-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VaL9BlT6dLYKrnlUk8sF5EyPbgcWXXZdY7lrm47GqDHTQydTlFOnbk68Ft5qh7u2 p+RIvzg6PDwVNhzjx0UKaA== 0000843078-04-000017.txt : 20041229 0000843078-04-000017.hdr.sgml : 20041229 20041229111518 ACCESSION NUMBER: 0000843078-04-000017 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20041031 FILED AS OF DATE: 20041229 DATE AS OF CHANGE: 20041229 EFFECTIVENESS DATE: 20041229 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAILY TAX FREE INCOME FUND INC CENTRAL INDEX KEY: 0000704480 IRS NUMBER: 133125130 STATE OF INCORPORATION: NY FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-03522 FILM NUMBER: 041229825 BUSINESS ADDRESS: STREET 1: C/O REICH & TANG ASSET MANAGEMENT LLC STREET 2: 600 FIFTH AVENUE 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10020-2302 BUSINESS PHONE: 2128305200 MAIL ADDRESS: STREET 1: C/O REICH & TANG ASSET MANAGEMENT LLC STREET 2: 600 FIFTH AVENUE 8TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10020-2302 N-CSR 1 dtfanncsr2004.txt As filed with the Securities and Exchange Commission on December 29, 2004 Investment Company Act file number 811-3522 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Daily Tax Free Income Fund, Inc. (Exact name of registrant as specified in charter) 600 Fifth Avenue New York, NY 10020 (Address of principal executive offices) (Zip code) Rosanne Holtzer c/o Reich & Tang Asset Management, LLC 600 Fifth Avenue New York, New York 10020 (Name and address of agent for service) Registrant's telephone number, including area code: 212-830-5200 Date of fiscal year end: October 31 Date of reporting period: October 31, 2004 ITEM 1: REPORT TO STOCKHOLDERS - -------------------------------------------------------------------------------- DAILY TAX FREE 600 Fifth Avenue, New York, NY 10020 INCOME FUND, INC. (212) 830-5200 ================================================================================ Dear Shareholders: We are pleased to present the annual report of Daily Tax Free Income Fund, Inc. (the "Fund") for the year ended October 31, 2004. The Fund had net assets of $384,905,165 and 2,701 active shareholders. We thank you for your support and look forward to continuing to serve your cash management needs. Sincerely, /s/ Steven W. Duff Steven W. Duff President - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. ABOUT YOUR FUND'S EXPENSES (UNAUDITED) ================================================================================ We believe it is important for you to understand the impact of costs on your investment. All mutual funds have operating expenses. As a shareholder of the 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 the fund. 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 May 1, 2004 through October 31, 2004 and held for the entire period. The table below illustrates your fund's costs in two ways: Actual fund return. This section helps you to estimate the actual expenses that you paid over the period. The "Ending Account Value" shown is derived from the fund's actual return, and the third column shows the dollar amount that would have been paid by an investor who started with $1,000 in the fund. You may use the information here, 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." Hypothetical 5% return. This section is intended to help you compare your fund's costs with those of other mutual funds. It assumes that the fund had a return of 5% per year before expenses, but that the expense ratio is unchanged. In this case-because the return used is not the fund's actual return-the results do not apply to your investment. The example is useful in making comparisons because the Securities and Exchange Commission requires all mutual funds to calculate expenses based on a 5% return. You can assess your fund's costs by comparing this hypothetical example with the hypothetical examples that appear in shareholder reports of other funds.
- -------------------------------------------------------------------------------------------------------------- Beginning Account Value Ending Account Value Actual Fund Return 5/1/04 10/31/04 Expenses Paid During the Period* - -------------------------------------------------------------------------------------------------------------- Class A $1,000.00 $1,001.60 $5.03 Class B 1,000.00 1,002.80 3.80 Thornburg shares 1,000.00 1,001.60 5.03 First Southwest shares 1,000.00 1,001.40 5.18 - -------------------------------------------------------------------------------------------------------------- Hypothetical 5% Return - -------------------------------------------------------------------------------------------------------------- Class A $1,000.00 $1,020.11 $5.08 Class B 1,000.00 1,021.34 3.83 Thornburg shares 1,000.00 1,020.11 5.08 First Southwest shares 1,000.00 1,019.96 5.23 - --------------------------------------------------------------------------------------------------------------
Note that the expenses in the table are meant to highlight and help you compare ongoing costs only and do not reflect any transactional costs or account maintenance fees. Your fund does not charge transaction fees, such as purchase or redemption fees, nor does it carry a "Sales Load". The calculations assume no shares were bought or sold during the period. Your actual costs may have been higher or lower, depending on the amount of your investment and the timing of any purchases or redemptions. You can find more information about the fund's expenses, including annual expense ratios for the past five years in the Notes to Financial Statement section of this report. For additional information on operating expenses and other shareholder costs, please refer to the appropriate fund prospectus. * Expenses are equal to the Fund's annualized expense ratios of 1.00%, 0.75%, 1.00%, and 1.03%, for the Class A, Class B, Thornburg, and First Southwest shares, respectively, multiplied by the average account value over the period (May 1, 2004 through October 31, 2004), multiplied by 184/366 (to reflect the most recent fiscal half-year). - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. STATEMENT OF NET ASSETS OCTOBER 31, 2004 ================================================================================
Ratings (a) ----------------- Face Maturity Value Standard Amount Date Yield (Note 1) Moody's & Poor's ------ ---- ----- ------ ------- --------- Put Bonds (b) (7.02%) - ------------------------------------------------------------------------------------------------------------------------------------ $ 5,000,000 City and County of Honolulu, HI GO - Series 2001C Insured by FGIC 12/02/04 1.18% $ 5,000,000 P1 A1+ 2,600,000 Clipper Tax Exempt COPS - Series 2001 Insured by MBIA Insurance Corp. 03/10/05 1.60 2,600,000 VMIG-1 3,340,000 Clipper Tax Exempt COPS - Series 2001-3 Insured by MBIA Insurance Corp. 03/10/05 1.60 3,340,000 VMIG-1 6,000,000 Houston, TX Independent School District Limited Tax Schoolhouse & Refunding Bonds 06/15/05 1.73 6,000,000 VMIG-1 A1+ 2,385,000 Marietta, GA Housing Authority (Falls at Bells Ferry) 01/15/05 1.25 2,385,000 VMIG-1 5,000,000 Metropolitan Government of Nashville & Davidson Counties, TN (Vanderbilt University) - Series 1985A 01/15/05 1.05 5,000,000 VMIG-1 A1+ 2,680,000 Pooled Puttable Floating Option Tax Exempt Receipts - Series PPT-33 LOC Merrill Lynch & Company, Inc. 06/16/05 1.90 2,680,000 A1+ - ----------- ------------ 27,005,000 Total Put Bonds 27,005,000 - ----------- ------------ Revenue Bond (0.16%) - ------------------------------------------------------------------------------------------------------------------------------------ $ 615,000 Lakehaven, WA Utility District Water & Sewer RB - Series 2003 (c) Insured by AMBAC Indemnity Corp. 12/01/04 1.15% $ 615,000 - ----------- ------------ 615,000 Total Revenue Bond 615,000 - ----------- ------------ Tax Exempt Commercial Paper (11.40%) - ------------------------------------------------------------------------------------------------------------------------------------ $ 4,000,000 Burke County, GA Development Authority (Ogelthorpe Power) - Series 1998B Insured by AMBAC Indemnity Corp. 12/07/04 1.77% $ 4,000,000 VMIG-1 A1+ 10,000,000 City of Mt. Vernon, IN Pollution Control & Solid Waste Disposal RB (General Electric Company) 11/02/04 1.75 10,000,000 P1 A1+ 4,000,000 Jacksonville, FL Health Facilities Authority HRB - Series 2003B LOC Bank of America 12/22/04 0.98 4,000,000 P1 A1+ 6,000,000 Maryland Health & Higher Education Authority (John Hopkins Hospital) 12/08/04 1.62 6,000,000 P1 A1+ 10,000,000 San Antonio, TX Water System - Series A 12/07/04 1.77 10,000,000 P1 A1+ 5,382,000 Sunshine State Government Finance Commission RN - Series E 11/17/04 1.72 5,382,000 P1 A1+ 4,500,000 Texas PFA - Series B 11/10/04 1.17 4,500,000 P1 A1 - ----------- ------------ 43,882,000 Total Tax Exempt Commercial Paper 43,882,000 - ----------- ------------
