<Page>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
<Table>
Investment Company Act file number: 811-2896
Exact name of registrant as specified in charter: Prudential High Yield Fund, Inc.
(d/b/a Dryden High Yield Fund)
Address of principal executive offices: Gateway Center 3
100 Mulberry Street
Newark, New Jersey 07102
Name and address of agent for service: Deborah Docs
Gateway Center 3
100 Mulberry Street
Newark, New Jersey 07102
Registrant's telephone number, including area code: 973-367-7521
Date of fiscal year end: December 31, 2003
Date of reporting period: June 30, 2003
</Table>
<Page>
Item 1 -- Reports to Stockholders
Dryden
High Yield Fund
JUNE 30, 2003 SEMIANNUAL REPORT
(GRAPHIC)
FUND TYPE OBJECTIVES
Junk bond Current income, with capital
appreciation as a secondary objective
--------------------------------------
This report is not authorized for
distribution to prospective investors unless
preceded or accompanied by
a current prospectus.
The views expressed in this report
and information about the Fund's
portfolio holdings are for the period covered
by this report and are subject
to change thereafter.
JennisonDryden is a service mark of
The Prudential Insurance Company
of America.
JennisonDrydenMutualFunds
Dear Shareholder, August 15, 2003
Stocks and bonds often move in opposite
directions. However, for a period during
the spring of 2003, both markets in the United
States rallied in tandem. Recently, signs of
stronger economic growth have helped sustain
the rise in equities but weighed heavily on
bonds. Regardless of the direction of financial
markets, it is important to remember that a
wise investor plans today for tomorrow's needs.
Current market activity should have little
impact on planning for your long-term
investment goals.
Whether you are investing for your retirement,
your children's education, or some other
purpose, JennisonDryden mutual funds offer the
experience, resources, and professional
discipline of three leading asset management
firms that can make a difference for you.
JennisonDryden equity funds are managed by
Jennison Associates and Quantitative
Management. Prudential Fixed Income manages the
JennisonDryden fixed income and money market
funds.
A diversified asset allocation strategy is a
disciplined approach to investing that
may help you make more consistent progress
toward your goals. We recommend
that you develop a personal asset allocation
strategy in consultation with a financial
professional who knows you, who understands
your reasons for investing, the time you have
to reach your goals, and the amount of risk you
are comfortable assuming. JennisonDryden mutual
funds offer a wide range of investment choices,
and your financial professional can help you
choose the appropriate funds to implement
your strategy.
I was named president of the Dryden High Yield
Fund in March 2003. Thank you for your
confidence in JennisonDryden mutual funds. We
look forward to serving your future investment
needs.
Sincerely,
Judy A. Rice, President
Dryden High Yield Fund
Dryden High Yield Fund 1
Your Fund's Performance
Fund Objectives
The primary investment objective of the Dryden
High Yield Fund (the Fund) is to maximize current
income. As a secondary investment objective, the Fund
seeks capital appreciation, but only when
consistent with the Fund's primary investment
objective. There can be no assurance that the
Fund will achieve its investment objectives.
Cumulative Total Returns1 as of 6/30/03
Six Months One Year Five Years Ten Years Since Inception2
Class A 15.61% 18.45% 5.05% 69.85% 165.52%
Class B 15.36 17.88 2.42 60.82 576.49
Class C 15.36 17.88 2.42 N/A 55.25
Class Z 15.72 18.73 6.45 N/A 36.13
Lehman Brothers U.S. Corp. High Yield Index3 18.49 22.76 15.56 89.49 ***
Lipper High Current Yield Funds Avg.4 14.61 17.41 4.49 62.73 ****
Average Annual Total Returns1 as of 6/30/03
One Year Five Years Ten Years Since Inception2
Class A 13.71% 0.17% 5.01% 7.21%
Class B 12.88 0.35 4.87 8.20
Class C 15.72 0.28 N/A 4.94
Class Z 18.73 1.26 N/A 4.30
Lehman Brothers U.S. Corp. High Yield Index3 22.76 2.94 6.60 ***
Lipper High Current Yield Funds Avg.4 17.41 0.66 4.87 ****
Distributions and Yields1 as of 6/30/03
Total Distributions 30-Day
Paid for Six Months SEC Yield
Class A $0.22 6.58%
Class B $0.21 6.36
Class C $0.21 6.29
Class Z $0.23 7.12
Past performance is not indicative of future
results. Principal value and investment return
will fluctuate so that an investor's shares,
when redeemed, may be worth more or less than
their original cost. 1Source: Prudential
Investments LLC and Lipper Inc. The cumulative
total returns do not take into account
applicable sales charges. If reflected, the
applicable sales charges would reduce the
cumulative total return performance quoted. The
average annual total returns do take into
account applicable sales charges. Without the
distribution and service (12b-1) fee waiver of
0.05% and 0.25% for Class A and Class C shares
respectively, the returns for these classes
would have been lower. The Fund charges a
maximum front-end sales charge of 4% for Class
A shares and a 12b-1 fee of up to 0.30%
annually. In some circumstances, Class A shares
may not be subject to a front-end sales charge,
but may be subject to a 1% contingent deferred
sales charge (CDSC) for the first year. Class B
shares are subject to a declining CDSC of 5%,
4%, 3%, 2%, 1%, and 1% for the first six years
respectively after purchase and a 12b-1 fee of
0.75% annually. Approximately seven years after
purchase, Class B shares will automatically
convert to Class A shares on a quarterly basis.
Class C shares are subject to a front-end sales
charge of 1%, a CDSC of 1% for shares redeemed
within 18 months of purchase, and a 12b-1 fee
of up to 1% annually. Class Z shares are not
subject to a sales charge or 12b-1 fee. The
returns in the tables do not reflect the
deduction of taxes that a shareholder would pay
on fund distributions or following the
redemption of fund shares. 2Inception dates:
Class A, 1/22/90; Class B, 3/29/79; Class C,
8/1/94; and Class Z, 3/1/96. 3The
2 Visit our website at www.jennisondryden.com
Lehman Brothers U.S. Corporate High Yield Index
is an unmanaged index of fixed-rate,
noninvestment-grade debt securities with at
least one year remaining to maturity. It gives
a broad look at how high yield ("junk") bonds
have performed. 4The Lipper High Current Yield
Funds Average (Lipper Average) represents
returns based on an average return of all funds
in the Lipper High Current Yield Funds category
for the periods noted. Funds in the Lipper
Average aim at high (relative) current yield
from fixed income securities, have no quality
or maturity restrictions, and tend to invest in
lower-grade debt issues. Investors cannot
invest directly in an index. The returns for
the Lehman Brothers U.S. Corporate High Yield
Index and the Lipper Average would be lower if
they included the effects of sales charges,
operating expenses of a mutual fund, or taxes.
Returns for the Lipper Average reflect the
deduction of operating expenses, but not sales
charges or taxes. ***Lehman Brothers U.S.
Corporate High Yield Index Closest Month-End to
Inception cumulative total returns as of
6/30/03 are 227.48% for Class A, 535.99% for
Class B, 81.46% for Class C, and 48.89% for
Class Z. Lehman Brothers U.S. Corporate High
Yield Index Closest Month-End to Inception
average annual total returns as of 6/30/03 are
9.24% for Class A, 9.69% for Class B, 6.91% for
Class C, and 5.58% for Class Z. The Lehman
Brothers U.S. Corporate High Yield Index began
on 6/30/83, therefore the return for Class B
shares represents an inception return from that
time until present (6/30/03). ****Lipper
Average Closest Month-End to Inception
cumulative total returns as of 6/30/03 are
175.30% for Class A, 700.34% for Class B,
54.44% for Class C, and 33.63% for Class Z.
Lipper Average Closest Month-End to Inception
average annual total returns as of 6/30/03 are
7.71% for Class A, 8.85% for Class B, 4.86% for
Class C, and 3.87% for Class Z.
Five Largest Issuers expressed as a percentage
of total investments(D) as of 6/30/03.
CSC Holdings, Inc. 3.0%
Nextel Communications, Inc. 2.0
Allied Waste of North America, Inc. 1.9
Qwest Capital Funding, Inc. 1.8
HCA, Inc. The Healthcare Co. 1.6
(D)Excludes cash received as a result of
securities on loan. Issuers are subject to
change.
Credit Quality* expressed as a percentage of
net assets as of 6/30/03.
High Grade 2.4%
Ba 31.2
B 47.5
Caa or Lower 14.8
Not Rated 2.4
Cash & Equivalents 1.7
*Source: Moody's rating, defaulting to S&P when
not rated. Credit Quality is subject to change.
Dryden High Yield Fund 3
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited)
<Table>
<Caption>
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PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
LONG-TERM INVESTMENTS 97.0%
ASSET BACKED SECURITIES 0.6%
----------------------------------------------------------------------------------
CSAM Funding Corp. I,
Sub. Notes, Cl. D-2 Ba2 7.661%(j) 3/29/16 $ 7,000 $ 5,040,000
Inner Harbor,
Sub. Notes, Cl. B-2
(cost $4,646,501;
purchased 4/19/01) Ba2 11.19 6/15/13 5,000(b) 2,500,000
Liberty Square Ltd.,
Ser. 2001-2A, Cl. D
(cost $3,730,968;
purchased 5/23/01) Ba3 7.53(j) 6/15/13 3,462(b) 415,409
Octagon Investment
Partners III, Sr. Sec'd
Notes
(cost $5,000,000;
purchased 12/7/99) Ba3 7.338(j) 12/14/11 5,000(b) 3,028,500
Stanfield/RMF
Transatlantic Ltd., Sr.
Notes, Ser. D-1 (cost
$5,000,000; purchased
4/19/00) B3 7.389(j) 4/15/15 5,000(b) 1,500,000
---------------
Total asset backed
securities
(cost $25,055,279) 12,483,909
---------------
CORPORATE BONDS 87.0%
AEROSPACE/DEFENSE 1.0%
-----------------------------------------------------------------------------------
K&F Industries, Inc.,
Sr. Sub. Notes B3 9.625 12/15/10 4,950 5,494,500
Sr. Sub. Notes, Ser. B B3 9.25 10/15/07 4,555 4,748,587
L-3 Communications Corp.,
Sr. Sub. Notes Ba3 7.625 6/15/12 7,500 8,250,000
Sequa Corp., Sr. Notes B1 8.875 4/1/08 3,500 3,657,500
Stellex Technologies,
Inc.,
Sr. Sub. Notes, Ser. B NR 9.50 11/1/07 1,000(f) 130
---------------
22,150,717
BANKS/FINANCIAL SERVICES/INSURANCE 0.3%
-----------------------------------------------------------------------------------
LNR Property Corp.,
Sr. Sub. Notes, Ser. B Ba3 9.375 3/15/08 1,000 1,051,250
</Table>
See Notes to Financial Statements.
4 Visit our website at www.jennisondryden.com
<Page>
<Table>
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PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Sovereign Bancorp, Inc.,
Sr. Notes Ba1 10.50% 11/15/06 $ 1,245 $ 1,495,680
Western Financial Savings
Bank, Sub. Cap. Deb. B1 8.875 8/1/07 4,400 4,576,000
---------------
7,122,930
BUILDING & CONSTRUCTION 1.6%
-----------------------------------------------------------------------------------
American Standard, Inc.,
Gtd. Notes Ba2 7.375 4/15/05 5,000 5,300,000
D.R. Horton, Inc.,
Sr. Gtd. Notes Ba1 8.00 2/1/09 5,125 5,701,562
Sr. Notes Ba1 7.50 12/1/07 4,000 4,330,000
Sr. Notes Ba1 8.50 4/15/12 2,375 2,671,875
KB Home, Sr. Sub. Notes Ba3 8.625 12/15/08 6,325 7,178,875
New Millenium Homes LLC NR Zero 12/31/04 1,854(d) 927,000
Nortek, Inc.,
Sr. Notes B1 9.25 3/15/07 1,440 1,483,200
Sr. Sub. Notes, Ser. B B3 9.875 6/15/11 5,175 5,446,688
---------------
33,039,200
CABLE 6.1%
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Avalon Cable Holdings
LLC, Sr. Disc. Notes,
Zero Coupon (until
12/1/03) Caa1 11.875 12/1/08 7,410 7,085,812
Callahan Nordrhein
Westfalen (Germany),
Sr. Disc. Notes, Zero
Coupon (until 07/15/05) NR 16.00 7/15/10 15,000(i) 375,000
Sr. Notes NR 14.00 7/15/10 6,900(i) 276,000
Charter Communications
Holdings LLC,
Sr. Disc. Notes Ca 9.92 4/1/11 3,000 1,972,500
Sr. Disc. Notes, Zero
Coupon (until 5/15/06) Ca 11.75 5/15/11 3,000 1,515,000
Sr. Notes Ca 8.625 4/1/09 4,400(g) 3,168,000
Sr. Notes Ca 10.00 4/1/09 1,500 1,147,500
Sr. Notes Ca 10.75 10/1/09 2,700 2,092,500
Sr. Notes Ca 9.625 11/15/09 7,250(g) 5,292,500
Sr. Notes Ca 10.25 1/15/10 8,200 6,191,000
Sr. Notes Ca 11.125 1/15/11 6,000(g) 4,650,000
Sr. Notes Ca 10.00 5/15/11 4,800 3,456,000
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 5
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
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PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Coaxial Communications,
Inc., Sr. Notes B3 10.00% 8/15/06 $ 12,000 $ 12,375,000
Comcast UK Cable Partners
Ltd. (Bermuda), Sr.
