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 811-09469 --------------------- Nuveen Virginia Dividend Advantage Municipal Fund - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Kevin J. McCarthy 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, 2007 ------------------ 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, 2007 Nuveen Investments MUNICIPAL CLOSED-END FUNDS Photo of: Small child 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 IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) Logo: NUVEEN Investments Photo of: Man working on computer LIFE IS COMPLEX. NUVEEN MAKES THINGS E-simple. --------------------------------------------------------------------------- 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. FREE E-REPORTS RIGHT TO YOUR E-MAIL! www.investordelivery.com If you receive your Nuveen Fund dividends and statements from your financial advisor or brokerage account. OR www.nuveen.com/accountaccess If you receive your Nuveen Fund dividends and statements directly from Nuveen. Logo: NUVEEN Investments Chairman's LETTER TO SHAREHOLDERS Photo of: Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board 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. I ALSO WANTED TO TAKE THIS OPPORTUNITY TO REPORT SOME IMPORTANT NEWS ABOUT NUVEEN INVESTMENTS. WE HAVE AGREED TO A "GROWTH BUYOUT" OFFER FROM A PRIVATE EQUITY INVESTMENT FIRM. WHILE THIS MAY AFFECT THE CORPORATE STRUCTURE OF NUVEEN INVESTMENTS, IT WILL HAVE NO IMPACT ON THE INVESTMENT OBJECTIVES OF THE FUNDS, PORTFOLIO MANAGEMENT STRATEGIES OR THEIR DIVIDEND POLICIES. WE WILL PROVIDE YOU WITH ADDITIONAL INFORMATION ABOUT THIS TRANSACTION AS MORE DETAILS BECOME AVAILABLE. FOR SOME TIME, I'VE USED THESE LETTERS TO REMIND YOU THAT 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. FOR MORE INFORMATION ABOUT THIS IMPORTANT INVESTMENT STRATEGY, I ENCOURAGE YOU TO CONTACT YOUR PERSONAL FINANCIAL ADVISOR. WE ALSO ARE PLEASED TO BE ABLE TO OFFER YOU A CHOICE CONCERNING HOW YOU RECEIVE YOUR SHAREHOLDER REPORTS AND OTHER FUND INFORMATION. AS AN ALTERNATIVE TO MAILED COPIES, YOU CAN 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 16, 2007 Portfolio Manager's COMMENTS Nuveen Investments Municipal Closed-End Funds NMY, NFM, NZR, NWI, NPV, NGB, NNB Portfolio manager Cathryn Steeves reviews national and state economic and municipal market environments, key investment strategies and the annual performance of these seven Nuveen Funds. Cathryn, who joined Nuveen in 1996, has managed the Maryland and Virginia Funds since July 2006. WHAT FACTORS AFFECTED THE U.S. ECONOMIC AND MUNICIPAL MARKET ENVIRONMENTS DURING THE 12-MONTH REPORTING PERIOD ENDED MAY 31, 2007? Between June 1, 2006 and May 31, 2007, we saw interest rates at the short end of the yield curve rise modestly, while longer rates generally declined. After announcing one further rate increase in late June 2006, the Federal Reserve ended its unprecedented series of 17 consecutive 0.25% rate hikes that brought the fed funds rate to 5.25% over a two-year span. During the remaining 11 months of this reporting period, the Fed left monetary policy unchanged as it kept close tabs on inflationary pressures and the pace of economic growth. Over this same 12-month period, the yield on the benchmark 10-year U.S. Treasury note dropped 22 basis points to end May 2007 at 4.89%. In the municipal market, the yield on the Bond Buyer 25 Revenue Bond Index, a widely followed measure of longer-term municipal market rates, fell to 4.57% at the end of May 2007, a decline of 65 basis points from the end of May 2006. As interest rates on shorter-term municipal bonds reached the levels of longer-term bonds, the municipal yield curve continued to flatten and bonds with longer durations1 generally outperformed those with shorter durations during this period. Although many market observers had expected to see the Fed act on rates in early 2007, slowing economic growth, higher energy prices and a slumping housing market helped to keep the Fed on the sidelines. The U.S. gross domestic product (GDP), a closely watched measure of economic growth, operated at below-trend levels through most of 2006, expanding at a rate of 2.6% in the second quarter of 2006, 2.0% in the third quarter, and 2.5% in the fourth quarter (all GDP numbers annualized). In the first quarter of 2007, the rate of GDP growth slowed even further to 0.7%, the weakest since 2002, due in part to a 16% decline in residential investment. While the Consumer Price Index (CPI) registered a 2.7% year-over-year gain as of May 2007, the increase in this inflation gauge for the first five months of 2007 was 5.5%, driven largely by a 36% gain in energy prices. By comparison, the core CPI (which excludes food and energy prices) rose 2.1% as of May 2007, close to the Fed's unofficial target of 2.0% or lower. The labor market remained tight with a national unemployment rate of 4.5% in May 2007, down from 4.6% in May 2006. 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. 4 Over the 12 months ended May 2007, municipal bond issuance nationwide totaled $423.4 billion, up 15% from the previous 12 months. This total reflected a sharp increase in supply during the first five months of 2007, when $173.7 billion in new securities came to market, up almost 30% over the same period in 2006. A major factor in 2007 volume was the 56% increase in advance refundings,2 driven by attractive borrowing rates for issuers. The strength and diversity of the demand for municipal bonds were as important as the increase in supply, as the surge in issuance was easily absorbed by retail investors, institutional investors such as hedge funds and arbitragers, and overseas investors, all of whom continued to participate in the market. HOW WERE ECONOMIC AND MARKET CONDITIONS IN MARYLAND AND VIRGINIA DURING THIS PERIOD? During this reporting period, Maryland's economic growth continued to be driven by the government sector, professional and business services, education and health care. Given the state's proximity to Washington D.C., the federal government remained an important element in the state economy, with Fort George G. Meade ranking as Maryland's largest employer. Manufacturing employment in Maryland was about half the national average, which was a positive factor over the past few years as U.S. manufacturing struggled. Population trends in the state were on par with the national average over the past six years. In May 2007, Maryland's jobless rate was 3.6%, down from 3.9% in May 2006, putting unemployment in the state at its lowest level since March 2001. Maryland's $29.2 billion fiscal 2007 budget provided additional funding for schools, health care, and higher education without adding new taxes. Although revenues lagged initial projections, the state's rainy day fund was expected to end fiscal 2007 with a balance of $1.4 billion. The $30 billion fiscal 2008 budget called for an increase of only 2.5% in spending and proposed drawing down the state's rainy day reserve to achieve balance. As of May 2007, Moody's and Standard & Poor's maintained their ratings on Maryland general obligation debt at Aaa/AAA with stable outlooks. During the 12 months ended May 31, 2007, issuance in the state totaled $6.4 billion, an increase of 35% over the previous 12-month period. For January-May 2007, Maryland saw $2.9 billion in new municipal paper, up 13% from the first five months of 2006. Although Maryland's debt levels have declined from their peaks in the 1980s, the state's debt per capita and debt as a percentage of personal income remained above national medians, according to Moody's. Virginia's economy continued to be led by the government sector and professional and business services. Recent reductions in military spending were partially responsible for a slower pace of economic growth in the commonwealth during this period, following several years of superior performance. Despite the cutbacks, federal spending remained a vital factor in the commonwealth's economy, with federal employment in Virginia accounting for more than twice as many jobs as the national average. While technology continued to play a growing economic role, manufacturing, especially in the textile industry, remained a drag on Virginia's economy. Population growth in the commonwealth over the past six years remained well above the national average. Job growth, while healthy, was concentrated in three areas: Northern Virginia, Virginia 2 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. 5 Beach, and Richmond. In May 2007, Virginia's unemployment rate was the fifth lowest in the nation at 2.9%, on par with the May 2006 reading. The commonwealth's 2007-2008 biennium budget, which called for general fund expenditures of $34.8 billion over the two-year period, increased spending on education and transportation projects while introducing no major tax hikes. General fund revenues for fiscal 2007 were projected to come in $340 million ahead of plan. In October 2006, Moody's reconfirmed its rating on Virginia General Obligation (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, 2007, issuance in Virginia totaled $9.7 billion, an increase of 58% over the previous 12 months. The first five months of 2007 saw issuance rise even more sharply to $4.6 billion, up 170% from the first five months of 2006. Some of this increase was due to a major refinancing deal, totaling $1.1 billion, involving Virginia tobacco bonds, which took place in April 2007. According to Moody's, Virginia's per capita debt and debt as a percentage of personal income remained lower than national medians. WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING PERIOD? In the municipal bond interest rate environment of the past 12 months, where the flattening yield curve remained a dominant market factor, we continued to emphasize a disciplined approach to duration management and yield curve positioning. As part of this approach, our purchases for the Funds' portfolios focused mainly on attractively priced bonds maturing in 20 to 30 years. Overall, we believed that the bonds we purchased during this period represented opportunities to add value, manage duration, and enhance performance and income. Our duration management strategies during this period also included the use of inverse floating rate trusts,3 a type of derivative financial instrument, in all seven of the Maryland and Virginia Funds. The inverse floaters had the dual benefit of increasing the Funds' distributable income and bringing their durations closer to our preferred strategic target. As discussed in past shareholder reports, we have also used forward interest rate swaps (another type of derivative instrument) as a duration management tool when we believed this would support our overall investment performance strategies. The goal of this strategy helped us manage total return performance in relation to our strategic target without having a negative impact on the Funds' income streams or common share dividends over the short term. During this reporting period, we deployed this strategy in NFM, NWI, and NPV, with swaps remaining in place in NFM and NPV as of May 31, 2007. We also continued to emphasize individual credit selection. As previously mentioned, both Maryland and Virginia saw increased supply during this period, and steady new issuance as well as a number of major advance refundings and debt restructurings provided us with a greater variety of bonds and sectors from which to choose. Since Maryland and Virginia are high-quality states, much of the new supply was highly rated and/or insured. However, we also found purchase opportunities among lower credit quality bonds that we considered attractive based on their strong performance and the support they provide for the Funds' income streams. 3 An inverse floating rate trust is a financial instrument designed to pay long-term tax-exempt interest at a rate that varies inversely with a short-term tax-exempt interest rate index. For the Nuveen Funds, the index typically used is the Securities Industry and Financial Markets (SIFM) Municipal Swap Index (previously referred to as the Bond Market Association Index or BMA). Inverse floaters, including those inverse floating rate securities in which the Funds invested during the 12-month period, are further defined within the "Notes to Financial Statements" and "Glossary of Terms Used in This Report" sections of this shareholder report. 6 During this period, we added to all of the Funds' positions in health care (including both hospitals and long-term/continuing care facilities), higher education, and single-family housing. In the three Virginia Funds, we purchased bonds issued by the Metropolitan Washington DC Airports Authority and participated in the new offering of Virginia tobacco credits that were issued as part of the advance refunding of the commonwealth's older tobacco bonds. We also continued to build positions in bonds that could help us increase the Funds' income-generating potential and manage duration, including zero coupon and non-callable bonds. To maintain the Funds' durations within our preferred strategic range and to generate cash for purchases, we selectively sold some of the Funds' holdings with shorter durations. In NMY, NFM, and NWI, we found 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 allowed us to maintain the Funds' current portfolio characteristics while strengthening their future income streams. HOW DID THE FUNDS PERFORM? Individual results for the Nuveen Maryland and Virginia Funds, as well as relevant index and peer group information, are presented in the accompanying table. Total Returns on Net Asset Value For periods ended 5/31/07 Annualized --------------------------------------------- 1-Year 5-Year 10-Year Maryland Funds NMY 5.35% 6.63% 6.42% NFM 5.74% 6.66% NA NZR 5.56% 6.99% NA NWI 5.75% NA NA Virginia Funds NPV 4.89% 6.29% 6.56% NGB 5.82% 7.10% NA NNB 5.60% 7.25% NA Lehman Brothers Municipal Bond Index4 4.84% 4.94% 5.61% Lipper Other States Municipal Debt Funds Average5 5.25% 6.68% 6.36% For the 12 months ended May 31, 2007, the total return on NAV for all seven of these Funds exceeded the return on the national Lehman Brothers Municipal Bond Index. NMY, NFM, NZR, NWI, NGB, and NNB also outperformed the average return for the Lipper Other States Municipal Debt Funds Average, while NPV trailed this Lipper average. Shareholders should note that the performance of the Lipper Other States Municipal Debt Funds Average represents the overall average of returns for 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. 4 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. 5 The Lipper Other States Municipal Debt Funds Average is calculated using the returns of all 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. 7 funds from 10 different states with a wide variety of municipal market conditions, making direct comparisons less meaningful. Factors that influenced the Funds' returns during this period included yield curve and duration positioning, exposure to lower-rated credits, individual security selection and sector allocations, and advance refunding activity. As the yield curve continued to flatten over the course of this period, municipal bonds with maturities of 15 years and longer, as measured by the Lehman Brothers Municipal Bond Index, performed best, generally outpacing municipal bonds with shorter maturities, especially those with maturities of less than 5 years. While our strategies during this period included adding longer bonds to our portfolios, most of these Funds remained slightly short of our strategic target in terms of their holdings of bonds in the longest part of the yield curve, which was negative for performance. However, this was offset by the Funds' heavier exposure to the intermediate part of the curve, which performed well, and their lower allocations to the shorter part of the curve, which underperformed the general municipal market. The Funds' yield curve and duration positioning during this period was a positive contributor to their performance. With bonds rated BBB or lower and non-rated bonds generally outperforming other credit quality sectors during this period, all of these Funds benefited from their weightings in lower-quality credits. The outperformance of these credit sectors was largely the result of investor demand for the higher yields typically associated with lower-rated bonds, which drove up their value. As Dividend Advantage Funds, NFM, NZR, NWI, NGB, and NNB can invest up to 20% of their assets in below- investment-grade securities (bonds rated BB or below) or in non-rated bonds judged to be in the same credit quality category. The exposure of these five Funds to the subinvestment-grade sector, together with a fee reimbursement agreement, contributed to the outperformance of these Funds relative to NMY and NPV, which overall represented higher credit quality. In addition, NFM and NWI also had the heaviest weightings of bonds rated BBB across all seven of these Funds, which further benefited their performance. Among the lower-rated holdings making positive contributions to the Funds' returns for this period were industrial development bonds and health care (including hospitals) credits, which ranked as the top performing revenue sectors in the Lehman Brothers Municipal Bond Index. Lower-rated bonds backed by the 1998 master tobacco settlement agreement performed well. As of May 31, 2007, NMY, NFM, NZR, and NWI held approximately 1.4% to 2.4% of their portfolios in lower-rated tobacco bonds, while the Virginia Funds' lower-rated tobacco allocations ranged from 2.3% in NPV to 3.2% in NNB and 4.5% in NGB. 8 Additional sectors that helped the Funds' performances during this period included tax-supported bonds and, in the Maryland Funds, higher education and multifamily housing credits. The Funds' holdings of zero coupon bonds also provided a positive impact on performance for this period. We continued to see positive contributions from advance refunding activity, which benefited the Funds through price appreciation and enhanced credit quality. All of the Maryland and Virginia Funds (with the exception of NZR) saw healthy levels of pre-refunding activity. As previously mentioned, one of the more significant advance refundings during this period involved BBB rated tobacco bonds issued by Virginia's Tobacco Settlement Financing Corporation, which were upgraded to AAA as a result of the refundings. At the same time, holdings of older, previously pre-refunded bonds tended to underperform the general municipal market during this period, due primarily to their shorter effective maturities. Among the Virginia Funds, NPV held appreciably heavier weightings of older pre-refunded bonds than NGB or NNB. In addition, the performance of the Maryland Funds was impacted by their holdings of single-family housing bonds, which underperformed during this period as the municipal market rallied. We should also note that all of these Funds continued to use financial leverage to provide opportunities for additional income and total return for common shareholders. This strategy can also add volatility to a Fund's NAV and share price. Over this period, the use of leverage was generally a positive factor in the Funds' total return performance, especially in relation to that of the unleveraged Lehman Brothers Municipal Bond Index. 9 Dividend and Share Price INFORMATION As previously noted, these seven Funds use leverage to potentially enhance opportunities for additional income for common shareholders. Although the Funds' use of this strategy continued to provide incremental income, the extent of this benefit was reduced during this period due to high short-term interest rates that, in turn, kept the Funds' borrowing costs high. The Funds' income streams were also impacted as the proceeds from older, higher-yielding bonds that matured or were called were reinvested into bonds currently available in the market, which generally offered lower yields. The combination of these factors resulted in one monthly dividend reduction in NMY, NFM, NZR, NPV and NNB and two in NGB over the 12-month period ended May 31, 2007. The dividend of NWI remained stable throughout this reporting period. Due to normal portfolio activity, common shareholders of the following Funds received capital gains or net ordinary income distributions at the end of December 2006 as follows: Short-Term Capital Gains Long-Term Capital Gains and/or Ordinary Income (per share) (per share) NZR -- $0.0014 NPV $0.0215 -- 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, 2007, all of the Funds in this report except NPV had positive UNII balances for tax purposes and negative UNII balances for financial statement purposes. NPV had a positive UNII balance for tax purposes and a positive UNII balance for financial statement purposes. 10 As of May 31, 2007, the Funds' share prices were trading at premiums or discounts to their NAVs as shown in the accompanying chart: 5/31/07 12-Month Average Premium Premium/Discount NMY +1.85% -0.50% NFM +4.30% +6.02% NZR +3.85% +5.89% NWI +1.80% -2.07% NPV +2.35% +1.39% NGB +16.89% +13.29% NNB +10.94% +7.31% 11 NMY Performance OVERVIEW Nuveen Maryland Premium Income Municipal Fund as of 5-31-07 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 54% AA 23% A 8% BBB 10% BB or Lower 3% N/R 2% Bar Chart: Monthly Tax-Free Dividends Per Share -- 2006-2007 Jun 0.058 Jul 0.058 Aug 0.058 Sep 0.055 Oct 0.055 Nov 0.055 Dec 0.055 Jan 0.055 Feb 0.055 Mar 0.055 Apr 0.055 May 0.055 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Jun 1, 2006 14.48 14.5 14.2 14.29 14.6 14.34 14.29 14.32 14.44 14.72 14.7 14.8499 14.88 15.1 14.66 14.65 14.74 14.6 14.58 14.34 14.31 14.4 14.63 14.58 14.63 14.63 14.67 14.82 14.43 14.34 14.46 14.42 14.59 14.49 14.59 14.45 14.51 14.65 14.7 14.87 14.85 14.91 15.04 15.01 15.15 15.04 14.9 14.95 14.89 14.74 14.68 May 31, 2007 14.8999 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.84 - ------------------------------------ Common Share Net Asset Value $14.57 - ------------------------------------ Premium/(Discount) to NAV 1.85% - ------------------------------------ Market Yield 4.45% - ------------------------------------ Taxable-Equivalent Yield1 6.49% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $155,004 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.9 - ------------------------------------ Leverage-Adjusted Duration 8.28 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 6.96% 5.35% - ------------------------------------ 5-Year 4.30% 6.63% - ------------------------------------ 10-Year 6.41% 6.42% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/General 22.7 - ------------------------------------ Health Care 15.4 - ------------------------------------ Education and Civic Organizations 14.5 - ------------------------------------ U.S. Guaranteed 13.5 - ------------------------------------ Tax Obligation/Limited 11.9 - ------------------------------------ Housing/Multifamily 8.7 - ------------------------------------ Other 13.3 - ------------------------------------ 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 31.4%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 12 NFM Performance OVERVIEW Nuveen Maryland Dividend Advantage Municipal Fund as of 5-31-07 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 48% AA 16% A 15% BBB 13% BB or Lower 2% N/R 6% Bar Chart: Monthly Tax-Free Dividends Per Share -- 2006-2007 Jun 0.0645 Jul 0.0645 Aug 0.0645 Sep 0.0615 Oct 0.0615 Nov 0.0615 Dec 0.0615 Jan 0.0615 Feb 0.0615 Mar 0.0615 Apr 0.0615 May 0.0615 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Jun 1, 2006 15.45 15.25 15.33 15.5 15.94 16.03 15.6 15.71 15.61 15.6 15.48 15.48 15.88 16.15 16.15 15.99 15.9616 15.89 15.6 15.47 15.54 15.73 15.66 15.65 15.88 15.6 15.52 15.79 15.15 15.07 15.45 15.3 15.1 15.23 15.12 15.4 15.54 15.8 15.89 15.8 16.3 16.3 15.7 15.84 16.04 16.25 16.42 16.05 15.9 15.38 15.23 May 31, 2007 15.2 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.28 - ------------------------------------ Common Share Net Asset Value $14.65 - ------------------------------------ Premium/(Discount) to NAV 4.30% - ------------------------------------ Market Yield 4.83% - ------------------------------------ Taxable-Equivalent Yield1 7.04% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $61,261 - ------------------------------------ Average Effective Maturity on Securities (Years) 18.32 - ------------------------------------ Leverage-Adjusted Duration 7.79 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 1/23/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 5.51% 5.74% - ------------------------------------ 5-Year 5.40% 6.66% - ------------------------------------ Since Inception 5.83% 6.26% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Health Care 20.7 - ------------------------------------ Tax Obligation/General 16.2 - ------------------------------------ U.S. Guaranteed 15.8 - ------------------------------------ Housing/Multifamily 12.3 - ------------------------------------ Tax Obligation/Limited 11.7 - ------------------------------------ Education and Civic Organizations 9.0 - ------------------------------------ Other 14.3 - ------------------------------------ 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 31.4%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 13 NZR Performance OVERVIEW Nuveen Maryland Dividend Advantage Municipal Fund 2 as of 5-31-07 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S.Guaranteed 49% AA 21% A 10% BBB 11% BB or Lower 3% N/R 6% Bar Chart: Monthly Tax-Free Dividends Per Share -- 2006-20072 Jun 0.064 Jul 0.064 Aug 0.064 Sep 0.064 Oct 0.064 Nov 0.064 Dec 0.064 Jan 0.064 Feb 0.064 Mar 0.0615 Apr 0.0615 May 0.0615 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Jun 1, 2006 15 14.87 15.25 15.25 16.3 16.17 15.87 15.89 15.52 15.8 15.7376 15.6 15.85 15.89 15.82 15.6 15.95 16.15 15.79 15.79 15.43 15.89 16.46 16.32 15.83 15.71 15.9024 15.95 15.59 15.99 16.24 15.85 15.51 15.74 16.01 16.2499 16.04 15.77 15.91 16.25 16.3101 16.12 16.09 16.18 16.38 16.06 16.25 15.94 15.94 15.71 15.5 May 31, 2007 15.449 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.38 - ------------------------------------ Common Share Net Asset Value $14.81 - ------------------------------------ Premium/(Discount) to NAV 3.85% - ------------------------------------ Market Yield 4.80% - ------------------------------------ Taxable-Equivalent Yield1 7.00% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $62,064 - ------------------------------------ Average Effective Maturity on Securities (Years) 17.73 - ------------------------------------ Leverage-Adjusted Duration 7.71 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 9.32% 5.56% - ------------------------------------ 5-Year 6.77% 6.99% - ------------------------------------ Since Inception 6.03% 6.31% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/General 23.6 - ------------------------------------ Health Care 16.8 - ------------------------------------ U.S. Guaranteed 12.4 - ------------------------------------ Tax Obligation/Limited 12.3 - ------------------------------------ Education and Civic Organizations 11.6 - ------------------------------------ Housing/Multifamily 6.3 - ------------------------------------ Housing/Single Family 4.3 - ------------------------------------ Other 12.7 - ------------------------------------ 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 31.4%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 2 The Fund paid shareholders net ordinary income distributions in December 2006 of $.0014 per share. 14 NWI Performance OVERVIEW Nuveen Maryland Dividend Advantage Municipal Fund 3 as of 5-31-07 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 46% AA 24% A 8% BBB 14% BB or Lower 3% N/R 5% Bar Chart: Monthly Tax-Free Dividends Per Share -- 2006-2007 Jun 0.0555 Jul 0.0555 Aug 0.0555 Sep 0.0555 Oct 0.0555 Nov 0.0555 Dec 0.0555 Jan 0.0555 Feb 0.0555 Mar 0.0555 Apr 0.0555 May 0.0555 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Jun 1, 2006 14.16 13.86 13.5 13.37 13.51 13.67 13.4501 13.66 13.78 13.89 13.74 14.1 13.89 14.15 13.89 14.14 14.07 14.39 14.25 14.31 14.34 14.55 14.66 14.53 14.58 14.5 14.57 14.54 14.29 14.2999 14.28 14.3 14.4001 14.16 14.11 14.25 14.58 14.25 14.38 14.5 14.78 14.7928 14.9 14.87 15.05 14.91 14.7 14.82 14.65 14.63 14.75 May 31, 2007 14.85 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.74 - ------------------------------------ Common Share Net Asset Value $14.48 - ------------------------------------ Premium/(Discount) to NAV 1.80% - ------------------------------------ Market Yield 4.52% - ------------------------------------ Taxable-Equivalent Yield1 6.59% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $77,640 - ------------------------------------ Average Effective Maturity on Securities (Years) 17.06 - ------------------------------------ Leverage-Adjusted Duration 8.23 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/02) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 11.47% 5.75% - ------------------------------------ Since Inception 4.86% 5.39% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/Limited 22.1 - ------------------------------------ Health Care 15.2 - ------------------------------------ U.S. Guaranteed 15.1 - ------------------------------------ Tax Obligation/General 14.7 - ------------------------------------ Housing/Multifamily 9.8 - ------------------------------------ Education and Civic Organizations 8.5 - ------------------------------------ Other 14.6 - ------------------------------------ 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 31.4%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 15 NPV Performance OVERVIEW Nuveen Virginia Premium Income Municipal Fund as of 5-31-07 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 61% AA 24% A 5% BBB 6% BB or Lower 1% N/R 3% Bar Chart: Monthly Tax-Free Dividends Per Share -- 2006-20072 Jun 0.059 Jul 0.059 Aug 0.059 Sep 0.059 Oct 0.059 Nov 0.059 Dec 0.059 Jan 0.059 Feb 0.059 Mar 0.0565 Apr 0.0565 May 0.0565 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Jun 1, 2006 14.81 14.88 14.5 14.26 14.45 14.5 14.31 14.65 14.8 14.96 15 14.78 14.76 14.89 14.89 14.99 15.3001 15.49 15.52 15.58 15.44 15.27 15.08 15.1 15.16 15.12 15.2 15.21 14.8 14.83 15.15 15.25 15.58 15.7501 15.76 16.1 16.69 15.95 15.9199 15.61 15.7 15.59 15.66 15.9 15.98 15.96 15.79 15.84 15.75 15.64 15.46 May 31, 2007 15.37 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.24 - ------------------------------------ Common Share Net Asset Value $14.89 - ------------------------------------ Premium/(Discount) to NAV 2.35% - ------------------------------------ Market Yield 4.45% - ------------------------------------ Taxable-Equivalent Yield1 6.55% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $132,900 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.25 - ------------------------------------ Leverage-Adjusted Duration 9.77 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 7.18% 4.89% - ------------------------------------ 5-Year 4.34% 6.29% - ------------------------------------ 10-Year 6.08% 6.56% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/Limited 20.2 - ------------------------------------ U.S. Guaranteed 19.2 - ------------------------------------ Tax Obligation/General 14.7 - ------------------------------------ Health Care 14.5 - ------------------------------------ Transportation 5.8 - ------------------------------------ Water and Sewer 5.4 - ------------------------------------ Utilities 4.8 - ------------------------------------ Education and Civic Organizations 3.4 - ------------------------------------ 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 32.1%. 