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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-07644
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Gabelli Capital Series Funds, Inc.
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(Exact name of registrant as specified in charter)

One Corporate Center
Rye, New York 10580-1422
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(Address of principal executive offices) (Zip code)

Bruce N. Alpert
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422
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(Name and address of agent for service)

registrant's telephone number, including area code: 1-800-422-3554
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Date of fiscal year end: December 31
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Date of reporting period: December 31, 2007
------------------

Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 100 F Street, NE,
Washington, DC 20549. The OMB has reviewed this collection of information under
the clearance requirements of 44 U.S.C. ss. 3507.

ITEM 1. REPORTS TO STOCKHOLDERS.

The Report to Shareholders is attached herewith.

ANNUAL REPORT
[ ] GABELLI CAPITAL ASSET FUND TO CONTRACTOWNERS
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[PHOTO OMITTED]
MARIO GABELLI, CFA,
PORTFOLIO MANAGER

OBJECTIVE:
Growth of capital. Current income is a secondary objective

PORTFOLIO:
At least 80% common stocks and securities convertible into common stocks

INCEPTION DATE:
May 1, 1995

NET ASSETS AT
DECEMBER 31, 2007:
$228,943,951

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AN UPDATE FROM FUND MANAGEMENT

The Gabelli Capital Asset Fund posted a total return of 9.13% in 2007 outpacing
the 5.49% return of the Standard & Poor's (S&P) 500 Index. For the year, the
best performing sectors were energy, utilities, and materials, while the worst
performing groups were financials, consumer discretionary, and health care.
Performance was also helped by several holdings that were acquired.

Investments that contributed significantly to returns over the past year
included Deere & Co. up 95.9% (0.5% of net assets as of December 31, 2007),
Flowserve up 90.6% (1.0%), Precision Castparts up 77.2% (1.4%), MGM Mirage up
46.5% (1.4%), and Archer-Daniels-Midland up 45.3% (1.6%). Finally, two long-time
holdings of the Fund were the subjects of completed buyouts during the year.
Blackstone Group purchased Hilton Hotels for $47.50 per share while the Carlyle
Group purchased Sequa Corp. for $175 per share.

It was a difficult year for a few of the Fund's larger holdings including
Citigroup down 47.1% (1.0%), RPC Inc. down 30.6% (0.4%), Sprint Nextel down
30.5% (0.9%), and Time Warner down 24.2% (1.3%).

THE VIEWS EXPRESSED ABOVE ARE THOSE OF THE FUND'S PORTFOLIO MANAGER AS OF
DECEMBER 31, 2007 AND ARE SUBJECT TO CHANGE WITHOUT NOTICE. THEY DO NOT
NECESSARILY REPRESENT THE VIEWS OF GABELLI FUNDS. THE VIEWS EXPRESSED HEREIN ARE
BASED ON CURRENT MARKET CONDITIONS AND ARE NOT INTENDED TO PREDICT OR GUARANTEE
THE FUTURE PERFORMANCE OF ANY FUND, ANY INDIVIDUAL SECURITY, ANY MARKET OR
MARKET SEGMENT. THE COMPOSITION OF EACH FUND'S PORTFOLIO IS SUBJECT TO CHANGE.
NO RECOMMENDATION IS MADE WITH RESPECT TO ANY SECURITY DISCUSSED HEREIN.

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ABOUT INFORMATION IN THIS REPORT:
o It is important to consider carefully the Fund's investment objectives,
risks, fees, and expenses before investing. All funds involve some risk,
including possible loss of the principal amount invested.
o The S&P 500 Index is an index of 500 primarily large cap U.S. stocks, which
is generally considered to be representative of U.S. stock market activity.
Index returns are provided for comparative purposes. Please note that the
index is unmanaged and not available for direct investment and its returns do
not reflect the fees and expenses that have been deducted from the Fund.

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GABELLI CAPITAL ASSET FUND 1

ANNUAL REPORT
[ ] GABELLI CAPITAL ASSET FUND TO CONTRACTOWNERS
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TOP TEN HOLDINGS (AS OF 12/31/2007)
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PERCENTAGE OF
COMPANY TOTAL NET ASSETS
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The Coca-Cola Co. 2.4%
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Honeywell International Inc. 2.2%
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American Express Co. 2.0%
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Diageo plc, ADR 1.9%
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Viacom Inc., Cl. A 1.9%
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General Mills Inc. 1.7%
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Cablevision Systems Corp., Cl. A 1.7%
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Allegheny Energy Inc. 1.7%
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Clear Channel Communications, Inc. 1.7%
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Archer-Daniels-Midland Co. 1.6%
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SECTOR WEIGHTINGS (PERCENTAGE OF TOTAL NET ASSETS AS OF 12/31/2007)

[PIE CHART OMITTED - PLOT POINTS FOLLOW]

Energy And Utilities 8.2%
Financial Services 7.3%
Diversified Industrial 6.9%
Entertainment 6.0%
Broadcasting 5.6%
Equipment And Supplies 5.0%
Health Care 4.0%
Aviation: Parts And Services 3.5%
Hotels And Gaming 3.5%
Other 37.0%
Food And Beverage 13.0%

AVERAGE ANNUAL TOTAL RETURNS (FOR PERIODS ENDED 12/31/2007)
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1 5 10 SINCE INCEPTION
YR YRS YRS 5/1/1995
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Gabelli Capital Asset Fund 9.13% 16.27% 10.19% 12.66%
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S&P 500 Index 5.49% 12.82% 5.91% 10.51%
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ABOUT INFORMATION IN THIS REPORT:

ALL PERFORMANCE DATA QUOTED IS HISTORICAL AND THE RESULTS REPRESENT PAST
PERFORMANCE AND NEITHER GUARANTEE NOR PREDICT FUTURE INVESTMENT RESULTS. To
obtain performance data current to the most recent month (availability within
seven business days of the most recent month end), please call us at (800)
221-3253 or visit our website at WWW.GUARDIANINVESTOR.COM. Current performance
may be higher or lower than the performance quoted here. Investment return and
principal value will fluctuate so that an investor's shares, when redeemed, may
be worth more or less than the original cost.

Total return figures are historical and assume the reinvestment of dividends and
distributions and the deduction of all Fund expenses. The actual total returns
for owners of variable annuity contracts or variable life insurance policies
that provide for investment in the Fund will be lower to reflect separate
account and contract/policy charges. The return figures shown do not reflect the
deduction of taxes that a contractowner may pay on distributions or redemption
of units.

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2 GABELLI CAPITAL ASSET FUND

ANNUAL REPORT
[ ] GABELLI CAPITAL ASSET FUND TO CONTRACTOWNERS
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GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT (UNAUDITED)

To give you a comparison, this chart shows you the performance of a hypothetical
$10,000 investment made in the Fund and in the S&P 500 Index. Index returns do
not include the fees and expenses of the Fund, but do include the reinvestment
of dividends.

[GRAPH OMITTED - PLOT POINTS FOLLOW]

Gabelli Capital Asset Fund S&P 500 Index
05/01/95 $10,000 $10,000
12/31/95 10,835 12,176
12/31/96 12,029 14,970
12/31/97 17,152 19,963
12/31/98 19,161 25,672
12/31/99 22,956 31,071
12/31/00 24,233 28,244
12/31/01 24,853 24,889
12/31/02 21,297 19,391
12/31/03 28,848 24,950
12/31/04 33,332 27,662
12/31/05 34,008 29,020
12/31/06 41,466 33,600
12/31/07 45,252 35,444

Past performance is not predictive of future results. The S&P 500 Index is an
unmanaged indicator of stock market performance.

The Fund files a complete schedule of portfolio holdings with the Securities and
Exchange Commission (the "SEC") for the first and third quarters of each fiscal
year on Form N-Q, the last of which was filed for the quarter ended September
30, 2007. The Fund's Form N-Q is available on the SEC's website at www.sec.gov
and may also be reviewed and copied at the SEC's Public Reference Room in
Washington, DC. Information on the operation of the Public Reference Room may be
obtained by calling 1-800-SEC-0330.

PROXY VOTING

The Fund files Form N-PX with its complete proxy voting record for the 12 months
ended June 30th, no later than August 31st of each year. A description of the
Fund's proxy voting policies, procedures, and how the Fund voted proxies
relating to portfolio securities is available without charge, upon request, by
(i) calling 800-GABELLI (800-422-3554); (ii) writing to The Gabelli Funds at One
Corporate Center, Rye, NY 10580-1422; or (iii) visiting the SEC's website at
www.sec.gov.