Disc. Deb. Caa2 11.20 11/15/07 10,900(i) 10,641,125
CSC Holdings, Inc.
Deb. B1 7.625 7/15/18 4,850(d) 4,837,875
Sr. Sub. Deb. B2 9.875 2/15/13 3,000(g) 3,135,000
DirecTV Holdings, Sr.
Notes B1 8.375 3/15/13 8,040 8,964,600
Echostar DBS Corp.,
Sr. Notes Ba3 10.375 10/1/07 18,225 20,184,187
Sr. Notes Ba3 9.125 1/15/09 11,045 12,342,788
Mediacom Broadband LLC,
Sr. Notes B2 7.875 2/15/11 9,750 9,701,250
Sr. Notes B2 11.00 7/15/13 1,500 1,668,750
Rogers Cable, Inc. Ba2 6.25 6/15/13 4,000 3,990,000
United Pan-Europe
Communications, Inc.
(Netherlands)
Sr. Disc. Notes, Zero
Coupon (until 2/1/05) Ca 13.75 2/1/10 21,550(i) 2,963,125
Sr. Disc. Notes, Zero
Coupon (until 8/1/04) Ca 12.50 8/1/09 3,820(i) 573,000
---------------
128,598,512
CHEMICALS 3.3%
-----------------------------------------------------------------------------------
Avecia Group PLC (United
Kingdom), Sr. Notes Caa1 11.00 7/1/09 850(i) 769,250
Equistar Chemicals LP,
Gtd. Notes B1 10.125 9/1/08 2,350(g) 2,420,500
Notes BB(a) 6.50 2/15/06 1,400 1,337,000
Sr. Notes B1 10.625 5/1/11 4,000(g) 4,100,000
Huntsman International
LLC, Sr. Sub. Notes Caa1 10.125 7/1/09 20,466 19,647,360
IMC Global, Inc.,
Notes B2 6.55 1/15/05 3,000 3,120,000
Sr. Notes B1 11.25 6/1/11 1,600 1,664,000
Sr. Notes, Ser. B B1 10.875 6/1/08 325 338,000
Sr. Notes, Ser. B B1 11.25 6/1/11 1,675(g) 1,742,000
ISP Chemco, Inc., Sr.
Sub. Notes, Ser. B B2 10.25 7/1/11 6,785 7,667,050
</Table>
See Notes to Financial Statements.
6 Visit our website at www.jennisondryden.com
<Page>
<Table>
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PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Lyondell Chemical Co.,
Sr. Notes, Ser. B Ba3 9.875% 5/1/07 $ 1,950 $ 1,911,000
Sr. Sec'd. Notes Ba3 9.50 12/15/08 2,405 2,284,750
Sr. Sec'd. Notes Ba3 10.50 6/1/13 4,350(g) 4,350,000
Sr. Sub. Notes B2 10.875 5/1/09 4,050 3,766,500
OM Group, Inc.,
Sr. Sub. Notes Caa2 9.25 12/15/11 16,440 16,029,000
---------------
71,146,410
CONSUMER PRODUCTS & SERVICES 1.1%
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Coinmach Corp., Sr. Notes B2 9.00 2/1/10 7,945 8,501,150
Corning Consumer Prods.
Co., Sr. Sub. Notes NR 9.625 5/1/08 5,030(e) 251,500
Dimon, Inc., Sr. Notes Ba3 9.625 10/15/11 3,150 3,465,000
Kindercare Learning
Centers, Inc., Sr. Sub.
Notes B3 9.50 2/15/09 8,200(g) 8,261,500
SPX Corp., Sr. Notes Ba3 6.25 6/15/11 2,275(g) 2,320,500
---------------
22,799,650
CONTAINERS 5.4%
-----------------------------------------------------------------------------------
Anchor Glass Container
Corp., Sr. Sec'd. Notes B2 11.00 2/15/13 3,725(g) 4,069,562
Berry Plastics Corp.,
Gtd. Notes B3 10.75 7/15/12 3,500 3,850,000
Bway Corp., Sr. Sub.
Notes B3 10.00 10/15/10 2,000 2,030,000
Crown European Holdings
SA, Sec'd. Notes B1 9.50 3/1/11 6,250 6,750,000
Graham Packaging
Holdings Co.,
Sr. Disc. Notes Caa2 10.75 1/15/09 10,675 10,995,250
Sr. Sub. Notes, Ser. B Caa1 8.75 1/15/08 7,150 7,114,250
Greif Brothers Corp., Sr.
Sub. Notes B2 8.875 8/1/12 3,495 3,757,125
Norampac, Inc., Sr. Notes Ba2 6.75 6/1/13 4,500 4,725,000
Owens-Brockway Glass
Container,
Sec'd. Notes B1 8.75 11/15/12 2,265 2,457,525
Sec'd. Notes B1 7.75 5/15/11 11,250 11,896,875
Riverwood Int'l. Corp.,
Gtd. Notes B3 10.625 8/1/07 3,067 3,182,013
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 7
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
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PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Silgan Holdings, Inc.,
Sr. Sub. Deb. B1 9.00% 6/1/09 $ 13,400 $ 13,869,000
Smurfit-Stone Container
Corp.,
Sr. Notes B2 8.25 10/1/12 10,750 11,529,375
Sr. Notes B2 7.50 6/1/13 7,000 7,140,000
Stone Container Corp.
(Canada),
Sr. Notes B2 11.50 8/15/06 4,870(i) 5,198,725
Sr. Notes B2 9.75 2/1/11 4,570(i) 5,004,150
Sr. Notes B2 8.375 7/1/12 5,000(i) 5,362,500
United States Can Corp.,
Bank Loan
(cost $4,408,194;
purchased 9/25/02) Caa1 5.65 12/31/08 6,776(k) 6,494,890
---------------
115,426,240
ENERGY 10.1%
-----------------------------------------------------------------------------------
AmeriGas Partners &
Eagle, Sr. Notes, Ser. B B2 8.875 5/20/11 4,600 5,014,000
Aquila, Inc., Sr. Notes Caa1 9.95 2/1/11 2,575(g) 2,266,000
Cogentrix, Inc., Sr.
Notes B1 8.10 3/15/04 1,850 1,688,125
Edison Mission Energy,
Sr. Notes B2 7.73 6/15/09 5,825 4,980,375
Sr. Notes B2 9.875 4/15/11 1,250 1,156,250
El Paso Corp., Sr. Notes Caa1 7.00 5/15/11 9,725(g) 8,849,750
El Paso Energy Partners
LP, Sr. Sub. Notes B1 8.50 6/1/11 775 829,250
El Paso Production
Holdings, Sr. Notes B2 7.75 6/1/13 20,775 20,723,062
Empresa Nacional de
Electricidad SA (Chile),
Notes Ba3 7.75 7/15/08 3,000(i) 3,133,902
Eott Energy Partners LP,
Sr. Notes NR 11.00 10/1/09 3,605(e) 3,424,750
Ferrellgas Partner LP,
Sr. Notes B2 8.75 6/15/12 2,590 2,810,150
Forest Oil Corp.,
Sr. Notes Ba3 8.00 6/15/08 3,500 3,745,000
Sr. Notes Ba3 8.00 12/15/11 7,199 7,738,925
Gazprom, Notes B+(a) 9.625 3/1/13 7,700(g) 8,489,250
Gemstone Investors Ltd.,
Gtd. Notes Caa1 7.71 10/31/04 6,995 6,960,025
</Table>
See Notes to Financial Statements.
8 Visit our website at www.jennisondryden.com
<Page>
<Table>
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PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
GulfTerra Energy
Partners, LP, Sr. Notes Ba3 6.25% 6/1/10 $ 2,600 $ 2,593,500
Hanover Equipment Trust,
Sec'd. Notes, Ser. B B2 8.75 9/1/11 7,325 7,691,250
Homer City Funding LLC,
Gtd. Notes Ba2 8.137 10/1/19 4,000 4,270,000
Houston Exploration Co.
Sr. Sub. Notes B2 8.625 1/1/08 11,020 11,515,900
Sr. Sub. Notes B2 7.00 6/15/13 2,350 2,426,375
Leviathan Gas Pipeline
Corp., Sr. Sub. Notes B1 10.375 6/1/09 4,750 5,070,625
Magnum Hunter Resources,
Inc., Sr. Notes B2 9.60 3/15/12 4,250 4,675,000
Parker & Parsley
Petroleum Co., Sr. Notes Ba1 8.875 4/15/05 2,000 2,190,000
Parker Drilling Co., Sr.
Notes, Ser. D B1 9.75 11/15/06 4,330(g) 4,459,900
Peabody Energy Corp.,
Sr. Notes Ba3 6.875 3/15/13 7,525 7,882,438
Pemex Project Funding,
Gtd. Notes Baa1 9.125 10/13/10 4,275 5,172,750
Plains All American
Pipeline LP, Gtd. Notes Ba2 7.75 10/15/12 1,120 1,254,400
Premcor Refining Group,
Inc.
Sr. Notes Ba3 9.50 2/1/13 8,150 9,005,750
Sr. Notes Ba3 7.50 6/15/15 1,550 1,526,750
Tennessee Gas Pipeline
Co.,
Deb. B1 7.00 3/15/27 4,355 4,409,438
Deb. B1 7.00 10/15/28 3,200(g) 3,044,000
Deb. B1 7.625 4/1/37 8,615 8,722,687
TransMontaigne, Inc.,
Sr. Sub. Notes B3 9.125 6/1/10 3,900 4,109,625
Vintage Petroleum, Inc.,
Sr. Notes Ba3 8.25 5/1/12 3,010 3,311,000
Sr. Sub. Notes B1 9.75 6/30/09 1,530 1,644,750
Sr. Sub. Notes B1 7.875 5/15/11 2,250 2,413,125
Westar Energy, Inc.,
1st Mtge. Ba1 7.875 5/1/07 4,870 5,442,225
Notes Ba2 6.25 8/15/18 1,505 1,510,644
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 9
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Williams Cos., Inc.,
Notes B3 9.25% 3/15/04 $ 3,030(g) $ 3,105,750
Notes B3 7.125 9/1/11 10,275(g) 10,018,125
Notes B3 8.125 3/15/12 6,110(g) 6,262,750
Sr. Notes B3 8.625 6/1/10 9,525 9,953,625
---------------
215,491,196
FOOD/BEVERAGES/BOTTLING 3.3%
-----------------------------------------------------------------------------------
Agrilink Foods, Inc.,
Sr. Sub. Notes B3 11.875 11/1/08 6,230 6,712,825
Ahold Finance USA, Inc.
(Netherlands), Notes B1 8.25 7/15/10 2,125(i) 2,178,125
Carrols Corp., Sr. Sub.
Notes B3 9.50 12/1/08 12,000 11,670,000
Del Monte Corp.,
Sr. Sub. Notes B2 8.625 12/15/12 4,400 4,664,000
Delhaize America, Inc.,
Gtd. Notes Ba1 8.125 4/15/11 11,695 12,806,025
Dole Food Co., Inc.,
Sr. Notes B2 8.625 5/1/09 7,100 7,508,250
Dominos, Inc., Sr. Sub.
Notes B3 8.25 7/1/11 2,950 3,045,875
Iowa Select Farms LP,
Sec'd. Notes, PIK NR 10.75 12/1/06 646 355,363
National Restaurant
Enterprises Holding,
Inc.,
Sr. Notes NR 10.75 11/15/07 1,090(e) 109,005
Sr. Notes, PIK NR 13.00 5/15/08 1,320(e) 132,006
Smithfield Foods, Inc.,
Notes Ba2 7.75 5/15/13 3,750 4,021,875
Sr. Notes Ba2 8.00 10/15/09 2,135(g) 2,311,137
Specialty Foods
Acquisition Corp., Sr.
Sec'd. Disc. Deb. NR 13.00 6/15/09 460(f) 5
Sun World Int'l, Inc.,
Notes, Ser. B NR 11.25 4/15/04 2,435(e) 1,607,100
Tricon Global
Restaurants, Inc.,
Sr. Notes Ba1 8.50 4/15/06 3,000 3,360,000
Sr. Notes Ba1 8.875 4/15/11 8,000 9,480,000
---------------
69,961,591
GAMING 5.4%
-----------------------------------------------------------------------------------
Argosy Gaming Co.,
Sr. Sub. Notes B2 9.00 9/1/11 2,355 2,543,400
</Table>
See Notes to Financial Statements.