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. STATEMENT OF NET ASSETS (CONTINUED) OCTOBER 31, 2004 ================================================================================
Ratings (a) ----------------- Face Maturity Value Standard Amount Date Yield (Note 1) Moody's & Poor's ------ ---- ----- ------ ------- -------- Tax Exempt General Obligation Notes & Bonds (25.28%) - ------------------------------------------------------------------------------------------------------------------------------------ $ 2,800,000 Arrowhead, WI Union High School District TRAN (c) 09/19/05 1.68% $ 2,807,770 5,000,000 Charleston County, SC School District BAN - Series 2004 11/04/04 0.96 5,000,424 MIG-1 SP-1+ 1,825,000 Clark County, OH BAN (c) 05/27/05 1.93 1,827,339 1,500,000 Drummond, WI Area School District TRAN (c) 11/01/04 1.20 1,500,000 1,900,000 Dublin City, OH School District BAN 10/13/05 1.79 1,905,834 MIG-1 9,000,000 Elkhart County, IN Community Schools TAW - Series A (c) 12/31/04 1.25 9,000,720 3,300,000 Glendale River Hills, WI School District Tax and Revenue Promissory Notes (c) 08/10/05 1.65 3,308,776 5,095,000 Grafton, WI School District TRAN (c) 10/13/05 1.70 5,109,212 800,000 Lancaster, WI Community School District TRAN (c) 10/28/05 2.00 800,965 5,000,000 Lebanon City, OH School District School Facility Construction & Improvement Notes 08/11/05 1.82 5,012,556 MIG-1 2,500,000 Maple Dale-Indian Hill, WI School District TRAN (c) 08/17/05 1.63 2,507,205 3,300,000 Marysville, OH Exempt Village School District BAN (School Construction Project) 05/26/05 1.58 3,305,304 MIG-1 3,000,000 Mequon-Thiensville, WI School District TRAN (c) 09/09/05 1.83 3,019,154 1,250,000 Merton, WI Community School District TRAN (c) 10/28/05 1.83 1,252,052 800,000 Mount Horeb, WI Area School District TRAN (c) 10/28/05 2.05 800,768 7,000,000 Muskegon, MI Public Schools TAN (c) 05/23/05 1.65 7,013,508 7,000,000 Painesville, OH Local School District Construction BAN 02/17/05 1.42 7,006,918 MIG-1 3,500,000 Pewaukee, WI School District TRAN (c) 09/09/05 1.68 3,509,390 3,650,000 Pulaski, WI Community School District TRAN (c) 09/27/05 1.74 3,658,415 4,300,000 Shorewood, WI School District TRAN (c) 09/02/05 1.65 4,312,348 2,500,000 State of Texas TRAN 08/31/05 1.60 2,528,577 MIG-1 SP-1+ 2,000,000 Strafford County, NH TAN (c) 12/30/04 1.05 2,002,236 1,000,000 Strafford County, NH TAN (c) 12/30/04 1.10 1,001,039 660,000 Wilmot, WI School District TRAN (Wilmot Union High School) (c) 11/01/04 1.19 660,000 7,599,978 Wyandotte County, KS - Series VIII (c) 11/01/05 1.95 7,659,227 10,808,165 Wyandotte County, KS Unified Government Municipal Temporary Notes - Series 2004V (c) 04/01/05 1.65 10,812,497 - ----------- ------------ 97,088,143 Total Tax Exempt General Obligation Notes & Bonds 97,322,234 - ----------- ------------
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. ================================================================================
Ratings (a) ----------------- Face Maturity Value Standard Amount Date Yield (Note 1) Moody's & Poor's ------ ---- ----- ------ ------- -------- Variable Rate Demand Instruments (d) (49.71%) - ------------------------------------------------------------------------------------------------------------------------------------ $ 5,000,000 Alachua County, FL HFA RB (Continuing Care Retirement Community - Oak Hammock) - Series 2002A LOC BNP Paribas 10/01/32 1.74% $ 5,000,000 VMIG-1 5,000,000 City of Lakeland, FL Energy System RB - Series 2001A 10/01/35 1.76 5,000,000 VMIG-1 A1+ 2,000,000 City of Manitowac, WI MHRB (Great Lakes Training) - Series A 08/01/37 2.01 2,000,000 VMIG-1 3,000,000 City of Wilmington, DE (Delaware Art Museum, Inc.) - Series 2003 LOC Allied Irish Bank 10/01/37 1.77 3,000,000 VMIG-1 5,000,000 Collier County, FL Educational Facilities Authority (International College Project) LOC Fifth Third Bank 04/01/28 1.76 5,000,000 A1+ 4,800,000 Collier County, FL Health Facilities HRB (Cleveland Clinic Health) - Series C-1 LOC JPMorgan Chase & Company 01/01/35 1.74 4,800,000 VMIG-1 A1+ 2,400,000 Connecticut State Development Authority Health Care RB (Independent Living Project) LOC Chase Manhattan Bank, N.A. 07/01/15 1.74 2,400,000 VMIG-1 7,300,000 Cuyahoga County, OH HRB (The Metrohealth System) - Series 2003 LOC Key Bank, N.A. 03/01/33 1.82 7,300,000 VMIG-1 10,000,000 Dade County, FL RB (Water And Sewer System) Insured By FGIC 10/05/22 1.74 10,000,000 VMIG-1 A1+ 400,000 Dekalb County, GA Development Authority IDRB (Pet Inc. Project) (c) LOC BNP Paribas 02/01/05 1.80 400,000 100,000 Fairfax, VA IDA (Fairfax Hospital System, Inc.) 10/01/25 1.76 100,000 VMIG-1 A1+ 4,500,000 Florida Finance Authority Continuing Care Retirement Commission RB (Glenridge Capital Project) - Series 2002C LOC Bank of Scotland 06/01/12 1.74 4,500,000 VMIG-1 1,900,000 Florida HFA MHRB (Huntington) - Series GGG LOC HSBC Bank US 12/01/13 1.76 1,900,000 A1+ 1,000,000 Florida HFA MHRB (Town Colony) - Series EE LOC Credit Suisse First Boston 09/01/08 1.81 1,000,000 A1+ 1,985,000 Franklin County, OH RB (The Villas at Saint Therese Project) - Series 1997F (c) LOC Fifth Third Bank 10/01/22 1.85 1,985,000
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. STATEMENT OF NET ASSETS (CONTINUED) OCTOBER 31, 2004 ================================================================================
Ratings (a) ----------------- Face Maturity Value Standard Amount Date Yield (Note 1) Moody's & Poor's ------ ---- ----- ------ ------- -------- Variable Rate Demand Instruments (d) (Continued) - ------------------------------------------------------------------------------------------------------------------------------------ $ 7,200,000 Fulton County, GA Development Authority IRB (Siemens Energy Inc. Project) 12/15/14 1.84% $ 7,200,000 VMIG-1 1,000,000 Greensboro, NC Public Improvement - Series B 04/01/14 1.80 1,000,000 VMIG-1 A1+ 5,000,000 Harris County, TX IDC RB (Odfjell Terminal Project) LOC Danske Bank 02/01/20 1.76 5,000,000 A1+ 2,835,000 Henderson, NV Public Improvement MHRB Pueblo I-A LOC Credit Suisse First Boston 08/01/26 1.83 2,835,000 A1+ 4,700,000 Illinois Development Finance Authority (James Jordan Boys & Girls Club & Family Life Center Project) - Series 1995 LOC American National Bank 08/01/30 1.77 4,700,000 A1+ 3,400,000 Illinois Development Finance Authority RB (Glenwood School For Boys) LOC Harris Trust & Savings Bank 02/01/33 1.77 3,400,000 A1+ 300,000 Indiana HFFA RB (Access Designated PG-B) LOC Comerica Bank 01/01/16 1.78 300,000 A1 3,000,000 Jackson County, MI EDC (Thrifty Leoni) (c) LOC Bank One 12/01/14 1.77 3,000,000 4,000,000 Jacksonville, FL Electric Authority RB (District Energy System) - Series A LOC State Street Bank & Trust Company 10/01/34 1.73 4,000,000 VMIG-1 2,500,000 Jacksonville, FL University (Health Science Center ) - Series 1989 07/01/19 1.85 2,500,000 VMIG-1 7,306,022 Koch Floating Rate Trust - Series 1 Insured by AMBAC Indemnity Corp. 04/01/09 2.01 7,306,022 A1+ 2,500,000 Lakeview, MI School District (School Building & Site Bonds) - Series 2002B 05/01/32 1.74 2,500,000 A1+ 2,500,000 Latrobe, PA IDA RB (Diocese of Greensburg) LOC Allied Irish Bank 06/01/33 1.80 2,500,000 VMIG-1 1,750,000 Lowell, MI Area School District GO - Series 2004 (c) 05/01/29 1.78 1,750,000 5,000,000 Lubbock, TX Educational Facilities Authority (Lubbock Christian University) LOC Allied Irish Bank 05/01/29 1.84 5,000,000 VMIG-1 3,975,000 Miami - Dade County, FL ROCS II - R - Series 4047 Water & Sewer RB Insured by MBIA Insurance Corp. 10/01/13 1.81 3,975,000 A1+