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GABELLI CAPITAL ASSET FUND 3

ANNUAL REPORT
[ ] GABELLI CAPITAL ASSET FUND TO CONTRACTOWNERS
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DISCLOSURE OF FUND EXPENSES (UNAUDITED)

For the Six Month Period from July 1, 2007 through December 31, 2007

EXPENSE TABLE

We believe it is important for you to understand the impact of fees and expenses
regarding your investment. All mutual funds have operating expenses. As a
shareholder of a fund, you incur ongoing costs, which include costs for
portfolio management, administrative services, and shareholder reports (like
this one), among others. Operating expenses, which are deducted from a fund's
gross income, directly reduce the investment return of a fund. When a fund's
expenses are expressed as a percentage of its average net assets, this figure is
known as the expense ratio. The following examples are intended to help you
understand the ongoing costs (in dollars) of investing in your Fund and to
compare these costs with those of other mutual funds. The examples are based on
an investment of $1,000 made at the beginning of the period shown and held for
the entire period.

The Expense Table below illustrates your Fund's costs in two ways:

ACTUAL FUND RETURN: This section provides information about actual account
values and actual expenses. You may use this section to help you to estimate the
actual expenses that you paid over the period after any fee waivers and expense
reimbursements. The "Ending Account Value" shown is derived from the Fund's
ACTUAL return during the past six months, and the "Expenses Paid During Period"
shows the dollar amount that would have been paid by an investor who started
with $1,000 in the Fund. You may use this information, together with the amount
you invested, to estimate the expenses that you paid over the period.

To do so, simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
given for your Fund under the heading "Expenses Paid During Period" to estimate
the expenses you paid during this period.

HYPOTHETICAL 5% RETURN: This section provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio. It assumes a hypothetical annualized return of 5% before expenses during
the period shown. In this case - because the hypothetical return used is NOT the
Fund's actual return - the results do not apply to your investment and you
cannot use the hypothetical account value and expense to estimate the actual
ending account balance or expenses you paid for the period. This example is
useful in making comparisons of the ongoing costs of investing in the Fund and
other funds. To do so, compare this 5% hypothetical example with the 5%
hypothetical examples that appear in shareholder reports of other funds.

Please note that the expenses shown in the table are meant to highlight
your ongoing costs only and do not reflect any transactional costs such as sales
charges (loads), redemption fees, or exchange fees, if any, which would be
described in the Prospectus. If these costs were applied to your account, your
costs would be higher. Therefore, the 5% hypothetical return is useful in
comparing ongoing costs only, and will not help you determine the relative total
costs of owning different funds. The "Annualized Expense Ratio" represents the
actual expenses for the last six months and may be different from the expense
ratio in the Financial Highlights which is for the year ended December 31, 2007.

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BEGINNING ENDING ANNUALIZED EXPENSES
ACCOUNT VALUE ACCOUNT VALUE EXPENSE PAID DURING
JULY 1, 2007 DECEMBER 31, 2007 RATIO PERIOD*
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GABELLI CAPITAL ASSET FUND
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ACTUAL FUND RETURN $1,000.00 $ 974.90 1.11% $5.56
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HYPOTHETICAL 5% RETURN $1,000.00 $1,019.72 1.11% $5.68
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* Expenses are equal to the Fund's annualized expense ratio for the last six
months multiplied by the average account value over the period, multiplied by
the number of days in the most recent fiscal half-year, then divided by 365.

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4 GABELLI CAPITAL ASSET FUND

[ ] GABELLI CAPITAL ASSET FUND
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SCHEDULE OF INVESTMENTS
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December 31, 2007
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COMMON STOCKS -- 99.6%
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MARKET
SHARES COST VALUE
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AEROSPACE -- 1.1%
5,000 HEICO Corp. .............................. $ 119,891 $ 272,400
40,000 Herley Industries Inc.+ .................. 692,012 550,000
150,000 Rolls-Royce Group plc+ ................... 1,273,743 1,630,305
6,060,000 Rolls-Royce Group plc, Cl. B ............. 12,385 13,269
------------ ------------
2,098,031 2,465,974
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AGRICULTURE -- 2.3%
80,000 Archer-Daniels- Midland Co. .............. 1,801,215 3,714,400
14,000 The Mosaic Co.+ .......................... 260,449 1,320,760
5,000 UAP Holding Corp. ........................ 192,575 193,000
------------ ------------
2,254,239 5,228,160
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AUTOMOTIVE -- 1.2%
70,000 General Motors Corp. ..................... 2,230,294 1,742,300
20,000 Navistar International Corp.+ ............ 465,125 1,084,000
------------ ------------
2,695,419 2,826,300
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AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.7%
1,000 BERU AG .................................. 106,336 109,800
10,000 BorgWarner Inc. .......................... 198,526 484,100
42,000 CLARCOR Inc. ............................. 393,050 1,594,740
20,000 Dana Corp.+ .............................. 32,036 480
85,000 Earl Scheib Inc.+ ........................ 483,196 297,500
20,000 Midas Inc.+ .............................. 402,432 293,200
15,000 Modine Manufacturing Co. ................. 363,510 247,650
27,000 Proliance International Inc.+ ............ 128,735 48,600
90,000 Standard Motor Products Inc. ............. 871,983 734,400
------------ ------------
2,979,804 3,810,470
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AVIATION: PARTS AND SERVICES -- 3.5%
36,000 Curtiss-Wright Corp. ..................... 518,187 1,807,200
70,000 GenCorp Inc.+ ............................ 714,297 816,200
55,000 Kaman Corp. .............................. 698,385 2,024,550
23,000 Precision Castparts Corp. ................ 501,266 3,190,100
113,500 The Fairchild Corp., Cl. A+ .............. 420,999 295,100
------------ ------------
2,853,134 8,133,150
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BROADCASTING -- 5.6%
45,000 CBS Corp., Cl. A ......................... 918,326 1,203,750
110,000 Clear Channel Communications Inc. ........ 4,163,241 3,797,200
10,000 Cogeco Inc. .............................. 195,072 400,223
58,000 Fisher Communications Inc.+ .............. 3,131,023 2,201,680
200,000 Gray Television Inc. ..................... 1,771,363 1,604,000
18,000 Liberty Media Corp. - Capital, Cl. A+ .... 942,330 2,096,820
70,000 Lin TV Corp., Cl. A+ ..................... 1,042,005 851,900
80,000 Sinclair Broadcast Group Inc., Cl. A ..... 672,744 656,800
20,000 Young Broadcasting Inc., Cl. A+ .......... 105,350 21,000
------------ ------------
12,941,454 12,833,373
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BUSINESS SERVICES -- 0.9%
55,000 Intermec Inc.+ ........................... 1,046,429 1,117,050
75,000 Nashua Corp.+ ............................ 623,470 871,500
------------ ------------
1,669,899 1,988,550
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CABLE AND SATELLITE -- 3.1%
5,000 Adelphia Communications Corp., Cl. A+ (a) 5,250 0
5,000 Adelphia Communications Corp.,
Cl. A, Escrow+ (a) ..................... 0 0
5,000 Adelphia Recovery Trust+ (a) ............. 0 0