10 Visit our website at www.jennisondryden.com
<Page>
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Boyd Gaming Corp.,
Sr. Sub. Notes B1 8.75% 4/15/12 $ 2,800(g) $ 3,066,000
Circus Circus
Enterprises, Inc.,
Deb. Ba2 6.70 11/15/96 9,595 9,690,950
Notes Ba2 6.45 2/1/06 2,925 3,027,375
Coast Hotels & Casinos,
Inc., Sr. Sub. Notes B2 9.50 4/1/09 8,000 8,560,000
Isle of Capri Casinos,
Inc.,
Sr. Sub. Notes B2 9.00 3/15/12 910 991,900
Kerzner International
Ltd. (Bahamas), Gtd.
Notes B2 8.875 8/15/11 9,670(i) 10,467,775
Majestic Investor
Holdings LLC, Sr. Sec'd.
Notes B2 11.653 11/30/07 5,000 5,018,750
Mandalay Resort Group,
Sr. Notes Ba2 9.50 8/1/08 3,500 4,007,500
MGM Mirage, Inc.,
Gtd. Notes Ba2 9.75 6/1/07 12,550 14,244,250
Sr. Notes Ba1 8.50 9/15/10 900 1,057,500
Sr. Sub. Notes Ba2 8.375 2/1/11 405(g) 460,688
Mohegan Tribal Gaming
Authority, Sr. Sub.
Notes Ba3 8.00 4/1/12 2,810(g) 3,034,800
Park Place Entertainment
Corp.,
Sr. Notes Ba1 8.50 11/15/06 1,275 1,408,875
Sr. Notes Ba1 7.00 4/15/13 5,975 6,393,250
Sr. Sub. Notes Ba2 7.875 12/15/05 3,500 3,731,875
Sr. Sub. Notes Ba2 9.375 2/15/07 2,100 2,325,750
Sr. Sub. Notes Ba2 8.875 9/15/08 2,240 2,469,600
Sr. Sub. Notes Ba2 7.875 3/15/10 1,855(g) 1,994,125
Sr. Sub. Notes Ba2 8.125 5/15/11 1,000(g) 1,097,500
Station Casinos, Inc.,
Sr. Sub. Notes B2 9.875 7/1/10 11,032 12,135,200
Venetian Casino Resort
LLC, Gtd. Notes B3 11.00 6/15/10 14,345 16,173,987
---------------
113,901,050
HEALTHCARE 6.4%
-----------------------------------------------------------------------------------
Alaris Medical Systems,
Inc.,
Sr. Disc. Notes, Zero
Coupon (until 8/1/03) Caa2 11.125 8/1/08 4,833 5,098,815
Sr. Sec'd. Notes B2 11.625 12/1/06 5,250 6,378,750
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 11
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Concentra Operating
Corp., Sr. Sub. Notes,
Ser. B B3 13.00% 8/15/09 $ 6,525 $ 7,308,000
Fresenius Med. Care
Capital Trust, Gtd.
Notes Ba2 7.875 6/15/11 3,550 3,745,250
Hanger Orthopedic Group,
Inc., Sr. Sub. Notes B3 11.25 6/15/09 4,085(g) 4,411,800
Harborside Healthcare
Corp., Sr. Sub. Disc.
Notes, Zero Coupon
(until 8/1/04) NR 12.08 8/1/07 7,373(f) 1,400,870
HCA, Inc., The Healthcare
Co.
Deb. Ba1 7.50 11/15/95 4,235 4,009,986
Notes Ba1 7.125 6/1/06 5,030 5,468,289
Notes Ba1 8.85 1/1/07 8,427 9,651,182
Notes Ba1 8.70 2/10/10 4,150 4,942,820
Notes Ba1 9.00 12/15/14 6,500 7,856,186
Notes Ba1 7.69 6/15/25 1,840 1,913,698
HEALTHSOUTH Corp.,
Sr. Notes Caa2 6.875 6/15/05 3,585(g) 2,850,075
Sr. Notes Caa2 8.50 2/1/08 5,925(g) 4,651,125
Magellan Health Services,
Inc., Sr. Notes Caa3 9.375 11/15/07 4,755(g) 4,755,000
Medquest, Inc., Gtd.
Notes, Ser. B B3 11.875 8/15/12 8,050 8,372,000
Omnicare, Inc.,
Sr. Sub. Notes Ba2 6.125 6/1/13 4,100(g) 4,182,000
Res-Care, Inc., Sr. Notes B2 10.625 11/15/08 6,000 5,640,000
Rotech Healthcare, Inc.,
Gtd. Notes B2 9.50 4/1/12 4,635 4,762,463
Select Medical Corp.,
Sr. Sub. Notes B2 9.50 6/15/09 4,120 4,475,350
Service Corp. Int'l.,
Notes B1 6.50 3/15/08 7,825(g) 7,648,937
Sr. Notes B1 6.00 12/15/05 870 876,525
Tenet Healthcare Corp.
Sr. Notes Ba3 6.375 12/1/11 2,300 2,162,000
Sr. Notes Ba3 6.50 6/1/12 4,900 4,544,750
Triad Hospitals, Inc.
Gtd. Notes, Ser. B B1 8.75 5/1/09 840 893,550
Sr. Sub. Notes B2 11.00 5/15/09 8,800 9,702,000
US Healthworks, Inc.,
Sr. Disc. Notes NR 17.00 10/15/04 2,044 2,187,584
</Table>
See Notes to Financial Statements.
12 Visit our website at www.jennisondryden.com
<Page>
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Ventas Realty LP,
Sr. Notes Ba3 8.75% 5/1/09 $ 4,000 $ 4,320,000
Sr. Notes Ba3 9.00 5/1/12 2,050 2,234,500
---------------
136,443,505
INDUSTRIALS/SERVICES 5.3%
-----------------------------------------------------------------------------------
Actuant Corp., Sr. Sub.
Notes B2 13.00 5/1/09 3,448 4,034,160
Alliant Techsystems,
Inc.,
Sr. Sub. Notes B2 8.50 5/15/11 2,955 3,280,050
Allied Waste of North
America, Inc.,
Gtd. Notes, Ser. B Ba3 8.50% 12/1/08 4,785(g) 5,143,875
Sr. Notes Ba3 7.875 1/1/09 17,400(g) 18,204,750
Sr. Notes Ba3 7.875 4/15/13 5,550 5,806,687
Sr. Sub. Notes B2 10.00 8/1/09 10,690(g) 11,358,125
Browning-Ferris
Industrials, Inc., Sr.
Deb. Ba3 7.40 9/15/35 5,000(g) 4,600,000
Gentek, Inc., Sr. Sub.
Notes NR 11.00 8/1/09 13,749(e) 120,304
International Wire Group,
Inc.,
Gtd. Notes Caa1 11.75 6/1/05 5,250 3,360,000
Sr. Sub. Notes Caa1 11.75 6/1/05 134 85,760
Iron Mountain, Inc.,
Sr. Sub. Notes B2 8.625 4/1/13 4,550 4,868,500
Manitowoc Co., Inc.,
Gtd. Notes B2 10.50 8/1/12 6,750(g) 7,492,500
Moore North America
Finance, Sr. Notes B1 7.875 1/15/11 3,900 4,065,750
Motors & Gears, Inc.,
Sr. Notes Caa1 10.75 11/15/06 9,500 8,312,500
Terex Corp.,
Sr. Sub. Notes B3 10.375 4/1/11 10,830 11,967,150
Sr. Sub. Notes B3 9.25 7/15/11 1,845 1,983,375
Thermadyne Holdings
Corp., Sr. Disc. Notes C 12.50 6/1/08 2,500(e) 100
Tyco Int'l. Group SA,
Gtd. Notes Ba2 6.125 11/1/08 1,175 1,227,875
Gtd. Notes Ba2 6.75 2/15/11 2,560 2,713,600
Gtd. Notes Ba2 6.375 10/15/11 4,450(g) 4,694,750
Notes Ba2 2.75 1/15/18 4,950 5,333,625
Notes Ba2 3.125 1/15/23 2,750 3,011,250
Sr. Notes Ba2 6.375 2/15/06 1,200 1,251,000
---------------
112,915,686
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 13
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
LODGING & LEISURE 4.8%
-----------------------------------------------------------------------------------
Extended Stay America,
Inc., Sr. Sub. Notes B2 9.15% 3/15/08 $ 6,050 $ 6,314,688
Felcor Lodging LP, Sr.
Notes B1 10.00 9/15/08 6,770 6,990,025
Felcor Suites LP, Gtd.
Sr. Notes B1 7.375 10/1/04 7,435 7,527,937
Hilton Hotels Corp.,
Sr. Notes Ba1 7.50 12/15/17 6,695 6,895,850
HMH Properties, Inc.,
Gtd Notes., Ser. B Ba3 7.875 8/1/08 6,690(g) 6,790,350
Sr. Notes, Ser. C Ba3 8.45 12/1/08 1,530 1,579,725
Host Marriott Corp.,
Gtd. Notes, Ser. I Ba3 9.50 1/15/07 11,115(g) 11,948,625
Intrawest Corp. (Canada),
Sr. Notes B1 9.75 8/15/08 75(i) 78,281
Sr. Notes B1 10.50 2/1/10 9,570(g) 10,287,750
ITT Corp.,
Deb. Ba1 7.375 11/15/15 7,000 7,236,250
Notes Ba1 6.75 11/15/05 7,365 7,687,263
La Quinta Inns, Inc.,
Sr. Notes Ba3 7.40 9/15/05 1,200 1,245,000
La Quinta Properties,
Sr. Notes Ba3 8.875 3/15/11 5,950 6,336,750
Meditrust Corp., Notes Ba3 7.00 8/15/07 1,150 1,171,563
Royal Caribbean Cruises
Ltd., Sr. Notes Ba2 8.125 7/28/04 2,665(g) 2,744,950
Starwood Hotels & Resorts
Worldwide, Inc.,
Gtd. Notes Ba1 7.375 5/1/07 10,500 11,051,250
Gtd. Notes Ba1 7.875 5/1/12 2,390 2,617,050
Vail Resorts, Inc.,
Sr. Sub. Notes B2 8.75 5/15/09 4,250 4,441,250
---------------
102,944,557
MEDIA 4.5%
-----------------------------------------------------------------------------------
Alliance Atlantis
Communications, Inc.
(Canada), Sr. Sub. Notes B1 13.00 12/15/09 8,125i) 9,262,500
</Table>
See Notes to Financial Statements.
14 Visit our website at www.jennisondryden.com
<Page>
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
American Media
Operations, Inc., Notes,
Ser. B B2 10.25% 5/1/09 $ 3,250 $ 3,510,000
CanWest Media, Inc.
(Canada),
Sr. Notes B1 7.625 4/15/13 1,775(i) 1,885,938
Sr. Sub. Notes B2 10.625 5/15/11 5,600(i) 6,384,000
Dex Media East LLC,
Gtd. Notes B3 12.125 11/15/12 13,125 15,520,312
Gray Television, Inc.,
Sr. Sub. Notes B3 9.25 12/15/11 5,980 6,607,900
InterAct Operating Co.,
PIK NR 14.00 8/1/03 1,976(f) 19,760
Phoenix Color Corp.,
Sr. Sub. Notes Caa2 10.375 2/1/09 1,000 950,000
Quebecor Media, Inc.
(Canada), Sr. Disc.
Notes, Zero Coupon
(until 7/15/06) B2 13.75 7/15/11 10,000(i) 8,300,000
Regal Cinemas, Inc.,
Sr. Sub. Notes B2 9.375 2/1/12 5,230 5,766,075
RH Donnelley Finance
Corp. I, Sr. Sub. Notes B2 10.875 12/15/12 5,675 6,611,375
Sinclair Broadcast Group,
Inc.,
Gtd. Notes B2 8.00 3/15/12 3,525 3,727,687
Sr. Sub. Notes B2 8.75 12/15/11 4,100(g) 4,499,750
Sr. Sub. Notes B2 8.00 3/15/12 4,050 4,323,375
Star Choice
Communications (Canada),
Sr. Sec'd. Notes B3 13.00 12/15/05 4,625(i) 4,937,188
Vertis, Inc.,
Gtd. Notes, Ser. B B3 10.875 6/15/09 4,600 4,600,000
Sec'd. Notes B2 9.75 4/1/09 7,750 8,060,000
World Color Press, Inc.,
Sr. Sub. Notes Baa2 7.75 2/15/09 250 261,641
---------------
95,227,501
METALS & MINING 1.1%
-----------------------------------------------------------------------------------
AK Steel Corp.,
Gtd. Notes B1 7.875 2/15/09 1,360 1,156,000
Gtd. Notes B1 7.75 6/15/12 8,265 6,859,950
Century Aluminum Co.,
Sr. Sec'd. 1st Mtge. B1 11.75 4/15/08 6,420 6,548,400
LTV Corp., Sr. Notes NR 11.75 11/15/09 7,305(e) 73,050
Lukens, Inc., Sr. Notes NR 6.50 2/1/06 5,000(e) 75,000
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 15
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Sheffield Steel Corp.,
Sec'd. Notes NR 10.00% 4/30/07 $ 2,549(d) $ 1,529,400
UCAR Finance, Inc.,
Sr. Notes B3 10.25 2/15/12 4,330 4,243,400
United States Steel
Corp.,
Sr. Notes B1 9.75 5/15/10 1,450(g) 1,471,750
---------------
21,956,950
PAPER & FOREST PRODUCTS 1.9%
-----------------------------------------------------------------------------------
Cascades, Inc., Sr. Notes Ba1 7.25 2/15/13 6,000 6,315,000
Fort James Corp., Sr.