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 2006 of $0.0215 per share. 16 NGB Performance OVERVIEW Nuveen Virginia Dividend Advantage Municipal Fund as of 5-31-07 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 53% AA 20% A 7% BBB 10% BB or Lower 1% N/R 9% Bar Chart: Monthly Tax-Free Dividends Per Share -- 2006-2007 Jun 0.0685 Jul 0.0685 Aug 0.0685 Sep 0.0655 Oct 0.0655 Nov 0.0655 Dec 0.0655 Jan 0.0655 Feb 0.0655 Mar 0.063 Apr 0.063 May 0.063 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Jun 1, 2006 17.21 17.2 16.78 16.7 16.8 16.24 15.9 15.96 15.96 16.17 16.35 16.8 17 17.05 16.52 16.53 16.28 16.76 16.75 16.65 16.6 16.5 16.75 16.75 16.69 16.93 17.649 17.18 17.21 17.37 17.5 18 18.19 17.59 17.19 17.85 17.95 17.73 17.53 17.6 17.8 17.82 17.78 17.7 17.765 17.8 17.68 17.6 17.65 17.49 17.41 May 31, 2007 17.51 FUND SNAPSHOT - ------------------------------------ Common Share Price $17.51 - ------------------------------------ Common Share Net Asset Value $14.98 - ------------------------------------ Premium/(Discount) to NAV 16.89% - ------------------------------------ Market Yield 4.32% - ------------------------------------ Taxable-Equivalent Yield1 6.36% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $46,908 - ------------------------------------ Average Effective Maturity on Securities (Years) 18.06 - ------------------------------------ Leverage-Adjusted Duration 10.25 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 1/26/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 7.24% 5.82% - ------------------------------------ 5-Year 8.58% 7.10% - ------------------------------------ Since Inception 7.98% 6.69% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/General 16.4 - ------------------------------------ Transportation 16.3 - ------------------------------------ U.S. Guaranteed 14.3 - ------------------------------------ Tax Obligation/Limited 12.9 - ------------------------------------ Health Care 8.8 - ------------------------------------ Long-Term Care 8.4 - ------------------------------------ Consumer Staples 4.5 - ------------------------------------ Education and Civic Organizations 4.5 - ------------------------------------ Other 13.9 - ------------------------------------ 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 32.1%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 17 NNB Performance OVERVIEW Nuveen Virginia Dividend Advantage Municipal Fund 2 as of 5-31-07 Pie Chart: Credit Quality (as a % of total investments) AAA/U.S. Guaranteed 55% AA 20% A 7% BBB 8% BB or Lower 1% N/R 9% Bar Chart: Monthly Tax-Free Dividends Per Share -- 2006-2007 Jun 0.065 Jul 0.065 Aug 0.065 Sep 0.065 Oct 0.065 Nov 0.065 Dec 0.065 Jan 0.065 Feb 0.065 Mar 0.0625 Apr 0.0625 May 0.0625 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Jun 1, 2006 16.6 15.98 15.95 15.79 15.94 15.9501 15.8 15.95 15.66 15.79 15.8399 15.8 15.99 16.1 16.09 15.95 15.9 16.11 15.94 15.8 15.85 16.06 16.34 16.0101 16.3 16.25 16.35 16.6 16.52 16.7101 16.86 16.81 16.96 16.7 16.4 16.75 16.75 16.83 17.04 17.09 17.13 16.91 17.05 16.53 16.85 16.6 16.49 16.5 16.34 16.6 16.65 May 31, 2007 16.7 FUND SNAPSHOT - ------------------------------------ Common Share Price $16.73 - ------------------------------------ Common Share Net Asset Value $15.08 - ------------------------------------ Premium/(Discount) to NAV 10.94% - ------------------------------------ Market Yield 4.48% - ------------------------------------ Taxable-Equivalent Yield1 6.60% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $86,382 - ------------------------------------ Average Effective Maturity on Securities (Years) 17.55 - ------------------------------------ Leverage-Adjusted Duration 9.81 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 11/15/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 6.96% 5.60% - ------------------------------------ 5-Year 8.26% 7.25% - ------------------------------------ Since Inception 7.75% 6.95% - ------------------------------------ INDUSTRIES (as a % of total investments) - ------------------------------------ Tax Obligation/General 16.7 - ------------------------------------ U.S. Guaranteed 15.3 - ------------------------------------ Health Care 14.1 - ------------------------------------ Tax Obligation/Limited 12.3 - ------------------------------------ Water and Sewer 11.1 - ------------------------------------ Housing/Single Family 8.4 - ------------------------------------ Long-Term Care 8.3 - ------------------------------------ Other 13.8 - ------------------------------------ 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 32.1%. When comparing this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 18 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, 2007, 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, 2007, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial 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, 2007, 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 19, 2007 19 NMY Nuveen Maryland Premium Income Municipal Fund Portfolio of INVESTMENTS as of 5-31-07 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 Revenue 9/16 at 100.00 AAA $ 2,245,005 Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 2.0% (1.3% OF TOTAL INVESTMENTS) 3,005 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 3,144,733 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 21.8% (14.5% OF TOTAL INVESTMENTS) 1,250 Frederick County, Maryland, Educational Facilities Revenue Bonds, 9/16 at 100.00 BBB- 1,330,038 Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38 1,000 Hartford County, Maryland, Economic Development Revenue Bonds, 4/14 at 100.00 A+ 1,053,860 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: 980 5.375%, 7/01/15 - AMBAC Insured 7/11 at 100.00 AAA 1,036,321 980 5.375%, 7/01/16 - AMBAC Insured 7/11 at 100.00 AAA 1,036,321 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 785,445 500 5.250%, 7/01/30 - FSA Insured 1/11 at 101.00 AAA 523,630 1,250 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 1,300,738 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 1,518,969 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 1,531,950 Revenue Refunding Bonds, Johns Hopkins University, Series 1997, 5.625%, 7/01/27 1,365 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 A1 1,441,809 Bonds, Montgomery College Arts Center Project, Series 2005A, 5.000%, 5/01/19 9,445 Morgan State University, Maryland, Student Tuition and Fee No Opt. Call AAA 11,153,031 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: 4,000 5.000%, 4/01/15 4/13 at 100.00 AA 4,216,719 2,680 5.000%, 4/01/19 4/13 at 100.00 AA 2,810,248 1,685 University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, 10/16 at 100.00 AA 1,792,789 Series 2006A, 5.000%, 10/01/22 Westminster, Maryland, Educational Facilities Revenue Bonds, McDaniel College, Series 2006: 1,400 5.000%, 11/01/31 11/16 at 100.00 BBB+ 1,455,384 850 4.500%, 11/01/36 11/16 at 100.00 BBB+ 825,665 - ------------------------------------------------------------------------------------------------------------------------------------ 31,095 Total Education and Civic Organizations 33,812,917 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 23.3% (15.4% OF TOTAL INVESTMENTS) 1,525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 1,625,604 Revenue Bonds, Calvert Memorial Hospital, Series 2004, 5.500%, 7/01/36 20 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (continued) $ 3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 $ 3,454,035 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 1,710,371 Revenue Bonds, Civista Medical Center, Series 2005, 5.000%, 7/01/37 - RAAI Insured 1,740 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa1 1,773,756 Revenue Bonds, Doctors Community Hospital, Series 2007A, 5.000%, 7/01/29 1,400 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,428,784 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+ 1,517,865 Revenue Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,019,060 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+ 2,068,060 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 Baa3 3,949,910 Revenue Bonds, Kennedy Krieger Institute, Series 2003, 5.500%, 7/01/33 2,040 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 2,091,632 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 A3 1,830,063 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 3,427,190 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 1,617,045 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 1,042,520 Revenue Bonds, University of Maryland Medical System, Series 2004B, 5.000%, 7/01/24 - AMBAC Insured 4,200 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 4,394,880 Revenue Bonds, Western Maryland Health, Series 2006A, 5.000%, 7/01/34 - MBIA Insured (UB) Prince George's County, Maryland, Revenue Bonds, Dimensions Health Corporation, Series 1994: 3,080 5.375%, 7/01/14 7/07 at 100.00 B3 2,898,927 295 5.300%, 7/01/24 7/07 at 100.00 B3 257,379 - ------------------------------------------------------------------------------------------------------------------------------------ 34,995 Total Health Care 36,107,081 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 13.1% (8.7% OF TOTAL INVESTMENTS) 1,450 Maryland Community Development Administration, FNMA 2/11 at 101.00 Aaa 1,513,336 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 2,535,225 Revenue Bonds, Series 1999A, 5.350%, 7/01/41 (Alternative Minimum Tax) 880 Maryland Community Development Administration, Housing 1/10 at 100.00 Aa2 906,629 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 B2 996,740 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 1,039,160 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 1,200,372 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, Maryland, 7/08 at 101.00 Aaa 3,887,910 FNMA/FHA-Insured Multifamily Housing Development Bonds, Series 1998A, 5.200%, 7/01/30 21 NMY Nuveen Maryland Premium Income Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY (continued) $ 360 Montgomery County Housing Opportunities Commission, Maryland, 7/07 at 100.00 Aa2 $ 360,490 GNMA/FHA-Insured Multifamily Housing Revenue Bonds, Series 1995A, 5.900%, 7/01/15 1,500 Montgomery County Housing Opportunities Commission, Maryland, 7/07 at 101.00 Aaa 1,520,445 Multifamily Housing Development Bonds, Series 1996B, 5.900%, 7/01/26 2,000 Montgomery County Housing Opportunities Commission, Maryland, 7/10 at 100.00 Aaa 2,081,440 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 561,573 Collateralized Mortgage Revenue Bonds, University Landing Apartments, Series 1999, 6.100%, 3/20/41 (Alternative Minimum Tax) Prince George's County Housing Authority, Maryland, GNMA Collateralized Mortgage Revenue Refunding Bonds, Overlook Apartments, Series 1995A: 2,000 5.700%, 12/20/15 6/07 at 101.00 AAA 2,016,640 1,670 5.750%, 12/20/19 6/07 at 101.00 AAA 1,682,625 - ------------------------------------------------------------------------------------------------------------------------------------ 19,875 Total Housing/Multifamily 20,302,585 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 5.9% (3.9% OF TOTAL INVESTMENTS) 1,195 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 1,205,002 of Housing and Community Development, Residential Revenue Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax) 4,100 Maryland Community Development Administration, Department 3/16 at 100.00 Aa2 4,128,740 of Housing and Community Development, Residential Revenue Bonds, Series 2006I, 4.875%, 9/01/26 (Mandatory put 3/01/22) (Alternative Minimum Tax) 1,630 Maryland Community Development Administration, Department 9/16 at 100.00 Aa2 1,635,298 of Housing and Community Development, Residential Revenue Bonds, Series 2006L, 4.900%, 9/01/31 (Alternative Minimum Tax) 1,200 Maryland Community Development Administration, Housing and 3/17 at 100.00 Aa2 1,191,432 Community Development Residential Revenue Bonds, Series 2007D, 4.850%, 9/01/37 (WI/DD, Settling 6/20/07) (Alternative Minimum Tax) 600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 600,570 Revenue Bonds, Series 2006B, 4.750%, 9/01/25 (Alternative Minimum Tax) 15 Prince George's County Housing Authority, Maryland, 8/10 at 100.00 AAA 15,422 FHLMC/FNMA/GNMA Collateralized Single Family Mortgage Revenue Bonds, Series 2000A, 6.150%, 8/01/19 (Alternative Minimum Tax) 320 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 321,802 Securities Program Home Mortgage Revenue Bonds, Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 9,060 Total Housing/Single Family 9,098,266 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 0.7% (0.4% OF TOTAL INVESTMENTS) 1,010 Maryland Economic Development Corporation, Solid Waste 4/12 at 101.00 BBB 1,002,274 Disposal Revenue Bonds, Waste Management Inc., Series 2002, 4.600%, 4/01/16 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 2.6% (1.7% OF TOTAL INVESTMENTS) 1,955 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 1,979,418 Series 2007A, 5.000%, 1/01/37 1,000 Carroll County, Maryland, Revenue Refunding Bonds, EMA 1/09 at 101.00 AA 1,032,100 Obligated Group, Series 1999A, 5.625%, 1/01/25 - RAAI Insured 1,065 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 BBB+ 1,053,754 Revenue Bonds, Mercy Ridge Retirement Community, Series 2007, 4.750%, 7/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ 4,020 Total Long-Term Care 4,065,272 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 34.2% (22.7% OF TOTAL INVESTMENTS) 2,030 Anne Arundel County, Maryland, General Obligation Bonds, 4/14 at 100.00 AAA 2,161,463 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 AAA 1,396,368 1,000 5.000%, 3/01/21 3/16 at 100.00 AAA 1,065,930 685 Anne Arundel County, Maryland, Water and Sewer Revenue Bonds, 3/16 at 100.00 AAA 737,313 Series 2006, 5.000%, 3/01/17 22 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) Baltimore County, Maryland, Metropolitan District Special Assessment Bonds, 67th Issue: $ 2,500 5.000%, 6/01/25 6/11 at 101.00 AAA $ 2,604,325 3,500 5.000%, 6/01/26 6/11 at 101.00 AAA 3,635,695 1,000 Baltimore, Maryland, Consolidated General Obligation Public No Opt. Call AA- 1,045,140 Improvement Bonds, Series 1989B, 7.150%, 10/15/08 1,540 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 AAA 1,626,748 Improvement Bonds, Series 2004A, 5.000%, 10/15/22 - AMBAC Insured 700 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA 755,097 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 2,330,587 820 5.000%, 3/01/16 No Opt. Call AA 884,509 1,500 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 1,642,260 Bonds, Series 2006, 5.000%, 11/01/20 615 Frederick County, Maryland, Special Obligation Bonds, Villages of 7/10 at 102.00 AA 653,597 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 782,393 1,625 5.000%, 8/15/17 2/14 at 100.00 AAA 1,729,390 1,180 5.000%, 8/15/19 2/14 at 100.00 AAA 1,248,735 1,725 Howard County, Maryland, Metropolitan District Refunding Bonds, 2/12 at 100.00 AAA 1,822,238 Series 2002A, 5.250%, 8/15/18 1,190 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA+ 1,260,710 Prince George's County, General Obligation Bonds, Park Acquisition and Development, Series 2004EE-2, 5.000%, 1/15/17 2,500 Maryland, General Obligation Bonds, Series 2005, 5.000%, 8/01/17 8/15 at 100.00 AAA 2,685,925 3,520 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 3,811,350 Public Improvement Bonds, Series 2006, 5.000%, 5/01/16 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 1,863,103 2,000 5.250%, 10/01/18 10/11 at 101.00 AAA 2,118,980 1,000 Prince George's County, Maryland, General Obligation Consolidated 12/11 at 101.00 AAA 1,063,840 Public Improvement Bonds, Series 2001, 5.250%, 12/01/20 - FGIC Insured 2,000 Prince George's County, Maryland, General Obligation Consolidated 9/12 at 101.00 AA+ 1,988,440 Public Improvement Bonds, Series 2002, 4.100%, 9/15/19 5,770 Prince George's County, Maryland, General Obligation Consolidated 10/13 at 100.00 AA+ 6,081,464 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 2,150,940 1,235 5.000%, 6/01/23 6/15 at 100.00 AAA 1,309,730 1,235 5.000%, 6/01/24 6/15 at 100.00 AAA 1,308,001 1,235 5.000%, 6/01/25 6/15 at 100.00 AAA 1,306,272 - ------------------------------------------------------------------------------------------------------------------------------------ 50,085 Total Tax Obligation/General 53,070,543 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 17.9% (11.9% 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+ 1,584,765 1,000 5.000%, 5/01/18 5/13 at 100.00 AA+ 1,051,920 2,900 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 3,056,803 5.000%, 7/01/31 - AMBAC Insured 23 NMY Nuveen Maryland Premium Income Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 300 Baltimore, Maryland, Special Obligation Bonds, North Locust 9/15 at 101.00 N/R $ 311,991 Point Project, Series 2005, 5.500%, 9/01/34 900 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 950,436 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+ 919,249 925 5.500%, 10/15/20 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 971,777 4,250 Maryland Department of Transportation, Consolidated Transportation No Opt. Call AAA 4,730,249 Revenue Bonds, Series 2002, 5.500%, 2/01/16 1,875 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,002,425 Bonds, Department of Transportation Headquarters Building, Series 2002, 5.375%, 6/01/19 1,700 Maryland Stadium Authority, Lease Revenue Bonds, Montgomery 6/13 at 100.00 AA+ 1,771,842 County Conference Center Facilities, Series 2003, 5.000%, 6/15/24 1,000 Montgomery County, Maryland, Lease Revenue Bonds, Metrorail 6/12 at 100.00 AA 1,043,300 Garage, Series 2002, 5.000%, 6/01/21 675 Montgomery County, Maryland, Special Obligation Bonds, West 7/12 at 101.00 AA 715,777 Germantown Development District, Senior Series 2002A, 5.500%, 7/01/27 - RAAI Insured 635 New Baltimore City Board of School Commissioners, Maryland, 11/10 at 100.00 AA+ 661,124 School System Revenue Bonds, Series 2000, 5.125%, 11/01/15 Puerto Rico Highway and Transportation Authority, Highway Revenue Bonds, Series 2007N: 1,000 5.500%, 7/01/29 - AMBAC Insured No Opt. Call AAA 1,161,340 2,500 5.250%, 7/01/31 - AMBAC Insured No Opt. Call AAA 2,835,675 2,100 Puerto Rico Municipal Finance Agency, Series 2002A, 8/12 at 100.00 AAA 2,228,352 5.250%, 8/01/21 - FSA Insured 1,500 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AAA 1,699,245 Authority, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 25,635 Total Tax Obligation/Limited 27,696,270 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 2.1% (1.4% OF TOTAL INVESTMENTS) 1,060 Baltimore, Maryland, Revenue Refunding Bonds, Parking System No Opt. Call AAA 1,161,643 Facilities, Series 1998A, 5.250%, 7/01/17 - FGIC Insured 2,075 Puerto Rico Ports Authority, Special Facilities Revenue Bonds, 6/07 at 101.00 CCC+ 2,090,542 American Airlines Inc., Series 1996A, 6.250%, 6/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 3,135 Total Transportation 3,252,185 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 20.4% (13.5% OF TOTAL INVESTMENTS) (4) 2,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 2,612,550 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 2,151,960 Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM) 2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AAA 2,184,880 Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured (ETM) Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount St. Mary's College, Series 2001A: 200 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 211,532 200 5.800%, 9/01/30 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 211,792 3,000 Frederick County, Maryland, General Obligation Public Facilities 7/09 at 101.00 AAA 3,119,790 Bonds, Series 1999, 5.250%, 7/01/18 (Pre-refunded 7/01/09) 2,550 Gaithersburg, Maryland, Hospital Facilities Revenue Refunding No Opt. Call AAA 2,735,513 and Improvement Bonds, Shady Grove Adventist Hospital, Series 1995, 6.500%, 9/01/12 - FSA Insured (ETM) 24 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED (4) (continued) $ 575 Howard County, Maryland, Consolidated Public Improvement 2/12 at 100.00 AAA $ 610,455 Refunding Bonds, Series 2002A, 5.250%, 8/15/18 (Pre-refunded 2/15/12) Maryland Economic Development Corporation, Health and Mental Hygiene Providers Revenue Bonds, Series 1996A: 905 7.625%, 4/01/21 (Pre-refunded 4/01/11) 4/11 at 102.00 N/R (4) 1,021,483 685 7.625%, 4/01/21 (Pre-refunded 4/01/11) 4/11 at 102.00 N/R (4) 773,166 2,250 Maryland Economic Development Corporation, Student Housing 6/09 at 102.00 Baa2 (4) 2,375,393 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 3,466,240 Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/27 - AMBAC Insured (ETM) 3,125 Maryland Health and Higher Educational Facilities Authority, 7/07 at 100.00 Aaa 3,158,000 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) 830,809 Revenue Bonds, University of Maryland Medical System, Series 2000, 6.750%, 7/01/30 (Pre-refunded 7/01/10) 230 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 258,718 Transportation Facilities Projects, First Series 1978, 6.800%, 7/01/16 (ETM) 925 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 AAA 983,941 Series 2000A, 6.000%, 6/01/20 (Pre-refunded 6/01/10) - ACA Insured 1,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 1,063,950 Bonds, Series 2000A, 5.500%, 10/01/20 1,000 Puerto Rico, Highway Revenue Bonds, Highway and Transportation 7/16 at 100.00 Aaa 1,120,140 Authority, Series 1996Y, 5.500%, 7/01/36 (Pre-refunded 7/01/16) 520 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 535,584 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded 7/01/10) 2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB+ (4) 2,179,500 Loan Note, Series 1999A, 6.500%, 10/01/24 (Pre-refunded 10/01/10) - ------------------------------------------------------------------------------------------------------------------------------------ 29,625 Total U.S. Guaranteed 31,605,396 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 4.0% (2.7% OF TOTAL INVESTMENTS) 2,500 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 2,521,675 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) 3,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/14 at 100.00 AAA 3,696,245 Series 2004PP, 5.000%, 7/01/22 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,000 Total Utilities 6,217,920 - ------------------------------------------------------------------------------------------------------------------------------------ 25 NMY Nuveen Maryland Premium Income Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 1.4% (0.9% OF TOTAL INVESTMENTS) $ 1,045 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AAA $ 1,138,799 Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured 860 Maryland Water Quality Financing Administration, Revolving Loan No Opt. Call AAA 927,519 Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 1,905 Total Water and Sewer 2,066,318 - ------------------------------------------------------------------------------------------------------------------------------------ $ 221,545 Total Investments (cost $226,265,245) - 150.8% 233,686,765 =============----------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (1.8)% (2,800,000) -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.0% 3,217,369 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.0)% (79,100,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 155,004,134 ==================================================================================================================== (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. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 26 NFM Nuveen Maryland Dividend Advantage Municipal Fund Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 3.7% (2.4% OF TOTAL INVESTMENTS) $ 205 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call B- $ 204,731 Motors Corporation, Series 1993, 5.350%, 4/01/08 1,000 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 AAA 1,069,050 Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured 310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 329,629 Revenue Bonds, Series 2006B, 5.875%, 9/01/39 650 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 653,666 Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%, 12/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 2,165 Total Consumer Discretionary 2,257,076 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 2.6% (1.7% OF TOTAL INVESTMENTS) 1,500 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 1,569,750 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 13.8% (9.0% OF TOTAL INVESTMENTS) 645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 679,740 Bonds, Battelle Memorial Institute, Series 2004, 5.250%, 4/01/34 980 Maryland Economic Development Corporation, Utility Infrastructure 7/11 at 100.00 AAA 1,016,368 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- 1,548,090 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- 520,295 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 647,188 Revenue Bonds, Maryland Institute College of Art, Series 2001, 5.500%, 6/01/32 475 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 509,404 Bonds, Our Lady of Good Counsel High School, Series 2005A, 6.000%, 5/01/35 615 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 A1 647,613 Bonds, Montgomery College Arts Center Project, Series 2005A, 5.000%, 5/01/20 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- 220,123 410 5.375%, 2/01/29 2/09 at 101.00 BBB- 418,717 500 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA 524,300 Bonds, Series 2003A, 5.000%, 4/01/19 800 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA 851,176 Bonds, Series 2006A, 5.000%, 10/01/22 900 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 874,233 McDaniel College, Series 2006, 4.500%, 11/01/36 - ------------------------------------------------------------------------------------------------------------------------------------ 8,165 Total Education and Civic Organizations 8,457,247 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 31.6% (20.7% OF TOTAL INVESTMENTS) 1,325 Maryland Health and Higher Education Facilities Authority, 7/16 at 100.00 A 1,348,174 Revenue Bonds, University of Maryland Medical System, Series 2006, 5.000%, 7/01/36 27 NFM Nuveen Maryland Dividend Advantage Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 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 $ 1,021,090 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 1,013,200 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 1,074,250 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 770,438 Revenue Bonds, Civista Medical Center, Series 2005, 5.000%, 7/01/37 - RAAI Insured 710 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa1 723,774 Revenue Bonds, Doctors Community Hospital, Series 2007A, 5.000%, 7/01/29 500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 510,280 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+ 657,742 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- 1,283,550 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+ 2,300,717 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 Baa3 1,039,450 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 599,806 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 A3 732,025 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- 1,041,870 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 2,049,680 Revenue Bonds, University of Maryland Medical System, Series 2001, 5.250%, 7/01/28 1,700 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 1,778,880 Revenue Bonds, Western Maryland Health, Series 2006A, 5.000%, 7/01/34 - MBIA Insured (UB) 570 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 A3 576,538 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 7/07 at 100.00 B3 272,951 700 5.300%, 7/01/24 7/07 at 100.00 B3 610,729 - ------------------------------------------------------------------------------------------------------------------------------------ 18,955 Total Health Care 19,405,144 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 18.9% (12.3% OF TOTAL INVESTMENTS) 750 Baltimore County, Maryland, GNMA Collateralized Revenue 10/08 at 102.00 AAA 762,615 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 2,032,520 Revenue Bonds, Series 1998A, 5.625%, 1/01/40 (Alternative Minimum Tax) 1,000 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 1,026,000 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 B2 206,682 50 5.000%, 10/01/15 10/13 at 100.00 B2 48,359 210 5.625%, 10/01/23 10/13 at 100.00 B2 209,315 28 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY (continued) $ 1,800 Maryland Economic Development Corporation, Student Housing 7/11 at 101.00 A $ 1,922,958 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 497,971 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 760,283 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, Maryland, 7/10 at 100.00 Aaa 2,063,600 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 2,049,000 Maryland, Multifamily Housing Development Bonds, Series 2001A, 5.600%, 7/01/42 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 11,250 Total Housing/Multifamily 11,579,303 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 6.5% (4.2% OF TOTAL INVESTMENTS) 300 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 302,511 of Housing and Community Development, Residential Revenue Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax) 1,200 Maryland Community Development Administration, Department 3/16 at 100.00 Aa2 1,208,412 of Housing and Community Development, Residential Revenue Bonds, Series 2006I, 4.875%, 9/01/26 (Mandatory put 3/01/22) (Alternative Minimum Tax) 815 Maryland Community Development Administration, Department 9/16 at 100.00 Aa2 817,649 of Housing and Community Development, Residential Revenue Bonds, Series 2006L, 4.900%, 9/01/31 (Alternative Minimum Tax) 500 Maryland Community Development Administration, Housing and 3/17 at 100.00 Aa2 496,430 Community Development Residential Revenue Bonds, Series 2007D, 4.850%, 9/01/37 (WI/DD, Settling 6/20/07) (Alternative Minimum Tax) 500 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 510,750 Revenue Bonds, Series 2001B, 5.450%, 9/01/32 (Alternative Minimum Tax) 600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 600,570 Revenue Bonds, Series 2006B, 4.750%, 9/01/25 (Alternative Minimum Tax) 20 Maryland Community Development Administration, Single Family 10/10 at 100.00 Aa2 20,070 Program Bonds, First Series 2001, 5.000%, 4/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ 3,935 Total Housing/Single Family 3,956,392 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 2.3% (1.5% OF TOTAL INVESTMENTS) 410 Maryland Economic Development Corporation, Solid Waste 4/12 at 101.00 BBB 406,864 Disposal Revenue Bonds, Waste Management Inc., Series 2002, 4.600%, 4/01/16 (Alternative Minimum Tax) 1,000 Northeast Maryland Waste Disposal Authority, Baltimore, Resource 1/09 at 101.00 BBB 1,007,690 Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 1,410 Total Industrials 1,414,554 - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 3.5% (2.3% OF TOTAL INVESTMENTS) 650 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 658,119 Series 2007A, 5.000%, 1/01/37 300 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 311,211 Revenue Bonds, Edenwald, Series 2006A, 5.400%, 1/01/31 720 Maryland Health and Higher Educational Facilities Authority, 1/17 at 100.00 N/R 739,613 Revenue Bonds, King Farm Presbyterian Community, Series 2007A, 5.250%, 1/01/27 440 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 BBB+ 435,354 Revenue Bonds, Mercy Ridge Retirement Community, Series 2007, 4.750%, 7/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ 2,110 Total Long-Term Care 2,144,297 - ------------------------------------------------------------------------------------------------------------------------------------ 29 NFM Nuveen Maryland Dividend Advantage Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 24.7% (16.2% OF TOTAL INVESTMENTS) Anne Arundel County, Maryland, General Obligation Bonds, Series 2006: $ 730 5.000%, 3/01/21 3/16 at 100.00 AAA $ 778,129 565 5.000%, 3/01/21 3/16 at 100.00 AAA 602,250 3,500 Baltimore County, Maryland, Metropolitan District Special 6/11 at 101.00 AAA 3,635,691 Assessment Bonds, 67th Issue, 5.000%, 6/01/27 300 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA 323,613 Series 2005A, 5.000%, 12/01/16 500 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 547,420 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 643,710 500 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 537,185 1,360 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,386,357 Bonds, Series 2001A, 4.750%, 2/15/21 1,000 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA+ 1,059,420 Prince George's County, General Obligation Bonds, Park Acquisition and Development, Series 2004EE-2, 5.000%, 1/15/17 1,360 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,472,567 Public Improvement Bonds, Series 2006, 5.000%, 5/01/16 740 Ocean City, Maryland, General Obligation Bonds, Series 2001, 3/11 at 101.00 AAA 770,118 4.875%, 3/01/19 - FGIC Insured 1,500 Prince George's County, Maryland, General Obligation Consolidated 12/11 at 101.00 AAA 1,595,760 Public Improvement Bonds, Series 2001, 5.250%, 12/01/20 - FGIC Insured 1,000 Prince George's County, Maryland, General Obligation Consolidated 10/13 at 100.00 AA+ 1,052,550 Public Improvement Bonds, Series 2003A, 5.000%, 10/01/17 700 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 752,829 Prince George's Counties, Maryland, Sewerage Disposal Bonds, Series 2005, 5.000%, 6/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ 14,355 Total Tax Obligation/General 15,157,599 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 18.0% (11.7% OF TOTAL INVESTMENTS) 625 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 642,063 Project, Series 2005A, 5.350%, 7/01/34 535 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 538,675 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+ 525,960 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 527,035 5.000%, 7/01/31 - AMBAC Insured 350 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 369,614 Center Project, Series 2004, 5.750%, 7/01/34 1,500 Maryland Department of Transportation, Consolidated Transportation No Opt. Call AAA 1,669,500 Revenue Bonds, Series 2002, 5.500%, 2/01/16 1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,500,484 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+ 390,002 Bonds, Montgomery County Town Square Parking Garage, Series 2002A, 5.000%, 9/15/13 740 Prince George's County, Maryland, Lease Revenue Bonds, Upper 6/13 at 100.00 AAA 783,475 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 275,252 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 456,642 Victoria Falls Project, Series 2005, 5.250%, 7/01/35 1,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,134,270 Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured 30 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 700 Puerto Rico, Highway Revenue Bonds, Highway and Transportation No Opt. Call AAA $ 792,981 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+ 1,392,374 Loan Note, Series 1999A, 6.375%, 10/01/19 - ------------------------------------------------------------------------------------------------------------------------------------ 10,235 Total Tax Obligation/Limited 10,998,327 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 1.1% (0.7% OF TOTAL INVESTMENTS) 650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 AAA 668,077 Parking Facilities Revenue Bonds, Johns Hopkins Hospital, Series 2001, 5.000%, 7/01/27 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 24.2% (15.8% 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 AAA 604,986 500 5.000%, 2/15/28 (Pre-refunded 2/15/11) 2/11 at 101.00 AAA 524,965 1,015 Baltimore, Maryland, Revenue Refunding Bonds, Water Projects, No Opt. Call AAA 1,092,120 Series 1998A, 5.000%, 7/01/28 - FGIC Insured (ETM) Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount St. Mary's College, Series 2001A: 465 5.700%, 9/01/20 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 491,212 500 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 528,830 500 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R (4) 549,590 Revenue Bonds, Collington Episcopal Life Care Community Inc., Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11) 835 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 939,258 Transportation Facilities Projects, First Series 1978, 6.800%, 7/01/16 (ETM) 430 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 AAA 457,400 Series 2000A, 6.000%, 6/01/20 (Pre-refunded 6/01/10) - ACA Insured 2,300 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 2,447,821 Bonds, Series 2000A, 5.500%, 10/01/32 1,700 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 1,808,154 Bonds, Series 2000A, 5.500%, 10/01/40 1,300 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,338,961 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded 7/01/10) Washington Suburban Sanitary District, Montgomery and Prince George's Counties, Maryland, General Obligation Construction Bonds, Series 2001: 895 5.000%, 6/01/22 (Pre-refunded 6/01/11) 6/11 at 100.00 AAA 934,675 935 5.000%, 6/01/23 (Pre-refunded 6/01/11) 6/11 at 100.00 AAA 976,449 985 5.000%, 6/01/24 (Pre-refunded 6/01/11) 6/11 at 100.00 AAA 1,028,665 1,035 5.000%, 6/01/25 (Pre-refunded 6/01/11) 6/11 at 100.00 AAA 1,080,882 - ------------------------------------------------------------------------------------------------------------------------------------ 13,975 Total U.S. Guaranteed 14,803,968 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 1.6% (1.1% OF TOTAL INVESTMENTS) 1,000 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,008,670 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 31 NFM Nuveen Maryland Dividend Advantage Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 0.6% (0.4% OF TOTAL INVESTMENTS) $ 355 Maryland Water Quality Financing Administration, Revolving Loan No Opt. Call AAA $ 382,871 Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ $ 90,060 Total Investments (cost $91,193,616) - 153.1% 93,803,275 =============----------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (1.8)% (1,133,000) -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 0.9% 591,154 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (52.2)% (32,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 61,261,429 ==================================================================================================================== FORWARD SWAPS OUTSTANDING AT MAY 31, 2007: FUND FIXED RATE UNREALIZED NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (5) DATE (DEPRECIATION) - ------------------------------------------------------------------------------------------------------------------------------------ JPMorgan $1,250,000 Pay 3 Month USD-LIBOR 5.388% Semi-Annually 4/25/08 4/25/35 $(39,197) ==================================================================================================================================== USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate) (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. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 32 NZR Nuveen Maryland Dividend Advantage Municipal Fund 2 Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 4.0% (2.6% OF TOTAL INVESTMENTS) $ 190 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call B- $ 189,751 Motors Corporation, Series 1993, 5.350%, 4/01/08 1,200 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 AAA 1,282,860 Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured 310 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 329,629 Revenue Bonds, Series 2006B, 5.875%, 9/01/39 650 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 653,666 Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%, 12/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 2,350 Total Consumer Discretionary 2,455,906 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 2.6% (1.7% OF TOTAL INVESTMENTS) 755 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 790,108 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 800 Tobacco Settlement Financing Corporation, Virgin Islands, 5/11 at 100.00 Baa3 812,016 Tobacco Settlement Asset-Backed Bonds, Series 2001, 5.000%, 5/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ 1,555 Total Consumer Staples 1,602,124 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 17.7% (11.6% OF TOTAL INVESTMENTS) 1,100 Anne Arundel County, Maryland, Economic Development Revenue 9/12 at 102.00 A3 1,147,927 Bonds, Community College Project, Series 2002, 5.125%, 9/01/22 500 Frederick County, Maryland, Educational Facilities Revenue Bonds, 9/16 at 100.00 BBB- 532,015 Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38 645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 679,740 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- 258,015 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 434,613 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- 520,295 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 1,294,375 Revenue Bonds, Maryland Institute College of Art, Series 2001, 5.500%, 6/01/32 500 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 536,215 Bonds, Our Lady of Good Counsel High School, Series 2005A, 6.000%, 5/01/35 590 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 A1 624,834 Bonds, Montgomery College Arts Center Project, Series 2005A, 5.000%, 5/01/18 500 Morgan State University, Maryland, Student Tuition and Fee 7/12 at 100.00 AAA 521,595 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 524,130 Revenue Bonds, Academic Fees and Auxiliary Facilities, Series 2003A, 5.000%, 7/01/20 - FGIC Insured 1,140 University of Maryland, Auxiliary Facility and Tuition Revenue 4/11 at 100.00 AA 1,154,877 Bonds, Series 2001B, 4.500%, 4/01/19 33 NZR Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS (continued) $ 1,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA $ 1,048,600 Bonds, Series 2003A, 5.000%, 4/01/19 650 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA 691,581 Bonds, Series 2006A, 5.000%, 10/01/22 950 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 987,582 McDaniel College, Series 2006, 5.000%, 11/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 10,490 Total Education and Civic Organizations 10,956,394 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 25.5% (16.8% OF TOTAL INVESTMENTS) 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,021,090 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 826,127 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 1,074,250 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 770,438 Revenue Bonds, Civista Medical Center, Series 2005, 5.000%, 7/01/37 - RAAI Insured 715 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa1 728,871 Revenue Bonds, Doctors Community Hospital, Series 2007A, 5.000%, 7/01/29 500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 510,280 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+ 657,742 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 Baa3 1,039,450 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 538,288 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 A3 732,025 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- 1,562,805 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 2,049,679 Revenue Bonds, University of Maryland Medical System, Series 2001, 5.250%, 7/01/28 1,700 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 1,778,880 Revenue Bonds, Western Maryland Health, Series 2006A, 5.000%, 7/01/34 - MBIA Insured (UB) 1,610 Montgomery County, Maryland, Economic Development Revenue 12/11 at 100.00 Aa2 1,664,160 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 7/07 at 100.00 B3 282,363 700 5.300%, 7/01/24 7/07 at 100.00 B3 610,729 - ------------------------------------------------------------------------------------------------------------------------------------ 15,425 Total Health Care 15,847,177 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 9.5% (6.3% OF TOTAL INVESTMENTS) 10 Maryland Community Development Administration, Insured 5/11 at 100.00 Aa2 10,173 Multifamily Housing Mortgage Loan Revenue Bonds, Series 2001A, 5.100%, 5/15/28 3,145 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 3,226,769 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 1,138,860 Housing Revenue Bonds, Princess Anne Apartments, Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax) 34 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY (continued) $ 1,000 Maryland Economic Development Corporation, Senior Lien Student 10/13 at 100.00 B2 $ 996,740 Housing Revenue Bonds, University of Maryland - Baltimore, Series 2003A, 5.625%, 10/01/23 520 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 545,147 Revenue Refunding Bonds, University of Maryland College Park Projects, Series 2006, 5.000%, 6/01/33 - CIFG Insured - ------------------------------------------------------------------------------------------------------------------------------------ 5,785 Total Housing/Multifamily 5,917,689 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 6.6% (4.3% OF TOTAL INVESTMENTS) 300 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 302,511 of Housing and Community Development, Residential Revenue Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax) 1,000 Maryland Community Development Administration, Department 3/16 at 100.00 Aa2 1,007,010 of Housing and Community Development, Residential Revenue Bonds, Series 2006I, 4.875%, 9/01/26 (Mandatory put 3/01/22) (Alternative Minimum Tax) 815 Maryland Community Development Administration, Department 9/16 at 100.00 Aa2 817,649 of Housing and Community Development, Residential Revenue Bonds, Series 2006L, 4.900%, 9/01/31 (Alternative Minimum Tax) 500 Maryland Community Development Administration, Housing and 3/17 at 100.00 Aa2 496,430 Community Development Residential Revenue Bonds, Series 2007D, 4.850%, 9/01/37 (WI/DD, Settling 6/20/07) (Alternative Minimum Tax) 850 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 862,801 Revenue Bonds, Series 2001H, 5.350%, 9/01/32 (Alternative Minimum Tax) 600 Maryland Community Development Administration, Residential 9/15 at 100.00 Aa2 600,570 Revenue Bonds, Series 2006B, 4.750%, 9/01/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 4,065 Total Housing/Single Family 4,086,971 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 2.5% (1.7% OF TOTAL INVESTMENTS) 410 Maryland Economic Development Corporation, Solid Waste 4/12 at 101.00 BBB 406,864 Disposal Revenue Bonds, Waste Management Inc., Series 2002, 4.600%, 4/01/16 (Alternative Minimum Tax) 1,150 Northeast Maryland Waste Disposal Authority, Baltimore, Resource 1/09 at 101.00 BBB 1,158,844 Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 1,560 Total Industrials 1,565,708 - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 3.5% (2.3% OF TOTAL INVESTMENTS) 650 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 658,119 Series 2007A, 5.000%, 1/01/37 300 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 311,211 Revenue Bonds, Edenwald, Series 2006A, 5.400%, 1/01/31 Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, King Farm Presbyterian Community, Series 2007A: 500 5.000%, 1/01/17 No Opt. Call N/R 511,445 220 5.250%, 1/01/27 1/17 at 100.00 N/R 225,993 435 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 BBB+ 430,406 Revenue Bonds, Mercy Ridge Retirement Community, Series 2007, 4.750%, 7/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ 2,105 Total Long-Term Care 2,137,174 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 35.8% (23.6% OF TOTAL INVESTMENTS) 750 Anne Arundel County, Maryland, General Obligation Bonds, 8/09 at 101.00 AAA 760,455 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 AAA 900,711 650 5.000%, 3/01/21 3/16 at 100.00 AAA 692,855 750 Baltimore, Maryland, General Obligation Consolidated Public 10/14 at 100.00 AAA 792,248 Improvement Bonds, Series 2004A, 5.000%, 10/15/22 - AMBAC Insured 35 NZR Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 300 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA $ 323,613 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- 1,003,002 1,020 4.600%, 8/01/19 8/11 at 101.00 AA- 1,045,867 750 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 821,130 Bonds, Series 2006, 5.000%, 11/01/20 200 Frederick County, Maryland, Special Obligation Bonds, Villages of 7/10 at 102.00 AA 212,552 Lake Linganore Community Development Authority, Series 2001A, 5.700%, 7/01/29 - RAAI Insured Frederick, Maryland, General Obligation Bonds, Series 2005: 600 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 643,710 500 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 537,185 510 Frederick, Maryland, General Obligation Refunding and 12/11 at 101.00 AA- 530,456 Improvement Bonds, Series 2001, 4.750%, 12/01/19 1,000 Howard County, Maryland, Consolidated Public Improvement 2/14 at 100.00 AAA 1,064,480 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 1,074,370 4,730 Montgomery County, Maryland, Consolidated General Obligation 10/11 at 101.00 AAA 5,011,384 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 1,063,840 2,820 5.250%, 12/01/21 - FGIC Insured 12/11 at 101.00 AAA 2,992,245 770 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 798,128 Series 2001, 5.000%, 7/01/24 - FSA Insured 800 Washington Suburban Sanitary District, Montgomery and 6/15 at 100.00 AAA 860,376 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 1,075,470 Prince George's Counties, Maryland, Water Supply Bonds, Series 2005, 5.000%, 6/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ 20,970 Total Tax Obligation/General 22,204,077 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 18.6% (12.3% OF TOTAL INVESTMENTS) 625 Annapolis, Maryland, Special Obligation Bonds, Park Place Project, 1/15 at 101.00 N/R 642,063 Series 2005A, 5.350%, 7/01/34 535 Anne Arundel County, Maryland, Tax Increment Financing Revenue No Opt. Call N/R 538,675 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+ 559,950 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+ 1,640,751 1,660 5.000%, 8/01/21 8/11 at 101.00 AA+ 1,721,885 500 Baltimore, Maryland, Project Revenue Bonds, Series 2006, 7/16 at 100.00 AAA 527,035 5.000%, 7/01/31 - AMBAC Insured 350 Hyattsville, Maryland, Special Obligation Bonds, University Town 7/14 at 102.00 N/R 369,614 Center Project, Series 2004, 5.750%, 7/01/34 1,000 Maryland Department of Transportation, Consolidated Transportation No Opt. Call AAA 1,113,000 Revenue Bonds, Series 2002, 5.500%, 2/01/16 1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,500,484 Bonds, Department of Transportation Headquarters Building, Series 2002, 5.375%, 6/01/19 1,000 Montgomery County, Maryland, Special Obligation Bonds, 7/12 at 101.00 AA 1,060,410 West Germantown Development District, Senior Series 2002A, 5.500%, 7/01/27 - RAAI Insured 36 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 270 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R $ 275,252 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 482,011 Victoria Falls Project, Series 2005, 5.250%, 7/01/35 1,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,134,270 Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 10,930 Total Tax Obligation/Limited 11,565,400 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 2.7% (1.8% 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 668,077 1,000 5.000%, 7/01/34 - AMBAC Insured 7/11 at 100.00 AAA 1,027,810 - ------------------------------------------------------------------------------------------------------------------------------------ 1,650 Total Transportation 1,695,887 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 18.7% (12.4% OF TOTAL INVESTMENTS) (4) 1,500 Baltimore County, Maryland, Consolidated General Obligation 8/12 at 100.00 AAA 1,567,530 Public Improvement Bonds, Series 2002, 5.000%, 8/01/18 (Pre-refunded 8/01/12) Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount St. Mary's College, Series 2001A: 100 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 105,766 100 5.800%, 9/01/30 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 105,896 1,500 Frederick County, Maryland, General Obligation Public Facilities 12/10 at 101.00 AAA 1,582,635 Bonds, Series 2000, 5.200%, 12/01/19 (Pre-refunded 12/01/10) Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Collington Episcopal Life Care Community Inc., Series 2001A: 31 6.750%, 4/01/20 (Pre-refunded 4/01/09) 4/09 at 100.00 N/R (4) 32,300 25 6.750%, 4/01/23 (Pre-refunded 4/01/11) 4/11 at 101.00 N/R (4) 27,480 1,260 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 1,335,310 Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 - AMBAC Insured (ETM) 1,175 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,321,711 Transportation Facilities Projects, First Series 1978, 6.800%, 7/01/16 (ETM) 3,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 3,190,859 Bonds, Series 2000A, 5.500%, 10/01/40 1,230 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 1,286,014 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 1,065,650 Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26 (Pre-refunded 7/01/10) - ------------------------------------------------------------------------------------------------------------------------------------ 10,921 Total U.S. Guaranteed 11,621,151 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 3.3% (2.2% OF TOTAL INVESTMENTS) 1,000 Guam Power Authority, Revenue Bonds, Series 1999A, 10/09 at 101.00 AAA 1,035,740 5.250%, 10/01/34 - MBIA Insured 1,000 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,008,670 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,000 Total Utilities 2,044,410 - ------------------------------------------------------------------------------------------------------------------------------------ 37 NZR Nuveen Maryland Dividend Advantage Municipal Fund 2 (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 0.6% (0.4% OF TOTAL INVESTMENTS) $ 355 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA $ 382,871 Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ $ 90,161 Total Investments (cost $91,526,983) - 151.6% 94,082,939 =============----------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (1.8)% (1,133,000) -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.8% 1,114,466 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.6)% (32,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 62,064,405 ==================================================================================================================== (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. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 38 NWI Nuveen Maryland Dividend Advantage Municipal Fund 3 Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 3.1% (2.1% OF TOTAL INVESTMENTS) $ 220 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call B- $ 219,712 Motors Corporation, Series 1993, 5.350%, 4/01/08 1,000 Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue 9/16 at 100.00 AAA 1,069,050 Bonds, Series 2006A, 5.250%, 9/01/39 - XLCA Insured 380 Baltimore, Maryland, Subordinate Lien Convention Center Hotel 9/16 at 100.00 Ba1 404,062 Revenue Bonds, Series 2006B, 5.875%, 9/01/39 700 Maryland Economic Development Corporation, Revenue Bonds, 12/16 at 100.00 N/R 703,948 Chesapeake Bay Hyatt Conference Center, Series 2006A, 5.000%, 12/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 2,300 Total Consumer Discretionary 2,396,772 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 3.5% (2.4% OF TOTAL INVESTMENTS) 2,620 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 2,741,830 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 12.7% (8.5% OF TOTAL INVESTMENTS) 225 Anne Arundel County, Maryland, Economic Development Revenue 9/12 at 102.00 A3 234,803 Bonds, Community College Project, Series 2002, 5.125%, 9/01/22 625 Frederick County, Maryland, Educational Facilities Revenue Bonds, 9/16 at 100.00 BBB- 665,019 Mount Saint Mary's College, Series 2006, 5.625%, 9/01/38 690 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 727,163 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- 650,369 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 1,033,930 Revenue Bonds, Johns Hopkins University, Series 2002A, 5.000%, 7/01/32 625 Maryland Industrial Development Financing Authority, Revenue 5/15 at 100.00 N/R 670,269 Bonds, Our Lady of Good Counsel High School, Series 2005A, 6.000%, 5/01/35 710 Montgomery County Revenue Authority, Maryland, Lease Revenue 5/15 at 100.00 A1 751,918 Bonds, Montgomery College Arts Center Project, Series 2005A, 5.000%, 5/01/18 1,000 Morgan State University, Maryland, Student Tuition and Fee 7/13 at 100.00 AAA 1,042,250 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 999,450 Bonds, Series 2001B, 4.625%, 4/01/21 1,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA 1,048,600 Bonds, Series 2003A, 5.000%, 4/01/19 800 University of Maryland, Auxiliary Facility and Tuition Revenue 10/16 at 100.00 AA 851,176 Bonds, Series 2006A, 5.000%, 10/01/22 1,150 Westminster, Maryland, Educational Facilities Revenue Bonds, 11/16 at 100.00 BBB+ 1,195,494 McDaniel College, Series 2006, 5.000%, 11/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 9,435 Total Education and Civic Organizations 9,870,441 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 22.8% (15.2% OF TOTAL INVESTMENTS) 700 Maryland Health and Higher Education Facilities Authority, 7/16 at 100.00 A 714,315 Revenue Bonds, University of Maryland Medical System, Series 2006, 5.000%, 7/01/31 39 NWI Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued) Portfolio of INVESTMENTS as of 5-31-07 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 $ 1,021,090 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 826,127 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 1,328,475 Revenue Bonds, Carroll County General Hospital, Series 2002, 5.800%, 7/01/32 870 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 893,708 Revenue Bonds, Civista Medical Center, Series 2005, 5.000%, 7/01/37 - RAAI Insured 885 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 Baa1 902,169 Revenue Bonds, Doctors Community Hospital, Series 2007A, 5.000%, 7/01/29 700 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 714,392 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+ 809,528 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- 1,026,840 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 Baa3 1,039,450 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 743,350 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 A3 941,175 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- 677,216 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 1,945,589 Revenue Bonds, Union Hospital of Cecil County, Series 2002, 5.625%, 7/01/32 2,100 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 2,197,440 Revenue Bonds, Western Maryland Health, Series 2006A, 5.000%, 7/01/34 - MBIA Insured (UB) 775 Maryland Health and Higher Educational Facilities Authority, 1/13 at 101.00 Baa2 820,694 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 7/07 at 100.00 B3 329,424 900 5.300%, 7/01/24 7/07 at 100.00 B3 785,223 - ------------------------------------------------------------------------------------------------------------------------------------ 17,225 Total Health Care 17,716,205 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 14.7% (9.8% OF TOTAL INVESTMENTS) 980 Maryland Community Development Administration, Housing 7/12 at 100.00 Aa2 981,921 Revenue Bonds, Series 2002B, 4.950%, 7/01/32 (Alternative Minimum Tax) 1,250 Maryland Economic Development Corporation, Senior Lien Student 10/13 at 100.00 B2 1,245,925 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 21,297 150 6.000%, 7/01/33 - ACA Insured 7/11 at 101.00 A 160,247 475 Maryland Economic Development Corporation, Student Housing 6/16 at 100.00 AAA 497,971 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 520,603 3,000 5.200%, 7/01/44 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 3,041,550 40 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY (continued) $ 4,860 Prince George's County Housing Authority, Maryland, 11/12 at 100.00 AAA $ 4,940,772 GNMA Collateralized Mortgage Revenue Bonds, Fairview and Hillside Projects, Series 2002A, 4.700%, 11/20/22 - ------------------------------------------------------------------------------------------------------------------------------------ 11,250 Total Housing/Multifamily 11,410,286 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 4.2% (2.8% OF TOTAL INVESTMENTS) 595 Maryland Community Development Administration, Department 9/15 at 100.00 Aa2 599,980 of Housing and Community Development, Residential Revenue Bonds, Series 2006F, 4.900%, 9/01/26 (Alternative Minimum Tax) 1,200 Maryland Community Development Administration, Department 3/16 at 100.00 Aa2 1,208,412 of Housing and Community Development, Residential Revenue Bonds, Series 2006I, 4.875%, 9/01/26 (Mandatory put 3/01/22) (Alternative Minimum Tax) 815 Maryland Community Development Administration, Department 9/16 at 100.00 Aa2 817,649 of Housing and Community Development, Residential Revenue Bonds, Series 2006L, 4.900%, 9/01/31 (Alternative Minimum Tax) 620 Maryland Community Development Administration, Housing and 3/17 at 100.00 Aa2 615,573 Community Development Residential Revenue Bonds, Series 2007D, 4.850%, 9/01/37 (WI/DD, Settling 6/20/07) (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 3,230 Total Housing/Single Family 3,241,614 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 2.0% (1.3% OF TOTAL INVESTMENTS) 510 Maryland Economic Development Corporation, Solid Waste 4/12 at 101.00 BBB 506,099 Disposal Revenue Bonds, Waste Management Inc., Series 2002, 4.600%, 4/01/16 (Alternative Minimum Tax) 1,000 Northeast Maryland Waste Disposal Authority, Baltimore, 1/09 at 101.00 BBB 1,007,690 Resource Recovery Revenue Bonds, RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 1,510 Total Industrials 1,513,789 - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 3.3% (2.2% OF TOTAL INVESTMENTS) 790 Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, 1/17 at 100.00 BBB+ 799,867 Series 2007A, 5.000%, 1/01/37 400 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 N/R 414,948 Revenue Bonds, Edenwald, Series 2006A, 5.400%, 1/01/31 Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, King Farm Presbyterian Community, Series 2007A: 280 5.000%, 1/01/17 No Opt. Call N/R 286,409 520 5.250%, 1/01/27 1/17 at 100.00 N/R 534,165 540 Maryland Health and Higher Educational Facilities Authority, 7/17 at 100.00 BBB+ 534,298 Revenue Bonds, Mercy Ridge Retirement Community, Series 2007, 4.750%, 7/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ 2,530 Total Long-Term Care 2,569,687 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 22.0% (14.7% OF TOTAL INVESTMENTS) 1,000 Annapolis, Maryland, General Obligation Public Improvement 4/12 at 101.00 AA 1,021,580 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 AAA 900,711 650 5.000%, 3/01/21 3/16 at 100.00 AAA 692,855 380 Carroll County, Maryland, Consolidated Public Improvement Bonds, 12/15 at 100.00 AA 409,910 Series 2005A, 5.000%, 12/01/16 1,260 Charles County, Maryland, Consolidated General Obligation Public 1/12 at 101.00 AA 1,294,486 Improvement Bonds, Series 2002, 4.400%, 1/15/16 500 Frederick County, Maryland, General Obligation Public Facilities No Opt. Call AA 547,420 Bonds, Series 2006, 5.000%, 11/01/20 245 Frederick County, Maryland, Special Obligation Bonds, Villages of 7/10 at 102.00 AA 260,188 Lake Linganore Community Development Authority, Series 2001A, 5.600%, 7/01/20 - RAAI Insured 41 NWI Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) Frederick, Maryland, General Obligation Bonds, Series 2005: $ 710 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA $ 761,724 535 5.000%, 8/01/17 - MBIA Insured 8/15 at 100.00 AAA 574,788 1,000 Maryland National Capital Park Planning Commission, 1/14 at 100.00 AA+ 1,059,420 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, 5.000%, 8/01/17 8/15 at 100.00 AAA 1,611,555 1,440 Montgomery County, Maryland, Consolidated General Obligation No Opt. Call AAA 1,559,189 Public Improvement Bonds, Series 2006, 5.000%, 5/01/16 1,000 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA+ 1,052,550 Consolidated Public Improvement Bonds, Series 2003A, 5.000%, 10/01/17 1,000 Prince George's County, Maryland, General Obligation No Opt. Call AA+ 1,050,260 Consolidated Public Improvement Bonds, Series 2004C, 5.000%, 12/01/11 1,000 St. Mary's County, Maryland, General Obligation Hospital Bonds, No Opt. Call AA 1,056,890 Series 2002, 5.000%, 10/01/12 1,000 Washington Suburban Sanitary District, Montgomery and No Opt. Call AAA 1,063,570 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 1,075,470 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 1,075,470 Prince George's Counties, Maryland, Water Supply Bonds, Series 2005, 5.000%, 6/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ 16,065 Total Tax Obligation/General 17,068,036 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 33.2% (22.1% OF TOTAL INVESTMENTS) 750 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 770,475 Project, Series 2005A, 5.350%, 7/01/34 1,000 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 1,056,510 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 632,442 5.000%, 7/01/31 - AMBAC Insured 450 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 475,218 Town Center Project, Series 2004, 5.750%, 7/01/34 5,000 Maryland Department of Transportation, Consolidated Transportation No Opt. Call AAA 5,564,999 Revenue Bonds, Series 2002, 5.500%, 2/01/16 2,200 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,254,802 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+ 474,327 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+ 3,114,328 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+ 1,535,276 1,620 5.000%, 6/15/23 6/13 at 100.00 AA+ 1,688,461 460 Prince George's County, Maryland, Special Obligation Bonds, 7/15 at 100.00 N/R 468,947 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 583,487 Victoria Falls Project, Series 2005, 5.250%, 7/01/35 1,200 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,361,124 Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured 42 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 Bonds, Series 2002G: $ 1,000 5.250%, 7/01/17 7/12 at 100.00 BBB- $ 1,044,550 1,205 5.250%, 7/01/20 7/12 at 100.00 BBB- 1,258,128 1,275 5.250%, 7/01/21 7/12 at 100.00 BBB- 1,330,029 1,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,094,330 Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 - AMBAC Insured 235 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB- 246,795 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 700 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 792,981 Transportation Authority, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 24,120 Total Tax Obligation/Limited 25,747,209 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 22.7% (15.1% OF TOTAL INVESTMENTS) (4) 10 Anne Arundel County, Maryland, General Obligation Bonds, 5/09 at 101.00 AAA 10,336 Consolidated General Improvements, Series 1999, 5.000%, 5/15/19 (Pre-refunded 5/15/09) Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount St. Mary's College, Series 2001A: 100 5.750%, 9/01/25 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 105,766 100 5.800%, 9/01/30 (Pre-refunded 3/01/10) 3/10 at 101.00 BBB- (4) 105,896 100 Frederick County, Maryland, General Obligation Public Facilities 7/09 at 101.00 AAA 103,993 Bonds, Series 1999, 5.250%, 7/01/17 (Pre-refunded 7/01/09) Frederick County, Maryland, General Obligation Public Facilities Bonds, Series 2002: 1,035 5.000%, 11/01/21 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 1,102,389 2,500 5.000%, 11/01/22 (Pre-refunded 11/01/12) 11/12 at 101.00 AA (4) 2,662,775 280 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R (4) 307,770 Revenue Bonds, Collington Episcopal Life Care Community Inc., Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11) 285 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 302,034 Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/17 - AMBAC Insured (ETM) 1,010 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,136,109 Transportation Facilities Projects, First Series 1978, 6.800%, 7/01/16 (ETM) 4,025 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 4,238,042 Series 2000HH, 5.250%, 7/01/29 (Pre-refunded 7/01/10) - FSA Insured 3,500 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 3,722,669 Bonds, Series 2000A, 5.500%, 10/01/40 700 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 Aaa 747,789 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 924,202 Series 2001, 5.125%, 7/01/30 (Pre-refunded 7/01/11) - FSA Insured 2,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/12 at 100.00 AA (4) 2,113,640 Bonds, Series 2002A, 5.125%, 4/01/22 (Pre-refunded 4/01/12) 25 Washington Suburban Sanitary District, Montgomery and 6/11 at 101.00 AAA 26,324 Prince George's Counties, Maryland, General Obligation Construction Bonds, Second Series 2001, 5.000%, 6/01/17 (Pre-refunded 6/01/11) - ------------------------------------------------------------------------------------------------------------------------------------ 16,550 Total U.S. Guaranteed 17,609,734 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 1.6% (1.1% OF TOTAL INVESTMENTS) 1,250 Maryland Energy Financing Administration, Revenue Bonds, 9/07 at 100.00 N/R 1,260,838 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 43 NWI Nuveen Maryland Dividend Advantage Municipal Fund 3 (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 4.0% (2.7% OF TOTAL INVESTMENTS) $ 2,570 Baltimore, Maryland, Revenue Refunding Bonds, Wastewater 7/12 at 100.00 AAA $ 2,676,501 Projects, Series 2002A, 5.125%, 7/01/42 - FGIC Insured 430 Maryland Water Quality Financing Administration, Revolving No Opt. Call AAA 463,759 Loan Fund Revenue Bonds, Series 2005A, 5.000%, 9/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 3,000 Total Water and Sewer 3,140,260 - ------------------------------------------------------------------------------------------------------------------------------------ $ 111,085 Total Investments (cost $114,131,178) - 149.8% 116,286,701 =============----------------------------------------------------------------------------------------------------------------------- Floating Rate Obligations - (1.8)% (1,400,000) -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.2% 1,752,984 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.2)% (39,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 77,639,685 ==================================================================================================================== (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. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (UB) Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions of SFAS No. 140. See accompanying notes to financial statements. 44 NPV Nuveen Virginia Premium Income Municipal Fund Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 3.4% (2.3% OF TOTAL INVESTMENTS) $ 4,640 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB $ 4,547,988 Settlement Asset Backed Bonds, Series 2007B1, 5.000%, 6/01/47 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 5.1% (3.4% OF TOTAL INVESTMENTS) 1,000 Prince William County Industrial Development Authority, Virginia, 10/13 at 101.00 A3 1,058,610 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 524,080 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- 735,196 Environmental Control Facilities Financing Authority, Higher Education Revenue Refunding Bonds, Ana G. Mendez University System, Series 2002, 5.375%, 12/01/21 475 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 507,918 Revenue Bonds, Series 2005, 5.000%, 6/01/18 2,120 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 2,182,349 Revenue Bonds, Public Higher Education Financing Program, Series 2001A, 5.000%, 9/01/26 1,635 Virginia Commonwealth University, Revenue Bonds, Series 2004A, 5/14 at 101.00 AAA 1,745,755 5.000%, 5/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ 6,430 Total Education and Civic Organizations 6,753,908 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 21.5% (14.5% OF TOTAL INVESTMENTS) 2,000 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A2 2,050,280 Hospital Revenue Bonds, Martha Jefferson Hospital, Series 2002, 5.250%, 10/01/35 4,850 Fairfax County Industrial Development Authority, Virginia, Hospital No Opt. Call AA+ 5,140,950 Revenue Refunding Bonds, Inova Health System, Series 1993A, 5.000%, 8/15/23 1,000 Fredericksburg Economic Development Authority, Virginia, No Opt. Call A3 1,065,530 Healthcare Revenue Bonds, Medicorp Health System, Series 2007, 5.250%, 6/15/23 1,250 Fredericksburg Industrial Development Authority, Virginia, Revenue 6/12 at 100.00 A3 1,271,038 Bonds, MediCorp Health System, Series 2002B, 5.125%, 6/15/33 1,000 Hanover County Industrial Development Authority, Virginia, Hospital No Opt. Call AAA 1,150,000 Revenue Bonds, Memorial Regional Medical Center, Series 1995, 6.375%, 8/15/18 - MBIA Insured 2,300 Harrisonburg Industrial Development Authority, Virginia, Hospital 8/16 at 100.00 AAA 2,404,282 Facilities Revenue Bonds, Rockingham Memorial Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured 1,500 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A- 1,576,035 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 1,796,805 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 1,545,810 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 4,865,567 Bonds, Series 1998, 5.125%, 7/01/23 - MBIA Insured 3,000 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 AAA 3,179,550 Revenue Bonds, Carilion Health System, Series 2002A, 5.500%, 7/01/19 - MBIA Insured 45 NPV Nuveen Virginia Premium Income Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (continued) $ 1,010 Stafford County Economic Development Authority, Virginia, Hospital 6/16 at 100.00 A3 $ 1,050,501 Facilities Revenue Bonds, MediCorp Health System, Series 2006, 5.250%, 6/15/31 1,425 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 AA- 1,481,843 Revenue Bonds, Winchester Medical Center, Series 2007, 5.125%, 1/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 27,085 Total Health Care 28,578,191 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 3.5% (2.3% OF TOTAL INVESTMENTS) 1,415 Arlington County Industrial Development Authority, Virginia, 5/10 at 100.00 Aaa 1,478,307 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 525,225 1,500 7.000%, 6/01/30 6/09 at 102.00 N/R 1,575,840 1,000 Lynchburg Redevelopment and Housing Authority, Virginia, Vistas 4/10 at 102.00 AAA 1,029,910 GNMA Mortgage-Backed Revenue Bonds, Series 2000A, 6.200%, 1/20/40 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 4,415 Total Housing/Multifamily 4,609,282 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 5.0% (3.4% OF TOTAL INVESTMENTS) 335 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 336,886 Securities Program Home Mortgage Revenue Bonds, Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax) 1,000 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 1,028,830 Bonds, Series 2001H-1, 5.350%, 7/01/31 - MBIA Insured 1,500 Virginia Housing Development Authority, Commonwealth Mortgage 1/15 at 100.00 AAA 1,479,240 Bonds, Series 2005C-C2, 4.750%, 10/01/32 (Alternative Minimum Tax) 3,900 Virginia Housing Development Authority, Commonwealth Mortgage 7/16 at 100.00 AAA 3,846,375 Bonds, Series 2007B, 4.750%, 7/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 6,735 Total Housing/Single Family 6,691,331 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 1.5% (1.0% OF TOTAL INVESTMENTS) 2,000 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 2,017,060 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 - 3.3% (2.2% OF TOTAL INVESTMENTS) 1,080 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 1,099,008 Residential Care Facilities Mortgage Revenue Bonds, Goodwin House, Inc., Series 2007A, 5.125%, 10/01/37 800 Fairfax County Economic Development Authority, Virginia, 10/16 at 100.00 BBB 796,232 Retirement Center Revenue Bonds, Greenspring Village, Series 2006A, 4.875%, 10/01/36 1,495 Henrico County Economic Development Authority, Virginia, 7/09 at 102.00 AAA 1,577,913 GNMA Mortgage-Backed Securities Program Assisted Living Revenue Bonds, Beth Sholom, Series 1999A, 5.900%, 7/20/29 Henrico County Economic Development Authority, Virginia, Residential Care Facility Revenue Bonds, Westminster Canterbury of Richmond, Series 2006: 100 5.000%, 10/01/27 10/11 at 103.00 BBB- 101,071 800 5.000%, 10/01/35 No Opt. Call BBB- 804,808 - ------------------------------------------------------------------------------------------------------------------------------------ 4,275 Total Long-Term Care 4,379,032 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 1.2% (0.8% OF TOTAL INVESTMENTS) 500 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 504,335 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation, Series 1998, 5.600%, 12/01/25 (Alternative Minimum Tax) (5) 46 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS (continued) $ 1,000 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 $ 1,008,860 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation Project, Series 1998, 5.650%, 12/01/25 (Alternative Minimum Tax) (5) - ------------------------------------------------------------------------------------------------------------------------------------ 1,500 Total Materials 1,513,195 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 21.8% (14.7% OF TOTAL INVESTMENTS) 1,500 Arlington County, Virginia, General Obligation Bonds, Series 2006, 8/16 at 100.00 AAA 1,609,920 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 1,960,558 2,060 5.000%, 6/01/23 6/13 at 100.00 AA 2,143,842 1,355 Harrisonburg, Virginia, General Obligation Bonds, Public Safety 7/12 at 101.00 AAA 1,424,661 and Steam Plant, Series 2002, 5.000%, 7/15/19 - FGIC Insured 1,390 Henrico County, Virginia, General Obligation Bonds, Series 2005, 7/15 at 100.00 AAA 1,495,904 5.000%, 7/15/16 2,105 Loudoun County, Virginia, General Obligation Bonds, Series 2006, 12/16 at 100.00 AAA 2,245,151 5.000%, 12/01/25 105 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 110,898 Bonds, Series 2002A, 5.250%, 5/01/22 1,435 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA 1,534,446 Bonds, Series 2005B, 5.000%, 6/01/18 1,185 Lynchburg, Virginia, General Obligation Bonds, Series 2004, 6/14 at 100.00 AA 1,252,284 5.000%, 6/01/21 1,515 Manassas Park, Virginia, General Obligation Bonds, Series 2007A, 4/17 at 100.00 AAA 1,602,340 5.000%, 4/01/29 (WI/DD, Settling 6/06/07) - CIFG Insured 1,350 Newport News, Virginia, General Obligation Bonds, Series 2004C, 5/14 at 101.00 AA 1,445,148 5.000%, 5/01/16 1,280 Portsmouth, Virginia, General Obligation Bonds, Series 2005A, No Opt. Call AAA 1,373,299 5.000%, 4/01/15 - MBIA Insured 1,480 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,558,499 5.000%, 7/15/21 - FSA Insured 1,500 Richmond, Virginia, General Obligation Bonds, Series 2005A, 7/15 at 100.00 AAA 1,603,620 5.000%, 7/15/17 - FSA Insured 1,430 Roanoke, Virginia, General Obligation Public Improvement Bonds, 10/12 at 101.00 AA 1,513,097 Series 2002A, 5.000%, 10/01/17 1,135 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call Aa3 1,220,091 5.000%, 12/01/15 2,155 Virginia Beach, Virginia, General Obligation Bonds, Series 2003B, 5/13 at 100.00 AA+ 2,273,288 5.000%, 5/01/15 1,100 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AA+ 1,170,015 5.000%, 1/15/20 1,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 1,487,472 Bonds, Series 2001, 5.000%, 6/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ 27,385 Total Tax Obligation/General 29,024,533 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 30.1% (20.2% 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 352,618 260 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 276,240 1,340 Culpeper Industrial Development Authority, Virginia, Lease 1/15 at 100.00 AAA 1,411,181 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 1,121,591 1,350 6.375%, 7/15/17 No Opt. Call N/R 1,484,568 1,000 Dinwiddie County Industrial Development Authority, Virginia, 2/14 at 100.00 AAA 1,064,510 Lease Revenue Bonds, Series 2004B, 5.125%, 2/15/16 - MBIA Insured 47 NPV Nuveen Virginia Premium Income Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 1,000 Fairfax County Economic Development Authority, Virginia, Lease 5/16 at 100.00 AA+ $ 1,068,500 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+ 2,405,657 2,165 5.000%, 6/01/22 6/13 at 101.00 AA+ 2,271,128 1,660 Front Royal and Warren County Industrial Development Authority, 4/14 at 100.00 AAA 1,747,449 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 1,344,625 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 2,042,191 County Facilities, Series 2005, 5.000%, 6/01/18 - AMBAC Insured 1,185 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 1,229,864 Revenue Bonds, Series 2002D, 5.000%, 7/01/32 - FSA Insured 2,000 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 2,268,540 Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured 5,000 Puerto Rico Infrastructure Financing Authority, Special Tax Revenue No Opt. Call AAA 950,300 Bonds, Series 2005A, 0.000%, 7/01/43 - AMBAC Insured 5,875 Puerto Rico Infrastructure Financing Authority, Special Tax Revenue No Opt. Call AAA 2,271,686 Bonds, Series 2005C, 0.000%, 7/01/28 - AMBAC Insured 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- 275,823 320 5.250%, 7/01/36 7/12 at 100.00 BBB- 331,888 1,110 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,118,902 Lease Revenue Bonds, School Facilities, Series 2003B, 4.375%, 8/01/20 - AMBAC Insured 3,235 Stafford County and Staunton Industrial Development Authority, 8/15 at 100.00 AAA 3,381,448 Virginia, Revenue Bonds, Virginia Municipal League and Virginia Association of Counties Finance Program, Series 2005C, 5.000%, 8/01/35 - MBIA Insured 1,600 Stafford County and Staunton Industrial Development Authority, 8/16 at 100.00 AAA 1,697,088 Virginia, Revenue Bonds, Virginia Municipal League and Virginia Association of Counties Finance Program, Series 2006A, 5.000%, 8/01/23 - MBIA Insured 1,400 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA 1,475,684 Bonds, Series 2005A,5.000%, 5/01/22 2,000 Virginia Public School Authority, School Financing Bonds, 8/10 at 101.00 AA+ 2,075,560 1997 Resolution, Series 2000B, 5.000%, 8/01/18 1,625 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 1,737,645 1997 Resolution, Series 2005C, 5.000%, 8/01/17 Virginia Resources Authority, Infrastructure Revenue Bonds, Pooled Loan Bond Program, Series 2000B: 95 5.500%, 5/01/20 - FSA Insured 5/10 at 101.00 AAA 99,985 550 5.500%, 5/01/30 - FSA Insured 5/10 at 101.00 AAA 577,533 1,740 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/11 at 101.00 AA 1,812,575 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+ 2,128,840 U.S. Route 58 Corridor Development Program, Series 2004B, 5.000%, 5/15/15 - ------------------------------------------------------------------------------------------------------------------------------------ 45,645 Total Tax Obligation/Limited 40,023,619 - ------------------------------------------------------------------------------------------------------------------------------------ 48 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 8.7% (5.8% OF TOTAL INVESTMENTS) $ 1,440 Metropolitan Washington D.C. Airports Authority, Airport System 10/16 at 100.00 AAA $ 1,494,288 Revenue Bonds, Series 2006, 5.000%, 10/01/36 - FGIC Insured (Alternative Minimum Tax) 4,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 4,118,919 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 1,052,250 5.000%, 2/01/23 - MBIA Insured 2,500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA 2,790,025 Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 - FGIC Insured 2,000 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 2,076,060 Bonds, Series 2001A, 5.250%, 8/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ 10,940 Total Transportation 11,531,542 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 28.6% (19.2% OF TOTAL INVESTMENTS) (4) 3,500 Alexandria Industrial Development Authority, Virginia, Fixed Rate 10/10 at 101.00 AAA 3,757,040 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 Bonds, No Opt. Call AAA 818,025 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 985,995 200 5.000%, 4/01/27 (Pre-refunded 4/01/12) 4/12 at 100.00 AAA 209,910 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 643,860 2,000 6.125%, 6/15/29 (Pre-refunded 6/15/10) at 101.00 AAA 2,146,200 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) 412,924 800 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 884,504 755 Metropolitan District of Columbia Airports Authority, Virginia, 10/07 at 101.00 AA- (4) 766,423 Airport System Revenue Bonds, Series 1997A, 5.375%, 10/01/23 (Pre-refunded 10/01/07) Newport News, Virginia, General Obligation Bonds, General Improvement and Water Projects, Series 2002A: 2,770 5.000%, 7/01/19 (Pre-refunded 7/01/13) 7/13 at 100.00 AA (4) 2,932,738 1,000 5.000%, 7/01/20 (Pre-refunded 7/01/13) 7/13 at 100.00 AA (4) 1,058,750 1,400 Northern Mariana Islands, General Obligation Bonds, Series 2000A, 6/10 at 100.00 AAA 1,489,208 6.000%, 6/01/20 (Pre-refunded 6/01/10) - ACA Insured 815 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 Aaa 859,222 Revenue Bonds, Series 2002D, 5.000%, 7/01/32 (Pre-refunded 7/01/12) - FSA Insured 2,500 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 2,659,050 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) 780,849 880 5.250%, 7/01/36 (Pre-refunded 7/01/12) 7/12 at 100.00 BBB- (4) 934,894 845 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 870,325 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded 7/01/10) 3,500 Richmond, Virginia, Public Utility Revenue Refunding Bonds, 1/08 at 101.00 AAA 3,565,450 Series 1998A, 5.125%, 1/15/28 (Pre-refunded 1/15/08) - FGIC Insured Richmond, Virginia, Public Utility Revenue Refunding Bonds, Series 2002: 750 5.000%, 1/15/27 (Pre-refunded 1/15/12) - FSA Insured 1/12 at 100.00 AAA 785,685 1,700 5.000%, 1/15/33 (Pre-refunded 1/15/12) - FSA Insured 1/12 at 100.00 AAA 1,780,886 49 NPV Nuveen Virginia Premium Income Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED (4) (continued) $ 490 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (4) $ 551,230 Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%, 7/15/21 (Pre-refunded 7/15/11) Tobacco Settlement Financing Corporation of Virginia, Tobacco Settlement Asset-Backed Bonds, Series 2005: 1,575 5.250%, 6/01/19 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 1,640,174 3,850 5.500%, 6/01/26 (Pre-refunded 6/01/15) 6/15 at 100.00 AAA 4,184,641 2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes Loan 10/10 at 101.00 BBB+ (4) 2,179,500 Note, Series 1999A, 6.500%, 10/01/24 (Pre-refunded 10/01/10) 1,000 Virginia College Building Authority, Educational Facilities Revenue 4/10 at 101.00 A+ (4) 1,065,690 Bonds, Hampton University, Series 2000, 6.000%, 4/01/20 (Pre-refunded 4/01/10) - ------------------------------------------------------------------------------------------------------------------------------------ 35,715 Total U.S. Guaranteed 37,963,173 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 7.1% (4.8% 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 1,828,630 1,800 5.250%, 7/15/15 - MBIA Insured 7/13 at 100.00 AAA 1,927,080 2,775 5.250%, 7/15/23 - MBIA Insured 7/13 at 100.00 AAA 2,944,553 2,500 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 2,777,000 Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 8,780 Total Utilities 9,477,263 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 8.0% (5.4% 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 111,638 800 5.000%, 4/01/27 4/12 at 100.00 AAA 826,272 1,770 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 1,820,587 Refunding Bonds, Series 1999, 5.000%, 5/01/28 1,000 Loudoun County Sanitation Authority, Virginia, Water and Sewerage 1/15 at 100.00 AA+ 1,049,140 System Revenue Bonds, Series 2004, 5.000%, 1/01/26 Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001: 1,310 5.000%, 11/01/21 - FGIC Insured 11/11 at 100.00 AAA 1,360,632 1,380 5.000%, 11/01/22 - FGIC Insured 11/11 at 100.00 AAA 1,430,232 2,250 Virginia Beach, Virginia, Storm Water Utility Revenue Bonds, 9/10 at 101.00 Aa3 2,410,470 Series 2000, 6.000%, 9/01/24 1,660 Virginia Resources Authority, Clean Water State Revolving Fund 10/17 at 100.00 AAA 1,649,293 Revenue Bonds, Series 2007, Residuals 1006, 5.397%, 10/01/29 (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 10,275 Total Water and Sewer 10,658,264 - ------------------------------------------------------------------------------------------------------------------------------------ $ 195,820 Total Investments (cost $191,342,034) - 148.8% 197,768,381 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - (0.8)% (1,068,345) -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.0)% (63,800,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 132,900,036 ==================================================================================================================== 50 FORWARD SWAPS OUTSTANDING AT MAY 31, 2007: FUND FIXED RATE UNREALIZED NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION) - ------------------------------------------------------------------------------------------------------------------------------------ JPMorgan $1,250,000 Pay 3-Month USD-LIBOR 5.388% Semi-Annually 4/25/08 4/25/35 $(39,197) ==================================================================================================================================== USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate) The Fund may invest in "zero coupon" securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the portfolio with a 0.00% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. (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 formal 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. (6) 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. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. See accompanying notes to financial statements. 51 NGB Nuveen Virginia Dividend Advantage Municipal Fund Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 6.7% (4.5% OF TOTAL INVESTMENTS) Guam Economic Development Authority, Tobacco Settlement Asset-Backed Bonds, Series 2001A: $ 65 5.000%, 5/15/22 5/11 at 100.00 Baa3 $ 65,788 850 5.400%, 5/15/31 5/11 at 100.00 Baa3 874,939 1,660 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB 1,627,082 Settlement Asset Backed Bonds, Series 2007B1, 5.000%, 6/01/47 715 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB 552,774 Settlement Asset-Backed Bonds, Series 2007B2, 0.000%, 6/01/46 - ------------------------------------------------------------------------------------------------------------------------------------ 3,290 Total Consumer Staples 3,120,583 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 6.6% (4.5% OF TOTAL INVESTMENTS) 500 Danville Industrial Development Authority, Virginia, Educational 3/11 at 102.00 N/R 515,070 Facilities Revenue Bonds, Averett University, Series 2001, 6.000%, 3/15/22 500 Prince William County Industrial Development Authority, Virginia, 10/13 at 101.00 A3 529,305 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 890,936 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- 163,813 320 5.375%, 2/01/29 2/09 at 101.00 BBB- 326,803 160 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 171,088 Revenue Bonds, Series 2005, 5.000%, 6/01/18 500 Virginia College Building Authority, Educational Facilities Revenue 7/08 at 101.00 AA 508,895 Refunding Bonds, Marymount University, Series 1998, 5.100%, 7/01/18 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ 2,990 Total Education and Civic Organizations 3,105,910 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 13.0% (8.8% OF TOTAL INVESTMENTS) 100 Fairfax County Industrial Development Authority, Virginia, Hospital No Opt. Call AA+ 105,999 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 1,050,480 Hospital Revenue Bonds, Fauquier Hospital, Series 2002, 5.250%, 10/01/25 - RAAI Insured 500 Fredericksburg Economic Development Authority, Virginia, No Opt. Call A3 532,765 Healthcare Revenue Bonds, Medicorp Health System, Series 2007, 5.250%, 6/15/23 500 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 508,415 Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%, 6/15/33 820 Harrisonburg Industrial Development Authority, Virginia, Hospital 8/16 at 100.00 AAA 857,179 Facilities Revenue Bonds, Rockingham Memorial Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured 500 Henrico County Economic Development Authority, Virginia, Revenue 11/12 at 100.00 A- 525,345 Bonds, Bon Secours Health System Inc., Series 2002A, 5.600%, 11/15/30 525 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 541,034 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 856,632 Revenue Refunding and Improvement Bonds, Norton Community Hospital, Series 2001, 6.000%, 12/01/22 - ACA Insured 52 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (continued) $ 360 Stafford County Economic Development Authority, Virginia, 6/16 at 100.00 A3 $ 374,436 Hospital Facilities Revenue Bonds, MediCorp Health System, Series 2006, 5.250%, 6/15/31 715 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 AA- 743,521 Revenue Bonds, Winchester Medical Center, Series 2007, 5.125%, 1/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 5,820 Total Health Care 6,095,806 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 4.4% (3.0% OF TOTAL INVESTMENTS) 1,000 Arlington County Industrial Development Authority, Virginia, 11/11 at 102.00 AAA 1,031,960 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+ 1,028,470 Series 2000G, 5.625%, 10/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 2,000 Total Housing/Multifamily 2,060,430 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 6.4% (4.3% OF TOTAL INVESTMENTS) 1,000 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 1,028,830 Bonds, Series 2001H-1, 5.350%, 7/01/31 - MBIA Insured 600 Virginia Housing Development Authority, Commonwealth Mortgage 1/15 at 100.00 AAA 591,696 Bonds, Series 2005C-C2, 4.750%, 10/01/32 (Alternative Minimum Tax) 1,400 Virginia Housing Development Authority, Commonwealth Mortgage 7/16 at 100.00 AAA 1,380,750 Bonds, Series 2007B, 4.750%, 7/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 3,000 Total Housing/Single Family 3,001,276 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 0.1% (0.1% OF TOTAL INVESTMENTS) 50 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 50,427 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 - 12.5% (8.4% OF TOTAL INVESTMENTS) 700 Albemarle County Industrial Development Authority, Virginia, 1/17 at 100.00 N/R 695,653 Residential Care Facilities Mortgage Revenue Bonds, Westminster-Cantebury of the Blue Ridge, Series 2007, 5.000%, 1/01/31 350 Chesterfield County Health Center Commission, Virginia, Mortgage 12/15 at 100.00 N/R 355,121 Revenue Bonds, Lucy Corr Village, Series 2005, 5.625%, 12/01/39 400 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 407,040 Residential Care Facilities Mortgage Revenue Bonds, Goodwin House, Inc., Series 2007A, 5.125%, 10/01/37 500 Fairfax County Economic Development Authority, Virginia, 10/16 at 100.00 BBB 490,970 Retirement Center Revenue Bonds, Greenspring Village, Series 2006A, 4.750%, 10/01/26 350 Henrico County Economic Development Authority, Virginia, No Opt. Call BBB- 352,104 Residential Care Facility Revenue Bonds, Westminster Canterbury of Richmond, Series 2006, 5.000%, 10/01/35 700 Industrial Development Authority of the County of Prince William, 1/17 at 100.00 N/R 713,510 Virginia, Residential Care Facility Revenue Bonds, Westminster at Lake, First Mortgage, Series 2006, 5.125%, 1/01/26 650 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 689,618 Residential Care Facility First Mortgage Revenue Refunding Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%, 3/01/23 440 Lynchburg Industrial Development Authority, Virginia, Residential 7/17 at 100.00 N/R 443,102 Care Revenue Bonds, Westminster-Canterbury, Series 2007, 5.000%, 7/01/31 830 Roanoke Industrial Development Authority, Virginia, Residential 12/16 at 100.00 N/R 820,140 Revenue Bonds, Virginia Lutheran Homes Incorporated, Series 2006, 5.000%, 12/01/39 350 Suffolk Industrial Development Authority, Virginia, Retirement 9/16 at 100.00 N/R 358,141 Facilities First Mortgage Revenue Bonds, Lake Prince Center, Series 2006, 5.300%, 9/01/31 53 NGB Nuveen Virginia Dividend Advantage Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE (continued) $ 350 Virginia Beach Development Authority, Virginia, Residential Care 11/15 at 100.00 N/R $ 354,785 Facility Mortgage Revenue Bonds, Westminster Canterbury on Chesapeake Bay, Series 2005, 5.000%, 11/01/22 175 Winchester Industrial Development Authority, Virginia, Residential 1/15 at 100.00 N/R 178,428 Care Facility Revenue Bonds, Westminster-Canterbury of Winchester Inc., Series 2005A, 5.200%, 1/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ 5,795 Total Long-Term Care 5,858,612 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 1.7% (1.1% OF TOTAL INVESTMENTS) 100 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 100,867 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 20,813 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 221,949 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, Environmental No Opt. Call CCC+ 503,375 Improvement Revenue Bonds, Smurfit Stone Container Corporation, Series 2005, 5.250%, 6/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 840 Total Materials 847,004 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 24.4% (16.4% OF TOTAL INVESTMENTS) 600 Arlington County, Virginia, General Obligation Bonds, Series 2006, 8/16 at 100.00 AAA 643,968 5.000%, 8/01/20 500 Henrico County, Virginia, General Obligation Bonds, Series 2005, 7/15 at 100.00 AAA 538,095 5.000%, 7/15/16 3,310 Leesburg, Virginia, General Obligation Public Improvement Bonds, 1/11 at 101.00 AAA 3,456,431 Series 2000, 5.125%, 1/15/21 - FGIC Insured 700 Loudoun County, Virginia, General Obligation Bonds, Series 2006, 12/16 at 100.00 AAA 746,606 5.000%, 12/01/25 500 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA 534,650 Bonds, Series 2005B, 5.000%, 6/01/18 535 Manassas Park, Virginia, General Obligation Bonds, Series 2007A, 4/17 at 100.00 AAA 565,843 5.000%, 4/01/29 (WI/DD, Settling 6/06/07) - CIFG Insured 845 Newport News, Virginia, General Obligation Bonds, Series 2004C, 5/14 at 101.00 AA 904,556 5.000%, 5/01/16 620 Richmond, Virginia, General Obligation Bonds, Series 2005A, 7/15 at 100.00 AAA 662,830 5.000%, 7/15/17 - FSA Insured 400 Suffolk, Virginia, General Obligation Bonds, Series 2005, No Opt. Call Aa3 429,988 5.000%, 12/01/15 400 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AA+ 425,460 5.000%, 1/15/20 2,425 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 2,531,312 Bonds, Series 2001, 5.000%, 6/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ 10,835 Total Tax Obligation/General 11,439,739 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 19.2% (12.9% OF TOTAL INVESTMENTS) 100 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 101,341 Assessment Bonds, Series 2003A, 6.750%, 3/01/22 500 Broad Street Community Development Authority, Virginia, Revenue 6/13 at 102.00 N/R 564,180 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 126,311 95 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 100,934 1,000 Culpeper Industrial Development Authority, Virginia, Lease Revenue 1/15 at 100.00 AAA 1,049,140 Bonds, School Facilities Project, Series 2005, 5.000%, 1/01/22 - MBIA Insured 54 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 500 Fairfax County Economic Development Authority, Virginia, Lease 5/16 at 100.00 AA+ $ 534,250 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 611,053 County Facilities, Series 2005, 5.000%, 6/01/20 - AMBAC Insured 700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 793,989 Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured 3,000 Puerto Rico Infrastructure Financing Authority, Special Tax Revenue No Opt. Call AAA 1,102,440 Bonds, Series 2005A, 0.000%, 7/01/29 - AMBAC Insured 1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,051,400 Lease Revenue Bonds, School Facilities, Series 2003B, 5.125%, 8/01/23 - AMBAC Insured 600 Stafford County and Staunton Industrial Development Authority, 8/16 at 100.00 AAA 636,408 Virginia, Revenue Bonds, Virginia Municipal League and Virginia Association of Counties Finance Program, Series 2006A, 5.000%, 8/01/23 - MBIA Insured 960 Virgin Islands Public Finance Authority, Gross Receipts Taxes Loan 10/10 at 101.00 BBB+ 1,036,186 Note, Series 1999A, 6.375%, 10/01/19 500 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA 527,030 Bonds, Series 2005A, 5.000%, 5/01/22 350 Virginia Gateway Community Development Authority, Prince William 3/13 at 102.00 N/R 381,969 County, Special Assessment Bonds, Series 2003, 6.375%, 3/01/30 345 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 368,915 1997 Resolution, Series 2005C, 5.000%, 8/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ 10,350 Total Tax Obligation/Limited 8,985,546 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 24.2% (16.3% OF TOTAL INVESTMENTS) 1,000 Capital Region Airport Authority, Richmond, Virginia, Revenue 7/15 at 100.00 AAA 1,057,830 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 1,160,050 General Resolution Revenue Refunding Bonds, Series 1998, 5.500%, 7/01/25 - MBIA Insured 3,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AAA 3,178,530 Revenue Bonds, Series 2001A, 5.500%, 10/01/27 - MBIA Insured (Alternative Minimum Tax) 250 Metropolitan Washington D.C. Airports Authority, Airport System 10/11 at 101.00 AAA 259,030 Revenue Bonds, Series 2001B, 5.000%, 10/01/21 - MBIA Insured 510 Metropolitan Washington D.C. Airports Authority, Airport System 10/16 at 100.00 AAA 529,227 Revenue Bonds, Series 2006, 5.000%, 10/01/36 - FGIC Insured (Alternative Minimum Tax) 1,500 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 1,544,595 Series 2001A, 5.125%, 7/01/31 - FGIC Insured 500 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 526,125 5.000%, 2/01/23 - MBIA Insured 500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA 558,005 Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 - FGIC Insured 1,225 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,271,587 Bonds, Series 2001A, 5.250%, 8/01/23 1,250 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,276,013 Bonds, Series 2001B, 5.125%, 8/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 10,735 Total Transportation 11,360,992 - ------------------------------------------------------------------------------------------------------------------------------------ 55 NGB Nuveen Virginia Dividend Advantage Municipal Fund (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 21.3% (14.3% OF TOTAL INVESTMENTS) (4) $ 500 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R (4) $ 546,615 Residential Care Facility Revenue Bonds, Westminster Canterbury of the Blue Ridge First Mortgage, Series 2001, 6.200%, 1/01/31 (Pre-refunded 1/01/12) 1,000 Bristol, Virginia, Utility System Revenue Refunding Bonds, No Opt. Call AAA 1,068,660 Series 2001, 5.000%, 7/15/21 - FSA Insured (ETM) 425 Loudoun County Industrial Development Authority, Virginia, 6/12 at 101.00 BBB (4) 467,980 Hospital Revenue Bonds, Loudoun Hospital Center, Series 2002A, 6.000%, 6/01/22 (Pre-refunded 6/01/12) 320 Northern Mariana Islands, General Obligation Bonds, Series 2000A, 6/10 at 100.00 AAA 340,390 6.000%, 6/01/20 (Pre-refunded 6/01/10) - ACA Insured 200 Pocahontas Parkway Association, Virginia, Senior Lien Revenue No Opt. Call AAA 200,592 Bonds, Route 895 Connector Toll Road, Series 1998A, 5.250%, 8/15/07 (ETM) 1,500 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 1,596,405 Bonds, Series 2000A, 5.500%, 10/01/32 1,500 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 1,595,430 Bonds, Series 2000A, 5.500%, 10/01/40 340 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 350,190 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded 7/01/10) 500 Richmond, Virginia, Public Utility Revenue Refunding Bonds, 1/12 at 100.00 AAA 523,790 Series 2002, 5.000%, 1/15/27 (Pre-refunded 1/15/12) - FSA Insured 280 Rockbridge County Industrial Development Authority, Virginia, No Opt. Call B2 (4) 293,602 Horse Center Revenue Refunding Bonds, Series 2001B, 6.125%, 7/15/11 (ETM) 980 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (4) 1,102,461 Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%, 7/15/21 (Pre-refunded 7/15/11) Tobacco Settlement Financing Corporation of Virginia, Tobacco Settlement Asset-Backed Bonds, Series 2005: 550 5.250%, 6/01/19 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 572,759 725 5.500%, 6/01/26 (Pre-refunded 6/01/15) 6/15 at 100.00 AAA 788,017 500 Virginia College Building Authority, Educational Facilities Revenue 2/12 at 100.00 AA+ (4) 523,995 Bonds, 21st Century College Program, Series 2002A, 5.000%, 2/01/22 (Pre-refunded 2/01/12) - ------------------------------------------------------------------------------------------------------------------------------------ 9,320 Total U.S. Guaranteed 9,970,886 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 2.3% (1.6% OF TOTAL INVESTMENTS) 1,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 1,110,800 Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 56 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 5.7% (3.8% OF TOTAL INVESTMENTS) $ 2,000 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ $ 2,062,260 Refunding Bonds, Series 1999, 5.000%, 5/01/22 595 Virginia Resources Authority, Clean Water State Revolving Fund 10/17 at 100.00 AAA 591,162 Revenue Bonds, Series 2007, Residuals 1006, 5.397%, 10/01/29 (IF) - ------------------------------------------------------------------------------------------------------------------------------------ 2,595 Total Water and Sewer 2,653,422 - ------------------------------------------------------------------------------------------------------------------------------------ $ 68,620 Total Investments (cost $67,515,636) - 148.5% 69,661,433 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.7% 1,246,453 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.2)% (24,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 46,907,886 ==================================================================================================================== The Fund may invest in "zero coupon" securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the portfolio with a 0.00% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. (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 formal 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. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. See accompanying notes to financial statements. 57 NNB Nuveen Virginia Dividend Advantage Municipal Fund 2 Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 4.8% (3.2% OF TOTAL INVESTMENTS) $ 3,100 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB $ 3,038,527 Settlement Asset Backed Bonds, Series 2007B1, 5.000%, 6/01/47 1,430 Tobacco Settlement Financing Corporation of Virginia, Tobacco 6/17 at 100.00 BBB 1,105,547 Settlement Asset-Backed Bonds, Series 2007B2, 0.000%, 6/01/46 - ------------------------------------------------------------------------------------------------------------------------------------ 4,530 Total Consumer Staples 4,144,074 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 7.0% (4.7% OF TOTAL INVESTMENTS) 1,000 Fairfax County Economic Development Authority, Virginia, Revenue 9/09 at 101.00 Aaa 1,037,950 Bonds, National Wildlife Federation, Series 1999, 5.375%, 9/01/29 - MBIA Insured 1,000 Prince William County Industrial Development Authority, Virginia, 10/13 at 101.00 A3 1,058,610 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- 1,575,420 Environmental Control Facilities Financing Authority, Higher Education Revenue Refunding Bonds, Ana G. Mendez University System, Series 2002, 5.375%, 12/01/21 275 The Rector and Visitors of the University of Virginia, General 6/15 at 100.00 AAA 294,058 Revenue Bonds, Series 2005, 5.000%, 6/01/18 2,000 Winchester Industrial Development Authority, Virginia, Educational 10/08 at 102.00 AAA 2,069,100 Facilities First Mortgage Revenue Bonds, Shenandoah University, Series 1998, 5.250%, 10/01/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ 5,775 Total Education and Civic Organizations 6,035,138 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 21.0% (14.1% OF TOTAL INVESTMENTS) 1,500 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A2 1,537,710 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 3,151,440 Hospital Revenue Bonds, Fauquier Hospital, Series 2002, 5.250%, 10/01/25 - RAAI Insured 1,000 Fredericksburg Economic Development Authority, Virginia, No Opt. Call A3 1,065,530 Healthcare Revenue Bonds, Medicorp Health System, Series 2007, 5.250%, 6/15/23 675 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 686,360 Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%, 6/15/33 1,500 Harrisonburg Industrial Development Authority, Virginia, Hospital 8/16 at 100.00 AAA 1,568,010 Facilities Revenue Bonds, Rockingham Memorial Hospital, Series 2006, 5.000%, 8/15/31 - AMBAC Insured 1,000 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,050,690 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 1,190,274 Revenue Bonds, Prince William Hospital, Series 2002, 5.250%, 4/01/33 1,200 Norton Industrial Development Authority, Virginia, Hospital Revenue 12/11 at 101.00 A 1,284,948 Refunding and Improvement Bonds, Norton Community Hospital, Series 2001, 6.000%, 12/01/22 - ACA Insured 1,000 Prince William County Industrial Development Authority, Virginia, 10/08 at 102.00 Aaa 1,025,370 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 4,148,412 Revenue Bonds, Carilion Health System, Series 2002A, 5.500%, 7/01/20 - MBIA Insured 58 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE (continued) $ 655 Stafford County Economic Development Authority, Virginia, 6/16 at 100.00 A3 $ 681,266 Hospital Facilities Revenue Bonds, MediCorp Health System, Series 2006, 5.250%, 6/15/31 715 Winchester Industrial Development Authority, Virginia, Hospital 1/17 at 100.00 AA- 743,521 Revenue Bonds, Winchester Medical Center, Series 2007, 5.125%, 1/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ 17,315 Total Health Care 18,133,531 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 12.5% (8.4% OF TOTAL INVESTMENTS) 7,485 Virginia Housing Development Authority, Commonwealth Mortgage 7/11 at 100.00 AAA 7,700,791 Bonds, Series 2001H-1, 5.350%, 7/01/31 - MBIA Insured 500 Virginia Housing Development Authority, Commonwealth Mortgage 1/15 at 100.00 AAA 493,080 Bonds, Series 2005C-C2, 4.750%, 10/01/32 (Alternative Minimum Tax) 2,600 Virginia Housing Development Authority, Commonwealth Mortgage 7/16 at 100.00 AAA 2,564,250 Bonds, Series 2007B, 4.750%, 7/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ 10,585 Total Housing/Single Family 10,758,121 - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 12.3% (8.3% OF TOTAL INVESTMENTS) 1,300 Albemarle County Industrial Development Authority, Virginia, 1/17 at 100.00 N/R 1,291,927 Residential Care Facilities Mortgage Revenue Bonds, Westminster-Cantebury of the Blue Ridge, Series 2007, 5.000%, 1/01/31 650 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 659,510 Mortgage Revenue Bonds, Lucy Corr Village, Series 2005, 5.625%, 12/01/39 720 Fairfax County Economic Development Authority, Virginia, 10/17 at 100.00 N/R 732,672 Residential Care Facilities Mortgage Revenue Bonds, Goodwin House, Inc., Series 2007A, 5.125%, 10/01/37 500 Fairfax County Economic Development Authority, Virginia, 10/16 at 100.00 BBB 490,970 Retirement Center Revenue Bonds, Greenspring Village, Series 2006A, 4.750%, 10/01/26 600 Henrico County Economic Development Authority, Virginia, No Opt. Call BBB- 603,606 Residential Care Facility Revenue Bonds, Westminster Canterbury of Richmond, Series 2006, 5.000%, 10/01/35 1,300 Industrial Development Authority of the County of Prince William, 1/17 at 100.00 N/R 1,325,090 Virginia, Residential Care Facility Revenue Bonds, Westminster at Lake, First Mortgage, Series 2006, 5.125%, 1/01/26 1,350 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 1,432,283 Residential Care Facility First Mortgage Revenue Refunding Bonds, Williamsburg Landing Inc., Series 2003A, 6.000%, 3/01/23 810 Lynchburg Industrial Development Authority, Virginia, Residential 7/17 at 100.00 N/R 815,711 Care Revenue Bonds, Westminster-Canterbury, Series 2007, 5.000%, 7/01/31 1,670 Roanoke Industrial Development Authority, Virginia, Residential 12/16 at 100.00 N/R 1,650,160 Revenue Bonds, Virginia Lutheran Homes Incorporated, Series 2006, 5.000%, 12/01/39 650 Suffolk Industrial Development Authority, Virginia, Retirement 9/16 at 100.00 N/R 665,119 Facilities First Mortgage Revenue Bonds, Lake Prince Center, Series 2006, 5.300%, 9/01/31 650 Virginia Beach Development Authority, Virginia, Residential Care 11/15 at 100.00 N/R 658,886 Facility Mortgage Revenue Bonds, Westminster Canterbury on Chesapeake Bay, Series 2005, 5.000%, 11/01/22 325 Winchester Industrial Development Authority, Virginia, Residential 1/15 at 100.00 N/R 331,367 Care Facility Revenue Bonds, Westminster-Canterbury of Winchester Inc., Series 2005A, 5.200%, 1/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ 10,525 Total Long-Term Care 10,657,301 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 1.8% (1.2% OF TOTAL INVESTMENTS) 165 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 B2 166,431 Industrial Development Revenue Refunding Bonds, Nekoosa Packaging Corporation, Series 1998, 5.600%, 12/01/25 (Alternative Minimum Tax) (5) 59 NNB Nuveen Virginia Dividend Advantage Municipal Fund 2 (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS (continued) $ 460 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 B2 $ 464,076 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, Environmental No Opt. Call CCC+ 1,006,750 Improvement Revenue Bonds, Smurfit Stone Container Corporation, Series 2005, 5.250%, 6/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ 1,625 Total Materials 1,637,257 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 25.0% (16.7% OF TOTAL INVESTMENTS) 500 Arlington County, Virginia, General Obligation Bonds, Series 2006, 8/16 at 100.00 AAA 536,640 5.000%, 8/01/20 1,750 Chesapeake, Virginia, General Obligation Bonds, Series 2001, 12/11 at 100.00 AA 1,870,505 5.500%, 12/01/16 1,000 Loudoun County, Virginia, General Obligation Bonds, Series 2006, 12/16 at 100.00 AAA 1,066,580 5.000%, 12/01/25 1,730 Loudoun County, Virginia, General Obligation Public Improvement 11/11 at 101.00 AAA 1,774,928 Bonds, Series 2001C, 4.500%, 11/01/17 95 Loudoun County, Virginia, General Obligation Public Improvement 5/12 at 100.00 AAA 100,336 Bonds, Series 2002A, 5.250%, 5/01/22 1,000 Loudoun County, Virginia, General Obligation Public Improvement 6/15 at 100.00 AAA 1,069,300 Bonds, Series 2005B, 5.000%, 6/01/18 1,000 Manassas Park, Virginia, General Obligation Bonds, Series 2007A, 4/17 at 100.00 AAA 1,057,650 5.000%, 4/01/29 (WI/DD, Settling 6/06/07) - CIFG Insured 40 Portsmouth, Virginia, General Obligation Public Utility Refunding 6/08 at 100.00 AAA 40,424 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 683,628 1,000 5.000%, 1/15/27 - AMBAC Insured 1/11 at 101.00 AAA 1,032,400 1,000 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,053,040 5.000%, 7/15/21 - FSA Insured Roanoke, Virginia, General Obligation Public Improvement Bonds, Series 2002A: 2,400 5.000%, 10/01/18 10/12 at 101.00 AA 2,537,688 2,435 5.000%, 10/01/19 10/12 at 101.00 AA 2,570,605 1,280 Roanoke, Virginia, General Obligation Public Improvement Bonds, 10/12 at 101.00 AAA 1,352,755 Series 2002B, 5.000%, 10/01/15 - FGIC Insured (Alternative Minimum Tax) 1,000 Staunton, Virginia, General Obligation Bonds, Series 2004, 2/14 at 101.00 AAA 1,136,880 6.250%, 2/01/25 - AMBAC Insured 600 Virginia Beach, Virginia, General Obligation Bonds, Series 2005, 1/16 at 100.00 AA+ 638,190 5.000%, 1/15/20 1,500 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ 1,565,760 Bonds, Series 2001, 5.000%, 6/01/19 1,420 Virginia Beach, Virginia, General Obligation Refunding and Public 3/12 at 100.00 AA+ 1,475,806 Improvement Bonds, Series 2002, 5.000%, 3/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ 20,410 Total Tax Obligation/General 21,563,115 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 18.3% (12.3% OF TOTAL INVESTMENTS) 184 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 186,467 Assessment Bonds, Series 2003A, 6.750%, 