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MARKET
SHARES COST VALUE
- --------------------------------------------------------------------------------
160,000 Cablevision Systems Corp., Cl. A+ ........ $ 1,044,288 $ 3,920,000
10,000 EchoStar Communications Corp., Cl. A+ .... 294,560 377,200
25,000 Liberty Global Inc., Cl. A+ .............. 363,484 979,750
9,315 Liberty Global Inc., Cl. C+ .............. 155,984 340,836
65,000 The DIRECTV Group Inc.+ .................. 1,540,273 1,502,800
------------ ------------
3,403,839 7,120,586
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COMMUNICATIONS EQUIPMENT -- 2.4%
80,000 Corning Inc. ............................. 519,700 1,919,200
103,000 Nortel Networks Corp.+ ................... 2,146,622 1,554,270
44,000 Thomas & Betts Corp.+ .................... 1,047,018 2,157,760
------------ ------------
3,713,340 5,631,230
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COMPUTER SOFTWARE AND SERVICES -- 2.0%
20,000 Cognos Inc.+ ............................. 1,144,795 1,151,400
125,000 Furmanite Corp.+ ......................... 434,644 1,475,000
88,000 Yahoo! Inc.+ ............................. 2,783,257 2,046,880
------------ ------------
4,362,696 4,673,280
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CONSUMER PRODUCTS -- 1.9%
10,000 Avon Products Inc. ....................... 273,243 395,300
8,000 Clorox Co. ............................... 445,938 521,360
15,000 Pactiv Corp.+ ............................ 152,305 399,450
35,000 Procter & Gamble Co. ..................... 1,969,070 2,569,700
70,000 Revlon Inc., Cl. A+ ...................... 184,193 82,600
65,000 Schiff Nutrition International Inc. ...... 178,934 373,100
------------ ------------
3,203,683 4,341,510
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CONSUMER SERVICES -- 0.8%
5,000 Liberty Media Corp. - Interactive, Cl. A+ 93,974 95,400
90,000 Rollins Inc. ............................. 463,434 1,728,000
------------ ------------
557,408 1,823,400
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DIVERSIFIED INDUSTRIAL -- 6.9%
36,000 Ampco-Pittsburgh Corp. ................... 591,081 1,372,680
83,000 Baldor Electric Co. ...................... 2,655,882 2,793,780
20,000 Cooper Industries Ltd., Cl. A ............ 729,981 1,057,600
30,000 Crane Co. ................................ 623,766 1,287,000
19,000 Greif Inc., Cl. A ........................ 231,598 1,242,030
82,000 Honeywell International Inc. ............. 2,497,596 5,048,740
25,000 ITT Corp. ................................ 1,118,635 1,651,000
22,000 Katy Industries Inc.+ .................... 60,243 44,000
85,000 Myers Industries Inc. .................... 857,404 1,229,950
------------ ------------
9,366,186 15,726,780
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ELECTRONICS -- 2.1%
15,000 Cypress Semiconductor Corp.+ ............. 312,790 540,450
60,000 Intel Corp. .............................. 1,228,332 1,599,600
30,000 LSI Corp.+ ............................... 154,117 159,300
75,000 Texas Instruments Inc. ................... 1,772,274 2,505,000
------------ ------------
3,467,513 4,804,350
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ENERGY AND UTILITIES -- 8.2%
60,000 Allegheny Energy Inc. .................... 601,526 3,816,600
300,000 Aquila Inc.+ ............................. 1,131,441 1,119,000
13,000 Cameron International Corp.+ ............. 187,927 625,690
10,000 Chevron Corp. ............................ 624,800 933,300
30,000 ConocoPhillips ........................... 860,026 2,649,000
10,000 Devon Energy Corp. ....................... 322,357 889,100
38,000 DPL Inc. ................................. 1,032,670 1,126,700

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See accompanying notes to financial statements. 5

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[ ] GABELLI CAPITAL ASSET FUND
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SCHEDULE OF INVESTMENTS (CONTINUED)
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December 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- --------------------------------------------------------------------------------
ENERGY AND UTILITIES (CONTINUED)
90,000 El Paso Corp. ........................... $ 807,999 $ 1,551,600
27,000 El Paso Electric Co.+ .................... 242,555 690,390
18,000 Exxon Mobil Corp. ........................ 654,381 1,686,420
6,699 Florida Public Utilities Co. ............. 52,922 78,713
20,000 Mirant Corp., Escrow+ (a) ................ 0 0
27,000 NSTAR .................................... 642,663 977,940
17,000 Progress Energy Inc., CVO+ (a) ........... 7,800 5,610
5,000 Puget Energy Inc. ........................ 137,500 137,150
15,000 Royal Dutch Shell plc, Cl. A, ADR ........ 937,915 1,263,000
80,000 RPC Inc. ................................. 734,413 936,800
10,000 Southwest Gas Corp. ...................... 277,041 297,700
------------ ------------
9,255,936 18,784,713
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ENTERTAINMENT -- 6.0%
15,000 Canterbury Park Holding Corp. ............ 194,588 180,000
50,000 Discovery Holding Co., Cl. A+ ............ 433,402 1,257,000
70,000 Dover Motorsports Inc. ................... 446,303 458,500
170,000 Gemstar-TV Guide International Inc.+ ..... 782,099 809,200
120,000 Grupo Televisa SA, ADR ................... 1,609,498 2,852,400
180,000 Time Warner Inc. ......................... 2,796,449 2,971,800
20,000 Triple Crown Media Inc.+ ................. 184,942 94,600
100,000 Viacom Inc., Cl. A+ ...................... 4,091,896 4,398,000
18,000 Vivendi .................................. 529,900 825,826
------------ ------------
11,069,077 13,847,326
- --------------------------------------------------------------------------------
ENVIRONMENTAL SERVICES -- 1.4%
60,000 Allied Waste Industries Inc.+ ............ 601,145 661,200
80,000 Waste Management Inc. .................... 2,709,895 2,613,600
------------ ------------
3,311,040 3,274,800
- --------------------------------------------------------------------------------
EQUIPMENT AND SUPPLIES -- 5.0%
33,000 AMETEK Inc. .............................. 225,394 1,545,720
38,000 Baldwin Technology Co. Inc., Cl. A+ ...... 52,525 179,360
16,000 Belden Inc. .............................. 244,993 712,000
40,000 Capstone Turbine Corp.+ .................. 70,880 65,200
19,000 CIRCOR International Inc. ................ 488,629 880,840
110,000 CTS Corp. ................................ 1,013,089 1,092,300
24,000 Flowserve Corp. .......................... 325,876 2,308,800
15,000 Franklin Electric Co. Inc. ............... 148,665 574,050
40,000 GrafTech International Ltd.+ ............. 352,242 710,000
25,000 IDEX Corp. ............................... 283,834 903,250
50,000 L.S. Starrett Co., Cl. A ................. 747,923 845,500
14,000 Robbins & Myers Inc. ..................... 350,229 1,058,820
14,000 The Eastern Co. .......................... 129,462 256,760
8,000 Watts Water Technologies Inc., Cl. A ..... 107,827 238,400
------------ ------------
4,541,568 11,371,000
- --------------------------------------------------------------------------------
FINANCIAL SERVICES -- 7.3%
90,000 American Express Co. ..................... 2,813,015 4,681,800
20,000 American International Group Inc. ........ 1,223,127 1,166,000
13,000 Argo Group International Holdings Ltd.+ .. 379,130 547,690
20,000 BKF Capital Group Inc.+ .................. 102,267 44,400
80,000 Citigroup Inc. ........................... 3,571,814 2,355,200
12,000 Deutsche Bank AG ......................... 720,360 1,552,920
152,000 Epoch Holding Corp. ..................... 385,826 2,280,000
8,000 Federal National Mortgage Association .... 273,821 319,840

