ARTICLE I.
DEFINITIONS

ARTICLE II.
OFFICES

ARTICLE III.
SHAREHOLDERS

ARTICLE IV.
TRUSTEES

ARTICLE V.
COMMITTEES

ARTICLE VI.
OFFICERS

ARTICLE VII.
FISCAL YEAR

ARTICLE VIII.
SEAL

ARTICLE IX.
WAIVERS OF NOTICE

ARTICLE X.
CUSTODY OF SECURITIES

ARTICLE XI.
INDEMNIFICATION

ARTICLE XII.
AMENDMENTS

ARTICLE I
DEFINITIONS

ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS

ARTICLE III
CUSTODY AND RELATED SERVICES

ARTICLE IV
PURCHASE AND SALE OF SECURITIES;
CREDITS TO ACCOUNT

ARTICLE V
OVERDRAFTS OR INDEBTEDNESS

ARTICLE VI
SALE AND REDEMPTION OF SHARES

ARTICLE VII
PAYMENT OF DIVIDENDS OR DISTRIBUTIONS

ARTICLE VIII
CONCERNING CUSTODIAN

ARTICLE IX
TERMINATION

ARTICLE X
MISCELLANEOUS

INTRODUCTION

I. PRUDENTIAL ’S POLICY STATEMENT ON INSIDER TRADING

II. SECURITIES TRADE MONITORING FOR COVERED AND ACCESS PERSONS

III. POLICY AND RESTRICTIONS FOR PERSONAL TRADING IN SECURITIES ISSUED BY PRUDENTIAL BY DESIGNATED PERSONS

IV. TRADING RESTRICTIONS FOR ASSOCIATES OF BROKER-DEALERS

V. TRADING RESTRICTIONS FOR PORTFOLIO MANAGEMENT AND TRADING UNITS AND REGISTERED INVESTMENT ADVISERS

VI. TRADING RESTRICTIONS OF PRIVATE ASSET MANAGEMENT UNITS

VII. POLICY FOR PRUDENTIAL EQUITY GROUP, INC.

EXHIBITS

ARTICLE I. DEFINITIONS

ARTICLE II. OFFICES

ARTICLE III. SHAREHOLDERS

ARTICLE IV. TRUSTEES

ARTICLE V. COMMITTEES

ARTICLE VI. OFFICERS

ARTICLE VII. FISCAL YEAR

ARTICLE VIII. SEAL

ARTICLE IX. WAIVERS OF NOTICE

ARTICLE X. CUSTODY OF SECURITIES

ARTICLE XI. INDEMNIFICATION

ARTICLE XII. AMENDMENTS

ARTICLE I DEFINITIONS

ARTICLE II APPOINTMENT OF CUSTODIAN; ACCOUNTS; REPRESENTATIONS, WARRANTIES, AND COVENANTS

ARTICLE III CUSTODY AND RELATED SERVICES

ARTICLE I.
DEFINITIONS

ARTICLE II.
OFFICES

ARTICLE III.
SHAREHOLDERS

ARTICLE IV.
TRUSTEES

ARTICLE V.
COMMITTEES

ARTICLE VI.
OFFICERS

ARTICLE VII.
FISCAL YEAR

ARTICLE VIII.
SEAL

ARTICLE IX.
WAIVERS OF NOTICE

ARTICLE X.
CUSTODY OF SECURITIES

ARTICLE XI.
INDEMNIFICATION

ARTICLE XII.
AMENDMENTS

ARTICLE I
DEFINITIONS

ARTICLE II
APPOINTMENT OF CUSTODIAN; ACCOUNTS;
REPRESENTATIONS, WARRANTIES, AND COVENANTS

ARTICLE III
CUSTODY AND RELATED SERVICES

Section 1. Principal Office . Until changed by the Trustees, the principal office of the Trust in The Commonwealth of Massachusetts shall be in the City of Boston, County of Suffolk.

Section 2. Other Offices . The Trust may have offices in such other places without as well as within the Commonwealth as the Trustees may from time to time determine.

Section 1. Meetings . Meetings of the Shareholders shall be held to the extent provided in the Declaration at such place within or without The Commonwealth of Massachusetts as the Trustees shall designate. One-third of the Shares entitled to vote on a matter shall be a quorum for the transaction of business with respect to such matter at a Shareholders’ meeting.

Section 2. Notice of Meetings . Notice of all meetings of the Shareholders, stating the time, place and purposes of the meeting, shall be given by the Trustees by mail to each Shareholder at his or her address as recorded on the register of the Trust mailed at least (10) days and not more than ninety (90) days before the meeting. Only the business stated in the notice of the meeting shall be considered at such meeting. Any adjourned meeting may be held as adjourned without further notice. No notice need be given to any Shareholder who shall have failed

to inform the Trust of his or her current address or if a written waiver of notice, executed before or after the meeting by the Shareholder or his or her attorney thereunto authorized, is filed with the records of the meeting.