Notes Ba2 6.625 9/15/04 5,000 5,087,500
Georgia-Pacific Corp.,
Deb. Ba3 7.70 6/15/15 4,000(g) 3,850,000
Deb. Ba3 8.625 4/30/25 1,275 1,192,125
Notes Ba3 8.875 5/15/31 1,300 1,274,000
Sr. Notes Ba2 9.375 2/1/13 11,900(g) 13,119,750
Louisiana-Pacific Corp.,
Sr. Notes Ba1 8.50 8/15/05 2,000 2,160,000
Riverwood Int'l. Corp.,
Sr. Notes B3 10.625 8/1/07 2,500 2,593,750
Sr. Sub. Notes Caa1 10.875 4/1/08 4,850(g) 4,971,250
---------------
40,563,375
REAL ESTATE INVESTMENT TRUST 0.3%
-----------------------------------------------------------------------------------
Senior Housing Trust,
Sr. Notes Ba2 8.625 1/15/12 6,000 6,390,000
RETAIL & SUPERMARKETS 2.9%
-----------------------------------------------------------------------------------
Color Spot Nurseries,
Sr. Sub. Notes NR 13.00 12/15/05 2,701(e) 270,061
Dillards, Inc., Notes Ba3 6.43 8/1/04 1,235 1,241,175
Great Atlantic & Pacific
Tea Co., Inc., Notes B3 7.75 4/15/07 2,220(g) 2,075,700
JC Penney Co., Inc.,
Deb. Ba3 7.40 4/1/37 6,390 6,661,575
Notes Ba3 8.00 3/1/10 3,650 3,823,375
Montgomery Ward & Co. NR Zero 1/1/49 2,450(e) 245
Pantry, Inc., Sr. Sub.
Notes B3 10.25 10/15/07 11,370 11,711,100
</Table>
See Notes to Financial Statements.
16 Visit our website at www.jennisondryden.com
<Page>
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Rite Aid Corp.,
Deb. Caa2 6.875% 8/15/13 $ 1,045(g) $ 903,925
Deb. Caa2 7.70 2/15/27 1,615 1,332,375
Deb. Caa2 6.875 12/15/28 4,000 3,120,000
Sec'd. Notes B2 8.125 5/1/10 8,150(g) 8,435,250
Saks, Inc.,
Notes B1 8.25 11/15/08 3,645 3,854,587
Notes B1 7.375 2/15/19 9,185 8,725,750
Southland Corp., Sr. Sub.
Deb. Ba1 5.00 12/15/03 7,380 7,380,000
Winn-Dixie Stores, Inc.,
Sr. Notes Ba2 8.875 4/1/08 1,085(g) 1,150,100
---------------
60,685,218
TECHNOLOGY 3.3%
-----------------------------------------------------------------------------------
Amkor Technology, Inc.,
Deb. B1 9.25 2/15/08 1,410 1,466,400
Ampex Corp., Sec'd.
Notes, (cost $150,000;
purchased 7/15/98), PIK NR 12.00 8/15/08 1,252(b) 187,754
Avaya, Inc., Sr. Sec'd
Notes B2 11.125 4/1/09 2,250 2,463,750
Fairchild Semiconductor
Corp., Gtd. Notes B2 10.375 10/1/07 1,000 1,051,880
Flextronics Int'l. Ltd.
(Singapore),
Notes Ba2 9.875 7/1/10 1,445(i) 1,582,275
Sr. Sub. Notes Ba2 6.50 5/15/13 11,665(i) 11,227,562
ON Semiconductor Corp.,
Gtd. Notes Caa1 13.00 5/15/08 4,885(g) 4,933,850
Sanmina-Sci Corp., Sec'd.
Notes Ba2 10.375 1/15/10 4,380 4,883,700
Solectron Corp., Sr.
Notes Ba3 Zero 11/20/20 11,460(g) 6,360,300
Unisys Corp.,
Sr. Notes Ba1 7.25 1/15/05 8,150 8,486,188
Sr. Notes Ba1 8.125 6/1/06 1,880 2,011,600
Xerox Capital Europe PLC
(United Kingdom),
Gtd. Notes B1 5.875 5/15/04 7,140(i) 7,175,700
Xerox Corp.
Sr. Notes B1 9.75 1/15/09 2,275(g) 2,559,375
Sr. Notes B1 7.125 6/15/10 6,000 5,992,500
Sr. Notes B1 7.625 6/15/13 10,175(g) 10,187,719
---------------
70,570,553
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 17
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
TELECOMMUNICATIONS 8.1%
-----------------------------------------------------------------------------------
Bestel SA (Mexico),
Sr. Disc. Notes NR 12.75% 5/15/05 $ 4,850(i) $ 485,000
Cellnet Data Systems,
Inc., Sr. Disc. Notes NR 14.00 10/1/07 13,069(f) 131
Crown Castle
International Corp., Sr.
Notes B3 10.75 8/1/11 5,520(g) 6,016,800
Dobson Communications
Corp., Sr. Notes B3 10.875 7/1/10 6,355(g) 6,863,400
Lucent Technologies,
Inc., Notes Caa1 5.50 11/15/08 5,725(g) 4,823,313
Nextel Communications,
Inc.,
Sr. Disc. Notes B3 10.65 9/15/07 6,388(d) 6,595,610
Sr. Disc. Notes B3 9.95 2/15/08 5,365(d) 5,606,425
Sr. Notes B3 9.375 11/15/09 2,250(g) 2,415,938
Sr. Notes B3 9.50 2/1/11 7,840(g) 8,682,800
Term Loan B (cost
$6,322,909; purchased
5/1/02, 5/6/02, 5/8/02,
7/3/02, 9/9/02) B3 4.685 6/30/08 7,214(k) 7,187,737
Term Loan C (cost
$6,316,797; purchased
5/1/02, 5/6/02, 5/8/02,
7/30/02, 9/9/02) B3 4.92 12/31/08 7,214(k) 7,187,737
Term Loan D (cost
$2,170,687; purchased
9/12/02) B3 4.33 3/31/09 2,494(k) 2,462,059
Nortel Networks Corp. B3 4.25 9/1/08 10,525 8,867,312
Nortel Networks Limited B3 6.125 2/15/06 0(l) 0
Qwest Capital Funding,
Inc.,
Gtd. Notes Caa2 5.875 8/3/04 4,850(g) 4,643,875
Gtd. Notes Caa2 6.25 7/15/05 11,275 10,429,375
Gtd. Notes Caa2 7.75 8/15/06 24,740 23,008,200
Qwest Corp., Notes Ba3 7.20 11/1/04 2,340 2,398,500
Qwest Services Corp.,
Notes CCC+(a) 13.50 12/15/10 11,656 13,171,280
Rogers Wireless
Communications, Inc.
(Canada), Sr. Sec'd.
Notes Ba3 9.625 5/1/11 5,165(i) 5,939,750
Tellus Corp. (Canada),
Notes Ba1 8.00 6/1/11 10,515(i) 12,144,825
Tritel PCS, Inc., Sr.
Sub. Notes Baa2 10.375 1/15/11 2,755(d) 3,367,988
Triton PCS, Inc., Sr.
Notes B2 8.50 6/1/13 5,000 5,375,000
Verizon Wireless, Inc.,
Notes A3 5.375 12/15/06 2,790 3,064,380
Voicestream Wireless
Corp.,
Sr. Disc. Notes, Zero
Coupon (until 11/15/04) Ba3 11.875 11/15/09 13,589 13,894,752
</Table>
See Notes to Financial Statements.
18 Visit our website at www.jennisondryden.com
<Page>
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
Sr. Notes Ba3 11.50% 9/15/09 $ 6,250 $ 7,296,875
Sr. Notes Ba3 10.375 11/15/09 0(l) 171
---------------
171,929,233
TRANSPORTATION 3.5%
-----------------------------------------------------------------------------------
American Airlines, Inc.,
Certs., Ser. 91-A2 B3 10.18 1/2/13 2,000 1,100,000
American Axle &
Manufacturing, Inc.,
Sr. Sub. Notes Ba2 9.75 3/1/09 3,560 3,827,000
AMR Corp.,
Deb. Caa2 10.00 4/15/21 3,783 2,307,630
Notes NR 10.40 3/10/11 4,450 3,026,000
ArvinMeritor, Inc., Notes Baa3 8.75 3/1/12 11,365(g) 12,728,800
AutoNation, Inc., Sr.
Notes Ba2 9.00 8/1/08 2,000(g) 2,220,000
Calair Capital LLC, Gtd.
Sr. Notes Caa2 8.125 4/1/08 2,980 2,518,100
Continental Airlines,
Inc.,
Sr. Notes Caa2 8.00 12/15/05 1,245(g) 1,114,275
Delta Air Lines, Inc.,
Notes B3 7.70 12/15/05 4,030 3,526,250
Notes B3 10.375 12/15/22 4,775 3,509,625
Notes B3 8.30 12/15/29 7,555 5,326,275
Holt Group, Inc., Sr.
Notes C(a) 9.75 1/15/06 8,120(e) 243,600
Lear Corp., Gtd. Notes,
Ser. B Ba1 7.96 5/15/05 2,925 3,115,125
Navistar International
Corp., Sr. Notes, Ser. B Ba3 9.375 6/1/06 2,875(g) 3,126,563
North America United
Rentals, Inc., Gtd.
Notes, Ser. B B1 10.75 4/15/08 6,900 7,538,250
Northwest Airlines, Inc.,
Gtd. Notes Caa1 9.875 3/15/07 200 158,000
Notes Caa1 7.625 3/15/05 805 680,225
Sr. Notes Caa1 8.875 6/1/06 2,625 2,073,750
Standyne Automotive
Corp., Sr. Sub. Notes,
Ser. B Caa1 10.25 12/15/07 2,965 2,401,650
Stena AB (Sweden),
Sr. Notes Ba3 8.75 6/15/07 4,225(i) 4,351,750
Sr. Notes Ba3 9.625 12/1/12 2,200(i) 2,417,250
TRISM, Inc., Sr. Sub.
Notes NR 12.00 2/15/05 435(e) 43
TRW Automotive, Sr. Notes B1 9.375 2/15/13 4,575 4,963,875
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 19
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
United Air Lines, Inc.,
Notes, Ser. A Caa2 10.11% 1/5/06 $ 1,907 $ 476,656
United Rentals North
America, Inc., Sr. Notes B1 10.75 4/15/08 2,000 2,185,000
---------------
74,935,692
UTILITIES 7.3%
-----------------------------------------------------------------------------------
AES Corp.,
Sec'd. Notes B2 8.75 5/15/13 13,000(g) 13,520,000
Sr. Notes B3 9.50 6/1/09 6,635(g) 6,701,350
Sr. Notes B3 9.375 9/15/10 9,475(g) 9,522,375
Sr. Sub. Notes Caa1 10.25 7/15/06 3,000 2,970,000
AES Drax Holdings Ltd.
(United Kingdom),
Sr. Sec'd. Bond Caa2 10.41 12/31/20 25,990(i) 16,373,700
AES Eastern Energy LP,
Certs., Ser. A Ba1 9.00 1/2/17 6,330 6,725,625
Beaver Valley II Funding
Corp., Deb. Baa3 9.00 6/1/17 6,900 8,271,299
Calpine Corp., Notes B1 8.50 2/15/11 24,420(g) 18,315,000
Calpine Energy Finance
(Canada), Gtd. Sr. Notes B1 8.50 5/1/08 1,300(i) 1,014,000
Cogentrix Energy, Inc.,
Sr. Gtd. Notes, Ser. B B1 8.75 10/15/08 3,175 2,730,500
Midland Funding II Corp.,
Deb. Ba3 11.75 7/23/05 9,025 9,747,000
Deb. Ba3 13.25 7/23/06 13,135 14,842,550
Mirant Americas
Generation LLC,
Sr. Notes Caa3 7.625 5/1/06 4,070 3,133,900
Sr. Notes Caa3 7.20 10/1/08 2,385(g) 1,502,550
Mirant Corp., Sr. Notes Ca 7.40 7/15/04 3,500(g) 2,607,500
Mirant Mid-Atlantic LLC,
Certs., Ser. A B3 8.625 6/30/12 6,945 6,875,324
Nisource Finance Corp.,
Gtd. Notes Baa3 7.50 11/15/03 1,895 1,930,505
Orion Power Holdings,
Inc., Sr. Notes B2 12.00 5/1/10 5,885 6,826,600
Reliant Energy
Mid-Atlantic, Inc.,
Certs., Ser. C B1 9.681 7/2/26 9,900(g) 9,900,000
USEC, Inc., Sr. Notes Ba2 6.75 1/20/09 2,000 1,760,000
</Table>
See Notes to Financial Statements.