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- ================================================================================
Ratings (a) ----------------- Face Maturity Value Standard Amount Date Yield (Note 1) Moody's & Poor's ------ ---- ----- ------ ------- -------- Variable Rate Demand Instruments (d) (Continued) - ------------------------------------------------------------------------------------------------------------------------------------ $ 3,550,000 Montgomery County, MD EDC RB (Brooke Grove Foundations, Inc. Facilities) - Series 1995 LOC First National Bank of Maryland 01/01/16 1.83% $ 3,550,000 A1 4,430,000 Munimae National TICs/TOCs Trust Insured by MBIA Insurance Corp. 10/01/40 1.87 4,430,000 A1+ 3,200,000 New Britain, CT GO - Series B (c) Insured by AMBAC Indemnity Corp. 04/01/20 1.78 3,200,000 4,800,000 New Ulm, MN Hospital Facility RB (Health Center System Project) - Series 1985 LOC Wells Fargo Bank, N.A 08/01/14 1.78 4,800,000 A1+ 3,400,000 New York City, NY GO - Series B-9 LOC Chase Manhattan Bank, N.A. 08/15/23 1.75 3,400,000 VMIG-1 A1+ 900,000 New York State Dormitory Authority (Cornell University) - Series 1990B 07/01/25 1.71 900,000 VMIG-1 A1+ 1,700,000 Oregon State GO - Series 73H LOC Bayeriche Landesbank 12/01/19 1.74 1,700,000 VMIG-1 A1+ 2,500,000 Orlando, FL Utilities Commission Water & Electric RB - Series 2002A 10/01/17 1.74 2,500,000 A1+ 7,350,000 Phoenix, AZ IDA MHRB (Bell Square Apartments Project) - Series 1995 LOC General Electric Capital Corporation 06/01/25 1.83 7,350,000 A1+ 3,500,000 Phoenix, AZ IDA MHRB (Paradise Lake Apartments Project) - Series 1995 LOC General Electric Capital Corporation 07/01/25 1.83 3,500,000 A1+ 4,025,000 Pinellas County, FL Health Facility RB (St. Mark's Village Project) - Series 1987 LOC Bank of America 03/01/17 1.77 4,025,000 A1+ 2,000,000 Port Orange, FL RB (Palmer College) - Series 2002 LOC LaSalle National Bank 10/01/32 1.77 2,000,000 A1+ 950,000 Richmond, VA Capital Region Airport (Richmond International Airport) Insured by AMBAC Indemnity Corp. 07/01/25 1.77 950,000 VMIG-1 A1+ 2,900,000 Salina, KS (Dillards Project) (c) LOC Bank of America 12/01/14 1.97 2,900,000 7,500,000 Savannah, GA EDA RB (Savannah Country Day School) LOC Suntrust Bank 09/01/29 1.77 7,500,000 VMIG-1
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. STATEMENT OF NET ASSETS (CONTINUED) OCTOBER 31, 2004 ================================================================================
Ratings (a) ----------------- Face Maturity Value Standard Amount Date Yield (Note 1) Moody's & Poor's ------ ---- ----- ------ ------- -------- Variable Rate Demand Instruments (d) (Continued) - ------------------------------------------------------------------------------------------------------------------------------------ $ 400,000 Southeast Georgia Health System (Glynn-Brunswick Memorial Hospital) Insured by MBIA Insurance Corp. 08/01/16 1.74% $ 400,000 VMIG-1 A1+ 1,840,000 St. Cloud, MN Commercial Development (Kelly Inn Project) (c) LOC First Bank of South Dakota 04/01/13 1.92 1,840,000 300,000 State of Connecticut HEFA (Hospital of Saint Raphael Project) - Series K LOC KBC Bank 07/01/22 1.76 300,000 VMIG-1 515,000 Suffolk, VA Redevelopment and Housing Authority (Oak Spring Apartments LLC) Guaranteed by Federal Home Loan Mortgage Corporation 12/01/19 1.78 515,000 VMIG-1 2,000,000 Sunshine State Government Financing Commission RB - Series 1986 Insured by AMBAC Indemnity Corp. 07/01/16 1.74 2,000,000 VMIG-1 1,945,000 Tulsa, OK IDA (Indiana Health Care Project) (c) LOC Bank One 06/01/14 1.87 1,945,000 6,400,000 University of North Carolina at Chapel Hill RB - Series 2001C 12/01/25 1.70 6,400,000 VMIG-1 A1+ 4,300,000 University of Southern Indiana (Student Fee) - Series G LOC Bank One 10/01/19 1.77 4,300,000 VMIG-1 A1 3,000,000 Vancouver, WA Housing Authority (Village Park Apartments) LOC US Bank, N.A. 11/02/05 1.81 3,000,000 A1 925,000 Virginia College Building Authority (University of Richmond Project) 11/01/26 1.79 925,000 VMIG-1 1,500,000 Washington State Public Power Supply (Nuclear Project #1) - Series 1993A LOC Bank of America 07/01/17 1.76 1,500,000 VMIG-1 A1+ 1,145,000 Winston-Salem, NC COPS - Series 88 07/01/09 1.75 1,145,000 VMIG-1 A1+ 3,000,000 Woodhaven Brownstown School District, MI (School Building & Site Bonds) - Series B LOC Fifth Third Bank 11/01/04 1.50 3,000,000 A1+ - ----------- ----------- 191,326,022 Total Tax Exempt Variable Rate Demand Instruments 191,326,022 - ----------- ----------- Variable Rate Demand Instruments - Participation Note (d) (0.01%) - ------------------------------------------------------------------------------------------------------------------------------------ $ 51,893 The Woodlands Fire Dept., Inc. Tax Exempt Loan LOC Chase Manhattan Bank, N.A. 06/30/06 2.61% $ 51,893 P1 A1+ - ----------- ------------ 51,893 Total Variable Rate Demand Instruments - Participation Note 51,893 - ----------- ------------
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. ================================================================================
Ratings (a) ----------------- Face Maturity Value Standard Amount Date Yield (Note 1) Moody's & Poor's ------ ---- ----- ------ ------- -------- Variable Rate Demand Instruments - Private Placements (d) (6.32%) - --------------------------------------------------------------------------------------------------------------------------------- $ 2,454,000 Anaheim, CA (West Anaheim Convalescent Home) LOC Union Bank of California 12/01/15 2.85% $ 2,454,000 P1 A1 3,589,000 Anaheim, CA HA MHRB (West Anaheim Royale Project) - Series 1985C LOC Union Bank of California 12/01/15 2.85 3,589,000 P1 A1 3,568,000 Culver City, CA RDRB (Culver City Royale Project) - Series 1985 LOC Union Bank of California 12/01/15 2.85 3,568,000 P1 A1 1,704,445 Franklin County, OH EDRB (Norwich Limited Partnership Project) - Series 1985 LOC Huntington National Bank 10/01/05 3.23 1,704,445 P1 A1 1,500,000 Harford County, MD EDRB (Harrigan Roller Company, Inc. Project) - Series 1984 LOC Dresdner Bank, A.G. 12/28/14 2.85 1,500,000 P1 A1 4,270,000 Howard County, MD RB (The Bluffs & Hawthorne Apartment Facility) - Series 1995 LOC First National Bank of Maryland 12/01/20 1.85 4,270,000 P1 A1 2,071,300 West Jordan, UT IDRB (The Lynn Partnership Nursing Home Project) - Series 1985 LOC Bank of America 07/01/15 3.09 2,071,300 P1 A1+ 2,000,000 Wood Dale, IL IDRB (Bohler Bros. of America, Inc. Project) - Series 1985 LOC Creditanstalt-Bankverein 06/01/10 2.85 2,000,000 P1 A2 3,170,000 York County IDA RB (York Outlet Mall Limited Partnership Project) - Series 1987 LOC Manufacturers & Traders Bank & Trust 12/01/14 1.85 3,170,000 P1 A1 - ----------- ------------ 24,326,745 Total Variable Rate Demand Instruments - Private Placements 24,326,745 - ----------- ------------ Total Investments (99.90%) (cost $384,528,894+) 384,528,894 Cash and other assets in excess of liabilities (0.10%) 376,271 ------------ Net Assets (100.00%) $384,905,165 ============ Net asset value, offering and redemption price per share: Class A Shares, 109,174,773 shares outstanding (Note 3) $ 1.00 ============ Class B Shares, 223,848,112 shares outstanding (Note 3) $ 1.00 ============ Thornburg Shares, 9,217,307 shares outstanding (Note 3) $ 1.00 ============ First Southwest Shares, 42,857,229 shares outstanding (Note 3) $ 1.00 ============ + Aggregate cost for federal income tax purposes is identical.