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MARKET
SHARES COST VALUE
- --------------------------------------------------------------------------------
5,000 Freddie Mac .............................. $ 165,393 $ 170,350
40,000 Marsh & McLennan Companies Inc. .......... 1,190,259 1,058,800
14,151 The Bank of New York Mellon Corp. ........ 481,615 690,003
9,000 The Bear Stearns Companies Inc. .......... 845,816 794,250
10,000 The Midland Co. .......................... 81,237 646,900
12,000 Wells Fargo & Co. ........................ 379,639 362,280
------------ ------------
12,613,319 16,670,433
- --------------------------------------------------------------------------------
FOOD AND BEVERAGE -- 13.0%
12,000 Anheuser-Busch Companies Inc. ............ 598,931 628,080
25,000 Brown-Forman Corp., Cl. A ................ 773,956 1,871,000
60,000 Cadbury Schweppes plc, ADR ............... 3,117,991 2,962,200
4,000 Corn Products International Inc. ......... 63,231 147,000
52,000 Diageo plc, ADR .......................... 2,063,627 4,463,160
27,000 Fomento Economico Mexicano SAB de CV, ADR 918,765 1,030,590
70,000 General Mills Inc. ....................... 3,322,849 3,990,000
170,000 Groupe Danone, ADR ....................... 1,820,822 3,068,500
10,000 H.J. Heinz Co. ........................... 308,996 466,800
90,000 PepsiAmericas Inc. ....................... 1,656,875 2,998,800
90,000 The Coca-Cola Co. ........................ 4,103,662 5,523,300
5,000 The Hershey Co. .......................... 193,725 197,000
30,900 Tootsie Roll Industries Inc. ............. 550,476 847,278
20,000 Wm. Wrigley Jr. Co. ...................... 918,527 1,171,000
5,750 Wm. Wrigley Jr. Co., Cl. B ............... 279,613 339,250
------------ ------------
20,692,046 29,703,958
- --------------------------------------------------------------------------------
HEALTH CARE -- 4.0%
5,000 Adams Respiratory Therapeutics Inc.+ ..... 298,726 298,700
93,000 Advanced Medical Optics Inc.+ ............ 3,116,692 2,281,290
4,000 Alpharma Inc., Cl. A+ .................... 85,401 80,600
100,000 Boston Scientific Corp.+ ................. 1,395,534 1,163,000
4,000 DENTSPLY International Inc. .............. 87,700 180,080
10,000 Henry Schein Inc.+ ....................... 290,333 614,000
2,000 Invitrogen Corp.+ ........................ 69,870 186,820
5,000 Laboratory Corp. of America Holdings+ .... 370,647 377,650
10,000 Patterson Companies Inc.+ ................ 293,978 339,500
150,000 Pfizer Inc. .............................. 4,200,172 3,409,500
60,000 TL Administration Corp.+ (a) ............. 144,933 0
5,000 UnitedHealth Group Inc. .................. 286,651 291,000
------------ ------------
10,640,637 9,222,140
- --------------------------------------------------------------------------------
HOTELS AND GAMING -- 3.5%
9,000 Boyd Gaming Corp. ........................ 437,077 306,630
18,000 Churchill Downs Inc. ..................... 747,971 971,460
2,000 Dover Downs Gaming & Entertainment Inc. .. 12,605 22,500
20,000 Gaylord Entertainment Co.+ ............... 563,712 809,400
10,000 Harrah's Entertainment Inc. .............. 816,457 887,500
14,000 International Game Technology ............ 414,725 615,020
10,000 Las Vegas Sands Corp.+ ................... 604,590 1,030,500
38,000 MGM Mirage+ .............................. 1,701,985 3,192,760
12,000 Pinnacle Entertainment Inc.+ ............. 341,631 282,720
------------ ------------
5,640,753 8,118,490
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
6 See accompanying notes to financial statements.

- --------------------------------------------------------------------------------

December 31, 2007
- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- --------------------------------------------------------------------------------
MACHINERY -- 1.9%
48,000 CNH Global NV ............................ $ 934,341 $ 3,159,360
12,000 Deere & Co. .............................. 365,420 1,117,440
------------ ------------
1,299,761 4,276,800
- --------------------------------------------------------------------------------
MANUFACTURED HOUSING AND RECREATIONAL VEHICLES -- 0.3%
3,000 Cavco Industries Inc.+ ................... 80,988 101,520
50,000 Champion Enterprises Inc.+ ............... 451,726 471,000
5,000 Skyline Corp. ............................ 184,656 146,750
------------ ------------
717,370 719,270
- --------------------------------------------------------------------------------
METALS AND MINING -- 1.1%
50,000 Newmont Mining Corp. ..................... 2,089,093 2,441,500
- --------------------------------------------------------------------------------
PUBLISHING -- 1.5%
70,000 Journal Communications Inc., Cl. A ....... 798,254 625,800
20,000 Lee Enterprises Inc. ..................... 359,254 293,000
18,000 McClatchy Co., Cl. A ..................... 534,476 225,360
5,000 Media General Inc., Cl. A ................ 192,159 106,250
7,000 Meredith Corp. ........................... 150,900 384,860
30,000 News Corp., Cl. A ........................ 427,299 614,700
40,000 PRIMEDIA Inc. ............................ 708,376 340,000
16,000 The E.W. Scripps Co., Cl. A .............. 667,408 720,160
15,000 The New York Times Co., Cl. A ............ 515,129 262,950
------------ ------------
4,353,255 3,573,080
- --------------------------------------------------------------------------------
REAL ESTATE -- 0.8%
50,000 Griffin Land & Nurseries Inc. ............ 753,028 1,825,000
- --------------------------------------------------------------------------------
RETAIL -- 2.6%
32,000 Aaron Rents Inc., Cl. A .................. 266,360 552,320
40,000 CSK Auto Corp.+ .......................... 394,565 200,400
40,000 CVS Caremark Corp. ....................... 1,509,812 1,590,000
10,000 Ingles Markets Inc., Cl. A ............... 125,475 253,900
15,000 Safeway Inc. ............................. 307,433 513,150
15,000 The Great Atlantic & Pacific Tea Co. Inc.+ 433,425 469,950
60,000 Walgreen Co. ............................. 2,339,025 2,284,800
------------ ------------
5,376,095 5,864,520
- --------------------------------------------------------------------------------
SPECIALTY CHEMICALS -- 2.7%
80,900 Ferro Corp. .............................. 1,623,426 1,677,057
50,000 Hawkins Inc. ............................. 681,993 750,000
30,000 Hercules Inc. ............................ 295,816 580,500
24,000 International Flavors & Fragrances Inc. .. 1,143,877 1,155,120
130,000 Omnova Solutions Inc.+ ................... 838,833 573,300
5,000 Quaker Chemical Corp. .................... 87,062 109,850
45,000 Sensient Technologies Corp. .............. 929,697 1,272,600
------------ ------------
5,600,704 6,118,427
- --------------------------------------------------------------------------------
TELECOMMUNICATIONS -- 2.7%
230,000 Cincinnati Bell Inc.+ .................... 1,163,898 1,092,500
17,000 Nortel Networks Corp.+ ................... 724,875 258,027
120,000 Qwest Communications International Inc.+ . 604,250 841,200
13,000 Rogers Communications Inc., Cl. B ........ 177,899 588,250
150,000 Sprint Nextel Corp. ...................... 2,259,749 1,969,500
8,000 Telephone & Data Systems Inc. ............ 320,900 500,800
5,000 Telephone & Data Systems Inc., Special ... 100,476 288,000
14,000 Verizon Communications Inc. .............. 458,536 611,660
------------ ------------
5,810,583 6,149,937

- --------------------------------------------------------------------------------
MARKET
SHARES COST VALUE
- --------------------------------------------------------------------------------
TRANSPORTATION -- 0.7%
42,000 GATX Corp. ............................... $ 1,845,968 $ 1,540,560
- --------------------------------------------------------------------------------
WIRELESS COMMUNICATIONS -- 1.4%
30,000 Price Communications Corp., Escrow+ (a) .. 0 0
38,000 United States Cellular Corp.+ ............ 1,444,576 3,195,800
------------ ------------
1,444,576 3,195,800
- --------------------------------------------------------------------------------
TOTAL COMMON STOCKS ................... 162,621,454 228,104,867
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
WARRANTS -- 0.0%
- --------------------------------------------------------------------------------
ENERGY AND UTILITIES -- 0.0%
1,000 Mirant Corp., Ser. A, expire 01/03/11+ .... 2,200 18,420
- --------------------------------------------------------------------------------
TOTAL INVESTMENTS -- 99.6% $162,623,654 228,123,287
OTHER ASSETS AND LIABILITIES (NET) -- 0.4% 820,664
- --------------------------------------------------------------------------------
NET ASSETS -- 100.0% $228,943,951
- --------------------------------------------------------------------------------

(a) Security fair valued under procedures established by the Board of Directors.
The procedures may include reviewing available financial information about
the company and reviewing valuation of comparable securities and other
factors on a regular basis. At December 31, 2007, the market value of fair
valued securities amounted to $5,610 or 0.00% of total net assets.
+ Non-income producing security.