3/01/22 1,000 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 1,128,360 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 221,044 165 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 175,306 800 Fairfax County Economic Development Authority, Virginia, Lease 5/16 at 100.00 AA+ 854,800 Revenue Bonds, Joint Public Uses Community Project, Series 2006, 5.000%, 5/15/18 60 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 1,800 Loudoun County Industrial Development Authority, Virginia, 3/13 at 100.00 AA+ $ 1,886,346 Lease Revenue Refunding Bonds, Public Facility Project, Series 2003, 5.000%, 3/01/19 1,300 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,474,551 Revenue Bonds, Series 2007N, 5.250%, 7/01/31 - AMBAC Insured 2,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call AAA 734,960 Revenue Bonds, Series 2005A, 0.000%, 7/01/29 - AMBAC Insured 400 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB- 416,336 Facilities Revenue Refunding Bonds, Series 2002D, 5.250%, 7/01/27 455 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB- 477,836 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 1,000 Spotsylvania County Industrial Development Authority, Virginia, 8/13 at 100.00 AAA 1,051,400 Lease Revenue Bonds, School Facilities, Series 2003B, 5.125%, 8/01/23 - AMBAC Insured 1,000 Stafford County and Staunton Industrial Development Authority, 8/16 at 100.00 AAA 1,060,680 Virginia, Revenue Bonds, Virginia Municipal League and Virginia Association of Counties Finance Program, Series 2006A, 5.000%, 8/01/23 - MBIA Insured 800 Virginia Beach Development Authority, Public Facilities Revenue 5/15 at 100.00 AA 843,248 Bonds, Series 2005A, 5.000%, 5/01/22 685 Virginia Gateway Community Development Authority, 3/13 at 102.00 N/R 747,568 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+ 2,654,503 1997 Resolution, Series 2001B, 5.000%, 8/01/19 570 Virginia Public School Authority, School Financing Bonds, 8/15 at 100.00 AA+ 609,512 1997 Resolution, Series 2005C, 5.000%, 8/01/17 1,265 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/10 at 101.00 AA 1,297,713 Pooled Loan Bond Program, Series 2001D, 5.000%, 5/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ 16,174 Total Tax Obligation/Limited 15,820,630 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 4.5% (3.0% OF TOTAL INVESTMENTS) 1,000 Metropolitan Washington D.C. Airports Authority, Airport System 10/12 at 100.00 AAA 1,032,150 Revenue Bonds, Series 2002A, 5.125%, 10/01/26 - FGIC Insured (Alternative Minimum Tax) 940 Metropolitan Washington D.C. Airports Authority, Airport System 10/16 at 100.00 AAA 975,438 Revenue Bonds, Series 2006, 5.000%, 10/01/36 - FGIC Insured (Alternative Minimum Tax) 1,500 Norfolk, Virginia, Parking System Revenue Bonds, Series 2005A, 2/15 at 100.00 AAA 1,578,375 5.000%, 2/01/23 - MBIA Insured 300 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 313,278 Bonds, Series 2001A, 5.250%, 8/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ 3,740 Total Transportation 3,899,241 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 22.8% (15.3% OF TOTAL INVESTMENTS) (4) 165 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R (4) 180,383 Residential Care Facility Revenue Bonds, Westminster Canterbury of the Blue Ridge First Mortgage, Series 2001, 6.200%, 1/01/31 (Pre-refunded 1/01/12) 1,000 Bristol, Virginia, General Obligation Utility System Revenue Bonds, No Opt. Call AAA 1,090,700 Series 2002, 5.000%, 11/01/24 - FSA Insured (ETM) 195 Fairfax County Water Authority, Virginia, Water Revenue Refunding 4/12 at 100.00 AAA 204,662 Bonds, Series 2002, 5.000%, 4/01/27 (Pre-refunded 4/01/12) 61 NNB Nuveen Virginia Dividend Advantage Municipal Fund 2 (continued) Portfolio of INVESTMENTS as of 5-31-07 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED (4) (continued) 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) $ 275,283 600 6.100%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 101.00 BBB (4) 663,378 1,840 Newport News, Virginia, General Obligation Bonds, General 7/13 at 100.00 AA (4) 1,948,100 Improvement and Water Projects, Series 2002A, 5.000%, 7/01/20 (Pre-refunded 7/01/13) 1,000 Newport News, Virginia, General Obligation Bonds, Series 2003B, 11/13 at 100.00 AA (4) 1,061,590 5.000%, 11/01/22 (Pre-refunded 11/01/13) 300 Pocahontas Parkway Association, Virginia, Senior Lien Revenue No Opt. Call AAA 300,888 Bonds, Route 895 Connector Toll Road, Series 1998A, 5.250%, 8/15/07 (ETM) 2,750 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 2,924,955 Bonds, Series 2000A, 5.500%, 10/01/40 1,100 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB- (4) 1,168,618 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 1,436,823 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 (Pre-refunded 2/01/12) 490 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (4) 551,230 Horse Center Revenue Refunding Bonds, Series 2001C, 6.850%, 7/15/21 (Pre-refunded 7/15/11) Salem, Virginia, General Obligation Public Improvement Bonds, Series 2002: 1,145 5.375%, 1/01/21 (Pre-refunded 1/01/12) 1/12 at 100.00 Aa3 (4) 1,216,952 1,200 5.375%, 1/01/22 (Pre-refunded 1/01/12) 1/12 at 100.00 Aa3 (4) 1,275,408 1,260 5.375%, 1/01/23 (Pre-refunded 1/01/12) 1/12 at 100.00 Aa3 (4) 1,339,178 Tobacco Settlement Financing Corporation of Virginia, Tobacco Settlement Asset-Backed Bonds, Series 2005: 1,050 5.250%, 6/01/19 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 1,093,449 2,700 5.500%, 6/01/26 (Pre-refunded 6/01/15) 6/15 at 100.00 AAA 2,934,684 - ------------------------------------------------------------------------------------------------------------------------------------ 18,390 Total U.S. Guaranteed 19,666,281 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 2.6% (1.7% OF TOTAL INVESTMENTS) 2,000 Mecklenburg County Industrial Development Authority, Virginia, 10/12 at 100.00 Baa1 2,221,600 Revenue Bonds, UAE Mecklenburg Cogeneration LP, Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 16.5% (11.1% OF TOTAL INVESTMENTS) 805 Fairfax County Water Authority, Virginia, Water Revenue Refunding 4/12 at 100.00 AAA 831,436 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 1,119,500 3,000 5.500%, 11/15/19 - FSA Insured No Opt. Call AAA 3,395,430 Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001: 1,130 5.000%, 11/01/18 - FGIC Insured 11/11 at 100.00 AAA 1,174,138 1,190 5.000%, 11/01/19 - FGIC Insured 11/11 at 100.00 AAA 1,235,994 1,450 5.000%, 11/01/23 - FGIC Insured 11/11 at 100.00 AAA 1,502,780 1,525 5.000%, 11/01/24 - FGIC Insured 11/11 at 100.00 AAA 1,580,510 62 PRINCIPAL OPTIONAL CALL AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) $ 1,080 Virginia Resources Authority, Clean Water State Revolving Fund 10/17 at 100.00 AAA $ 1,073,034 Revenue Bonds, Series 2007, Residuals 1006, 5.397%, 10/01/29 (IF) 2,250 Virginia Resources Authority, Water and Sewerage System 5/11 at 101.00 AA 2,319,840 Revenue Bonds, Caroline County Public Improvements Project, Series 2001, 5.000%, 5/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ 13,430 Total Water and Sewer 14,232,662 - ------------------------------------------------------------------------------------------------------------------------------------ $ 124,499 Total Investments (cost $124,020,171) - 149.1% 128,768,951 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - (0.5)% (386,858) -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.6)% (42,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 86,382,093 ==================================================================================================================== The Fund may invest in "zero coupon" securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. Such securities are included in the portfolio with a 0.00% coupon rate in their description. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically. (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 formal 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. WI/DD Purchased on a when-issued or delayed delivery basis. (ETM) Escrowed to maturity. (IF) Inverse floating rate investment. See accompanying notes to financial statements. 63 Statement of ASSETS & LIABILITIES May 31, 2007 MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at value (cost $226,265,245, $91,193,616, $91,526,983 and $114,131,178, respectively) $233,686,765 $93,803,275 $94,082,939 $116,286,701 Cash 635,206 -- 35,875 700,513 Receivables: Interest 3,885,792 1,631,075 1,565,189 1,736,016 Investments sold 115,000 360,000 75,072 -- Other assets 7,523 7,814 4,528 4,611 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 238,330,286 95,802,164 95,763,603 118,727,841 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft -- 797,061 -- -- Floating rate obligations 2,800,000 1,133,000 1,133,000 1,400,000 Payable for investments purchased 1,200,000 500,000 500,000 620,000 Unrealized depreciation on forward swaps -- 39,197 -- -- Accrued expenses: Management fees 125,239 34,413 30,703 31,111 Other 64,865 27,332 25,631 28,923 Preferred share dividends payable 36,048 9,732 9,864 8,122 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 4,226,152 2,540,735 1,699,198 2,088,156 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 79,100,000 32,000,000 32,000,000 39,000,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $155,004,134 $61,261,429 $62,064,405 $ 77,639,685 ==================================================================================================================================== Common shares outstanding 10,637,954 4,181,361 4,191,688 5,362,670 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 14.57 $ 14.65 $ 14.81 $ 14.48 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 106,380 $ 41,814 $ 41,917 $ 53,627 Paid-in surplus 147,763,730 59,335,928 59,476,610 75,690,468 Undistributed (Over-distribution of) net investment income (54,806) (79,783) (41,412) (138,732) Accumulated net realized gain (loss) from investments and derivative transactions (232,690) (606,992) 31,334 (121,201) Net unrealized appreciation (depreciation) of investments and derivative transactions 7,421,520 2,570,462 2,555,956 2,155,523 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $155,004,134 $61,261,429 $62,064,405 $ 77,639,685 ==================================================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 64 VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at value (cost $191,342,034, $67,515,636 and $124,020,171, respectively) $197,768,381 $69,661,433 $128,768,951 Cash -- -- -- Receivables: Interest 2,960,512 1,031,691 1,736,780 Investments sold 1,282,195 1,816,145 343,110 Other assets 9,246 7,744 6,304 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 202,020,334 72,517,013 130,855,145 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 3,495,616 993,075 1,330,367 Floating rate obligations -- -- -- Payable for investments purchased 1,600,355 565,142 1,056,340 Unrealized depreciation on forward swaps 39,197 -- -- Accrued expenses: Management fees 105,573 26,192 41,905 Other 51,063 22,516 32,877 Preferred share dividends payable 28,494 2,202 11,563 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 5,320,298 1,609,127 2,473,052 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 63,800,000 24,000,000 42,000,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $132,900,036 $46,907,886 $ 86,382,093 ==================================================================================================================================== Common shares outstanding 8,928,307 3,131,241 5,726,830 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 14.89 $ 14.98 $ 15.08 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 89,283 $ 31,312 $ 57,268 Paid-in surplus 125,716,566 44,415,804 81,290,977 Undistributed (Over-distribution of) net investment income 45,172 (81,479) (117,479) Accumulated net realized gain (loss) from investments and derivative transactions 661,865 396,452 402,547 Net unrealized appreciation (depreciation) of investments and derivative transactions 6,387,150 2,145,797 4,748,780 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $132,900,036 $46,907,886 $ 86,382,093 ==================================================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 65 Statement of OPERATIONS Year Ended May 31, 2007 MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $11,309,507 $4,547,316 $4,494,578 $ 5,318,113 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 1,483,239 595,639 601,122 744,410 Preferred shares - auction fees 197,750 80,001 80,001 97,499 Preferred shares - dividend disbursing agent fees 20,000 10,000 20,000 10,000 Shareholders' servicing agent fees and expenses 22,282 1,834 1,162 992 Floating rate obligations interest expense and fees 58,711 23,757 23,757 29,356 Custodian's fees and expenses 81,512 35,659 36,753 41,734 Trustees' fees and expenses 5,903 2,430 2,189 2,850 Professional fees 21,143 13,594 15,827 15,926 Shareholders' reports - printing and mailing expenses 34,162 14,796 16,631 18,528 Stock exchange listing fees 9,804 355 356 456 Investor relations expense 33,683 12,594 12,889 16,002 Other expenses 18,830 14,081 14,357 24,356 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 1,987,019 804,740 825,044 1,002,109 Custodian fee credit (18,703) (13,295) (9,278) (11,568) Expense reimbursement -- (218,982) (252,295) (375,025) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 1,968,316 572,463 563,471 615,516 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 9,341,191 3,974,853 3,931,107 4,702,597 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 19,964 137,858 176,432 120,873 Net realized gain (loss) from forward swaps -- -- -- 33,256 Change in net unrealized appreciation (depreciation) of investments 1,306,051 379,809 233,703 907,283 Change in net unrealized appreciation (depreciation) of forward swaps -- (39,197) -- (211,923) - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) 1,326,015 478,470 410,135 849,489 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (2,475,539) (986,560) (969,809) (1,185,502) From accumulated net realized gains -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (2,475,539) (986,560) (969,809) (1,185,502) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations $ 8,191,667 $3,466,763 $3,371,433 $ 4,366,584 ==================================================================================================================================== See accompanying notes to financial statements. 66 VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $ 9,416,931 $3,436,799 $ 6,184,447 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 1,250,000 452,789 819,744 Preferred shares - auction fees 159,501 59,999 105,000 Preferred shares - dividend disbursing agent fees 20,000 10,000 10,000 Shareholders' servicing agent fees and expenses 18,294 951 1,317 Floating rate obligations interest expense and fees -- -- -- Custodian's fees and expenses 57,027 28,413 44,016 Trustees' fees and expenses 4,647 1,724 3,270 Professional fees 16,666 12,179 14,339 Shareholders' reports - printing and mailing expenses 31,010 13,150 20,264 Stock exchange listing fees 9,848 266 486 Investor relations expense 27,971 9,430 16,728 Other expenses 17,731 13,926 15,349 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 1,612,695 602,827 1,050,513 Custodian fee credit (16,076) (9,067) (14,106) Expense reimbursement -- (166,461) (355,109) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 1,596,619 427,299 681,298 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 7,820,312 3,009,500 5,503,149 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain (loss) from investments 662,460 467,890 658,811 Net realized gain (loss) from forward swaps -- -- -- Change in net unrealized appreciation (depreciation) of investments 53,189 (52,127) (33,280) Change in net unrealized appreciation (depreciation) of forward swaps (39,197) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain (loss) 676,452 415,763 625,531 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (2,029,334) (757,118) (1,363,368) From accumulated net realized gains (38,016) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (2,067,350) (757,118) (1,363,368) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations $ 6,429,414 $2,668,145 $ 4,765,312 ==================================================================================================================================== See accompanying notes to financial statements. 67 Statement of CHANGES in NET ASSETS MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR) ----------------------------- ---------------------------- ----------------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 5/31/07 5/31/06 5/31/07 5/31/06 5/31/07 5/31/06 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 9,341,191 $ 9,509,021 $ 3,974,853 $ 3,981,268 $ 3,931,107 $ 3,928,931 Net realized gain (loss) from investments 19,964 83,005 137,858 (25,376) 176,432 (1,124) Net realized gain (loss) from forward swaps -- -- -- (62,612) -- (77,385) Net realized gain (loss) from futures -- -- -- -- -- -- Change in net unrealized appreciation (depreciation) of investments 1,306,051 (6,030,163) 379,809 (2,009,294) 233,703 (2,456,188) Change in net unrealized appreciation (depreciation) of forward swaps -- -- (39,197) 64,747 -- 98,762 Distributions to Preferred Shareholders: From net investment income (2,475,539) (1,920,310) (986,560) (790,032) (969,809) (772,031) From accumulated net realized gains -- (31,400) -- -- -- (14,225) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 8,191,667 1,610,153 3,466,763 1,158,701 3,371,433 706,740 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (7,114,011) (8,311,346) (3,120,217) (3,532,953) (3,190,218) (3,484,393) From accumulated net realized gains -- (260,035) -- -- -- (115,219) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (7,114,011) (8,571,381) (3,120,217) (3,532,953) (3,190,218) (3,599,612) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Offering costs adjustments -- -- -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 92,621 298,649 152,937 84,704 156,976 119,407 Preferred shares offering costs adjustments -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 92,621 298,649 152,937 84,704 156,976 119,407 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 1,170,277 (6,662,579) 499,483 (2,289,548) 338,191 (2,773,465) Net assets applicable to Common shares at the beginning of year 153,833,857 160,496,436 60,761,946 63,051,494 61,726,214 64,499,679 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $155,004,134 $153,833,857 $61,261,429 $60,761,946 $62,064,405 $61,726,214 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ (54,806) $ 266,281 $ (79,783) $ 52,442 $ (41,412) $ 187,990 ==================================================================================================================================== See accompanying notes to financial statements. 68 MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB) ----------------------------- ---------------------------- ----------------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 5/31/07 5/31/06 5/31/07 5/31/06 5/31/07 5/31/06 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 4,702,597 $ 4,610,127 $ 7,820,312 $ 7,868,441 $ 3,009,500 $ 3,037,231 Net realized gain (loss) from investments 120,873 163,785 662,460 1,639,045 467,890 255,078 Net realized gain (loss) from forward swaps 33,256 (75,241) -- -- -- -- Net realized gain (loss) from futures -- (156) -- -- -- -- Change in net unrealized appreciation (depreciation) of investments 907,283 (2,948,764) 53,189 (7,073,360) (52,127) (1,918,503) Change in net unrealized appreciation (depreciation) of forward swaps (211,923) 406,799 (39,197) -- -- -- Distributions to preferred shareholders: From net investment income (1,185,502) (978,804) (2,029,334) (1,304,947) (757,118) (541,517) From accumulated net realized gains -- -- (38,016) (231,433) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 4,366,584 1,177,746 6,429,414 897,746 2,668,145 832,289 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (3,570,184) (3,826,714) (6,247,006) (7,081,332) (2,464,212) (2,732,873) From accumulated net realized gains -- -- (191,731) (2,160,808) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (3,570,184) (3,826,714) (6,438,737) (9,242,140) (2,464,212) (2,732,873) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Offering costs adjustments -- -- -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 34,058 15,363 282,861 630,496 78,442 52,481 Preferred shares offering costs adjustments -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 34,058 15,363 282,861 630,496 78,442 52,481 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 830,458 (2,633,605) 273,538 (7,713,898) 282,375 (1,848,103) Net assets applicable to Common shares at the beginning of year 76,809,227 79,442,832 132,626,498 140,340,396 46,625,511 48,473,614 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $77,639,685 $76,809,227 $132,900,036 $132,626,498 $46,907,886 $46,625,511 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ (138,732) $ (84,856) $ 45,172 $ 501,200 $ (81,479) $ 132,605 ==================================================================================================================================== See accompanying notes to financial statements. 69 Statement of CHANGES in NET ASSETS (continued) VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) ----------------------------- YEAR YEAR ENDED ENDED 5/31/07 5/31/06 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 5,503,149 $ 5,449,719 Net realized gain (loss) from investments 658,811 147,265 Net realized gain (loss) from forward swaps -- (161,404) Net realized gain (loss) from futures -- -- Change in net unrealized appreciation (depreciation) of investments (33,280) (3,264,225) Change in net unrealized appreciation (depreciation) of forward swaps -- 216,228 Distributions to Preferred Shareholders: From net investment income (1,363,368) (1,029,859) From accumulated net realized gains -- (42,756) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 4,765,312 1,314,968 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (4,420,783) (4,841,986) From accumulated net realized gains -- (380,508) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (4,420,783) (5,222,494) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Offering costs adjustments -- 10,292 Net proceeds from shares issued to shareholders due to reinvestment of distributions 150,558 148,139 Preferred shares offering costs adjustments -- 10,038 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 150,558 168,469 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 495,087 (3,739,057) Net assets applicable to Common shares at the beginning of year 85,887,006 89,626,063 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $86,382,093 $85,887,006 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ (117,479) $ 163,523 ==================================================================================================================================== See accompanying notes to financial statements. 70 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 may establish 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. Futures contracts are valued using the closing settlement price, or, in the absence of such a price, at the mean of the bid and asked prices. If the pricing service is unable to supply a price for a municipal bond, forward swap contract or futures 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/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, 2007, Maryland Premium Income (NMY), Maryland Dividend Advantage (NFM), Maryland Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI), Virginia Premium Income (NPV), Virginia Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB) had outstanding when-issued/delayed delivery purchase commitments of $1,200,000, $500,000, $500,000, $620,000, $1,600,355, $565,142 and $1,056,340, respectively. 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 71 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. 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. 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 ================================================================================================================== Inverse Floating Rate Securities Each Fund may invest in inverse floating rate securities. An inverse floating rate security is created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. In turn, this trust (a) issues floating rate certificates, in face amounts equal to some fraction of the deposited bond's par amount or market value, that typically pay short-term tax-exempt interest rates to third parties, and (b) issues to a long-term investor (such as one of the Funds) an inverse floating rate certificate (sometimes referred to as an "inverse floater") that represents all remaining or residual interest in the trust. The income received by the inverse floater holder varies inversely with the short-term rate paid to the floating rate certificates' holders, and in most circumstances the inverse floater holder bears substantially all of the underlying bond's downside investment risk and also benefits disproportionately from any potential appreciation of the underlying bond's value. The price of an inverse floating rate security will be more volatile than that of the underlying bond because the interest rate is dependent on not only the fixed coupon rate of the underlying bond but also on the short-term interest paid on the floating rate certificates, and because the inverse floating rate security essentially bears the risk of loss of the greater face value of the underlying bond. A Fund may purchase an inverse floating rate security in a secondary market transaction without first owning the underlying bond (referred to as an "externally-deposited inverse floater"), or instead by first selling a fixed-rate bond to a broker-dealer for deposit into the special purpose trust and receiving in turn the residual interest in the trust (referred to as a "self-deposited inverse floater"). 72 An investment in an externally-deposited inverse floater is identified in the Portfolio of Investments as an "Inverse floating rate investment". An investments in a self-deposited inverse floater is accounted for as a financing transaction in accordance with Statement of Financial Accounting Standards (SFAS) No. 140 "Accounting for Transfers and Servicing of Financial Assets and Extinguishment of Liabilities". In such instances, a fixed-rate bond deposited into a special purpose trust is identified in the Portfolio of Investments as an "Underlying bond of an inverse floating rate trust", with the Fund accounting for the short-term floating rate certificates issued by the trust as "Floating rate obligations" on the Statement of Assets and Liabilities. In addition, the Fund reflects in Investment Income the entire earnings of the underlying bond and accounts for the related interest paid to the holders of the short-term floating rate certificates as "Floating rate obligations interest expense and fees" in the Statement of Operations. During the fiscal year ended May 31, 2007, each Fund invested in externally deposited inverse floaters and/or self-deposited inverse floaters. The average floating rate obligations outstanding and average annual interest rate and fees related to self-deposited inverse floaters during the fiscal year ended May 31, 2007, were as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) ================================================================================================================== Average floating rate obligations $ 1,511,233 $ 611,510 $ 611,510 $ 755,616 Average annual interest rate and fees 3.88% 3.88% 3.88% 3.89% ================================================================================================================== Forward Swap Transactions The Funds are authorized to invest in certain derivative financial instruments. Each Funds' use of forward interest rate swap transactions is intended to help the Fund manage its overall interest rate sensitivity, either shorter or longer, generally to more closely align the Fund's interest rate sensitivity with that of the broader municipal market. Forward interest rate swap transactions involve each Fund's agreement with a counterparty to pay, in the future, a fixed or variable rate payment in exchange for the counterparty paying the Fund a variable or fixed 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 the termination date of the swap (which is akin to a bond's maturity). The value of the Fund's swap commitment would increase or decrease based primarily on the extent to which long-term interest rates for bonds having a maturity of the swap's termination date increases or decreases. The Funds may terminate a swap contract prior to the effective date, at which point a realized gain or loss is 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 reduce 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 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 are authorized to invest in futures contracts. 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 or expired, a Fund records a realized gain or loss equal to the difference between the value of the contract on the closing date and value of the contract when originally entered into. Cash held by the broker to cover initial margin requirements on open futures contracts, if any, is recognized in the Statement of Assets and Liabilities. Additionally, the Statement of Assets and Liabilities reflects a receivable or payable for the variation margin when applicable. The Funds did not invest in any such instruments during the fiscal year ended May 31, 2007. 