20 Visit our website at www.jennisondryden.com
<Page>
<Table>
-----------------------------------------------------------------------------------
PRINCIPAL
MOODY'S INTEREST MATURITY AMOUNT
DESCRIPTION RATING RATE DATE (000) VALUE (NOTE 1)
York Power Funding
(Cayman Islands), Sr.
Sec'd. Notes, (cost
$10,755,000; purchased
7/31/98) D(a) 12.00% 10/30/07 $ 10,755(i) $9,034,200
---------------
154,303,978
---------------
Total corporate bonds
(cost $1,835,162,595) 1,848,503,744
---------------
SOVEREIGN BONDS 3.3%
Republic of Brazil,
Notes B2 8.00 4/15/14 8,503(i) 7,472,336
Unsub. Notes B2 11.00 8/17/40 5,905(i) 5,344,025
Republic of Colombia,
Notes Ba2 10.50 7/9/10 2,250(i) 2,587,500
Notes Ba2 10.00 1/23/12 2,781(i) 3,114,720
Notes Ba2 10.75 1/15/13 4,293(i) 5,022,810
Republic of El Salvador,
Notes Baa3 8.50 7/25/11 4,000(i) 4,290,000
Notes Baa3 7.75 1/24/23 10,840(i) 11,300,700
Republic of Panama Ba1 9.625 2/8/11 8,700(i) 10,092,000
Republic of Peru Ba3 4.50 3/7/17 3,304(i) 2,568,860
Russian Federation Ba2 5.00 3/31/30 13,030(i) 12,658,645
Ukraine Government, Sr.
Notes B2 11.00 3/15/07 4,704(i) 5,165,015
---------------
Total sovereign bonds
(cost $60,839,621) 69,616,611
---------------
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 21
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
-----------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (NOTE 1)
COMMON STOCKS(C) 0.8%
AmeriKing, Inc. 50 $ 0
Birch Telecom 31,304 313
Classic Communications,
Inc. 3,000(f) 30
Firearms Training
Systems, Inc. 122,000 50,020
Grant Geophysical, Inc. 28,675 7,169
IMPSAT Fiber Networks,
Inc. 110,756(f) 127,369
International Wireless
Communications 386,756(f) 38,676
Jordon Telecom 125 125
Kaiser Group Holdings,
Inc. 21,359(f) 279,803
Nextel Communications,
Inc., Cl. A 50,000(d) 904,000
NTL, Inc. 16,869 575,570
Peachtree Cable Assoc.
Ltd. 31,559(f) 54,950
Premier Cruise Ltd. 962,763(f) 963
PSF Holdings Group, Inc. 9,517(f) 14,275,755
Samuels Jewelers, Inc. 23,425 1,523
Sheffield Steel Corp. 403,749(d) 1,614,996
Specialty Foods
Acquisition Corp. 25(f) 0
Star Gas Partners LP 440 9,667
Stellex Technologies,
Inc. 214(f) 0
Sterling Chemicals, Inc. 159 2,385
TRISM, Inc. 27,543(d) 14
York Research Corp. 15,105(f) 1
---------------
Total common stocks
(cost $55,045,416) 17,943,329
---------------
PREFERRED STOCKS 5.3%
BUILDING & CONSTRUCTION
-----------------------------------------------------------------------------------
New Millenium Homes LLC,
Ser. A 2,000(f) 20
CABLE 2.7%
-----------------------------------------------------------------------------------
Adelphia Communications
Corp., 13.00% 20,000(e) 5,000
CSC Holdings, Inc., Ser.
H, 11.75% 208,485(d) 21,421,834
CSC Holdings, Inc., Ser.
M, 11.125% 320,016(g) 32,801,640
TVN Entertainment, Ser.
A, 14.00% 707,155(f) 1,555,741
---------------
55,784,215
INDUSTRIALS/SERVICES 0.3%
-----------------------------------------------------------------------------------
Eagle-Picher Holdings,
Inc., 11.75% 1,530 6,732,000
</Table>
See Notes to Financial Statements.
22 Visit our website at www.jennisondryden.com
<Page>
<Table>
-----------------------------------------------------------------------------------
DESCRIPTION SHARES VALUE (NOTE 1)
InterAct Electronic
Marketing, Inc., 14.00% 2,910(d) $ 29
Kaiser Group Holdings,
Inc., 7.00%, PIK 13,295(f) 623,868
Kaiser Group Holdings,
Inc., 8.78% 17,729(f) 177
---------------
7,356,074
LODGING & LEISURE
-----------------------------------------------------------------------------------
AmeriKing, Inc., 13.00% 1,619(e) 16
MEDIA 1.4%
-----------------------------------------------------------------------------------
Paxon Communications
Corp., 13.25% 1,719 17,104,050
Primedia, Inc., Ser. D.
10.00% 77,640 7,453,440
Sinclair Capital Corp.,
11.625%, 45,450 4,783,613
---------------
29,341,103
REAL ESTATE INVESTMENT TRUST 0.6%
-----------------------------------------------------------------------------------
Sovereign Real Estate
Investment Corp., 12.00% 8,667 12,567,150
RETAIL
-----------------------------------------------------------------------------------
Color Spot Nurseries,
Ser. B, 13.00% 36,328(d) 363
TECHNOLOGY 0.1%
-----------------------------------------------------------------------------------
Viasystems Group, Inc.,
Ser. B, 8.00 223,544 22
Xerox Corp., 6.25 28,520 2,980,340
---------------
2,980,362
TELECOMMUNICATIONS 0.2%
-----------------------------------------------------------------------------------
Dobson Communications
Corp., 12.25% 3,996 3,956,040
Global Crossing Holdings
Ltd. (Bermuda), 10.50% 42,889)e) 429
McLeodUSA, Inc., Ser. A,
2.50% 78,235 566,421
NTL Europe, Inc., Ser. A,
10.00% 10 20
World Access, Inc.,
13.25% 4,663(f) 5
---------------
4,522,915
---------------
Total preferred stocks
(cost $126,319,611) 112,552,218
---------------
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 23
<Page>
Portfolio of Investments
as of June 30, 2003 (Unaudited) Cont'd.
<Table>
-----------------------------------------------------------------------------------
EXPIRATION
DESCRIPTION DATE UNITS VALUE (NOTE 1)
WARRANTS(C)
Aladdin Gaming 3/1/10 $ 30,000 $ 3
Allegiance Telecom, Inc. 2/3/08 14,200 1,775
Asia Pulp & Paper Ltd.
(Indonesia) 3/15/05 3,705 667
Bell Technology Group
Ltd. 5/1/05 8,500 85
Bestel SA (Mexico) 5/15/05 12,000 0
Birch Telecom, Inc. 6/15/08 6,000 60
Communications Cellular
SA (Colombia) 11/15/03 29,000 3
GT Group Telecom, Inc.
(Canada) 2/1/10 8,610 3,229
Harborside Healthcare
Corp. 8/1/09 136,354(f) 1,364
HF Holdings, Inc. 9/27/09 4,375 44
ICG Communications, Inc. 9/15/05 127,809 1,278
Inter Act Systems, Inc. 8/1/03 2,910(d) 29
InterAct Electronic
Marketing, Inc. 12/15/09 2,910(d) 29
McLeodUSA, Inc. 4/16/07 173,364 71,079
National Restaurant
Enterprises Holding,
Inc. 5/15/08 1,014(d) 10
Price Communications
Corp. 8/1/07 17,200 577,576
Primus Telecommunications
Group 8/1/04 12,250 122
Star Choice
Communications (Canada) 12/15/05 124,485 497,940
Sterling Chemicals, Inc. 8/15/08 5,450 55
Tellus Corp. (Canada) 9/15/05 108,785(f) 125
USN Communications, Inc. 10/15/04 92,500 925
Verado Holdings, Inc. 4/15/08 4,075 41
Versatel Telecom Int'l.
NV (Netherlands) 5/15/08 10,000 100
Wam!Net, Inc. 3/1/05 22,500 225
XM Satellite Radio, Inc. 3/3/10 345 3
---------------
Total warrants
(cost $2,155,020) 1,156,767
---------------
Total long-term
investments
(cost $2,104,577,542) 2,062,256,578
---------------
</Table>
See Notes to Financial Statements.
24 Visit our website at www.jennisondryden.com
<Page>
<Table>
<Caption>
DESCRIPTION SHARES VALUE (NOTE 1)
SHORT-TERM INVESTMENTS 11.3%
MONEY MARKET FUND 9.6%
Prudential Core
Investment Fund-Taxable
Money Market Series
(Note 3)
(cost $205,031,729) 205,031,729(h) $205,031,729
---------------
<Caption>
PRINCIPAL
INTEREST MATURITY AMOUNT
DESCRIPTION RATE DATE (000) VALUE (NOTE 1)
----------------------------------------------------------------------------------------------------
REPURCHASE AGREEMENTS 1.7%
Joint Repurchase
Agreement Account, (Note
6)
(cost $35,184,000) 1.25% 7/1/03 $ 35,184 35,184,000
---------------
Total short-term
investments (cost
$240,215,729) 240,215,729
---------------
TOTAL INVESTMENTS 108.3%
(COST $2,344,793,271; NOTE 5) 2,302,472,307
Liabilities in excess of
other assets (8.3%) (177,317,198)
---------------
NET ASSETS 100.0% $ 2,125,155,109
---------------
---------------
</Table>
<Table>
(a) Standard & Poor's rating.
(b) Indicates a restricted security; the aggregate cost of such securities is
$48,501,056. The aggregate value of $39,998,286 is approximately 1.9% of net
assets.
(c) Non-income producing security.
(d) Consists of more than one class of securities traded together as a unit;
generally bonds with attached stock or warrants.
(e) Represents issuer in default on interest payments; non-income producing security.
(f) Fair valued security.
(g) Portion of securities on loan, see Note 4.
(h) Represents security, or portion thereof, purchased with cash collateral received
for securities on loan.
(i) US$ denominated foreign bonds.
(j) Floating rate bond. The coupon is indexed to a floating interest rate. The rate
shown is the rate at year end.
(k) Loan participation agreement.
(l) Less than $1,000 principal amount held.
</Table>
LLC--Limited Liability Company.
LP--Limited Partnership.
PIK--Payment-in-kind.
NR--Not Rated by Moody's or Standard & Poor's.
The Fund's current Prospectus contains a description of Moody's and Standard &
Poor's ratings.
See Notes to Financial Statements.
Dryden High Yield Fund 25
<Page>
Statement of Assets and Liabilities
as of June 30, 2003 (Unaudited)
<Table>
ASSETS
-----------------------------------------------------------------------------------
Investments, at value--including $200,116,735 of securities loaned
(Note 4) (cost $2,344,793,271) $2,302,472,307
Cash 136,669
Foreign currency, at value (cost $203) 275
Interest receivable 40,000,498
Receivable for Investments sold 12,735,583
Receivable for Fund shares sold 2,626,802
Dividends receivable 1,579,022
Receivable for securities lending 208,890
Other assets 53,484
--------------
TOTAL ASSETS 2,359,813,530
LIABILITIES
-----------------------------------------------------------------------------------
Payable to broker for collateral for securities on loan 205,031,729
Payable for Fund shares reacquired 12,178,726
Payable for investments purchased 11,315,650
Dividends payable 3,574,281
Accrued expenses 830,863
Management fee payable 800,518
Distribution fee payable 735,109
Securities lending rebate payable 133,009
Deferred directors' fees payable 39,566
Payable to securities lending agent 18,970
--------------
TOTAL LIABILITIES 234,658,421
--------------
NET ASSETS $2,125,155,109
--------------
--------------
-----------------------------------------------------------------------------------
Net assets were comprised of:
Common stock, at par $ 3,830,813
Paid-in capital in excess of par 3,644,034,100
--------------
3,647,864,913
Accumulated net investment loss (2,617,582)
Accumulated net realized loss on investments and foreign currency
transactions (1,477,771,352)
Net unrealized depreciation on investments and foreign currencies (42,320,870)
--------------
NET ASSETS, JUNE 30, 2003 $2,125,155,109
--------------
--------------
</Table>
See Notes to Financial Statements.