ADR - American Depository Receipt
CVO - Contingent Value Obligation

- --------------------------------------------------------------------------------
See accompanying notes to financial statements. 7

- --------------------------------------------------------------------------------

[ ] GABELLI CAPITAL ASSET FUND

- --------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------

December 31, 2007
- --------------------------------------------------------------------------------

ASSETS:
Investments, at value (cost $162,623,654) $228,123,287
Foreign currency, at value (cost $19) 19
Receivable for investments sold 1,187,766
Receivable for Fund shares sold 12,368
Dividends receivable 196,581
Prepaid expense 7,517
------------
TOTAL ASSETS 229,527,538
------------
LIABILITIES:
Payable to custodian 154,984
Payable for Fund shares redeemed 158,731
Payable for investment management fees 196,792
Payable for accounting fees 11,251
Payable for legal and audit fees 51,080
Other accrued expenses 10,749
------------
TOTAL LIABILITIES 583,587
------------
NET ASSETS applicable to 12,272,227
shares outstanding $228,943,951
============
NET ASSETS CONSIST OF:
Paid-in capital, at $0.001 par value $166,856,755
Accumulated distributions in excess of
net realized gain on investments
and foreign currency transactions (3,412,683)
Net unrealized appreciation on investments 65,499,633
Net unrealized appreciation on foreign
currency translations 246
------------
NET ASSETS $228,943,951
============
NET ASSET VALUE, offering and redemption price
per share ($228,943,951 / 12,272,227 shares
outstanding; 500,000,000 shares authorized) $18.66
======

- --------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------

FOR THE YEAR ENDED
DECEMBER 31, 2007
- --------------------------------------------------------------------------------

INVESTMENT INCOME:
Dividends (net of foreign taxes of $30,576) $ 3,318,324
Interest 446,542
-----------
TOTAL INVESTMENT INCOME 3,764,866
-----------
EXPENSES:
Management fees 2,430,048
Legal and audit fees 84,867
Accounting fees 45,000
Custodian fees 43,282
Directors' fees 22,917
Shareholder services fees 11,367
Miscellaneous expenses 40,555
-----------
TOTAL EXPENSES 2,678,036
Less: Custodian fee credits (7,411)
-----------
NET EXPENSES 2,670,625
-----------
NET INVESTMENT INCOME 1,094,241
-----------
NET REALIZED AND UNREALIZED GAIN ON
INVESTMENTS AND FOREIGN CURRENCY:
Net realized gain on investments 18,478,002
Net realized gain on foreign
currency transactions 199
-----------
Net realized gain on investments and
foreign currency transactions 18,478,201
-----------
Net change in unrealized appreciation/
depreciation on investments 1,794,435
Net change in unrealized appreciation/
depreciation on foreign currency translations 104
-----------
Net change in unrealized appreciation/
depreciation on investments and
foreign currency translations 1,794,539
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS AND FOREIGN CURRENCY 20,272,740
-----------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS $21,366,981
===========

- --------------------------------------------------------------------------------
8 See accompanying notes to financial statements.

[ ] GABELLI CAPITAL ASSET FUND
- --------------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------

YEAR ENDED YEAR ENDED
DECEMBER 31, 2007 DECEMBER 31, 2006
----------------- -----------------

OPERATIONS:
Net investment income $ 1,094,241 $ 632,601
Net realized gain on investments and foreign currency transactions 18,478,201 28,591,124
Net change in unrealized appreciation/depreciation on investments
and foreign currency translations 1,794,539 15,321,310
------------ ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 21,366,981 44,545,035
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (1,085,270) (632,604)
Net realized gain on investments (17,236,080) (28,686,990)
Return of capital (43,265) (24,731)
------------ ------------
TOTAL DISTRIBUTIONS TO SHAREHOLDERS (18,364,615) (29,344,325)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Net increase (decrease) in net assets from capital share transactions (8,472,068) 86,062
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS (5,469,702) 15,286,772

NET ASSETS:
Beginning of period 234,413,653 219,126,881
------------ ------------
End of period (including undistributed net investment income of
$0 and $0, respectively) $228,943,951 $234,413,653
============ ============

- --------------------------------------------------------------------------------
See accompanying notes to financial statements. 9

[ ] GABELLI CAPITAL ASSET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------

December 31, 2007

1. ORGANIZATION

The Gabelli Capital Asset Fund (the "Fund") is a series of Gabelli Capital
Series Funds, Inc. (the "Company"), which was organized on April 8, 1993 as a
Maryland corporation. The Company is a diversified open-end management
investment company registered under the Investment Company Act of 1940, as
amended (the "1940 Act"). The Fund's primary objective is growth of capital.
Current income is a secondary objective. The Fund commenced investment
operations on May 1, 1995. Shares of the Fund are available to the public only
through the purchase of certain variable annuity and variable life insurance
contracts issued by The Guardian Insurance & Annuity Company, Inc. ("Guardian")
and other selected insurance companies.

2. SIGNIFICANT ACCOUNTING POLICIES

The preparation of financial statements in accordance with United States
("U.S.") generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts and disclosures in
the financial statements. Actual results could differ from those estimates. The
following is a summary of significant accounting policies followed by the Fund
in the preparation of its financial statements.

SECURITY VALUATION

Portfolio securities listed or traded on a nationally recognized securities
exchange or traded in the U.S. over-the-counter market for which market
quotations are readily available are valued at the last quoted sale price or a
market's official closing price as of the close of business on the day the
securities are being valued. If there were no sales that day, the security is
valued at the average of the closing bid and asked prices or, if there were no
asked prices quoted on that day, then the security is valued at the closing bid
price on that day. If no bid or asked prices are quoted on such day, the
security is valued at the most recently available price or, if the Board of
Directors (the "Board") so determines, by such other method as the Board shall
determine in good faith to reflect its fair market value. Portfolio securities
traded on more than one national securities exchange or market are valued
according to the broadest and most representative market, as determined by
Gabelli Funds, LLC (the "Adviser").

Portfolio securities primarily traded on a foreign market are generally
valued at the preceding closing values of such securities on the relevant
market, but may be fair valued pursuant to procedures established by the Board
if market conditions change significantly after the close of the foreign market
but prior to the close of business on the day the securities are being valued.
Debt instruments with remaining maturities of 60 days or less that are not
credit impaired are valued at amortized cost, unless the Board determines such
amount does not reflect the securities' fair value, in which case these
securities will be fair valued as determined by the Board. Debt instruments
having a maturity greater than 60 days for which market quotations are readily
available are valued at the average of the latest bid and asked prices. If there
were no asked prices quoted on such day, the security is valued using the
closing bid price. Futures contracts are valued at the closing settlement price
of the exchange or board of trade on which the applicable contract is traded.

Securities and assets for which market quotations are not readily available
are fair valued as determined by the Board. Fair valuation methodologies and
procedures may include, but are not limited to: analysis and review of available
financial and non-financial information about the company; comparisons to the
valuation and changes in valuation of similar securities, including a comparison
of foreign securities to the equivalent U.S. dollar value ADR securities at the
close of the U.S. exchange; and evaluation of any other information that could
be indicative of the value of the security.

In September 2006, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standards ("SFAS") 157, Fair Value
Measurements, which clarifies the definition of fair value and requires
companies to expand their disclosure about the use of fair value to measure
assets and liabilities in interim and annual periods subsequent to initial
recognition. Adoption of SFAS 157 requires the use of the price that would be
received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. SFAS 157 is
effective for financial statements issued for fiscal years beginning after
November 15, 2007, and interim periods within those fiscal years. As of December
31, 2007, the Fund does not believe the adoption of SFAS 157 will impact the
amounts reported in the financial statements.

FOREIGN CURRENCY TRANSLATIONS

The books and records of the Fund are maintained in U.S. dollars. Foreign
currencies, investments, and other assets and liabilities are translated into
U.S. dollars at the current exchange rates. Purchases and sales of investment
securities, income, and expenses are translated at the exchange rate prevailing
on the respective dates of such transactions. Unrealized gains and losses that
result from changes in foreign exchange rates and/or changes in market prices of
securities have been included in unrealized appreciation/depreciation on
investments and foreign currency

- --------------------------------------------------------------------------------
10

[ ] GABELLI CAPITAL ASSET FUND
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------

December 31, 2007

translations. Net realized foreign currency gains and losses resulting from
changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Fund and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.

FOREIGN SECURITIES

The Fund may directly purchase securities of foreign issuers. Investing in
securities of foreign issuers involves special risks not typically associated
with investing in securities of U.S. issuers. The risks include possible
revaluation of currencies, the ability to repatriate funds, less complete
financial information about companies, and possible future adverse political and
economic developments. Moreover, securities of many foreign issuers and their
markets may be less liquid and their prices more volatile than those of
securities of comparable U.S. issuers.