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. STATEMENT OF NET ASSETS (CONTINUED) OCTOBER 31, 2004 ================================================================================ FOOTNOTES: (a) Unless the variable rate demand instruments are assigned their own ratings, the ratings are those of the holding company of the bank whose letter of credit guarantees the issue or the insurance company who insures the issue. All letters of credit and insurance are irrevocable and direct pay covering both principal and interest. Ratings are unaudited. In addition, certain issuers may have either a line of credit, a liquidity facility, a standby purchase agreement or some other financing mechanism to ensure the remarketing of the securities. This is not a guarantee and does not serve to insure or collateralize the issue. (b) The maturity date indicated for the put bonds is the next put date. (c) Securities that are not rated that the Adviser has determined to be of comparable quality to those rated securities in which the Fund invests. (d) Securities payable on demand at par including accrued interest (usually with seven days notice) and unconditionally secured as to principal and interest by a bank letter of credit. The interest rates are adjustable and are based on bank prime rates or other interest rate adjustment indices. The rate shown is the rate in effect at the date of this statement.
KEY: BAN = Bond Anticipation Note IRB = Industrial Revenue Bond COPS = Certificates of Participation LOC = Letter of Credit EDA = Economic Development Authority MHRB = Multi-Family Housing Revenue Bond EDC = Economic Development Corporation PFA = Public Finance Authority EDRB = Economic Development Revenue Bond RB = Revenue Bond FGIC = Financial Guaranty Insurance Company RDRB = Residential Development Revenue Bond GO = General Obligation RN = Revenue Note HEFA = Health & Education Facilities Authority ROCS = Reset Option Certificates HFA = Housing Finance Authority TAN = Tax Anticipation Note HFFA = Health Facility Finance Authority TAW = Tax Anticipation Warrant HRB = Hospital Revenue Bond TICs = Trust Inverse Certificates IDA = Industrial Development Authority TOCs = Tender Option Certificates IDC = Industrial Development Corporation TRAN = Tax and Revenue Anticipation Note IDRB = Industrial Development Revenue Bond
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. BREAKDOWN OF PORTFOLIO HOLDINGS BY STATE OCTOBER 31, 2004 ================================================================================ States Value % of Portfolio - -------------------------------------------------------------------------------- Arizona $ 10,850,000 2.82% California 9,611,000 2.50 Connecticut 5,900,000 1.53 Delaware 3,000,000 0.78 Florida 67,582,000 17.58 Georgia 21,885,000 5.69 Hawaii 5,000,000 1.30 Illinois 10,100,000 2.63 Indiana 23,600,720 6.14 Kansas 21,371,724 5.56 Maryland 15,320,000 3.98 Massachusetts 5,940,000 1.54 Michigan 17,263,508 4.49 Minnesota 6,640,000 1.73 Nevada 2,835,000 0.74 New Hampshire 3,003,275 0.78 New York 4,300,000 1.12 North Carolina 8,545,000 2.22 Ohio 30,047,396 7.81 Oklahoma 1,945,000 0.51 Oregon 1,700,000 0.44 Pennsylvania 5,670,000 1.47 South Carolina 5,000,424 1.30 Tennessee 5,000,000 1.30 Texas 33,080,471 8.60 Utah 2,071,300 0.54 Virginia 2,490,000 0.65 Washington 5,115,000 1.33 Wisconsin 35,246,054 9.17 Other Territories 14,416,022 3.75 - -------------------------------------------------------------------------------- Total $ 384,528,894 100.00% - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. STATEMENT OF OPERATIONS YEAR ENDED OCTOBER 31, 2004 ================================================================================
INVESTMENT INCOME Income: Interest................................................................................ $ 4,920,608 --------------- Expenses: (Note 2) Investment management fee............................................................... 1,316,621 Administration fee...................................................................... 850,740 Distribution fee (First Southwest shares)............................................... 115,344 Shareholder servicing fee (Class A shares).............................................. 263,701 Shareholder servicing fee (Thornburg shares)............................................ 26,816 Shareholder servicing fee (First Southwest shares)...................................... 115,344 Custodian expenses...................................................................... 23,063 Shareholder servicing and related shareholder expenses+................................. 249,297 Legal, compliance and filing fees....................................................... 403,766 Audit and accounting.................................................................... 152,807 Directors' fees and expenses............................................................ 34,789 Miscellaneous........................................................................... 20,042 --------------- Total expenses........................................................................ 3,572,330 Less: Expense paid indirectly....................................................... (8,430) Fees waived................................................................... (101,283) --------------- Net expenses.......................................................................... 3,462,617 --------------- Net investment income....................................................................... 1,457,991 REALIZED GAIN (LOSS) ON INVESTMENTS Net realized gain on investments............................................................ -0- --------------- Increase in net assets from operations...................................................... $ 1,457,991 =============== + Includes class specific transfer agency expenses of $72,833, $126,618 and $7,445 for Class A, Class B and Thornburg shares, respectively.
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. ================================================================================ DAILY TAX FREE INCOME FUND, INC. STATEMENTS OF CHANGES IN NET ASSETS YEARS ENDED OCTOBER 31, 2004 AND 2003 - --------------------------------------------------------------------------------
2004 2003 ---------------- ---------------- INCREASE (DECREASE) IN NET ASSETS Operations: Net investment income......................................... $ 1,457,991 $ 1,748,360 Net realized gain on investments.............................. -0- 3,006 ---------------- ---------------- Increase in net assets from operations........................ 1,457,991 1,751,366 Dividends to shareholders from net investment income: * Class A shares................................................ (231,039) (308,702) Class B shares................................................ (1,111,730) (1,352,324) Thornburg shares.............................................. (22,677) (22,286) First Southwest shares........................................ (92,545) (65,048) Capital share transactions (Note 3): Class A shares................................................ (799,871) (18,794,276) Class B shares................................................ (51,960,856) 13,375,458 Thornburg shares.............................................. (2,359,240) 3,295,731 First Southwest shares........................................ 6,149,625 17,380,507 ---------------- ---------------- Total (decrease) increase................................. (48,970,342) 15,260,426 Net assets: Beginning of year............................................. 433,875,507 418,615,081 ---------------- ---------------- End of year................................................... $ 384,905,165 $ 433,875,507 ================ ================ Undistributed net investment income........................... $ -0- $ -0- ================ ================ * Designated as exempt-interest dividends for federal income tax purposes.