26 Visit our website at www.jennisondryden.com
<Page>
<Table>
CLASS A
-----------------------------------------------------------------------------------
Net asset value and redemption price per share
($1,325,396,884 / 238,798,117 shares of common stock issued and outstanding) $5.55
Maximum sales charge (4% of offering price) .23
-----
Maximum offering price to public $5.78
-----
-----
CLASS B
-----------------------------------------------------------------------------------
Net asset value, offering price and redemption price per share
($638,439,630 / 115,212,648 shares of common stock issued and outstanding) $5.54
-----
-----
CLASS C
-----------------------------------------------------------------------------------
Net asset value and redemption price per share
($96,373,755/ 17,391,649 shares of common stock issued and outstanding) $5.54
Sales charge (1% of offering price) .06
-----
Offering price to public $5.60
-----
-----
CLASS Z
-----------------------------------------------------------------------------------
Net asset value, offering price and redemption price per share
($64,944,840 / 11,678,897 shares of common stock issued and outstanding) $5.56
-----
-----
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 27
<Page>
Statement of Operations
Six Months Ended June 30, 2003 (Unaudited)
<Table>
NET INVESTMENT INCOME
-----------------------------------------------------------------------------------
Income
Interest $ 87,292,598
Dividends 6,179,908
Income from securities lending (net) 279,429
-----------------
93,751,935
-----------------
Expenses
Management fee 4,567,214
Distribution fee--Class A 1,546,541
Distribution fee--Class B 2,355,577
Distribution fee--Class C 317,444
Transfer agent's fees and expenses 1,503,000
Reports to shareholders 220,000
Custodian's fees and expenses 171,000
Registration fees 37,000
Legal fees and expenses 28,000
Insurance 20,000
Directors' fees 20,000
Audit fee 19,000
Miscellaneous 62,323
-----------------
TOTAL EXPENSES 10,867,099
-----------------
Net investment income 82,884,836
-----------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
-----------------------------------------------------------------------------------
Net realized loss on:
Investment transactions (28,372,443)
Foreign currency transactions (12,518)
-----------------
(28,384,961)
-----------------
Net change in unrealized depreciation on:
Investments 246,611,113
Foreign currencies 50
-----------------
246,611,163
-----------------
Net gain on investments 218,226,202
-----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $ 301,111,038
-----------------
-----------------
</Table>
See Notes to Financial Statements.
28 Visit our website at www.jennisondryden.com
<Page>
Statement of Changes in Net Assets
For the Six Months and Year Ended Periods (Unaudited)
<Table>
<Caption>
-----------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, 2003 DECEMBER 31, 2002
INCREASE (DECREASE) IN NET ASSETS
-----------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 82,884,836 $ 182,444,423
Net realized loss on investment and foreign
currency transactions (28,384,961) (302,043,607)
Net change in unrealized depreciation of
investments and foreign currencies 246,611,163 71,675,008
----------------- -----------------
Net increase (decrease) in net assets
resulting from operations 301,111,038 (47,924,176)
----------------- -----------------
DIVIDENDS FROM NET INVESTMENT INCOME
Class A (52,946,368) (111,074,417)
Class B (25,289,849) (62,481,407)
Class C (3,412,655) (6,328,367)
Class Z (2,406,131) (4,125,177)
----------------- -----------------
(84,055,003) (184,009,368)
----------------- -----------------
FUND SHARE TRANSACTIONS (NET OF SHARE
CONVERSIONS)
Net proceeds from shares sold(a) 299,144,510 438,342,272
Net asset value of shares issued in
reinvestment of dividends 42,035,762 93,534,967
Cost of shares reacquired (321,906,713) (646,294,302)
----------------- -----------------
Net increase (decrease) in net assets from
Fund share transactions 19,273,559 (114,417,063)
----------------- -----------------
Total increase (decrease) 236,329,594 (346,350,607)
NET ASSETS
---------------------------------------------------------------------------------------
Beginning of period 1,888,825,515 2,235,176,122
----------------- -----------------
End of period $ 2,125,155,109 $ 1,888,825,515
----------------- -----------------
----------------- -----------------
------------------------------
(a) For the year ended December 31, 2002, includes $69,733,943 for shares issued in
connection with the acquisition of Prudential High Yield Total Return Fund.
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 29
<Page>
Notes to Financial Statements
(Unaudited)
Prudential High Yield Fund, Inc., doing business as Dryden High Yield Fund (the
'Fund'), is registered under the Investment Company Act of 1940 as a
diversified, open-end management investment company. The primary investment
objective of the Fund is to maximize current income through investment in a
diversified portfolio of high yield fixed-income securities which, in the
opinion of the Fund's investment adviser, do not subject the Fund to
unreasonable risks. As a secondary investment objective, the Fund seeks capital
appreciation but only when consistent with its primary objective. Lower rated or
unrated (i.e., high yield) securities are more likely to react to developments
affecting market risk (general market liquidity) and credit risk (an issuer's
inability to meet principal and interest payments on its obligations) than are
more highly rated securities, which react primarily to movements in the general
level of interest rates. The ability of issuers of debt securities held by the
Fund to meet their obligations may be affected by economic developments in a
specific industry or region.
NOTE 1. ACCOUNTING POLICIES
The following is a summary of significant accounting policies followed by the
Fund in the preparation of its financial statements.
Security Valuation: Securities traded in the over-the-counter market, including
securities listed on exchanges whose primary market is believed to be
over-the-counter, are valued at market value using prices provided by an
independent pricing agent or principal market maker. Any security for which the
primary market is on an exchange is valued at the last sales price on such
exchange on the day of valuation or, if there was no sale on such day, the last
bid price quoted on such day. Securities traded via Nasdaq are valued at the
official closing price as provided by Nasdaq. Securities issued in private
placements are valued at the bid price or the mean between the bid and asked
prices, if available, provided by principal market makers. Securities for which
reliable market quotations are not readily available or for which the pricing
agent or market maker does not provide a valuation or methodology, or provides a
valuation or methodology that, in the judgement of the subadviser, does not
represent fair value, are valued at fair value by a Valuation Committee
appointed by the Board of Trustees, in consultation with the Manager or
subadviser.
Investments in mutual funds are valued at their net asset value as of the close
of the New York Stock Exchange on the date of valuation.
30 Visit our website at www.jennisondryden.com
<Page>
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost, which approximates market value.
Repurchase Agreements: In connection with transactions in repurchase agreements
with United States financial institutions, it is the Fund's policy that its
custodian or designated subcustodians, under triparty repurchase agreements, as
the case may be, take possession of the underlying collateral securities, the
value of which exceeds the principal amount of the repurchase transaction,
including accrued interest. To the extent that any repurchase transaction
exceeds one business day, the value of the collateral is marked-to-market on a
daily basis to ensure the adequacy of the collateral. If the seller defaults and
the value of the collateral declines or if bankruptcy proceedings are commenced
with respect to the seller of the security, realization of the collateral by the
Fund may be delayed or limited.
Restricted Securities: The Fund may hold up to 15% of its net assets in illiquid
securities, including those which are restricted as to disposition under
securities law ('restricted securities'). Certain issues of restricted
securities held by the Fund at June 30, 2003 include registration rights under
which the Fund may demand registration by the issuer, of which the Fund may bear
the cost of such registration. Restricted securities, sometimes referred to as
private placements, are valued pursuant to the valuation procedures noted above.
Loan Participations: The Fund may invest in loan participations, another type of
restricted security. When the Fund purchases a loan participation, the Fund
typically enters into a contractual relationship with the lender or third party
selling such participations ('Selling Participant'), but not the borrower. As a
result, the Fund assumes the credit risk of the borrower, the selling
participant and any other persons interpositioned between the Fund and the
borrower ('intermediate participants'). The Fund may not directly benefit from
the collateral supporting the senior loan in which it has purchased the loan
participation.
Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:
(i) market value of investment securities, other assets and liabilities at the
closing daily rates of exchange;
(ii) purchases and sales of investment securities, income and expenses at the
rates of exchange prevailing on the respective dates of such transactions.
Dryden High Yield Fund 31
<Page>
Although the net assets of the Fund are presented at the foreign exchange rates
and market values at the close of the fiscal period, the Fund does not isolate
that portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the market
prices of long-term securities held at the end of the fiscal period. Similarly,
the Fund does not isolate the effect of changes in foreign exchange rates from
the fluctuations arising from changes in the market prices of long-term
portfolio securities sold during the fiscal period. Accordingly, realized
foreign currency gains (losses) are included in the reported net realized gains
(losses) on investment transactions.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from the holding of foreign currencies, currency
gains (losses) realized between the trade and settlement dates on security
transactions, and the difference between the amounts of dividends, interest and
foreign withholding taxes recorded on the Fund's books and the U.S. dollar
equivalent amounts actually received or paid. Net realized currency gains
(losses) from valuing foreign currency denominated assets and liabilities (other
than investments) at period-ended exchange rates are reflected as a component of
net unrealized appreciation (depreciation) on investments and foreign
currencies.
Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin as a result of,
among other factors, the possibility of political and economic instability or
the level of governmental supervision and regulation of foreign securities
markets.
Forward Currency Contracts: A forward currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current forward exchange rates and
any unrealized gain or loss is included in net unrealized appreciation
(depreciation) on investments and foreign currencies. Gain (loss) is realized on
the settlement date of the contract equal to the difference between the
settlement value of the original and renegotiated forward contracts. This gain
(loss), if any, is included in net realized gain (loss) on foreign currency
transactions. Risks may arise upon entering into these contracts from the
potential inability of the counterparties to meet the terms of their contracts.
Forward currency contracts involve elements of both market and credit risk in
excess of the amounts reported on the Statement of Assets and Liabilities.
Securities Lending: The Fund may lend its portfolio securities to qualified
institutions. The loans are secured by collateral at least equal, at all times,
to the
32 Visit our website at www.jennisondryden.com
+
<Page>
market value of the securities loaned. The Fund may bear the risk of delay in
recovery of, or even of rights in, the securities loaned should the borrower of
the securities fail financially. The Fund receives compensation, net of any
rebate and securities lending agent fees, for lending its securities in the form
of interest or dividends on the securities loaned. The Fund is entitled to any
gain or loss in the market price of the collateral received for the securities
loaned that may occur during the term of the loan.
Securities Transactions and Net Investment Income: Securities transactions are
recorded on the trade date. Realized gains (losses) on sales of investments are
calculated on the identified cost basis. Dividend income is recorded on the
ex-dividend date and interest income is recorded on the accrual basis. The Fund
amortizes premiums and accretes discounts on portfolio securities as adjustments
to interest income. Expenses are recorded on the accrual basis which may require
the use of certain estimates by management.
Net investment income or loss (other than distribution fees which are charged
directly to the respective class) and unrealized and realized gains and losses
are allocated daily to each class of shares based upon the relative proportion
of net assets of each class at the beginning of the day.
Federal Income Taxes: It is Fund's policy to continue to meet the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute all of its taxable net income and capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.
Dividends and Distributions: The Fund declares daily and pays dividends of net
investment income monthly and makes distributions of net realized capital and
currency gains, if any, annually.
NOTE 2. AGREEMENTS
The Fund has a management agreement with Prudential Investments LLC ('PI').
Pursuant to this agreement, PI has responsibility for all investment advisory
services and supervises the subadvisor's performance of such services. PI has
entered into a subadvisory agreement with Prudential Investment Management, Inc.
('PIM').The Subadvisory Agreement provides that PIM will furnish investment
advisory services in connection with the management of the Fund. PI pays for the
services of PIM, the cost of compensation of officers of the Fund, occupancy and
certain clerical and bookkeeping costs of the Fund. The Fund bears all other
costs and expenses.
Dryden High Yield Fund 33
<Page>
The management fee paid to PI is accrued daily and payable monthly, at an annual
rate of .50% of the Fund's average daily net assets up to $250 million, .475% of
the next $500 million, .45% of the next $750 million, .425% of the next $500
million, .40% of the next $500 million, .375% of the next $500 million and .35%
of the Fund's average daily net assets in excess of $3 billion.
The Fund has a distribution agreement with Prudential Investment Management
Services LLC ('PIMS'), which acts as the distributor of the Class A, Class B,
Class C and Class Z shares of the Fund. The Fund compensates PIMS for
distributing and servicing the Fund's Class A, B and C shares, pursuant to plans
of distribution (the 'Class A, B and C Plans'), regardless of expenses actually
incurred by it. The distribution fees are accrued daily and payable monthly. No
distribution or service fees are paid to PIMS as distributor of the Class Z
shares of the Fund.
Pursuant to the Class A, B and C Plans, the Fund compensates PIMS with respect
to Class A, B and C shares, for distribution-related activities at an annual
rate of up to .30 of 1%, .75 of 1% and 1%, of the average daily net assets of
the Class A, B and C shares, respectively. For the six months ended June 30,
2003, such expenses under the Plans were .25 of 1%, .75 of 1% and .75 of 1% of
the average daily net assets of the Class A, B and C shares, respectively.
PIMS has advised the Fund that it has received approximately $357,200 and
$110,300 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the six months ended June 30, 2003. From these
fees, PIMS paid such sales charges to affiliated broker-dealers, which in turn
paid commissions to salespersons and incurred other distribution costs.
PIMS has advised the Fund that for the six months ended June 30, 2003, it
received approximately $451,000 and $16,700 in contingent deferred sales charges
imposed upon certain redemptions by Class B and Class C shareholders,
respectively.
PI, PIMS and PIM are indirect, wholly-owned subsidiaries of Prudential
Financial, Inc. ('Prudential').