FOREIGN TAXES

The Fund may be subject to foreign taxes on income, gains on investments,
or currency repatriation, a portion of which may be recoverable. The Fund will
accrue such taxes and recoveries as applicable, based upon its current
interpretation of tax rules and regulations that exist in the markets in which
it invests.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME

Securities transactions are accounted for on the trade date with realized
gain or loss on investments determined by using the identified cost method.
Interest income (including amortization of premium and accretion of discount) is
recorded on the accrual basis. Premiums and discounts on debt securities are
amortized using the effective yield to maturity method. Dividend income is
recorded on the ex-dividend date except for certain dividends which are recorded
as soon as the Fund is informed of the dividend.

EXPENSES

Certain administrative expenses are common to, and allocated among, various
affiliated funds. Such allocations are made on the basis of each Fund's average
net assets or other criteria directly affecting the expenses as determined by
the Adviser pursuant to procedures established by the Board.

CUSTODIAN FEE CREDITS AND INTEREST EXPENSE

When cash balances are maintained in the custody account, the Fund receives
credits which are used to offset custodian fees. The gross expenses paid under
the custody arrangement are included in custodian fees in the Statement of
Operations with the corresponding expense offset, if any, shown as "custodian
fee credits." When cash balances are overdrawn, the Fund is charged an overdraft
fee equal to 2.00% above the federal funds rate on outstanding balances. This
amount, if any, would be shown as "interest expense" in the Statement of
Operations.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions to shareholders are recorded on the ex-dividend date.
Distributions to shareholders are based on income and capital gains as
determined in accordance with federal income tax regulations, which may differ
from income and capital gains as determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities and foreign
currency transactions held by the Fund, timing differences, and differing
characterizations of distributions made by the Fund. Distributions from net
investment income include net realized gains on foreign currency transactions.
These book/tax differences are either temporary or permanent in nature. To the
extent these differences are permanent, adjustments are made to the appropriate
capital accounts in the period when the differences arise. These
reclassifications have no impact on the net asset value ("NAV") per share of the
Fund. For the year ended December 31, 2007, reclassifications were made to
decrease accumulated net investment income by $8,971 and to decrease accumulated
distributions in excess of net realized gains on investments by $52,236 with an
offsetting adjustment to paid-in capital.

The tax character of distributions paid during the years ended December 31,
2007 and December 31, 2006 was as follows:

YEAR ENDED YEAR ENDED
DECEMBER 31, DECEMBER 31,
2007 2006
------------- ------------
Distributions paid from:
Ordinary income (inclusive of
short-term capital gains) $ 2,625,614 $ 1,652,200
Net long-term capital gains 15,695,736 27,667,394
Non-taxable return of capital 43,265 24,731
----------- -----------
Total distributions paid $18,364,615 $29,344,325
=========== ===========
PROVISION FOR INCOME TAXES

The Fund intends to continue to qualify as a regulated investment company
under Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). It is the policy of the Fund to comply with the requirements of the
Code applicable to regulated investment companies and to distribute
substantially all of its net investment company taxable income and net capital
gains. Therefore, no provision for federal income taxes is required.

- --------------------------------------------------------------------------------
11

December 31, 2007

At December 31, 2007, the difference between book basis and tax basis
unrealized appreciation was primarily attributable to the tax deferral of losses
on wash sales.

As of December 31, 2007, the components of accumulated earnings/(losses) on
a tax basis were as follows:

Net unrealized appreciation on investments .......... $62,086,950
Net unrealized appreciation on foreign currency ..... 246
-----------
Total ............................................... $62,087,196
===========

The following summarizes the tax cost of investments and the related
unrealized appreciation/(depreciation) at December 31, 2007:

GROSS GROSS NET
UNREALIZED UNREALIZED UNREALIZED
COST APPRECIATION DEPRECIATION APPRECIATION
---- ------------ ------------ ------------
Investments $166,036,337 $77,205,454 $(15,118,504) $62,086,950

FASB Interpretation No. 48, "Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109" (the "Interpretation") established a
minimum threshold for financial statement recognition of the benefit of
positions taken in filing tax returns (including whether the Fund is taxable in
a particular jurisdiction) and required certain expanded tax disclosures.

For the fiscal year ended December 31, 2007, the Fund did not have any
liability for any unrecognized tax benefits. The Fund recognizes interest and
penalties, if any, related to unrecognized tax benefits as income tax expenses
in the Statement of Operations. The Fund is not subject to examination by U.S.
federal tax authorities for tax years before 2003 and by state tax authorities
for tax years before 2002.

3. AGREEMENTS WITH AFFILIATED PARTIES

Pursuant to a management agreement (the "Management Agreement"), the Fund
will pay Guardian Investor Services Corporation (the "Manager") a fee, computed
daily and paid monthly, at the annual rate of 1.00% of the value of its average
daily net assets. Pursuant to an Investment Advisory Agreement among the Fund,
the Manager, and the Adviser, the Adviser, under the supervision of the
Company's Board of Directors and the Manager, manages the Fund's assets in
accordance with the Fund's investment objectives and policies, makes investment
decisions for the Fund, places purchase and sale orders on behalf of the Fund,
provides investment research, and provides facilities and personnel required for
the Fund's administrative needs. The Adviser may delegate its administrative
role and currently has done so to PFPC Inc., the Fund's sub-administrator (the
"Sub-Administrator"). The Adviser will supervise the performance of
administrative and professional services provided by others and pays the
compensation of the Sub-Administrator and all Officers and Directors of the
Company who are its affiliates. As compensation for its services and the related
expenses borne by the Adviser, the Manager pays the Adviser a fee, computed
daily and paid monthly, at the annual rate of 0.75% of the value of the Fund's
average daily net assets.

The Fund pays each Director who is not considered to be an affiliated
person an annual retainer of $3,000 plus $500 for each Board meeting attended
and they are reimbursed for any out of pocket expenses incurred in attending
meetings. All Board committee members receive $500 per meeting attended.
Directors who are directors or employees of the Adviser or an affiliated company
receive no compensation or expense reimbursement from the Fund.

4. PORTFOLIO SECURITIES

Purchases and proceeds from the sales of securities for the year ended
December 31, 2007, other than short-term securities, aggregated $77,728,184 and
$54,821,818, respectively.

5. TRANSACTIONS WITH AFFILIATES

During the year ended December 31, 2007, the Fund paid brokerage
commissions on security trades of $100,933 to Gabelli & Company, Inc.

The cost of calculating the Fund's NAV per share is a Fund expense pursuant
to the Investment Advisory Agreement. During the year ended December 31, 2007,
the Fund paid or accrued $45,000 to the Adviser in connection with the cost of
computing the Fund's NAV.

The Fund is assuming its portion of the allocated cost of the Gabelli
Funds' Chief Compliance Officer in the amount of $4,830 for the year ended
December 31, 2007, which is included in miscellaneous expenses in the Statement
of Operations.

6. LINE OF CREDIT

Effective June 20, 2007, the Fund participates in an unsecured line of
credit of up to $75,000,000, and may borrow up to 10% of its net assets from the
custodian for temporary borrowing purposes. Prior to June 20, 2007, the line of
credit was $25,000,000. Borrowings under this arrangement bear interest at 0.75%
above the federal funds rate on outstanding balances. This amount, if any, would
be shown as "interest expense" in the Statement of Operations.

The average daily amount of borrowings outstanding from the line of credit
within the year ended December 31, 2007 was $2,482 with a weighted average
interest rate of 5.04%. The maximum amount borrowed at any time during the year
ended December 31, 2007 was $194,000.

- --------------------------------------------------------------------------------
12

December 31, 2007

7. CAPITAL STOCK TRANSACTIONS

Transactions in shares of capital stock were as follows:

Year Ended Year Ended Year Ended Year Ended
December 31, 2007 December 31, 2006 December 31, 2007 December 31, 2006
- --------------------------------------------------------------------------------------------------------------------------------
Shares Amount
- --------------------------------------------------------------------------------------------------------------------------------

Shares sold 803,368 710,099 $ 16,086,710 $ 13,570,627
Shares issued upon reinvestment of distributions 979,446 1,568,376 18,364,615 29,344,326
Shares redeemed (2,124,404) (2,260,473) (42,923,393) (42,828,891)
================================================================================================================================
NET INCREASE (DECREASE) (341,590) 18,002 $ (8,472,068) $ 86,062
================================================================================================================================

8. INDEMNIFICATIONS

The Fund enters into contracts that contain a variety of indemnifications.
The Fund's maximum exposure under these arrangements is unknown. However, the
Fund has not had prior claims or losses pursuant to these contracts and expects
the risk of loss to be remote.