- -------------------------------------------------------------------------------- The accompanying notes are an integral part of these financial statements. - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. NOTES TO FINANCIAL STATEMENTS ================================================================================ 1. Summary of Accounting Policies Daily Tax Free Income Fund, Inc. is a no-load, diversified, open-end management investment company registered under the Investment Company Act of 1940. The Fund is a short term, tax exempt money market fund. The Fund has four classes of stock authorized, Class A, Class B, Thornburg shares and First Southwest Tax Free Income Fund shares (First Southwest shares). The Class A shares, Thornburg shares and First Southwest shares are subject to a service fee pursuant to Shareholder Servicing Agreements. The First Southwest shares are subject to an additional fee pursuant to a Distribution Agreement. The Class B shares are not subject to a service fee. Additionally, the Fund may allocate among its classes certain expenses to the extent allowable to specific classes, including transfer agent fees, government registration fees, certain printing and postage costs, and certain administrative and legal expenses. Class specific expenses of the Fund were limited to distribution fees, servicing fees and transfer agent expenses. Income, expenses (other than expenses attributable to a specific class) and realized and unrealized gains or losses on investments are allocated to each class of shares based on its relative net assets. Thornburg shares commenced on February 8, 2000. First Southwest shares commenced on August 5, 2002. The Fund's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America for investment companies as follows: a) Valuation of Securities - Investments are valued at amortized cost. Under this valuation method, a portfolio instrument is valued at cost and any discount is accreted or premium is amortized on a constant basis to the maturity of the instrument. The maturity of variable rate demand instruments is deemed to be the longer of the period required before the Fund is entitled to receive payment of the principal amount or the period remaining until the next interest rate adjustment. b) Federal Income Taxes - It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its tax exempt and taxable (if any) income to its shareholders. Therefore, no provision for federal income tax is required. c) Dividends and Distributions - Dividends from investment income (excluding capital gains and losses, if any, and amortization of market discount) are declared daily and paid monthly. Distributions of net capital gains, if any, realized on sales of investments are made after the close of the Fund's fiscal year, as declared by the Fund's Board of Directors. d) Use of Estimates - The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets from operations during the reporting period. Actual results could differ from those estimates. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 1. Summary of Accounting Policies (Continued) e) General - Securities transactions are recorded on a trade date basis. Interest income, including accretion of discount and amortization of premiums, is accrued as earned. Realized gains and losses from securities transactions are recorded on the identified cost basis. 2. Investment Management Fees and Other Transactions with Affiliates Under the Investment Management Contract, the Fund pays an investment management fee to Reich & Tang Asset Management LLC (the "Manager") at the annual rate of ..325% of the Fund's average daily net assets up to $750 million plus .30% of such assets in excess of $750 million. Pursuant to an Administrative Services Agreement, the Fund pays to the Manager an annual fee of .21% of the Fund's average daily net assets up to $1.25 billion, plus .20% of such assets in excess of $1.25 billion but not in excess of $1.5 billion, plus .19% of such assets in excess of $1.5 billion. Pursuant to a Distribution and Service Plan adopted under Securities and Exchange Commission Rule 12b-1, the Fund and Reich & Tang Distributors, Inc. (the "Distributor"), an affiliate of the Manager, have entered into a Distribution Agreement and a Shareholder Servicing Agreement, with respect to the Class A, the Thornburg shares and the First Southwest shares of the Fund. For its services under the Shareholder Servicing Agreement, the Distributor receives from the Fund, a service fee equal to .25% of the Fund's average daily net assets with respect only to the Class A, the Thornburg shares and the First Southwest shares. In addition, for its services under the Distribution Agreement, the Distributor receives from the First Southwest Class of shares, a distribution fee equal to .25% of the Class's average daily net assets. There were no additional expenses borne by the Fund pursuant to the Distribution and Service Plans. For the year ended October 31, 2004, the Distributor voluntarily waived the following fees: Distribution fees - First Southwest shares $ 78,434 Shareholder servicing fees - Class A shares 20,084 Shareholder servicing fees - Thornburg shares 2,091 Shareholder servicing fees - First Southwest shares 674 ----------- Total $ 101,283 =========== The Distributor has no right to recoup prior waivers. Fees are paid to Directors who are unaffiliated with the Manager on the basis of $6,000 per annum plus $750 per meeting attended. In addition, beginning in July 2004, the Audit Committee chairman receives an aggregate payment of $1,000 per quarter allocated among the funds of the Reich & Tang Complex on whose audit committee he serves. Included in the Statement of Operations under the caption "Shareholder servicing and related shareholder expenses" are fees of $179,530 paid to Reich & Tang Services, Inc., an affiliate of the Manager, as transfer agent for the Fund. For the year ended October 31, 2004, the breakdown of expenses paid indirectly by the Fund were as follows: Custodian expenses $ 7,282 Shareholder servicing and related shareholder expenses 1,148 ---------- Total $ 8,430 ========== - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================
3. Capital Stock At October 31, 2004, 20,000,000,000 shares of $.001 par value stock were authorized. Transactions, all at $1.00 per share, were as follows: Year Year Ended Ended Class A shares October 31, 2004 October 31, 2003 - -------------- ---------------- ---------------- Sold...................................... 422,872,612 451,314,282 Issued on reinvestment of dividends....... 180,404 286,103 Redeemed.................................. (423,852,887) (470,394,661) -------------- -------------- Net decrease.............................. (799,871) (18,794,276) ============== ============== Class B shares - -------------- Sold...................................... 787,356,478 683,544,050 Issued on reinvestment of dividends....... 838,450 1,111,772 Redeemed.................................. (840,155,784) (671,280,364) -------------- -------------- Net (decrease) increase................... (51,960,856) 13,375,458 ============== ============== Thornburg shares - ---------------- Sold...................................... 9,742,939 19,450,595 Issued on reinvestment of dividends....... 20,621 24,566 Redeemed.................................. (12,122,800) (16,179,430) -------------- -------------- Net (decrease) increase................... (2,359,240) 3,295,731 ============== ============== First Southwest shares - ---------------------- Sold...................................... 184,014,497 154,766,562 Issued on reinvestment of dividends....... 92,346 67,929 Redeemed.................................. (177,957,218) (137,453,984) -------------- -------------- Net increase.............................. 6,149,625 17,380,507 ============== ============== As of October 31, 2004, the breakdown of net assets by share class were as follows: Class A.................................. $ 109,120,269 Class B.................................. 223,736,358 Thornburg shares......................... 9,212,705 First Southwest shares................... 42,835,833 -------------- Total................................. $ 384,905,165 ============== 4. Liabilities At October 31, 2004, the Fund had the following liabilities: Fees payable to Affiliates*............... $ 199,034 Due to custodian.......................... 371,439 Dividends payable......................... 98,020 Accrued other payables.................... 108,534 -------------- Total liabilities...................... $ 777,027 ============== * Includes fees payable to Reich & Tang Asset Management, LLC, Reich & Tang Distributors, Inc. and Reich & Tang Services, Inc.
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 5. Tax Information
The tax character of all dividends paid during the years ended October 31, 2004 and 2003 were tax exempt income. At October 31, 2004, the Fund had unused capital loss carry forwards of $25,143, available for Federal income tax purposes to be applied against future gains, if any. If not applied against future gains, such losses expire in varying amounts through October 31, 2010. At October 31, 2004, the Fund had no distributable earnings. 6. Financial Highlights Year Ended October 31, ----------------------------------------------------------- Class A shares 2004 2003 2002 2001 2000 - -------------- -------- --------- --------- -------- --------- Per Share Operating Performance: (for a share outstanding throughout the year) Net asset value, beginning of year.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- --------- --------- -------- --------- Income from investment operations: Net investment income.................... 0.002 0.002 0.007 0.025 0.031 Net realized and unrealized gain (loss) on investments........................ -- 0.000 0.000 0.000 0.000 -------- --------- --------- -------- --------- Total from investment operations......... 0.002 0.002 0.007 0.025 0.031 -------- --------- --------- -------- --------- Less distributions: Dividends from net investment income..... (0.002) (0.002) (0.007) (0.025) (0.031) Net realized gains on investments........ -- -- -- -- -- -------- --------- --------- -------- --------- Total distributions...................... (0.002) (0.002) (0.007) (0.025) (0.031) -------- --------- --------- -------- --------- Net asset value, end of year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ========= ========= ======== ========= Total Return................................ 0.22% 0.25% 0.73% 2.58% 3.17% Ratios/Supplemental Data Net assets, end of year (000's)............. $109,120 $109,926 $ 128,709 $146,799 $177,209 Ratios to average net assets: Expenses, net of fees waived (a)......... 1.00% 1.00% 0.97% 0.92% 0.99% Net investment income.................... 0.22% 0.25% 0.73% 2.60% 3.05% Expenses paid indirectly................. 0.00% 0.00% 0.00% 0.00% 0.00% Shareholder servicing fees waived........ 0.02% 0.04% 0.00% 0.00% 0.00% (a) Includes expenses paid indirectly
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ 6. Financial Highlights (Continued)
Year Ended October 31, ---------------------------------------------------------- Class B shares 2004 2003 2002 2001 2000 - -------------- -------- -------- -------- -------- --------- Per Share Operating Performance: (for a share outstanding throughout the year) Net asset value, beginning of year.......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- -------- -------- -------- --------- Income from investment operations: Net investment income.................... 0.005 0.005 0.010 0.028 0.035 Net realized and unrealized gain (loss) on investments........................ -- 0.000 0.000 0.000 0.000 -------- -------- -------- -------- -------- Total from investment operations......... 0.005 0.005 0.010 0.028 0.035 -------- -------- -------- -------- -------- Less distributions: Dividends from net investment income..... (0.005) (0.005) (0.010) (0.028) (0.035) Net realized gains on investments........ -- -- -- -- -- -------- -------- -------- -------- -------- Total distribution....................... (0.005) (0.005) (0.010) (0.028) (0.035) -------- -------- -------- -------- -------- Net asset value, end of year................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ======== ======== ======== ======== Total Return................................ 0.47% 0.49% 1.05% 2.85% 3.52% Ratios/Supplemental Data Net assets, end of year (000's)............. $223,736 $275,687 $262,311 $406,013 $431,704 Ratios to average net assets: Expenses (a)............................. 0.75% 0.75% 0.66% 0.65% 0.65% Net investment income.................... 0.46% 0.49% 1.05% 2.86% 3.50% Expenses paid indirectly................. 0.00% 0.00% 0.00% 0.00% 0.00% (a) Includes expenses paid indirectly