73 Risks of investments in futures contracts include 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 or indices. 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 YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 5/31/07 5/31/06 5/31/07 5/31/06 5/31/07 5/31/06 - ----------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions 6,252 19,420 9,782 5,298 9,920 7,521 ================================================================================================================= MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB) --------------------- -------------------- -------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 5/31/07 5/31/06 5/31/07 5/31/06 5/31/07 5/31/06 - ----------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions 2,324 1,071 18,377 38,319 4,617 3,038 ================================================================================================================= VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) -------------------- YEAR YEAR ENDED ENDED 5/31/07 5/31/06 - ----------------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions 9,265 8,839 ================================================================================================================= 74 3. INVESTMENT TRANSACTIONS Purchases and sales (including maturities but excluding short-term investments and derivative transactions) during the fiscal year ended May 31, 2007, were as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) ================================================================================================================== Purchases $33,382,065 $14,000,508 $11,125,971 $15,319,295 Sales and maturities 29,560,480 11,299,418 9,139,967 13,191,549 ================================================================================================================== VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) ================================================================================================================== Purchases $36,465,445 $15,948,108 $26,792,214 Sales and maturities 32,202,287 16,377,657 24,477,943 ================================================================================================================== 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, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate transactions subject to SFAS No. 140. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset values of the Funds. At May 31, 2007, 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 $223,430,916 $90,067,053 $90,438,232 $112,807,910 ================================================================================================================== VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) ================================================================================================================== Cost of investments $191,034,790 $67,478,723 $123,943,055 ================================================================================================================== Gross unrealized appreciation and gross unrealized depreciation of investments at May 31, 2007, were as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) ================================================================================================================== Gross unrealized: Appreciation $8,205,594 $2,820,167 $2,784,046 $2,601,457 Depreciation (749,759) (216,904) (272,298) (522,673) - ------------------------------------------------------------------------------------------------------------------ Net unrealized appreciation (depreciation) of investments $7,455,835 $2,603,263 $2,511,748 $2,078,784 ================================================================================================================== VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) ================================================================================================================== Gross unrealized: Appreciation $7,261,662 $2,391,053 $5,105,213 Depreciation (528,071) (208,343) (279,317) - ------------------------------------------------------------------------------------------------------------------ Net unrealized appreciation (depreciation) of investments $6,733,591 $2,182,710 $4,825,896 ================================================================================================================== 75 The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains at May 31, 2007, the Funds' tax year end, 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 * $258,179 $142,245 $172,965 $127,885 Undistributed net ordinary income ** 69,718 -- -- 3,541 Undistributed net long-term capital gains -- -- 128,819 -- ================================================================================================================== VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) ================================================================================================================== Undistributed net tax-exempt income * $262,579 $ 77,723 $167,225 Undistributed net ordinary income ** 8,291 3,355 1,499 Undistributed net long-term capital gains 661,863 396,454 408,716 ================================================================================================================== * Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on May 1, 2007, paid on June 1, 2007. ** 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, 2007 and May 31, 2006, 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 2007 (NMY) (NFM) (NZR) (NWI) ================================================================================================================== Distributions from net tax-exempt income *** $9,664,847 $4,128,452 $4,166,021 $4,771,527 Distributions from net ordinary income ** -- -- 6,683 -- Distributions from net long-term capital gains **** -- -- 562 -- ================================================================================================================== VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 2007 (NPV) (NGB) (NNB) ================================================================================================================== Distributions from net tax-exempt income *** $8,317,694 $3,260,186 $5,809,897 Distributions from net ordinary income ** -- -- -- Distributions from net long-term capital gains **** 229,747 -- -- ================================================================================================================== 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 ================================================================================================================== ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. *** The Funds hereby designate these amounts paid during the fiscal year ended May 31, 2007, as Exempt Interest Dividends. **** The Funds hereby designate these amounts paid during the fiscal year ended May 31, 2007, as long-term capital gain dividends pursuant to Internal Revenue Code Section 852(b)(3). 76 At May 31, 2007, 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 PREMIUM DIVIDEND DIVIDEND INCOME INCOME ADVANTAGE 3 (NMY) (NFM) (NWI) ================================================================================================================== Expiration year: 2009 $ -- $ 774 $ -- 2010 -- 37,159 -- 2011 -- -- -- 2012 -- 430,282 -- 2013 -- 15,613 -- 2014 -- 62,054 8,870 2015 28,576 -- -- - ------------------------------------------------------------------------------------------------------------------ Total $28,576 $545,882 $8,870 ================================================================================================================== Maryland Dividend Advantage elected to defer net realized losses from investments incurred from November 1, 2006 through May 31, 2007 ("post-October losses") in accordance with federal income tax regulations. The post-October losses of $9,857 were treated as having arisen on the first day of the following taxable year. 5. MANAGEMENT FEES 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 ================================================================================ 77 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, 2007, the complex-level fee rate was .1824%. 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 preferred stock issued by or borrowings 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 its 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. 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. 78 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. 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. NEW ACCOUNTING PRONOUNCEMENTS Financial Accounting Standards Board Interpretation No. 48 On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds' tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006, and is to be applied to all open tax years as of the effective date. Recent SEC guidance allows funds to delay implementing FIN 48 into NAV calculations until the fund's last NAV calculation in the first required financial statement reporting period. As a result, the Funds must begin to incorporate FIN 48 into their NAV calculations by November 30, 2007. At this time, management is continuing to evaluate the implications of FIN 48 and does not expect the adoption of FIN 48 will have a significant impact on the net assets or results of operations of the Funds. Financial Accounting Standards Board Statement of Financial Accounting Standards No. 157 In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value Measurements." This standard establishes a single authoritative definition of fair value, sets out a framework for measuring fair value and requires additional disclosures about fair value measurements. SFAS No. 157 applies to fair value measurements already required or permitted by existing standards. SFAS No. 157 is effective for financial statements issued for fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The changes to current generally accepted accounting principles from the application of this standard relate to the definition of fair value, the methods used to measure fair value, and the expanded disclosures about fair value measurements. As of May 31, 2007, the Funds do not believe the adoption of SFAS No. 157 will impact the financial statement amounts; however, additional disclosures may be required about the inputs used to develop the measurements and the effect of certain of the measurements included within the Statement of Operations for the period. 79 7. SUBSEQUENT EVENTS Distributions to Common Shareholders The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on July 2, 2007, to shareholders of record on June 15, 2007, as follows: MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) ================================================================================ Dividend per share $.0515 $.0585 $.0585 $.0525 ================================================================================ VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) ================================================================================ Dividend per share $.0530 $.0595 $.0595 ================================================================================ Agreement and Plan of Merger On June 20, 2007, Nuveen Investments announced that it had entered into a definitive Agreement and Plan of Merger ("Merger Agreement") with an investor group majority-led by Madison Dearborn Partners, LLC. Madison Dearborn Partners, LLC is a private equity investment firm based in Chicago, Illinois. The investor group includes affiliates of Merrill Lynch, Wachovia, Citigroup, Deutsche Bank and Morgan Stanley. It is anticipated that Merrill Lynch and its affiliates will be indirect "affiliated persons" (as that term is defined in the Investment Company Act of 1940) of the Funds. Under the terms of the merger, each outstanding share of Nuveen Investments' common stock (other than dissenting shares) will be converted into the right to receive a specified amount of cash, without interest. The merger is expected to be completed by the end of the year, subject to customary conditions, including obtaining the approval of Nuveen Investments shareholders, obtaining necessary fund and client consents sufficient to satisfy the terms of the Merger Agreement, and expiration of certain regulatory waiting periods. The obligations of Madison Dearborn Partners, LLC to consummate the merger are not conditioned on its obtaining financing. The Merger Agreement includes a "go shop" provision through July 19, 2007, during which Nuveen Investments may actively solicit and negotiate competing takeover proposals. The consummation of the merger will be deemed to be an "assignment" (as defined in the 1940 Act) of the investment management agreement between each Fund and the Adviser, and will result in the automatic termination of each Fund's agreement. Prior to the consummation of the merger, it is anticipated that the Board of Trustees of each Fund will consider a new investment management agreement with the Adviser. If approved by the Board, the new agreement would be presented to the Fund's shareholders for approval, and, if so approved by shareholders, would take effect upon consummation of the merger. There can be no assurance that the merger described above will be consummated as contemplated or that necessary shareholder approvals will be obtained. 80 Financial HIGHLIGHTS 81 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: 2007 $14.47 $ .88 $ .12 $(.23) $ -- $ .77 $(.67) $ -- $(.67) 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) MARYLAND DIVIDEND ADVANTAGE (NFM) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 14.57 .95 .12 (.24) -- .83 (.75) -- (.75) 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) ==================================================================================================================================== Total Returns ---------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value* Value* ========================================================================================= MARYLAND PREMIUM INCOME (NMY) - ----------------------------------------------------------------------------------------- Year Ended 5/31: 2007 $ -- $14.57 $14.84 6.96% 5.35% 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 MARYLAND DIVIDEND ADVANTAGE (NFM) - ----------------------------------------------------------------------------------------- Year Ended 5/31: 2007 -- 14.65 15.28 5.51 5.74 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 ========================================================================================= Ratios/Supplemental Data -------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement After Credit/Reimbursement** -------------------------------------------- ------------------------------------------- Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate ==================================================================================================================================== MARYLAND PREMIUM INCOME (NMY) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 $155,004 1.27% 1.23% 5.95% 1.26% 1.22% 5.96% 13% 2006 153,834 1.23 1.23 6.05 1.21 1.21 6.07 13 2005 160,496 1.24 1.24 6.22 1.23 1.23 6.22 10 2004 151,107 1.24 1.24 6.54 1.23 1.23 6.55 16 2003 159,415 1.26 1.26 7.00 1.25 1.25 7.01 16 MARYLAND DIVIDEND ADVANTAGE (NFM) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 61,261 1.30 1.26 6.06 .93 .89 6.43 12 2006 60,762 1.26 1.26 5.99 .81 .81 6.44 14 2005 63,051 1.26 1.26 6.11 .79 .79 6.57 11 2004 60,041 1.24 1.24 6.34 .78 .78 6.80 10 2003 64,338 1.26 1.26 6.54 .79 .79 7.01 12 ==================================================================================================================================== Floating Rate Obligations Preferred Shares at End of Period at End of Period -------------------------------------- -------------------------- Aggregate Liquidation Aggregate Amount and Market Asset Amount Asset Outstanding Value Coverage Outstanding Coverage (000) Per Share Per Share (000) Per $1,000 ================================================================================ MARYLAND PREMIUM INCOME (NMY) - -------------------------------------------------------------------------------- Year Ended 5/31: 2007 $79,100 $25,000 $73,990 $2,800 $84,609 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 -- -- MARYLAND DIVIDEND ADVANTAGE (NFM) - -------------------------------------------------------------------------------- Year Ended 5/31: 2007 32,000 25,000 72,860 1,133 83,314 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 -- -- ================================================================================ * 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) Interest expense arises from the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Inverse Floating Rate Securities. See accompanying notes to financial statements. 82-83 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 ==================================================================================================================================== MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 $14.76 $.94 $ .10 $(.23) $ -- $ .81 $(.76) $ -- $(.76) 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) MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 14.33 .88 .16 (.22) -- .82 (.67) -- (.67) 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 ---------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value** Value** =========================================================================================== MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - ------------------------------------------------------------------------------------------- Year Ended 5/31: 2007 $ -- $14.81 $15.38 9.32% 5.56% 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 MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - ------------------------------------------------------------------------------------------- Year Ended 5/31: 2007 -- 14.48 14.74 11.47 5.75 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 ------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement After Credit/Reimbursement*** -------------------------------------------- ------------------------------------------- Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate ==================================================================================================================================== MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 $62,064 1.32% 1.28% 5.86% .90% .86% 6.28% 10% 2006 61,726 1.25 1.25 5.76 .77 .77 6.23 15 2005 64,500 1.23 1.23 5.74 .77 .77 6.20 10 2004 61,064 1.24 1.24 5.90 .78 .78 6.36 11 2003 65,490 1.26 1.26 6.07 .80 .80 6.53 12 MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 77,640 1.28 1.24 5.52 .79 .75 6.01 11 2006 76,809 1.23 1.23 5.41 .73 .73 5.91 14 2005 79,443 1.23 1.23 5.40 .74 .74 5.89 12 2004 74,369 1.22 1.22 5.59 .73 .73 6.08 15 2003(b) 79,700 1.18* 1.18* 5.01* .70* .70* 5.50* 13 ==================================================================================================================================== Floating Rate Obligations Preferred Shares at End of Period at End of Period -------------------------------------- -------------------------- Aggregate Liquidation Aggregate Amount and Market Asset Amount Asset Outstanding Value Coverage Outstanding Coverage (000) Per Share Per Share (000) Per $1,000 ================================================================================ MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - -------------------------------------------------------------------------------- Year Ended 5/31: 2007 $32,000 $25,000 $73,488 $1,133 $84,022 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 -- -- MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - -------------------------------------------------------------------------------- Year Ended 5/31: 2007 39,000 25,000 74,769 1,400 84,314 2006 39,000 25,000 74,237 -- -- 2005 39,000 25,000 75,925 -- -- 2004 39,000 25,000 72,672 -- -- ================================================================================ * 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) Interest expense arises from the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Inverse Floating Rate Securities. (b) For the period September 25, 2002 (commencement of operations) through May 31, 2003. See accompanying notes to financial statements. 84-85 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: 2007 $14.89 $ .88 $ .07 $(.23) $ --* $ .72 $(.70) $(.02) $ (.72) 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) VIRGINIA DIVIDEND ADVANTAGE (NGB) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 14.91 .96 .14 (.24) -- .86 (.79) -- (.79) 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) ==================================================================================================================================== Total Returns ---------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value** Value** ============================================================================================= VIRGINIA PREMIUM INCOME (NPV) - --------------------------------------------------------------------------------------------- Year Ended 5/31: 2007 $ -- $14.89 $15.24 7.18% 4.89% 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 VIRGINIA DIVIDEND ADVANTAGE (NGB) - --------------------------------------------------------------------------------------------- Year Ended 5/31: 2007 -- 14.98 17.51 7.24 5.82 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 ============================================================================================= Ratios/Supplemental Data ------------------------------------------------------------------------------------------------------------------- Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement After Credit/Reimbursement*** -------------------------------------------- ------------------------------------------- Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate ==================================================================================================================================== VIRGINIA PREMIUM INCOME (NPV) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 $132,900 1.20% 1.20% 5.80% 1.19% 1.19% 5.82% 16% 2006 132,626 1.19 1.19 5.75 1.17 1.17 5.77 16 2005 140,340 1.20 1.20 5.98 1.19 1.19 5.99 17 2004 132,122 1.20 1.20 6.33 1.19 1.19 6.34 14 2003 140,223 1.25 1.25 6.61 1.24 1.24 6.62 17 VIRGINIA DIVIDEND ADVANTAGE (NGB) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 46,908 1.27 1.27 5.99 .90 .90 6.36 23 2006 46,626 1.26 1.26 5.93 .82 .82 6.38 16 2005 48,474 1.28 1.28 6.13 .81 .81 6.59 15 2004 44,988 1.24 1.24 6.39 .77 .77 6.86 7 2003 48,102 1.28 1.28 6.45 .81 .81 6.92 10 ==================================================================================================================================== Floating Rate Obligations Preferred Shares at End of Period at End of Period -------------------------------------- -------------------------- Aggregate Liquidation Aggregate Amount and Market Asset Amount Asset Outstanding Value Coverage Outstanding Coverage (000) Per Share Per Share (000) Per $1,000 ================================================================================ VIRGINIA PREMIUM INCOME (NPV) - -------------------------------------------------------------------------------- Year Ended 5/31: 2007 $63,800 $25,000 $77,077 $ -- $ -- 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 -- -- VIRGINIA DIVIDEND ADVANTAGE (NGB) - -------------------------------------------------------------------------------- Year Ended 5/31: 2007 24,000 25,000 73,862 -- -- 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 -- -- ================================================================================ * Per share Distributions from Capital Gains to Preferred Shareholders rounds to less than $.01 per share. ** 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) Interest expense arises from the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Inverse Floating Rate Securities. See accompanying notes to financial statements. 86-87 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 DIVIDEND ADVANTAGE 2 (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 $15.02 $.96 $ .11 $(.24) $ -- $ .83 $(.77) $ -- $ (.77) 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) ==================================================================================================================================== Total Returns ---------------------- Offering Based Costs and Ending on Preferred Common Based Common Share Share Ending on Share Net Underwriting Net Asset Market Market Asset Discounts Value Value Value* Value* ============================================================================================ VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - -------------------------------------------------------------------------------------------- Year Ended 5/31: 2007 $ -- $15.08 $16.73 6.96% 5.60% 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 ============================================================================================ Ratios/Supplemental Data ------------------------------------------------------------------------------------------------------------------ Ratios to Average Net Assets Ratios to Average Net Assets Applicable to Common Shares Applicable to Common Shares Before Credit/Reimbursement After Credit/Reimbursement** ------------------------------------------- ------------------------------------------ Ending Net Assets Applicable Expenses Expenses Net Expenses Expenses Net Portfolio to Common Including Excluding Investment Including Excluding Investment Turnover Shares (000) Interest++(a) Interest++(a) Income++ Interest++(a) Interest++(a) Income++ Rate ==================================================================================================================================== VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2007 $86,382 1.21% 1.21% 5.89% .78% .78% 6.31% 19% 2006 85,887 1.19 1.19 5.75 .73 .73 6.21 10 2005 89,626 1.19 1.19 5.74 .74 .74 6.19 13 2004 84,248 1.20 1.20 5.99 .74 .74 6.44 16 2003 91,065 1.21 1.21 6.01 .75 .75 6.47 15 ==================================================================================================================================== Floating Rate Obligations Preferred Shares at End of Period at End of Period -------------------------------------- -------------------------- Aggregate Liquidation Aggregate Amount and Market Asset Amount Asset Outstanding Value Coverage Outstanding Coverage (000) Per Share Per Share (000) Per $1,000 ================================================================================ VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - -------------------------------------------------------------------------------- Year Ended 5/31: 2007 $42,000 $25,000 $76,418 $ -- $ -- 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 -- -- ================================================================================ * 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) Interest expense arises from the application of SFAS No. 140 to certain inverse floating rate transactions entered into by the Fund as more fully described in Footnote 1 - Inverse Floating Rate Securities. See accompanying notes to financial statements. 88-89 spread Board Members & 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. NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S) & ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER AND TERM(2) OVERSEEN BY DIRECTORSHIPS BOARD MEMBER DURING PAST 5 YEARS BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS: o TIMOTHY R. SCHWERTFEGER(1) Director (since 1996) and Non-executive 3/28/49 Chairman of 1994 Chairman (since July 1, 2007) formerly, 333 W. Wacker Drive the Board ANNUAL 176 Chairman (1996-June 30, 2007) of Nuveen Chicago, IL 60606 and Board Member Investments, Inc., Nuveen Investments, LLC; 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); formerly, Chairman and Director (1996-2004) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); formerly, Director (1996-2006) of Institutional Capital Corporation. BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: o ROBERT P. BREMNER Private Investor and Management Consultant. 8/22/40 Lead 1997 333 W. Wacker Drive Independent CLASS III 176 Chicago, IL 60606 Board member o JACK B. EVANS President, The Hall-Perrine Foundation, a 10/22/48 1999 private philanthropic corporation (since 333 W. Wacker Drive Board member CLASS III 176 1996); Director and Vice Chairman, United Chicago, IL 60606 Fire Group, a publicly held company; Member of the Board of Regents for the State of Iowa University System; Director, Gazette Companies; Life Trustee of Coe College and Iowa College Foundation; Member of the Advisory Council of the Department of Finance in the Tippie College of Business, University of Iowa; 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. o WILLIAM C. HUNTER Dean, Tippie College of Business, University 3/6/48 2004 of Iowa (since July 2006); formerly, Dean 333 W. Wacker Drive Board member CLASS II 176 and Distinguished Professor of Finance, Chicago, IL 60606 School of Business at the University of Connecticut (2003-2006); 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). 