9. OTHER MATTERS

The Adviser and/or affiliates received subpoenas from the Attorney General
of the State of New York and the SEC requesting information on mutual fund share
trading practices involving certain funds managed by the Adviser. GAMCO
Investors, Inc. ("GAMCO"), the Adviser's parent company, responded to these
requests for documents and testimony. In June 2006, GAMCO began discussions with
the SEC regarding a possible resolution of their inquiry. In February 2007, the
Adviser made an offer of settlement to the staff of the SEC for communication to
the Commission for its consideration to resolve this matter. This offer of
settlement is subject to agreement regarding the specific language of the SEC's
administrative order and other settlement documents. On a separate matter, in
September 2005, the Adviser was informed by the staff of the SEC that the staff
may recommend to the Commission that an administrative remedy and a monetary
penalty be sought from the Adviser in connection with the actions of two of nine
closed-end funds managed by the Adviser relating to Section 19(a) and Rule 19a-1
of the 1940 Act. These provisions require registered investment companies to
provide written statements to shareholders when a dividend is made from a source
other than net investment income. While the two closed-end funds sent annual
statements and provided other materials containing this information, the funds
did not send written statements to shareholders with each distribution in 2002
and 2003. The Adviser believes that all of the funds are now in compliance. The
Adviser believes that these matters would have no effect on the Fund or any
material adverse effect on the Adviser or its ability to manage the Fund.

- --------------------------------------------------------------------------------
13

[ ] GABELLI CAPITAL ASSET FUND
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------

SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THROUGHOUT THE PERIODS
INDICATED:

YEAR ENDED DECEMBER 31,
---------------------------------------------------------------------
2007 2006 2005 2004 2003
- --------------------------------------------------------------------------------------------------------------------------------

OPERATING PERFORMANCE:
Net asset value, beginning of period $18.58 $17.40 $18.28 $16.44 $12.16
- --------------------------------------------------------------------------------------------------------------------------------
Net investment income 0.10 0.06 0.05 0.06 0.02
Net realized and unrealized gain on investments 1.61 3.77 0.33 2.50 4.29
- --------------------------------------------------------------------------------------------------------------------------------
Total from investment operations 1.71 3.83 0.38 2.56 4.31
- --------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS:
Net investment income (0.10) (0.06) (0.05) (0.06) (0.02)
Net realized gain on investments (1.53) (2.59) (1.21) (0.66) (0.01)
Return of capital (0.00)(a) (0.00)(a) -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Total distributions (1.63) (2.65) (1.26) (0.72) (0.03)
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, END OF PERIOD $18.66 $18.58 $17.40 $18.28 $16.44
- --------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN + 9.1% 21.9% 2.0% 15.5% 35.5%
================================================================================================================================
RATIOS TO AVERAGE NET ASSETS AND SUPPLEMENTAL DATA:
Net assets, end of period (in 000's) $228,944 $234,414 $219,127 $240,035 $214,480
Ratio of net investment income to average net assets 0.45% 0.28% 0.26% 0.34% 0.13%
Ratio of operating expenses to average net assets 1.10% 1.10%(b) 1.10% 1.10% 1.11%
Portfolio turnover rate 24% 40% 25% 27% 39%
================================================================================================================================

+ Total return represents aggregate total return of a hypothetical $1,000
investment at the beginning of the period and sold at the end of the period
including reinvestment of distributions.
(a) Amount represents less than $0.005 per share.
(b) The ratios do not include a reduction of expenses for custodian fee credits
on cash balances maintained with the custodian. Including such custodian fee
credits, the expense ratio for the year ended December 31, 2006 would have
been 1.09%. For the year ended December 31, 2007, the effect of the
custodian fee credits was minimal.

- --------------------------------------------------------------------------------
14 See accompanying notes to financial statements.

[ ] GABELLI CAPITAL SERIES FUND, INC.
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REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
- --------------------------------------------------------------------------------

TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
GABELLI CAPITAL SERIES FUNDS, INC.

We have audited the accompanying statement of assets and liabilities,
including the schedule of investments, of Gabelli Capital Asset Fund (the
"Fund"), the only series of Gabelli Capital Series Funds, Inc., as of December
31, 2007, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Fund's internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of December 31, 2007, by correspondence with the Fund's
custodian and brokers. We believe that our audits provide a reasonable basis for
our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
Gabelli Capital Asset Fund, a series of Gabelli Capital Series Funds, Inc., at
December 31, 2007, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the five years in the period then
ended, in conformity with U.S. generally accepted accounting principles.

/s/ ERNST & YOUNG LLP

Philadelphia, Pennsylvania
February 21, 2008

- --------------------------------------------------------------------------------
15

[ ] GABELLI CAPITAL ASSET FUND
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION (UNAUDITED)
- --------------------------------------------------------------------------------

The business and affairs of the Fund are managed under the direction of the
Company's Board of Directors. Information pertaining to the Directors and
Officers of the Fund is set forth below. The Fund's Statement of Additional
Information includes additional information about the Fund's Directors and
Officers and is available, without charge, upon request, by writing to Gabelli
Capital Series Funds, Inc. at One Corporate Center, Rye, NY 10580-1422.

NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND COMPLEX
NAME, POSITION(S) LENGTH OF TIME OVERSEEN BY PRINCIPAL OCCUPATION(S) OTHER DIRECTORSHIPS
ADDRESS(1) AND AGE SERVED(2) DIRECTOR DURING PAST FIVE YEARS HELD BY DIRECTOR(4)
- ---------------------------------------------------------------------------------------------------------------------------------
INTERESTED DIRECTORS(3)

Mario J. Gabelli Since 1995 26 Chairman and Chief Executive Officer of Director of Morgan Group
Director and Chief GAMCO Investors, Inc. and Chief Investment Holdings, Inc. (holding
Investment Officer Officer - Value Portfolios of Gabelli Funds, company); Chairman of the
Age: 65 LLC and GAMCO Asset Management Inc.; Board of LICT Corp.
Director/Trustee or Chief Investment (multimedia and
Officer of other registered investment communication services
companies in the Gabelli/GAMCO Funds company)
complex; Chairman and Chief Executive
Officer of GGCP, Inc.

Arthur V. Ferrara Since 1995 7 Former Chairman of the Board and Chief --
Director Executive Officer of The Guardian Life
Age: 77 Insurance Company of America
(1993-1995)

INDEPENDENT DIRECTORS
Anthony J. Colavita Since 1995 35 Partner in the law firm of --
Director Anthony J. Colavita, P.C.
Age: 72

Anthony R. Pustorino Since 1995 14 Certified Public Accountant; Professor Director of The LGL
Director Emeritus, Pace University Group, Inc.
Age: 82 (diversified
manufacturing)

Werner J. Roeder, MD Since 1995 23 Medical Director of Lawrence Hospital and --
Director practicing private physician
Age: 67

Anthonie C. van Ekris Since 1995 19 Chairman of BALMAC International, Inc. --
Director (commodities and futures trading)
Age: 73

- --------------------------------------------------------------------------------
16

[ ] GABELLI CAPITAL ASSET FUND
- --------------------------------------------------------------------------------
ADDITIONAL INFORMATION (UNAUDITED) (CONTINUED)

TERM OF
OFFICE AND
NAME, POSITION(S) LENGTH OF TIME PRINCIPAL OCCUPATION(S)
ADDRESS(1) AND AGE SERVED(2) DURING PAST FIVE YEARS
- -----------------------------------------------------------------------------------------------------------------------------------
OFFICERS

Bruce N. Alpert Since 1995 Executive Vice President and Chief Operating Officer of Gabelli Funds, LLC and an officer
President of most of the registered investment companies in the Gabelli/GAMCO Funds complex.
Age: 56 Director and President of Gabelli Advisers, Inc. since 1998

James E. McKee Since 1995 Vice President, General Counsel, and Secretary of GAMCO Investors, Inc. since 1999, and
Secretary GAMCO Asset Management Inc. since 1993; Secretary of all of the registered investment
Age: 44 companies in the Gabelli/GAMCO Funds complex