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================ 6. Financial Highlights (Continued)
Years Ended October 31, February 8, 2000 ------------------------------------------------ (Commencement of Offering) to Thornburg shares 2004 2003 2002 2001 October 31, 2000 - ---------------- -------- --------- --------- -------- ----------------- Per Share Operating Performance: (for a share outstanding throughout the period) Net asset value, beginning of period........ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 -------- --------- --------- -------- --------- Income from investment operations: Net investment income.................... 0.002 0.002 0.007 0.025 0.024 Net realized and unrealized gain (loss) on investments........................ -- 0.000 0.000 0.000 0.000 -------- --------- --------- -------- --------- Total from investment operations......... 0.002 0.002 0.007 0.025 0.024 -------- --------- --------- -------- --------- Less distributions: Dividends from net investment income (0.002) ( 0.002) (0.007) (0.025) (0.024) Net realized gains on investments........ -- -- -- -- -- -------- --------- --------- -------- --------- Total distribution....................... (0.002) ( 0.002) (0.007) (0.025) (0.024) -------- --------- --------- -------- --------- Net asset value, end of period.............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ======== ========= ========= ======== ========= Total Return................................ 0.22% 0.25% 0.73% 2.58% 2.43%(a) Ratios/Supplemental Data Net assets, end of period (000's)........... $ 9,213 $ 11,572 $ 8,277 $ 4,039 $ 1,941 Ratios to average net assets: Expenses, net of fees waived (b)......... 1.00% 1.00% 0.97% 0.92% 0.99%(c) Net investment income.................... 0.22% 0.25% 0.73% 2.60% 3.05%(c) Expenses paid indirectly................. 0.00% 0.00% 0.00% 0.00% 0.00%(c) Shareholder servicing fees waived........ 0.02% 0.04% 0.00% 0.00% 0.00%(c) (a) Not annualized (b) Includes expenses paid indirectly (c) Annualized
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. NOTES TO FINANCIAL STATEMENTS (CONTINUED) ================================================================================ 6. Financial Highlights (Continued)
Year Ended October 31, August 5, 2002 ------------------------------- (Commencement of Offering) to First Southwest shares 2004 2003 October 31, 2002 - ---------------------- --------- --------- ---------------- Per Share Operating Performance: (for a share outstanding throughout the period) Net asset value, beginning of period........... $ 1.00 $ 1.00 $ 1.00 -------- -------- --------- Income from investment operations: Net investment income....................... 0.002 0.002 0.002 Net realized and unrealized gain (loss) on investments........................... -- 0.000 0.000 -------- -------- --------- Total from investment operations............ 0.002 0.002 0.002 -------- -------- --------- Less distributions: Dividends from net investment income........ (0.002) (0.002) (0.002) Net realized gains on investments........... -- -- -- -------- -------- --------- Total distributions......................... (0.002) (0.002) (0.002) -------- -------- --------- Net asset value, end of period................. $ 1.00 $ 1.00 $ 1.00 ======== ======== ========= Total Return................................... 0.19% 0.23% 0.15%(a) Ratios/Supplemental Data Net assets, end of period (000's).............. $ 42,836 $ 36,691 $ 19,318 Ratios to average net assets: Expenses, net of fees waived (b)............ 1.03% 1.02% 1.03%(c) Net investment income....................... 0.20% 0.19% 0.63%(c) Expenses paid indirectly.................... 0.00% 0.00% 0.00%(c) Shareholder servicing and distribution fees waived 0.17% 0.19% 0.08%(c) (a) Not annualized (b) Includes expenses paid indirectly (c) Annualized
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. REPORT OF independent REGISTERED PUBLIC ACCOUNTING FIRM ================================================================================ To The Board of Directors and Shareholders of Daily Tax Free Income Fund, Inc. In our opinion, the accompanying statement of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of the Daily Tax Free Income Fund, Inc. (the "Fund") at October 31, 2004, 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 periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Fund's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements 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 are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2004 by correspondence with the custodian provide a reasonable basis for our opinion. PricewaterhouseCoopers LLP New York, NY December 8, 2004 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. ADDITIONAL INFORMATION (UNAUDITED) ================================================================================ ADDITIONAL INFORMATION ABOUT PORTFOLIO HOLDINGS The Fund is required to file its complete schedule of portfolio holdings with the Securities and Exchange Commission ("SEC") on Form N-Q for its first and third fiscal quarters. The Fund's Form N-Q is available without charge on the SEC's website (http//www.sec.gov) or by calling the Fund toll free at (800) 433-1918. You can also obtain copies of the Fund's Form N-Q by visiting the SEC's Public Reference Room in Washington, DC (please call the SEC at (800) 732-0330 for information on the operation of the Public Reference Room). INFORMATION ABOUT PROXY VOTING Information regarding the Fund's proxy voting record for the 12-month period ending June 30 of each year is filed with the SEC on Form N-PX no later than August 31 of each year. The Fund's Form N-PX is available without charge, upon request, by calling the Fund at (800) 433-1918 and on the SEC's website (http//www.sec.gov). The Fund does not presently invest in voting securities and has therefore not adopted proxy voting policies and procedures. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. ADDITIONAL INFORMATION (UNAUDITED) ================================================================================
Directors and Officers Information October 31, 20041 - -------------------- ------------- ----------------- -------------------------------- ------------------------ ---------------- Position(s) Term of Office Principal Occupation(s) Number of Portfolios Other Name, Address2, Held with and Length of During Past in Fund Complex Directorships and Age Fund Time Served3 5 Years Overseen by held by Director Director - -------------------- ------------- ----------------- -------------------------------- ------------------------ ---------------- Disinterested Directors - -------------------- ------------- ----------------- -------------------------------- ------------------------ ---------------- Dr. W. Giles Melon, Director Since 1982 Professor Emeritus of Director/Trustee of N/A Age 73 Business Administration eleven portfolios in the Graduate School of Management, Rutgers University with which he has been associated with since 1966. - -------------------- ------------- ----------------- -------------------------------- ------------------------ ---------------- Robert Straniere, Director Since 1983 Owner, Straniere Law Director/Trustee of WPG Funds Esq., Firm since 1980, New eleven portfolio Group Age 63 York State Assemblyman since 1981 and counsel at Fisher, Fisher & Berger since 1995. - -------------------- ------------- ----------------- -------------------------------- ------------------------ ---------------- Dr. Yung Wong, Director Since 1982 Managing Director of Director/Trustee of N/A Age 65 Abacus Associates, an eleven portfolios investment firm, since 1996. - -------------------- ------------- ----------------- -------------------------------- ------------------------ ---------------- 1 The Statement of Additional Information includes additional information about Daily Tax Free Income Fund, Inc. (the "Fund") directors/officers and is available, without charge, upon request by calling the Fund's transfer agent at (212) 830-5200. 2 The address for each of the above directors/officers of the Fund is Reich & Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020. 3 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 Articles of Incorporation, as amended, and Amended and Restated By-Laws. Each officer will hold office for an indefinite term until the date he or she resigns or retires or until his/her successor is elected and qualifies.
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. ADDITIONAL INFORMATION (CONTINUED) (UNAUDITED) ================================================================================
Directors and Officers Information October 31, 20041 (continued) - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Position(s) Term of Office Principal Occupation(s) Number of Portfolios Other Name, Address2, Held with and Length of During Past in Fund Complex Directorships and Age Fund Time Served3 5 Years Overseen by held by Director Director - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Interested Directors/Officers: - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Steven W. Duff, President and Since 1994 Manager and President of Reich & Director/Trustee None Age 50 Director4 Tang Asset Management, LLC ("RTAM, and/or Officer of LLC"), a registered Investment sixteen portfolios Advisor and President of the Mutual Funds Division of RTAM LLC. Associated with RTAM, LLC since 1994. Mr. Duff is also President and Director/Trustee of nine other funds in the Reich & Tang Fund Complex, Director of Pax World Money Market Fund, Inc. and President and Chief Executive Officer of Tax Exempt Proceeds Fund, Inc. Mr. Duff also serves as a Director of Reich & Tang Services, Inc. and Reich & Tang Distributors, Inc. - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Richard De Sanctis, Treasurer Since 1992 Executive Vice President and CFO of N/A N/A Age 48 and Assistant RTAM, LLC. Associated with RTAM, Secretary LLC since 1990. Mr. De Sanctis is also Treasurer and Assistant Secretary of ten other funds in the Reich & Tang Fund Complex, and the Vice President, Treasurer and Assistant Secretary of Cortland Trust, Inc. Mr. De Sanctis also serves as Executive Vice President and Chief Financial Officer of Reich & Tang Services, Inc. and Reich & Tang Distributors, Inc. - --------------------- ------------- -------------- --------------------------------------- --------------------- ---------------- 1 The Statement of Additional Information includes additional information about Daily Tax Free Income Fund, Inc. (the "Fund") directors/officers and is available, without charge, upon request by calling the Fund's transfer agent at (212) 830-5200. 2 The address for each of the above directors/officers of the Fund is Reich & Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020. 3 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 Articles of Incorporation, as amended, and Amended and Restated By-Laws. Each officer will hold office for an indefinite term until the date he or she resigns or retires or until his/her successor is elected and qualifies. 4 Steven W. Duff is deemed an interested person of the Fund due to his affiliation with Reich & Tang Asset Management, LLC, the Fund's investment advisor.