The Fund, along with other affiliated registered investment companies (the
'Funds'), is a party to a syndicated credit agreement ('SCA') with a group of
banks. For the six months ended June 30, 2003, the SCA provides for a commitment
of $800 million and allows the Funds to increase the commitment to $1 billion,
if necessary. Interest on any borrowings will be at market rates. The Funds pay
a commitment fee of .08 of 1% of the unused portion of the SCA. The commitment
fee is accrued and paid quarterly on a pro rata basis by the Funds. The
expiration date of the SCA was May 2, 2003. On May 2, 2003, the SCA was renewed
under the same terms and conditions ('May 2003 renewal'). The expiration date of
the May 2003 renewal is
34 Visit our website at www.jennisondryden.com
<Page>
April 30, 2004. The Fund did not borrow any amounts pursuant to the SCA during
the six months ended June 30, 2003.
NOTE 3. OTHER TRANSACTIONS WITH AFFILIATES
Prudential Mutual Fund Services LLC, ('PMFS'), an affiliate of PI and an
indirect, wholly-owned subsidiary of Prudential, serves as the Fund's transfer
agent. During the six months ended June 30, 2003, the Fund incurred fees of
approximately $1,114,000 for the services of PMFS. As of June 30, 2003,
approximately $183,000 of such fees were due to PMFS.
The Fund pays networking fees to affiliated and unaffiliated broker/dealers.
These networking fees are payments made to broker/dealers that clear mutual fund
transactions through a national clearing system. The Fund incurred approximately
$93,200 in total networking fees, of which the amount relating to the services
of Prudential Securities, Inc. ('PSI'), an affiliate of PI and an indirect,
wholly-owned subsidiary of Prudential was approximately $87,700 for the six
months ended June 30, 2003. As of June 30, 2003, approximately $14,600 of such
fees were due to PSI. These amounts are included in transfer agent's fees and
expenses in the Statement of Operations.
PSI is the securities lending agent for the Fund. For the six months ended June
30, 2003, PSI has been compensated by the Fund approximately $93,000 for these
services of which $19,000 is due at June 30, 2003.
The Fund invests in the Taxable Money Market Series, a portfolio of Prudential
Core Investment Fund, pursuant to an exemptive order received from the
Securities and Exchange Commission. The Taxable Money Market Series is a money
market mutual fund registered under the Investment Company Act of 1940, as
amended, and managed by PI.
NOTE 4. PORTFOLIO SECURITIES
Purchases and sales of investment securities, other than short-term investments,
for the six months ended June 30, 2003 were $729,292,287 and $683,277,589,
respectively.
As of June 30, 2003, the Fund has securities on loan with an aggregate market
value of $200,116,735. The Fund received $205,031,729 in cash, as collateral for
securities on loan with which it purchased highly liquid short-term investments
in accordance with the Fund's securities lending procedures.
Dryden High Yield Fund 35
<Page>
NOTE 5. TAX INFORMATION
For federal income tax purposes, the Fund had a capital loss carryforward at
December 31, 2002, of approximately $1,429,139,000, of which $162,250,000
expires in 2003, $169,718,000 expires in 2007, $312,066,000 expires in 2008,
$369,236,000 expires 2009 and $386,017,000 expires in 2010. The remaining amount
resulted from when the Fund acquired a capital loss carryforward from the merger
with Prudential High Yield Total Return Fund, Inc. in the amount of $29,852,000,
of which $1,698,000 expires in 2006, $6,981,000 expires in 2007, $8,555,000 in
2008 and $12,618,000 expires in 2009, respectively. The future utilization of
the acquired built-in losses from Prudential High Yield Total Return Fund, Inc.
in the amount of $18,309,338, will be limited under Section 382 of the Internal
Revenue Code of 1986, as amended. The annual limitation to be applied to all
Section 382 losses will be $3,494,000. Accordingly, no capital gains
distribution is expected to be paid to shareholders until net gains have been
realized in excess of such allowable amounts. In addition, the Fund has elected
to treat post-October capital losses of approximately $12,393,000 as having been
incurred in the current fiscal year.
The United States federal income tax basis of the Fund's investments and the
net unrealized depreciation as of June 30, 2003 were as follows:
NET UNREALIZED
TAX BASIS APPRECIATION DEPRECIATION DEPRECIATION
- ----------------- --------------- --------------- ---------------
$2,346,063,788 $178,602,261 $222,193,742 $43,591,481
The difference between book basis and tax basis is primarily attributable to the
difference in the treatment of market discount, amortization of premiums and
wash sales for book and tax purposes.
NOTE 6. JOINT REPURCHASE AGREEMENT ACCOUNT
The Fund, along with other affiliated registered investment companies, transfers
uninvested cash balances into a single joint account, the daily aggregate
balance of which is invested in one or more repurchase agreements collateralized
by U.S. Treasury or federal agency obligations. As of June 30, 2003, the Fund
had a 16.1% undivided interest in the joint account. The undivided interest for
the Fund represents $35,184,000 in principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefore were as
follows:
Bank of America Securities, 1.26%, in the principal amount of $72,637,000,
repurchase price $72,639,542, due 7/1/03. The value of the collateral including
accrued interest was $74,089,740.
36 Visit our website at www.jennisondryden.com
<Page>
Bear Stearns & Co., Inc., 1.24%, in the principal amount of $72,636,000,
repurchase price $72,638,502, due 7/1/03. The value of the collateral including
accrued interest was $74,089,944.
State Street Corp., 1.25%, in the principal amount of $72,637,000, repurchase
price $72,639,522, due 7/1/03. The value of the collateral including accrued
interest was $74,096,024.
NOTE 7. CAPITAL
The Fund offers Class A, Class B, Class C and Class Z shares. Class A shares are
sold with a front-end sales charge of up to 4%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares automatically convert to Class A shares on a quarterly
basis approximately seven years after purchase. A special exchange privilege is
also available for shareholders who qualify to purchase Class A shares at net
asset value. Class Z shares are not subject to any sales or redemption charge
and are offered exclusively for sale to a limited group of investors.
The Fund has 3 billion shares of $.01 par value common stock authorized; equally
divided into four classes, designated Class A, Class B, Class C and Class Z
shares.
Transactions in shares of common stock were as follows:
<Table>
<Caption>
CLASS A SHARES AMOUNT
- ----------------------------------------------------------- ----------- -------------
Six months ended June 30, 2003:
Shares sold 36,659,154 $ 193,477,359
Shares issued in reinvestment of dividends 5,160,316 27,307,152
Shares reacquired (45,822,930) (244,251,070)
----------- -------------
Net increase (decrease) in shares outstanding before
conversion (4,003,460) (23,466,559)
Shares issued upon conversion from Class B 10,090,429 54,078,022
----------- -------------
Net increase (decrease) in shares outstanding 6,086,969 $ 30,611,463
----------- -------------
----------- -------------
Year ended December 31, 2002:
Shares sold 39,828,820 $ 204,352,128
Shares issued in connection with reorganization (Note 8) 2,382,263 13,284,198
Shares issued in reinvestment of dividends 11,385,140 59,010,116
Shares reacquired (76,153,597) (397,420,267)
----------- -------------
Net increase (decrease) in shares outstanding before
conversion (22,557,374) (120,773,825)
Shares issued upon conversion from Class B 17,763,327 92,315,277
----------- -------------
Net increase (decrease) in shares outstanding (4,794,047) $ (28,458,548)
----------- -------------
----------- -------------
</Table>
Dryden High Yield Fund 37
<Page>
<Table>
<Caption>
CLASS B SHARES AMOUNT
- ----------------------------------------------------------- ----------- -------------
Six months ended June 30, 2003:
Shares sold 9,973,660 $ 52,541,456
Shares issued in reinvestment of dividends 2,073,420 10,943,972
Shares reacquired (9,387,441) (49,290,455)
----------- -------------
Net increase (decrease) in shares outstanding before
conversion 2,659,639 14,194,973
Shares reacquired upon conversion into Class A (10,109,321) (54,078,022)
----------- -------------
Net increase (decrease) in shares outstanding (7,449,682) $ (39,883,049)
----------- -------------
----------- -------------
Year ended December 31, 2002:
Shares sold 18,148,290 $ 95,003,748
Shares issued in connection with reorganization (Note 8) 8,320,848 46,313,859
Shares issued in reinvestment of dividends 5,342,085 27,701,984
Shares reacquired (35,430,755) (183,090,227)
----------- -------------
Net increase (decrease) in shares outstanding before
conversion (3,619,532) (14,070,636)
Shares reacquired upon conversion into Class A (17,788,474) (92,315,277)
----------- -------------
Net increase (decrease) in shares outstanding (21,408,006) $(106,385,913)
----------- -------------
----------- -------------
<Caption>
CLASS C
- -----------------------------------------------------------
Six months ended June 30, 2003:
Shares sold 4,214,460 $ 22,035,023
Shares issued in reinvestment of dividends 332,486 1,759,557
Shares reacquired (1,661,294) (8,730,369)
----------- -------------
Net increase (decrease) in shares outstanding 2,885,652 $ 15,064,211
----------- -------------
----------- -------------
Year ended December 31, 2002:
Shares sold 4,438,546 $ 23,074,896
Shares issued in connection with reorganization (Note 8) 1,640,289 9,129,836
Shares issued in reinvestment of dividends 619,893 3,198,179
Shares reacquired (4,486,748) (23,132,599)
----------- -------------
Net increase (decrease) in shares outstanding 2,211,980 $ 12,270,312
----------- -------------
----------- -------------
<Caption>
CLASS Z
- -----------------------------------------------------------
Six months ended June 30, 2003:
Shares sold 5,858,541 $ 31,090,672
Shares issued in reinvestment of dividends 380,991 2,025,081
Shares reacquired (3,688,448) (19,634,819)
----------- -------------
Net increase (decrease) in shares outstanding 2,551,084 $ 13,480,934
----------- -------------
----------- -------------
Year ended December 31, 2002:
Shares sold 8,811,692 $ 46,177,557
Shares issued in connection with reorganization (Note 8) 179,828 1,006,050
Shares issued in reinvestment of dividends 698,006 3,624,688
Shares reacquired (8,130,945) (42,651,209)
----------- -------------
Net increase (decrease) in shares outstanding 1,558,581 $ 8,157,086
----------- -------------
----------- -------------
</Table>
38 Visit our website at www.jennisondryden.com
<Page>
NOTE 8. ACQUISITION OF PRUDENTIAL HIGH YIELD TOTAL RETURN FUND
On March 20, 2002, Dryden High Yield Fund, formally know as Prudential High
Yield Fund acquired all of the net assets of Prudential High Yield Total Return
Fund pursuant to a plan of reorganization approved by Prudential High Yield Fund
shareholders on March 7, 2002. The acquisition was accomplished by a tax-free
exchange of Class A, Class B, Class C, and Class Z shares:
PRUDENTIAL HIGH YIELD PRUDENTIAL
TOTAL RETURN FUND HIGH YIELD FUND
SHARES REDEEMED SHARES ISSUED VALUE
--------------------- ---------------- -----------
Class A 2,150,976 2,382,263 $13,284,198
Class B 7,463,305 8,320,848 46,313,859
Class C 1,471,242 1,640,289 9,129,836
Class Z 162,924 179,828 1,006,050
Prudential High Yield Total Return Fund's net assets at that date of
$69,733,943, including $18,309,338 of unrealized depreciation, were combined
with those of Prudential High Yield Fund. The aggregate net assets of Prudential
High Yield Fund and Prudential High Yield Total Return Fund immediately before
the acquisition were $2,203,447,051 and $69,733,943, respectively.
Dryden High Yield Fund 39
<Page>
Financial Highlights
(Unaudited)
<Table>
<Caption>
CLASS A
-----------------
SIX MONTHS ENDED
JUNE 30, 2003
-----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 4.99
--------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .22
Net realized and unrealized gain (loss) on investments .56
--------
TOTAL FROM INVESTMENT OPERATIONS .78
--------
LESS DISTRIBUTIONS
Dividends from net investment income (.22)
Distributions in excess of net investment income --
Tax return of capital distributions --
--------
TOTAL DISTRIBUTIONS (.22)
--------
Net asset value, end of period $ 5.55
--------
--------
TOTAL RETURN(A) 15.61%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 1,325,397
Average net assets (000) $ 1,247,486
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .91%(d)
Expenses, excluding distribution and service (12b-1) fees .66%(d)
Net investment income 8.44%(d)
For Classes A, B, C and Z shares:
Portfolio turnover rate 36%(e)
</Table>
- ------------------------------
(a) Total return does not consider the effects of sales load. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods less than one full year are not
annualized.
(b) Calculated based upon weighted average shares outstanding during the period.
(c) Less than $.005 per share.
(d) Annualized.
(e) Not annualized.
See Notes to Financial Statements.