Agnes Mullady Since 2006 Vice President of Gabelli Funds, LLC since 2007; Officer of all of the registered
Treasurer investment companies in the Gabelli/GAMCO Funds complex; Senior Vice President of
Age: 49 U.S. Trust Company, N.A. and Treasurer and Chief Financial Officer of Excelsior
Funds from 2004 through 2005; Chief Financial Officer of AMIC Distribution Partners
from 2002 through 2004; Controller of Reserve Management Corporation and Reserve
Partners, Inc. and Treasurer of Reserve Funds from 2000 through 2002

Peter D. Goldstein Since 2004 Director of Regulatory Affairs at GAMCO Investors, Inc. since 2004; Chief Compliance
Chief Compliance Officer Officer of all of the registered investment companies in the Gabelli/GAMCO Funds
Age: 54 complex; Vice President of Goldman Sachs Asset Management from 2000 through 2004

1. Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.
2. Each Director will hold office for an indefinite term until the earliest of
(i) the next meeting of shareholders, if any, called for the purpose of
considering the election or re-election of such Director and until the
election and qualification of his or her successor, if any, elected at such
meeting, or (ii) the date a Director resigns or retires, or a Director is
removed by the Board of Directors or shareholders, in accordance with the
Fund's By-Laws and Articles of Incorporation. Each officer will hold office
for an indefinite term until the date he or she resigns or retires or until
his or her successor is elected and qualified.
3. "Interested person" of the Fund as defined in the 1940 Act. Mr. Gabelli is
considered an "interested person" because of his affiliation with Gabelli
Funds, LLC which acts as the Fund's investment adviser. Mr. Ferrara is
considered an interested person because of his affiliation with The Guardian
Life Insurance Company of America, which is the parent company of the Fund's
Manager.
4. This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934, as amended (i.e. public
companies) or other investment companies registered under the 1940 Act.

[ ] GABELLI CAPITAL ASSET FUND
- --------------------------------------------------------------------------------
2007 TAX NOTICE TO SHAREHOLDERS (UNAUDITED)
- --------------------------------------------------------------------------------

For the fiscal year ended December 31, 2007, the Fund paid to shareholders
on December 27, 2007 an ordinary income dividend (comprised of net investment
income and short-term capital gains) totaling $0.232 per share and a long-term
capital gain dividend totaling $15,695,736 which is designated as a capital gain
distribution. For the fiscal year ended December 31, 2007, 100% of the ordinary
income distribution qualified for the dividend received deduction available to
corporations, and 100% of the ordinary income distribution was qualified
dividend income.

U.S. GOVERNMENT INCOME

The percentage of the ordinary income dividend paid by the Fund during
fiscal year 2007 which was derived from U.S. Treasury securities was 4.97%. Such
income is exempt from state and local tax in all states. However, many states,
including New York and California, allow a tax exemption for a portion of the
income earned only if a mutual fund has invested at least 50% of its assets at
the end of each quarter of the Fund's fiscal year in U.S. Government securities.
The Gabelli Capital Asset Fund did not meet this strict requirement in 2007. Due
to the diversity in state and local tax law, it is recommended that you consult
your personal tax adviser as to the applicability of the information provided to
your specific situation.

- --------------------------------------------------------------------------------
17

ITEM 2. CODE OF ETHICS.

(a) The registrant, as of the end of the period covered by this report,
has adopted a code of ethics that applies to the registrant's
principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the
registrant or a third party.

(c) There have been no amendments, during the period covered by this
report, to a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, and that relates to any
element of the code of ethics description.

(d) The registrant has not granted any waivers, including an implicit
waiver, from a provision of the code of ethics that applies to the
registrant's principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing
similar functions, regardless of whether these individuals are
employed by the registrant or a third party, that relates to one or
more of the items set forth in paragraph (b) of this item's
instructions.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

As of the end of the period covered by the report, the registrant's Board of
Directors has determined that Anthony R. Pustorino is qualified to serve as an
audit committee financial expert serving on its audit committee and that he is
"independent," as defined by Item 3 of Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$39,900 for 2006 and $41,500 for 2007.

AUDIT-RELATED FEES

(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $0 for 2006 and $0 for 2007.

TAX FEES

(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $3,900 for 2006 and
$4,100 for 2007. Tax fees represent tax compliance services provided
in connection with the review of the Registrant's tax returns.

ALL OTHER FEES

(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are
$0 for 2006 and $0 for 2007.

(e)(1) Disclose the audit committee's pre-approval policies and procedures
described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

Pre-Approval Policies and Procedures. The Audit Committee
("Committee") of the registrant is responsible for pre-approving (i)
all audit and permissible non-audit services to be provided by the
independent registered public accounting firm to the registrant and
(ii) all permissible non-audit services to be provided by the
independent registered public accounting firm to the Adviser, Gabelli
Funds, LLC, and any affiliate of Gabelli Funds, LLC ("Gabelli") that
provides services to the registrant (a "Covered Services Provider") if
the independent registered public accounting firm's engagement related
directly to the operations and financial reporting of the registrant.
The Committee may delegate its responsibility to pre-approve any such
audit and permissible non-audit services to the Chairperson of the
Committee, and the Chairperson must report to the Committee, at its
next regularly scheduled meeting after the Chairperson's pre-approval
of such services, his or her decision(s). The Committee may also
establish detailed pre-approval policies and procedures for
pre-approval of such services in accordance with applicable laws,
including the delegation of some or all of the Committee's
pre-approval responsibilities to the other persons (other than Gabelli
or the registrant's officers). Pre-approval by the Committee of any
permissible non-audit services is not required so long as: (i) the
permissible non-audit services were not recognized by the registrant
at the time of the engagement to be non-audit services; and (ii) such
services are promptly brought to the attention of the Committee and
approved by the Committee or Chairperson prior to the completion of
the audit.

(e)(2) The percentage of services described in each of paragraphs (b)
through (d) of this Item that were approved by the audit committee
pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X are
as follows:

(b) Not applicable

(d) Not applicable

(f) The percentage of hours expended on the principal accountant's
engagement to audit the registrant's financial statements for the most
recent fiscal year that were attributed to work performed by persons
other than the principal accountant's full-time, permanent employees
was (0%) zero percent.

(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of
the registrant was $100,900 for 2006 and $69,100 for 2007.

(h) The registrant's audit committee of the board of directors has
considered whether the provision of non-audit services that were
rendered to the registrant's investment adviser (not including any
sub-adviser whose role is primarily portfolio management and is
subcontracted with or overseen by another investment adviser), and any
entity controlling, controlled by, or under common control with the
investment adviser that provides ongoing services to the registrant
that were not pre-approved pursuant to paragraph (c)(7)(ii) of Rule
2-01 of Regulation S-X is compatible with maintaining the principal
accountant's independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Schedule of Investments in securities of unaffiliated issuers as of the close of
the reporting period is included as part of the report to shareholders filed
under Item 1 of this form.

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

Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Directors, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 407(c)(2)(iv) of Regulation S-K (17 CFR
229.407) (as required by Item 22(b)(15) of Schedule 14A (17 CFR 240.14a-101)),
or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of the report that includes the disclosure
required by this paragraph, based on their evaluation of these
controls and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Securities Exchange Act of 1934, as amended (17 CFR 240.13a-15(b) or
240.15d-15(b)).

(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's second
fiscal quarter of the period covered by this report that has
materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.

ITEM 12. EXHIBITS.

(a)(1) Code of ethics, or any amendment thereto, that is the subject of
disclosure required by Item 2 is attached hereto.

(a)(2) Certifications pursuant to Rule 30a-2(a) under the 1940 Act and
Section 302 of the Sarbanes-Oxley Act of 2002 are attached hereto.

(a)(3) Not applicable.

(b) Certifications pursuant to Rule 30a-2(b) under the 1940 Act and
Section 906 of the Sarbanes-Oxley Act of 2002 are attached hereto.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.

(registrant) Gabelli Capital Series Funds, Inc.
--------------------------------------------------------------------

By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer

Date 03/05/08
----------------------------------------------------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By (Signature and Title)* /s/ Bruce N. Alpert
-------------------------------------------------------
Bruce N. Alpert, Principal Executive Officer

Date 03/05/08
----------------------------------------------------------------------------

By (Signature and Title)* /s/ Agnes Mullady
-------------------------------------------------------
Agnes Mullady, Principal Financial Officer and
Treasurer

Date 03/05/08
----------------------------------------------------------------------------

* Print the name and title of each signing officer under his or her signature.