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- ================================================================================
Directors and Officers Information October 31, 20041 (continued) - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Position(s) Term of Office Principal Occupation(s) Number of Portfolios Other Name, Address2, Held with and Length of During Past in Fund Complex Directorships and Age Fund Time Served3 5 Years Overseen by held by Director Director - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Interested Directors/Officers: - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Dawn Fischer, Vice Since 1985 Managing Director of Thornburg N/A N/A Age 57 President Investment Management, Inc. with which she has been associated since 1982. - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Molly Flewharty, Vice Since 1983 Senior Vice President of RTAM, LLC. N/A N/A Age 53 President Associated with RTAM, LLC since 1977. Ms. Flewharty is also Vice President of eleven other funds in the Reich & Tang Fund Complex. - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Rosanne Holtzer, Chief Since 1998 Senior Vice President of RTAM, N/A N/A Age 40 Compliance LLC. Associated with RTAM, LLC Officer, since 1986. Ms. Holtzer is also Secretary and Chief Compliance Officer, Secretary Assistant and Assistant Treasurer of eleven Treasurer other funds in the Reich & Tang Fund Complex. Ms. Holtzer also serves as Vice President of Reich & Tang Distributors, Inc. - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- Dana E. Messina, Vice Since 1982 Executive Vice President of RTAM, N/A N/A Age 48 President LLC. Associated with RTAM, LLC since 1980. Ms. Messina is also Vice President of eight other funds in the Reich & Tang Fund Complex. - -------------------- ------------- ----------------- ----------------------------------- --------------------- ---------------- 1 The Statement of Additional Information includes additional information about Daily Tax Free Income Fund, Inc. (the "Fund") directors/officers and is available, without charge, upon request by calling the Fund's transfer agent at (212) 830-5200. 2 The address for each of the above directors/officers of the Fund is Reich & Tang Asset Management, LLC, 600 Fifth Avenue, New York, NY 10020. 3 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 Articles of Incorporation, as amended, and Amended and Restated By-Laws. Each officer will hold office for an indefinite term until the date he or she resigns or retires or until his/her successor is elected and qualifies.
- -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- DAILY TAX FREE INCOME FUND, INC. Annual Report October 31, 2004 - ----------------------------------------------------------------------------- - ----------------------------------------------------------------------------- - ----------------------------------------------------- This report is submitted for the general information of the shareholders of the Fund. It is not authorized for distribution to prospective investors in the Fund unless preceded or accompanied by an effective prospectus, which includes information regarding the Funds objectives and policies, experience of its management, marketability of shares, and other information. - ------------------------------------------------------ Daily Tax Free Income Fund, Inc. 600 Fifth Avenue New York, New York 10020 Manager Reich & Tang Asset Management, LLC 600 Fifth Avenue New York, New York 10020 Custodian The Bank of New York 101 Barclay Street, 13th Floor New York, New York 10286 Transfer Agent & Dividend Disbursing Agent Reich & Tang Services, Inc. 600 Fifth Avenue New York, New York 10020 DTF1004A - -------------------------------------------------------------------------------- ITEM 2: CODE OF ETHICS The registrant has adopted a Code of Ethics applicable to its Principal Executive and Senior Financial Officers. ITEM 3: AUDIT COMMITTEE FINANCIAL EXPERT The registrant's Board of Directors has determined that it does not have an audit committee financial expert serving on its audit committee. The Board believes that the collective experience of the audit committee members, including their long-standing service as audit committee members, is sufficient to effectively carry out the role and obligations of the audit committee. In making its determination, the Board considered, among other things, the nature of investment company financials, and the fact that the audit committee is able to consult with the registrant's independent accountants and to seek outside advice, as it deems appropriate. ITEM 4: PRINCIPAL ACCOUNTANT FEES AND SERVICES FYE 10/31/2004 FYE 10/31/2003 4(a) Audit Fees $34,000 $32,400 4(b) Audit Related Fees $ 0 $ 0 4(c) Tax Fees $ 3,000 $ 3,000 4(d) All Other Fees $ 0 $ 0 4(e)(1) The audit committee has adopted pre-approval policies and procedures whereby the audit committee has pre-approved the provision of certain enumerated tax services to the registrant by the registrant's principal accountant to the extent the fee is less than $5,000 per occurrence. 4(e)(2) None. 4(f) Not applicable. 4(g) $3,000 and $20,000, respectively, were the amount of non-audit fees that were billed by the registrant's accountant for services rendered to (i) the registrant, and (ii) the registrant's investment adviser and any control person of the adviser that provides ongoing services to the registrant for the fiscal year ended October 31, 2004. $3,000 and $17,600, respectively, were the amount of non-audit fees that were billed by the registrant's accountant for services rendered to (i) the registrant, and (ii) the registrant's investment adviser and any control person of the adviser that provides ongoing services to the registrant for the fiscal year ended October 31, 2003. 4(h) The registrant's audit committee has considered whether its principal accountant's provision of non-audit services that were rendered to the registrant's investment adviser, and any control persons of 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 is included under Item 1. ITEM 7: DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not applicable. ITEM 8: PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS Not applicable. ITEM 9: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS There were no material changes to the procedures by which shareholders may recommend nominees to the registrant's board of directors that were implemented after the registrant last provided disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A, or this Item 9. ITEM 10: CONTROLS AND PROCEDURES (a) The registrant's Principal Executive Officer and Principal Financi zal Officer have evaluated the design and operation of the registrant's disclosure controls and procedures within 90 days of this filing and have concluded that the registrant's disclosure controls and procedures were effective in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized and reported on a timely basis. (b) There were no changes in the registrant's internal controls over financial reporting that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to affect, the registrant's internal controls over financial reporting. ITEM 11: EXHIBITS (a)(1) Code of Ethics. (a)(2) Certifications of Principal Executive Officer and Principal Financial Officer, under Rule 30a-2 of the Investment Company Act of 1940. (a)(3) Not applicable. (b) Certifications of Principal Executive Officer and Principal Financial Officer, under Section 906 of the Sarbanes-Oxley Act of 2002 and 18 U.S.C. ss.1350. 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) Daily Tax Free Income Fund, Inc. By (Signature and Title)* /s/ Rosanne Holtzer Rosanne Holtzer, Secretary Date December 29, 2004 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/ Steven W. Duff Steven W. Duff, President Date December 29, 2004 By (Signature and Title)* /s/ Anthony Pace Anthony Pace, Treasurer Date December 29, 2004 * Print the name and title of each signing officer under his or her signature. EX-99.CODE ETH 3 dtfannualncsrex11a1.txt EX-99.CERT 11(a)(1) REICH & TANG FUNDS CODE OF ETHICS FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL OFFICERS I. Covered Officers/Purpose of the Code This code of ethics (the "Code") applies to the Principal Executive Officer and Principal Financial Officer (the "Covered Officers," each of whom are set forth in Exhibit A) of the Reich & Tang Funds listed in Exhibit B (each a "Fund" and collectively, the "Funds") for the purpose of promoting: o honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; o full, fair, accurate, timely and understandable disclosure in reports and documents that a registrant files with, or submits to, the Securities and Exchange Commission ("SEC") and in other public communications made by the Funds; o compliance with applicable laws and governmental rules and regulations; o the prompt internal reporting of violations of the Code to an appropriate person or persons identified in the Code; and o accountability for adherence to the Code. Each Covered Officer should adhere to a high standard of business ethics and should be sensitive to situations that may give rise to actual as well as apparent conflicts of interest. II. Covered Officers Should Handle Ethically Actual and Apparent Conflicts of Interest Overview. A "conflict of interest" occurs when a Covered Officer's private interest interferes with the interests of, or his service to, a Fund. For example, a conflict of interest would arise if a Covered Officer, or a member of his family, receives improper personal benefits as a result of his position with the Fund. Certain conflicts of interest arise out of the relationships between Covered Officers and the Funds and already are subject to conflict of interest provisions in the Investment Company Act of 1940 ("Investment Company Act") and the Investment Advisers Act of 1940 ("Investment Advisers Act"). For example, Covered Officers may not individually engage in certain transactions (such as the purchase or sale of securities or other property) with the Funds because of their status as "affiliated persons" of the Funds. The Funds' and the investment adviser's compliance programs and procedures are designed to prevent, or identify and correct, violations of these provisions. This Code does not, and is not intended to, repeat or replace these programs and procedures, and such conflicts fall outside of the parameters