90 NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S) & ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER AND TERM(2) OVERSEEN BY DIRECTORSHIPS BOARD MEMBER DURING PAST 5 YEARS BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: o DAVID J. KUNDERT Director, Northwestern Mutual Wealth 10/28/42 2005 Management Company; Retired (since 2004) as 333 W. Wacker Drive Board member CLASS II 174 Chairman, JPMorgan Fleming Asset Management, Chicago, IL 60606 President and CEO, Banc One Investment Advisors Corporation, and President, One Group Mutual 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; member of Board of Directors, Milwaukee Repertory Theater. o WILLIAM J. SCHNEIDER Chairman of Miller-Valentine Partners Ltd., 9/24/44 1997 a real estate investment company; formerly, 333 W. Wacker Drive Board member ANNUAL 176 Senior Partner and Chief Operating Officer Chicago, IL 60606 (retired, 2004) of Miller-Valentine 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. o JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy 12/29/47 1997 Donnelley Foundation (since 1994); prior 333 W. Wacker Drive Board member CLASS I 176 thereto, Executive Director, Great Lakes Chicago, IL 60606 Protection Fund (from 1990 to 1994). o CAROLE E. STONE Director, Chicago Board Options Exchange 6/28/47 2007 (since 2006); Chair New York Racing 333 West Wacker Drive Board member CLASS I 176 Association Oversight Board (since 2005); Chicago, IL 60606 Commissioner, New York State Commission on Public Authority Reform (since 2005); formerly Director, New York State Division of the Budget (2000-2004), Chair, Public Authorities Control Board (2000-2004) and Director, Local Government Assistance Corporation (2000-2004). o EUGENE S. SUNSHINE Senior Vice President for Business and 1/22/50 2005 Finance, Northwestern University (since 333 W. Wacker Drive Board member CLASS II 176 1997); Director (since 2003), Chicago Board Chicago, IL 60606 Options Exchange; 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; Director (since 2006), Pathways, a provider of therapy and related information for physically disabled infants and young children; formerly, Director (2003-2006), National Mentor Holdings, a privately-held, national provider of home and community-based services. 91 NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S) AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS OVERSEEN BY OFFICER OFFICERS OF THE FUND: o GIFFORD R. ZIMMERMAN Managing Director (since 2002), Assistant 9/9/56 Chief Secretary and Associate General Counsel, 333 W. Wacker Drive Administrative 1988 176 formerly, Vice President and Assistant Chicago, IL 60606 Officer General Counsel, of Nuveen Investments, LLC; 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 Assistant Secretary of Rittenhouse Asset Management, Inc., Symphony Asset Management LLC (since 2003), Tradewinds Global Investors, LLC and Santa Barbara Asset Management, LLC; (since 2006); formerly, Managing Director (2002-2004), General Counsel (1998-2004) and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Chartered Financial Analyst. o WILLIAMS ADAMS IV Executive Vice President, U.S. Structured 6/9/55 Products of Nuveen Investments, LLC, (since 333 West Wacker Drive Vice President 2007 119 1999), prior thereto, Managing Director of Chicago, IL 60606 Structured Investments. o JULIA L. ANTONATOS Managing Director (since 2005), formerly 9/22/63 Vice President (since 2002) of Nuveen 333 W. Wacker Drive Vice President 2004 176 Investments, LLC; Chartered Financial Chicago, IL 60606 Analyst. o CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004) previously, 1/11/62 Vice President (1993-2004) of Nuveen 333 W. Wacker Drive Vice President 2007 119 Investments, LLC. Chicago, IL 60606 o MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen 2/3/66 Vice President Investments, LLC. 333 W. Wacker Drive and Assistant 2000 176 Chicago, IL 60606 Secretary o PETER H. D'ARRIGO Vice President and Treasurer of Nuveen 11/28/67 Investments, LLC and of Nuveen Investments, 333 W. Wacker Drive Vice President 1999 176 Inc. (since 1999); Vice President and Chicago, IL 60606 Treasurer of Nuveen Asset Management (since 2002) 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. (since 2003); Treasurer of Symphony Asset Management LLC (since 2003) and Santa Barbara Asset Management, LLC (since 2006); Assistant Treasurer, Tradewinds Global Investors, LLC (since 2006); formerly, Vice President and Treasurer (1999-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Chartered Financial Analyst. o LORNA C. FERGUSON Managing Director (since 2004), formerly, 10/24/45 Vice President of Nuveen Investments, LLC, 333 W. Wacker Drive Vice President 1998 176 Managing Director (2004) formerly, Vice Chicago, IL 60606 President (1998-2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2005) of Nuveen Asset Management. 92 NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S) AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS OVERSEEN BY OFFICER OFFICERS OF THE FUND: o WILLIAM M. FITZGERALD Managing Director (since 2002), formerly, 3/2/64 Vice President of Nuveen Investments, LLC; 333 W. Wacker Drive Vice President 1995 176 Managing Director (1997-2004) of Nuveen Chicago, IL 60606 Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2001) of Nuveen Asset Management; Vice President (since 2002) of Nuveen Investments Advisers Inc.; Chartered Financial Analyst. o STEPHEN D. FOY Vice President (since 1993) and Funds 5/31/54 Vice President Controller (since 1998) of Nuveen 333 W. Wacker Drive and Controller 1998 176 Investments, LLC; formerly, Vice President Chicago, IL 60606 and Funds Controller (1998-2004) of Nuveen Investments, Inc.; Certified Public Accountant. o WALTER M. KELLY Assistant Vice President and Assistant 2/24/70 Chief Compliance Secretary of the Nuveen Funds (2003-2006); 333 West Wacker Drive Officer and 2003 176 Vice President (since 2006) formerly, Chicago, IL 60606 Vice President Assistant Vice President and Assistant General Counsel (2003-2006) of Nuveen Investments, LLC; previously, Associate (2001-2003) at the law firm of Vedder, Price, Kaufman & Kammholz. o DAVID J. LAMB Vice President (since 2000) of Nuveen 3/22/63 Investments, LLC; Certified Public 333 W. Wacker Drive Vice President 2000 176 Accountant. Chicago, IL 60606 o TINA M. LAZAR Vice President of Nuveen Investments, LLC 8/27/61 (since 1999). 333 W. Wacker Drive Vice President 2002 176 Chicago, IL 60606 o LARRY W. MARTIN Vice President, Assistant Secretary and 7/27/51 Vice President Assistant General Counsel of Nuveen 333 W. Wacker Drive and Assistant 1988 176 Investments, LLC; formerly, Vice President Chicago, IL 60606 Secretary and Assistant Secretary of Nuveen Advisory Corp. and Nuveen 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), Symphony Asset Management LLC (since 2003) and Tradewinds Global Investors, LLC and Santa Barbara Asset Management, LLC (since 2006). o KEVIN J. MCCARTHY Vice President and Assistant General 3/26/66 Vice President Counsel, Nuveen Investments, LLC (since 333 W. Wacker Drive and Secretary 2007 176 2007); prior thereto, Partner, Bell, Boyd & Chicago, IL 60606 Lloyd LLP (1997-2007) o JOHN V. MILLER Managing Director (since 2007), formerly, 4/10/67 Vice President (2002-2007) of Nuveen 333 W. Wacker Drive Vice President 2007 176 Investments, LLC; Chartered Financial Chicago, IL 60606 Analyst. (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 three year terms, except for two board members who are elected by the holders of Preferred Shares. The Board of Trustees is divided into three classes, Class I, Class II, and Class III, with each being elected to serve until the third succeeding annual shareholders' meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed, except two board members are elected by the holders of Preferred Shares to serve until the next annual shareholders' meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed. The first year 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. 93 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 21-23, 2007 (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 to the services provided by the Fund Adviser and the performance of the Funds. At each of its quarterly meetings, the Board reviews investment performance and various matters relating to the respective Fund's operations, including the Fund's compliance program, shareholder services, valuation, custody, distribution and other information relating to the nature, extent and quality of services provided by the Fund Adviser. Between the regularly scheduled quarterly meetings, the Trustees received information on particular matters as the need arose. In considering whether to renew the respective advisory contract with the Fund Adviser at the May Meeting, the independent Trustees also received extensive materials well 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 as well as the Fund's performance compared to funds with similar investment objectives based on data and information provided 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 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 an independent third party (the "Peer Universe") as well as compared to a subset of funds within the Peer Universe (the "Peer Group") of 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; and o from independent legal counsel, a legal memorandum describing among other things, applicable laws, regulations and duties in reviewing and approving advisory contracts. At the May Meeting, the Fund Adviser made a presentation to and responded to questions from the Board. Prior to and after the presentations and 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. 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, but not limited to, 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; (d) the extent to which economies of scale would be realized; and (e) whether fee levels reflect these economies of scale for the benefit of Fund investors. In addition, as noted, the Trustees met regularly throughout the year to oversee the Funds. In evaluating the advisory contracts, the Trustees also relied upon 94 their knowledge resulting from their meetings and other interactions throughout the year of the Fund Adviser, its services and the Funds. It is with this background that the Trustees considered each advisory contract. 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 Nuveen has taken for the municipal fund product line. As noted, the Trustees are already familiar with the organization, operations and personnel of the Fund Adviser due to the Trustees' experience in governing the respective Fund and working with NAM on matters relating to the Funds. With respect to personnel, the Trustees recognized NAM's investment in additional qualified personnel throughout the various groups in the organization and recommended to NAM that it continue to review staffing needs as necessary. In addition, with respect to the municipal funds advised by NAM, the Trustees reviewed materials describing the current status and, in particular, the developments in 2006 with respect to NAM's investment process, investment strategies (including additional tools used in executing such strategies), personnel (including portfolio management and research teams), trading process, hedging team, risk management team (e.g., reviewing credit quality, duration limits, derivative use, as applicable), and investment operations (such as, enhancements to trading procedures, pricing procedures, and client services). The Trustees recognized NAM's investment of resources and efforts to continue to enhance and refine its investment process. In addition to advisory services, the independent Trustees considered the quality of any administrative or non-advisory services provided. With respect to NAM, NAM provides the Funds with a wide variety of services and officers and other personnel as are necessary for the operations of the respective Fund, including, o product management; o fund administration; o oversight of shareholder services and other fund service providers; o administration of Board relations; o regulatory and portfolio compliance; and o legal support services. As the Funds operate in a highly regulated industry and given the importance of compliance, the Trustees considered, in particular, NAM's compliance activities for the Funds and enhancements thereto. In this regard, the Trustees recognized the quality of NAM's compliance team. The Trustees further noted NAM's negotiations with other service providers and the corresponding reduction in certain service providers' fees. With respect to closed-end funds, in addition to the foregoing services, the Trustees also noted the additional services that NAM or its affiliates provide to closed-end funds, including, in particular, its 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 programs designed to raise investor and analyst awareness and understanding of closed-end funds. These efforts include: o maintaining shareholder communications; o providing advertising for closed-end funds; o maintaining its closed-end fund website; o continual contact with financial advisers; o providing educational symposia; o conducting research with investors and financial analysis regarding closed-end funds; and o evaluating secondary market performance. 95 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, among other things: o maintaining an in-house trading desk; o maintaining a product manager for the preferred shares; o developing distribution for preferred shares with new market participants; o maintaining an orderly auction process; o managing leverage and risk management of leverage; and o maintaining systems necessary to test compliance with rating agency criteria. 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 Agreements were satisfactory. B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND FUND ADVISER 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 (the "Performance Peer Group") based on data provided by an independent third party (as described below). With respect to municipal funds, the Trustees reviewed portfolio level performance against customized benchmarks, as described in further detail below. In evaluating the performance information, in certain instances, the Trustees noted that the closest Performance Peer Group for a Fund may not adequately reflect such Fund's investment objectives and strategies, 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 also 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. With respect to municipal closed-end funds, municipal funds that do not have corresponding state-specific Performance Peer Groups are from all states other than New York, California, Florida, New Jersey, Michigan, and Pennsylvania. However, with respect to Funds based on Florida, New Jersey, Michigan and Pennsylvania, the peer group may be so small or the Nuveen Funds may dominate the category to such an extent that performance information for such Funds was also compared to the more general category for all states (other than New York and California). With respect to municipal funds, 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, 2006. 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, 2006 (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 its quarterly meetings. Based on their review, the Trustees determined that the respective Fund's absolute and relative investment performance over time had been satisfactory, subject to the following. With respect to various municipal closed-end funds, the Trustees have noted the relative total return underperformance in recent years compared to peers. The Trustees reviewed materials and discussed with the Fund Adviser the factors contributing to the shift in performance including, among other things, the degree of risk undertaken by peers compared to the Funds (such as through the increased use of leverage or taking concentrated positions in high risk credits). In addition, the Trustees also considered a Fund's dividend performance and the extent of any secondary market discounts. The Trustees noted NAM's efforts to evaluate the factors affecting performance and determine whether modification to a Fund's investment strategy is necessary or appropriate and are satisfied with the steps being taken. 96 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. In reviewing the fee schedule for a Fund, 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). The Trustees further 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 may be the same. In reviewing the comparison of fee and expense information, the Trustees recognized that in certain cases, the Fund size relative to peers, the small size and odd composition of the Peer Group (including differences in objectives and strategies), expense anomalies, timing of information used or other factors impact the comparisons thereby limiting some of their usefulness. With respect to municipal closed-end funds, the Trustees also considered the differences in the use of leverage. 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 NAM with fees NAM charges to other clients. With respect to municipal funds, such other clients include municipal managed accounts. In general, the advisory fees charged for separate accounts are somewhat lower than the advisory fees assessed to the Funds. The Trustees considered the differences in the product types, including, but not limited to, the services provided, the structure and operations, product distribution and costs thereof, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Trustees noted, in particular, that the range of services provided to the Funds (as discussed above) is more extensive than that provided to separately managed 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. Given the inherent differences in the products, particularly the extensive services provided to the 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 for its advisory activities (which incorporated Nuveen's wholly-owned affiliated sub-advisers) and its financial condition. The Trustees reviewed the revenues and expenses of Nuveen's advisory activities for the last three years, the allocation methodology used in preparing the profitability data as well as the 2006 Annual Report for Nuveen. The Trustees noted this information supplements the profitability information requested and received during the year to help keep them apprised of developments affecting profitability (such as changes in fee waivers and expense reimbursement commitments). In this regard, the Trustees noted the enhanced dialogue and information regarding profitability with NAM during the year, including more frequent meetings and updates from Nuveen's corporate finance group. The Trustees also 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 profit margins of various unaffiliated management firms with similar amounts of assets under management prepared by Nuveen. In reviewing profitability, the Trustees have recognized the subjective nature in determining profitability which may be affected by numerous factors, including, the allocation of expenses. Further, the Trustees 97 have recognized the difficulties in making comparisons as the profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative of the industry and may be affected by, among other things, the adviser's particular business mix, capital costs, types of funds managed and expense allocations. Notwithstanding the foregoing, the Trustees reviewed Nuveen's methodology and assumptions for allocating expenses across product lines to determine profitability. Last year, the Trustees also designated an independent Trustee as a point person for the Board to review the methodology determinations during the year and any refinements thereto and report back to them. The Trustees also reviewed the comparisons of Nuveen's profitability margins (including pre- and post-marketing profit margins) with the profitability of various unaffiliated management firms. In reviewing profitability, the Trustees recognized Nuveen's increased investment into its fund business. Based on its review, the Trustees concluded that they were satisfied that Nuveen's level of profitability for its advisory activities was reasonable in light of the services provided. In evaluating the reasonableness of the compensation, the Trustees also considered any other revenues paid to the 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. 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. 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. In addition to advisory fee breakpoints, the Board also approved in 2004 a complex-wide fee arrangement. 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 noted that the last breakpoint for the complex-wide fee schedule is at the $91 billion level and anticipate further review and/or negotiations prior to the assets of the Nuveen complex reaching such threshold. 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 subject to further evaluation of the complex-wide fee schedule as assets in the complex increase. 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. With respect to closed-end funds, the Trustees considered revenues received by affiliates of NAM 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 whereby a portion of the commissions paid by a Fund for brokerage may be used to acquire research that may be useful to the Fund Adviser in managing the assets of the Fund and other clients. With respect to NAM, the Trustees noted that NAM does not currently have any soft dollar arrangements; however, to the extent certain bona fide agency transactions that occur on markets that traditionally trade on a principal basis and riskless principal transactions are considered as generating "commissions," NAM intends to comply with the applicable safe harbor provisions. F. OTHER CONSIDERATIONS The Trustees did not identify any single factor discussed previously as all-important or controlling. The Trustees, including the independent Trustees, unanimously concluded that the terms of the NAM Investment Management Agreements are 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 NAM Investment Management Agreements should be approved. 98 Reinvest Automatically EASILY and CONVENIENTLY NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen 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 greater of the net asset value or 95% of 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. If the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund's shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares' net asset value or 95% of the shares' market value on the last business day immediately prior to the purchase date. 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. 99 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. 100 NOTES 101 Glossary of TERMS USED in this REPORT o 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. o AVERAGE EFFECTIVE MATURITY: The average of the number of years to maturity of the bonds in a Fund's portfolio, computed by weighting each bond's time to maturity (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 unless an escrow account has been established to redeem the bond before maturity. The market value weighting for an investment in an inverse floating rate security is the value of the portfolio's residual interest in the inverse floating rate trust, and does not include the value of the floating rate securities issued by the trust. o INVERSE FLOATERS: Inverse floating rate securities are created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. This trust, in turn, (a) issues floating rate certificates typically paying short-term tax-exempt interest rates to third parties in amounts equal to some fraction of the deposited bond's par amount or market value, and (b) issues an inverse floating rate certificate (sometimes referred to as an "inverse floater") to an investor (such as a Fund) interested in gaining investment exposure to a long-term municipal bond. The income received by the holder of the inverse floater varies inversely with the short-term rate paid to the floating rate certificates' holders, and in most circumstances the holder of the inverse floater bears substantially all of the underlying bond's downside investment risk. The holder of the inverse floater typically also benefits disproportionately from any potential appreciation of the underlying bond's value. Hence, an inverse floater essentially represents an investment in the underlying bond on a leveraged basis. o 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. o MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's current annualized dividend divided by its current market price. o 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. o 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. 102 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 For Funds listed on the New York Stock Exchange, each Fund's Chief Executive Officer has submitted to the 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. INVESTMENT POLICY CHANGE In February 2007, the Board of Trustees voted to remove investment policy restrictions that limited the territorial bond holdings of these Funds to a maximum of 10 percent of net assets. This change will give the Funds' portfolio managers greater flexibility to achieve its investment objectives. BOARD OF TRUSTEES Robert P. Bremner Jack B. Evans William C. Hunter David J. Kundert William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Carol E. Stone 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. 103 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 $166 billion in assets, as of March 31, 2007, 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 six distinct brands: NWQ, specializing in value-style equities; Nuveen, managing fixed-income investments; Santa Barbara, committed to growth equities; Tradewinds, specializing in global value equities; Rittenhouse, focused on "blue-chip" growth equities; and Symphony, with expertise in alternative investments as well as equity and income 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. Learn more about Nuveen Funds at: WWW.NUVEEN.COM/ETF SHARE PRICES FUND DETAILS DAILY FINANCIAL NEWS INVESTOR EDUCATION INTERACTIVE PLANNING TOOLS EAN-A-0507D 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 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, 2007 $ 8,237 $ 0 $ 0 $ 2,250 - -------------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% 0% pursuant to pre-approval exception - -------------------------------------------------------------------------------------------------------------------------- May 31, 2006 $ 7,821 $ 0 $475 $ 2,850 - -------------------------------------------------------------------------------------------------------------------------- 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, 2007 $ 0 $ 0 $ 0 - -------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - -------------------------------------------------------------------------------------------------------------- May 31, 2006 $ 0 $ 2,400 $ 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 $161,400 in 2006. Beginning with fund fiscal years ending August 31, 2006, Ernst & Young LLP will no longer prepare the fund tax returns. 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, 2007 $ 2,250 $ 0 $ 0 $ 2,250 May 31, 2006 $ 3,325 $ 2,400 $ 0 $ 5,725 "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, Jack B. Evans, William J. Schneider, Eugene S. Sunshine and David J. Kundert. 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 P. STEEVES Nuveen Virginia Dividend Advantage Municipal Fund 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 P. Steeves Registered Investment Company 41 $8.274 billion Other Pooled Investment Vehicles -0- $0 Other Accounts -0- $0 * Assets are as of May 31, 2007. None of the assets in these accounts are subject to an advisory fee based on performance. Compensation. Each portfolio manager's 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 April 30, 2007, the S&P/Investortools Municipal Bond index was comprised of 50,300 securities with an aggregate current market value of $985.260 billion. Base salary. Each portfolio manager is 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. Each portfolio manager is 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 serves as portfolio manager relative to any benchmarks established for those accounts, his effectiveness in communicating investment performance to stockholders and their representatives, and his contribution to the NAM's 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. Each portfolio manager is 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. Each 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, 2007, 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 EQUITY SECURITIES DOLLAR RANGE OF BENEFICIALLY OWNED EQUITY IN THE REMAINDER OF SECURITIES NUVEEN FUNDS MANAGED BENEFICIALLY BY NAM'S MUNICIPAL NAME OF PORTFOLIO MANAGER FUND OWNED IN FUND INVESTMENT TEAM - -------------------------- ---------------------------------------------- ----------------- ---------------------- Cathryn Steeves Nuveen Virginia Dividend Advantage Municipal $0 $10,000-$50,000 Fund - -------------------------- ---------------------------------------------- ----------------- ---------------------- PORTFOLIO MANAGER BIO: Cathryn Steeves, PhD is currently a portfolio manager for 42 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. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrants Board implemented after the registrant last provided disclosure in response to this item. 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 ----------------------------------------------------------- By (Signature and Title)* /s/ Kevin J. McCarthy ---------------------------------------------- Kevin J. McCarthy Vice President and Secretary Date: August 8, 2007 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Gifford R. Zimmerman ---------------------------------------------- Gifford R. Zimmerman Chief Administrative Officer (principal executive officer) Date: August 8, 2007 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) Date: August 8, 2007 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.