40 Visit our website at www.jennisondryden.com
<Page>
<Table>
<Caption>
CLASS A
----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------------
2002 2001 2000 1999 1998
-----------------------------------------------------------------------------------
$ 5.57 $ 6.20 $ 7.38 $ 7.88 $ 8.65
-------- -------- -------- -------- --------
.47 .61(b) .69(b) .71 .76
(.57) (.61) (1.17) (.45) (.76)
-------- -------- -------- -------- --------
(.10) -- (.48) .26 --
-------- -------- -------- -------- --------
(.48) (.61) (.69) (.71) (.76)
-- -- --(c) (.01) (.01)
-- (.02) (.01) (.04) --
-------- -------- -------- -------- --------
(.48) (.63) (.70) (.76) (.77)
-------- -------- -------- -------- --------
$ 4.99 $ 5.57 $ 6.20 $ 7.38 $ 7.88
-------- -------- -------- -------- --------
-------- -------- -------- -------- --------
(1.56)% (.25)% (6.88)% 3.38% (0.13)%
$1,160,389 $1,323,184 $1,482,144 $1,750,618 $1,677,605
$1,206,048 $1,433,298 $1,591,228 $1,746,123 $1,712,531
.90% .88% .85% .80% .67%
.65% .63% .60% .55% .52%
9.13% 10.14% 9.95% 9.30% 9.04%
50% 77% 71% 70% 103%
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 41
<Page>
Financial Highlights
(Unaudited) Cont'd.
<Table>
<Caption>
CLASS B
-----------------
SIX MONTHS ENDED
JUNE 30, 2003
-----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 4.98
-------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .21
Net realized and unrealized gain (loss) on investments .56
-------
TOTAL FROM INVESTMENT OPERATIONS .77
-------
LESS DISTRIBUTIONS
Dividends from net investment income (.21)
Distributions in excess of net investment income --
Tax return of capital distributions --
-------
TOTAL DISTRIBUTIONS (.21)
-------
Net asset value, end of period $ 5.54
-------
-------
TOTAL RETURN(A) 15.36%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $ 638,440
Average net assets (000) $ 633,359
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees 1.41%(d)
Expenses, excluding distribution and service (12b-1) fees .66%(d)
Net investment income 7.94%(d)
</Table>
- ------------------------------
(a) Total return does not consider the effects of sales load. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods less than one full year are not
annualized.
(b) Calculated based upon weighted average shares outstanding during the period.
(c) Less than $.005 per share.
(d) Annualized.
See Notes to Financial Statements.
42 Visit our website at www.jennisondryden.com
<Page>
<Table>
<Caption>
CLASS B
----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------------
2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------
$ 5.56 $ 6.19 $ 7.36 $ 7.86 $ 8.63
------- ------- -------- -------- --------
.44 .58(b) .65(b) .67 .71
(.57) (.61) (1.16) (.45) (.76)
------- ------- -------- -------- --------
(.13) (.03) (.51) .22 (.05)
------- ------- -------- -------- --------
(.45) (.58) (.65) (.66) (.71)
-- -- --(c) (.02) (.01)
-- (.02) (.01) (.04) --
------- ------- -------- -------- --------
(.45) (.60) (.66) (.72) (.72)
------- ------- -------- -------- --------
$ 4.98 $ 5.56 $ 6.19 $ 7.36 $ 7.86
------- ------- -------- -------- --------
------- ------- -------- -------- --------
(2.07)% (.78)% (7.28)% 2.86% (.70)%
$610,615 $801,358 $1,051,971 $1,867,620 $2,381,793
$720,123 $965,014 $1,453,221 $2,180,904 $2,557,252
1.40% 1.38% 1.35% 1.30% 1.27%
.65% .63% .60% .55% .52%
8.60% 9.66% 9.41% 8.78% 8.41%
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 43
<Page>
Financial Highlights
(Unaudited) Cont'd.
<Table>
<Caption>
CLASS C
-----------------
SIX MONTHS ENDED
JUNE 30, 2003
-----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 4.98
------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .21
Net realized and unrealized gain (loss) on investments .56
------
TOTAL FROM INVESTMENT OPERATIONS .77
------
LESS DISTRIBUTIONS
Dividends from net investment income (.21)
Distributions in excess of net investment income --
Tax return of capital distributions --
------
TOTAL DISTRIBUTIONS (.21)
------
Net asset value, end of period $ 5.54
------
------
TOTAL RETURN(A) 15.36%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $96,374
Average net assets (000) $85,353
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees 1.41%(d)
Expenses, excluding distribution and service (12b-1) fees .66%(d)
Net investment income 7.94%(d)
</Table>
- ------------------------------
(a) Total return does not consider the effects of sales load. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods less than one full year are not
annualized.
(b) Calculated based upon weighted average shares outstanding during the period.
(c) Less than $.005 per share.
(d) Annualized.
See Notes to Financial Statements.
44 Visit our website at www.jennisondryden.com
<Page>
<Table>
<Caption>
CLASS C
----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------------
2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------
$ 5.56 $ 6.19 $ 7.36 $ 7.86 $ 8.63
------ ------ ------ ------ ------
.44 .58(b) .65(b) .67 .71
(.57) (.61) (1.16) (.45) (.76)
------ ------ ------ ------ ------
(.13) (.03) (.51) .22 (.05)
------ ------ ------ ------ ------
(.45) (.58) (.65) (.67) (.71)
-- -- --(c) (.01) (.01)
-- (.02) (.01) (.04) --
------ ------ ------ ------ ------
(.45) (.60) (.66) (.72) (.72)
------ ------ ------ ------ ------
$ 4.98 $ 5.56 $ 6.19 $ 7.36 $ 7.86
------ ------ ------ ------ ------
------ ------ ------ ------ ------
(2.07)% (.78)% (7.28)% 2.86% (.70)%
$ 72,213 $ 68,382 $ 67,890 $ 98,347 $ 83,687
$ 72,506 $ 70,073 $ 82,438 $ 95,443 $ 67,296
1.40% 1.38% 1.35% 1.30% 1.27%
.65% .63% .60% .55% .52%
8.65% 9.66% 9.44% 8.81% 8.49%
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 45
<Page>
Financial Highlights
(Unaudited) Cont'd.
<Table>
<Caption>
CLASS Z
-----------------
SIX MONTHS ENDED
JUNE 30, 2003
-----------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE:
NET ASSET VALUE, BEGINNING OF PERIOD $ 5.00
------
INCOME FROM INVESTMENT OPERATIONS
Net investment income .23
Net realized and unrealized gain (loss) on investments .56
------
TOTAL FROM INVESTMENT OPERATIONS .79
------
LESS DISTRIBUTIONS
Dividends from net investment income (.23)
Distributions in excess of net investment income --
Tax return of capital distributions --
------
TOTAL DISTRIBUTIONS (.23)
------
Net asset value, end of period $ 5.56
------
------
TOTAL RETURN(A) 15.72%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000) $64,945
Average net assets (000) $55,083
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees .66%(c)
Expenses, excluding distribution and service (12b-1) fees .66%(c)
Net investment income 8.68%(c)
</Table>
- ------------------------------
(a) Total return is calculated assuming a purchase of shares on the first day
and a sale on the last day of each period reported and includes reinvestment
of dividends and distributions. Total returns for periods less than one full
year are not annualized.
(b) Calculated based upon weighted average shares outstanding during the period.
(c) Annualized.
See Notes to Financial Statements.
46 Visit our website at www.jennisondryden.com
<Page>
<Table>
<Caption>
CLASS Z
----------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------------------------------------
2002 2001 2000 1999 1998
----------------------------------------------------------------------------------------------------
$ 5.58 $ 6.20 $ 7.39 $ 7.88 $ 8.65
------ ------ ------ ------ ------
.48 .63(b) .70(b) .73 .76
(.57) (.60) (1.17) (.44) (.75)
------ ------ ------ ------ ------
(.09) .03 (.47) .29 .01
------ ------ ------ ------ ------
(.49) (.63) (.70) (.73) (.76)
-- -- (.01) (.01) (.02)
-- (.02) (.01) (.04) --
------ ------ ------ ------ ------
(.49) (.65) (.72) (.78) (.78)
------ ------ ------ ------ ------
$ 5.00 $ 5.58 $ 6.20 $ 7.39 $ 7.88
------ ------ ------ ------ ------
------ ------ ------ ------ ------
(1.30)% .19% (6.58)% 3.79% 0.00%
$ 45,609 $ 42,252 $ 37,288 $ 50,330 $ 65,068
$ 43,494 $ 42,557 $ 43,997 $ 60,652 $ 57,453
.65% .63% .60% .55% .52%
.65% .63% .60% .55% .52%
9.41% 10.41% 10.17% 9.53% 9.23%
</Table>
See Notes to Financial Statements.
Dryden High Yield Fund 47
<Page>
[THIS PAGE INTENTIONALLY LEFT BLANK]
MAIL TELEPHONE WEBSITE
Gateway Center Three (800) 225-1852 www.jennisondryden.com
100 Mulberry Street
Newark, NJ 07102-4077
DIRECTORS
David E.A. Carson - Robert F. Gunia - Robert E.
La Blanc - Douglas H. McCorkindale - Stephen P.
Munn - Richard A. Redeker - Judy A. Rice -
Robin B. Smith - Stephen D. Stoneburn - Clay T. Whitehead
OFFICERS
Judy A. Rice, President - Robert F. Gunia, Vice
President - Grace C. Torres, Treasurer -
Marguerite E.H. Morrison, Chief Legal Officer
and Assistant Secretary - Deborah A. Docs,
Secretary - Maryanne Ryan,
Anti-Money Laundering Compliance Officer
- ---------------------------------------------------------------------------
MANAGER Prudential Investments LLC Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077
- ---------------------------------------------------------------------------
INVESTMENT ADVISER Prudential Investment Gateway Center Two
Management, Inc. 100 Mulberry Street
Newark, NJ 07102
- ---------------------------------------------------------------------------
DISTRIBUTOR Prudential Investment Gateway Center Three
Management Services LLC 14th Floor
100 Mulberry Street
Newark, NJ 07102-4077
- ---------------------------------------------------------------------------
CUSTODIAN State Street Bank One Heritage Drive
and Trust Company North Quincy, MA 02171
- ---------------------------------------------------------------------------
TRANSFER AGENT Prudential Mutual Fund PO Box 8098
Services LLC Philadelphia, PA 19101
- ---------------------------------------------------------------------------
INDEPENDENT AUDITORS PricewaterhouseCoopers LLP 1177 Avenue of the
Americas
New York, NY 10036
- ---------------------------------------------------------------------------
LEGAL COUNSEL Shearman & Sterling LLP 599 Lexington Avenue
New York, NY 10022
- ---------------------------------------------------------------------------
Dryden High Yield Fund
Share Class A B C Z
Nasdaq PBHAX PBHYX PBHCX PHYZX
CUSIP 262438104 262438203 262438302 262438401
The views expressed in this report and information about the Fund's portfolio
holdings are for the period covered by this report and are subject to change
thereafter. The accompanying financial statements as of June 30, 2003 were not
audited and, accordingly, no auditors' opinion is expressed on them.
Mutual Funds:
ARE NOT INSURED BY THE FDIC OR ANY FEDERAL
GOVERNMENT AGENCY
MAY LOSE VALUE
ARE NOT A DEPOSIT OF OR GUARANTEED BY ANY BANK OR
ANY BANK AFFILIATE
JennisonDrydenMutualFunds
Dryden High Yield Fund
Share Class A B C Z
Nasdaq PBHAX PBHYX PBHCX PHYZX
CUSIP 262438104 262438203 262438302 262438401
MF110E2 IFS-A083139
<Page>
Item 2 -- Code of Ethics -- Not required in this filing
Item 3 -- Audit Committee Financial Expert -- Not required in this filing
Item 4 -- Principal Accountant Fees and Services -- Not required in this filing
Item 5 -- Reserved
Item 6 -- Reserved
Item 7 -- Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies -- Not required in this filing
Item 8 -- Reserved
Item 9 -- Controls and Procedures
(a) It is the conclusion of the registrant's principal executive
officer and principal financial officer that the effectiveness of
the registrant's current disclosure controls and procedures (such
disclosure controls and procedures having been evaluated within
90 days of the date of this filing) provide reasonable assurance
that the information required to be disclosed by the registrant
has been recorded, processed, summarized and reported within the
time period specified in the Commission's rules and forms and
that the information required to be disclosed by the registrant
has been accumulated and communicated to the registrant's
principal executive officer and principal financial officer in
order to allow timely decisions regarding required disclosure.
(b) There have been no significant changes in the registrant's
internal controls or in other factors that could significantly
affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Item 10 -- Exhibits
(a) Code of Ethics -- Not required in this filing
(b) Certifications pursuant to Sections 302 and 906 of the
Sarbanes-Oxley Act -- Attached hereto
<Page>
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.
Prudential High Yield Fund, Inc. (d/b/a Dryden High Yield Fund)
By: /s/ Deborah Docs
----------------------------------------------------------
Deborah Docs
Secretary
Date: August 26, 2003
Pursuant to the requirements of the Securities Exchange Act of 1934 and
the Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By: /s/ Judy A. Rice
----------------------------------------------------------
Judy A. Rice
President and Principal Executive Officer
Date: August 26, 2003
By: /s/ Grace C. Torres
----------------------------------------------------------
Grace C. Torres
Treasurer and Principal Financial Officer
Date: August 26, 2003