of this Code. Although typically not presenting an opportunity for improper personal benefit, conflicts arise from, or as a result of, the contractual relationship between the Funds and the investment adviser, of which the Covered Officers are also officers or employees. As a result, this Code recognizes that the Covered Officers will, in the normal course of their duties (whether formally for the Funds or for the adviser, or for both), be involved in establishing policies and implementing decisions that will have different effects on the adviser and the Funds. The participation of the Covered Officers in such activities is inherent in the contractual relationship between the Funds and the adviser and is consistent with the performance by the Covered Officers of their duties as officers of the Funds. Thus, if performed in conformity with the provisions of the Investment Company Act and the Investment Advisers Act, such activities will be deemed to have been handled ethically. In addition, it is recognized by the Funds' Boards of Directors/Trustees (the "Boards") that the Covered Officers may also be officers of one or more other investment companies covered by this or other codes. Other conflicts of interest are covered by the Code, even if such conflicts of interest are not subject to provisions in the Investment Company Act and the Investment Advisers Act. The following list provides examples of conflicts of interest under the Code, but Covered Officers should keep in mind that these examples are not exhaustive. The overarching principle is that the personal interest of a Covered Officer should not be placed improperly before the interest of a Fund. * * * * Each Covered Officer must: o not use his personal influence or personal relationships improperly to influence investment decisions or financial reporting by the Fund whereby the Covered Officer would benefit personally to the detriment of the Fund; o not cause the Fund to take action, or fail to take action, for the individual personal benefit of the Covered Officer rather than the benefit of the Fund; and o not use material non-public knowledge of portfolio transactions made or contemplated for the Fund to trade personally or cause others to trade personally in contemplation of the market effect of such transactions. There are some potential conflict of interest situations that should be discussed with Fund counsel in order to determine whether these situations pose a material risk of causing detriment to the Funds. Examples of these include: o service as a director on the board of any public or private company; o the receipt of any non-nominal gifts from any company with which a Fund has current or prospective business dealings, to the extent the situation is not addressed by a Fund's 17j-1 Code of Ethics or the investment adviser's Code of Ethics; o the receipt of any entertainment from any company with which a Fund has current or prospective business dealings unless such entertainment is business-related, reasonable in cost, appropriate as to time and place, and not so frequent as to raise any question of impropriety, to the extent the situation is not addressed by a Fund's 17j-1 Code of Ethics or the investment adviser's Code of Ethics; o any ownership interest in, or any consulting or employment relationship with, any of the Funds' service providers, other than its investment adviser, principal underwriter, administrator or any affiliated person thereof; and o a direct or indirect financial interest in commissions, transaction charges or spreads paid by the Funds for effecting portfolio transactions or for selling or redeeming shares other than an interest arising from the Covered Officer's employment, such as compensation or equity ownership. III. Disclosure and Compliance o Each Covered Officer should familiarize himself with the disclosure requirements generally applicable to the Funds; o each Covered Officer should not knowingly misrepresent, or cause others to misrepresent, facts about the Funds to others, whether within or outside the Funds, including to the Fund's directors and auditors, and to governmental regulators and self-regulatory organizations; o each Covered Officer should, to the extent appropriate within his area of responsibility, consult with other officers and employees of the Funds and the adviser with the goal of promoting full, fair, accurate, timely and understandable disclosure in the reports and documents the Funds file with, or submit to, the SEC and in other public communications made by the Funds; o each Covered Officer should comply with his or her obligations under the Funds' Disclosure Controls and Procedures and certification requirements relating to the reports on Form N-CSR (certified shareholder reports) and on Form N-Q (quarterly schedule of portfolio holdings) that the Funds are required to file; and o it is the responsibility of each Covered Officer to promote compliance with the standards and restrictions imposed by applicable laws, rules and regulations. IV. REPORTING AND ACCOUNTABILITY Each Covered Officer must: o upon adoption of the Code (or thereafter as applicable, upon becoming a Covered Officer), affirm in writing to the Board that he has received, read, and understands the Code; o annually thereafter affirm to the Board that he has complied with the requirements of the Code; o not retaliate against any other Covered Officer or any employee of the Funds or their affiliated persons for reports of potential violations that are made in good faith; and o notify the Audit Committee promptly if he knows of any violation of this Code. Failure to do so is itself a violation of this Code. Fund counsel is responsible for applying this Code to specific situations in which questions are presented under it and has the authority to interpret this Code in any particular situation. Any approvals or waivers1 sought by the Covered Officers must be considered Fund counsel. The Funds will follow these procedures in investigating and enforcing this Code: o Fund counsel will take all appropriate action to investigate any potential violations reported to it; o if, after such investigation, Fund counsel believes that no violation has occurred, Fund counsel is not required to take any further action; o if Fund counsel determines that a violation has occurred it will inform and make a recommendation to the full Board, which will consider appropriate action, which may include (i) review of, and appropriate modifications to, applicable policies and procedures; (ii) notification to appropriate personnel of the investment adviser or its board; or (iii) a recommendation to dismiss the Covered Officer; o Fund counsel will be responsible for granting waivers, as appropriate; and o any changes to or waivers of this Code will, to the extent required, be disclosed as provided by SEC rules. V. Other Policies and Procedures This Code shall be the sole code of ethics adopted by the Funds for purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms applicable to registered investment companies thereunder. Insofar as other policies or procedures of the Funds, the Funds' adviser, principal underwriter, or other service providers govern or purport to govern the behavior or activities of the Covered Officers who are subject to this Code, they are superseded by this Code to the extent that they overlap or conflict with the provisions of this Code. The Funds' and their investment adviser's and principal underwriter's codes of ethics under Rule 17j-l under the Investment Company Act, and any other codes of conduct applicable to such entities, are separate requirements applying to the Covered Officers and others, and are not part of this Code. VI. Amendments Any amendments to this Code, other than amendments to Exhibits A or B, must be approved or ratified by a majority vote of the Boards. VII. Confidentiality All reports and records prepared or maintained pursuant to this Code will be considered confidential and shall be maintained and protected accordingly. Except as otherwise required by law or this Code, such matters shall not be disclosed to anyone other than Fund counsel and the Board of Directors (and its counsel) of a Fund where such reports or records pertain to a Covered Officer of such Fund. VIII. Internal Use The Code is intended solely for the internal use by the Funds and does not constitute an admission, by or on behalf of any Fund, as to any fact, circumstance, or legal conclusion. Adopted: July 31, 2003, as amended July 22, 2004. Exhibit A Persons Covered by this Code of Ethics Steven W. Duff Principal Executive Officer (all funds except Pax World Money Market Fund, Inc.) Thomas W.Grant Principal Executive Officer (Pax World Money Market Fund, Inc. only) Anthony Pace Principal Financial Officer Exhibit B California Daily Tax Free Income Fund, Inc. Connecticut Daily Tax Free Income Fund, Inc. Daily Tax Free Income Fund, Inc. Delafield Fund, Inc. Florida Daily Municipal Income Fund Institutional Daily Income Fund, Inc. New Jersey Daily Municipal Income Fund, Inc. Pax World Money Market Fund, Inc. Short Term Income Fund, Inc. EX-99.CERT 4 dtfanncsrex11a2a.txt EX-99.CERT 11(a)(2)(A) CERTIFICATIONS I, Steven W. Duff, certify that: 1. I have reviewed this report on Form N-CSR of Daily Tax Free Income Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 29, 2004 /s/ Steven W. Duff Steven W. Duff President EX-99.CERT 11(a)(2)(B) CERTIFICATIONS I, Anthony Pace, certify that: 1. I have reviewed this report on Form N-CSR of Daily Tax Free Income Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: December 29, 2004 /s/ Anthony Pace Anthony Pace Treasurer EX-99.CERT 5 dtfsemincsrex11b.txt EX-99.CERT 11(b) This certification is provided pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, and 18 U.S.C. ss.1350, and accompanies the report on Form N-CSR for the period ended October 31, 2004 of Daily Tax Free Income Fund, Inc. ( the "Company"). Each of the undersigned officers of the Company hereby certify that, to the best of such officer's knowledge: (i) the Form N-CSR fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and (ii) the information contained in the Form N-CSR fairly presents, in all material respects, the financial condition and results of operation of the Company. Date: December 29, 2004 /s/ Steven W. Duff Steven W. Duff President Date: December 29, 2004 /s/ Anthony Pace Anthony Pace Treasurer -----END PRIVACY-ENHANCED MESSAGE-----