Section 3. Record Date for Meetings and Other Purposes . For the purpose of determining the Shareholders who are entitled to notice of and to vote at any meeting, or to participate in any distribution, or for the purpose of any other action, the Trustees may from time to time close the transfer books for such period, not exceeding thirty (30) days, as the Trustees may determine; or without closing the transfer books the Trustees may fix a date not more than ninety (90) days prior to the date of any meeting of Shareholders or distribution or other action as a record date for the determinations of the persons to be treated as Shareholders of record for such purposes, except for dividend payments which shall be governed by the Declaration.

Section 4. Proxies . At any meeting of Shareholders, any holder of Shares entitled to vote thereat may vote by proxy, provided that no proxy shall be voted at any meeting unless it shall have been placed on file with the Secretary, or with such other officer or agent of the Trust as the Secretary may direct, for verification prior to the time at which such vote shall be taken. Proxies may be solicited in the name of one or more Trustees or one or more of the officers of the Trust. A Shareholder may sign a writing authorizing another person to act as proxy. Signing may be accomplished by the Shareholder or the Shareholder’s authorized agent signing the writing or causing the Shareholder’s signature to be affixed to the writing by any reasonable means, including facsimile signature. A Shareholder may authorize another person to act as proxy by transmitting, or authorizing the transmission of, a telegram, cablegram, datagram, or other means of electronic transmission to the person authorized to act as proxy or to a proxy solicitation firm, proxy support service organization, or other person authorized the who will act as proxy to receive the transmission. Only Shareholders of record shall be entitled to vote. When any Share is held jointly by several persons, any one of them may vote at any meeting in person or by proxy in respect of such Share, but if more than one of them shall be present at such meeting in person or by proxy, and such joint owners or their proxies so present disagree as to any vote to be cast, such vote shall not be received in respect of such Share. A proxy purporting to be executed by or on behalf of a Shareholder shall be deemed valid unless challenged at or prior to its exercise, and the burden of proving invalidity shall rest on the challenger. If the holder of any such Share is a minor or a person of unsound mind, and subject to guardianship or the legal control of any other person as regards the

charge or management of such Share, he or she may vote by his or her guardian or such other person appointed or having such control, and such vote may be given in person or by proxy.

Section 5. Inspection of Records . The records of the Trust shall be open to inspection by Shareholders to the same extent as is permitted shareholders of a Massachusetts business corporation.

Section 6. Action without Meeting . Any action which may be taken by Shareholders may be taken without a meeting if a majority of Shareholders of the Trust or the applicable series of the Trust entitled to vote on the matter (or such larger proportion thereof as shall be required by law, the Declaration or these By-Laws for approval of such matter) consent to the action in writing and the written consents are filed with the records of the meetings of Shareholders. Such consents shall be treated for all purposes as a vote taken at a meeting of Shareholders.

Section 1. Meetings of the Trustees . The Trustees may in their discretion provide for regular or stated meetings of the Trustees. Notice of regular or stated meetings need not be given. Meetings of the Trustees other than regular or stated meetings shall be held whenever called by the President, or by any one of the Trustees, at the time being in office. Notice of the time and place of each meeting other than regular or stated meetings shall be given by the Secretary or an Assistant Secretary or by the officer or Trustee calling the meeting and shall be mailed to each Trustee at least two days before the meeting, or shall be telegraphed, cabled, or wired to each Trustee at his or her business address, or personally delivered to him or her at least one day before the meeting. Such notice may, however, be waived by any Trustee. Notice of a meeting need not be given to any Trustee if a written waiver of notice, executed by him or her before or after the meeting, is filed with the records of the meeting, or to any Trustee who attends the meeting without protesting prior thereto or at its commencement the lack of notice to him or her. A notice or waiver of notice need not specify the purpose of any meeting. The Trustees may meet by means of a telephone conference circuit or similar communications equipment by means of which all persons participating in the meeting are connected, which meeting shall be deemed to have been held at a place designated by the Trustees at the meeting. Participation in a telephone conference meeting shall constitute presence in person at such meeting. Any action required or permitted to be taken at any meeting of the Trustees may be taken by the Trustees without a

meeting if all the Trustees consent to the action in writing and the written consents are filed with the records of the Trustees’ meetings. Such consents shall be treated for all purposes as a vote taken at a meeting of the Trustees. Notwithstanding the foregoing, all actions of the Trustees shall be taken in compliance with the provisions of the Investment Company Act of 1940, as amended.

Section 2. Quorum and Manner of Acting . A majority of the Trustees shall be present in person at any regular or special meeting of the Trustees in order to constitute a quorum for the transaction of business at such meetings and (except as otherwise required by law, the Declaration or these By-Laws) the act of a majority of the Trustees present at any such meeting, at which a quorum is present, shall be the act of the Trustees. In the absence of a quorum, a majority of the Trustees present may adjourn the meeting from time to time until a quorum shall be present. Notice of an adjourned meeting need not be given.

Section 3. Chair . The Trustees may elect a Trustee as Chair of the Trustees. The Chair, if one is elected, shall preside at all meetings of the Trustees and of the stockholders at which he or she is present. The Chair shall perform such duties and have such powers as are assigned by the Trustees. The Chair shall not be an officer of the Trust for any purposes. The Chair shall not be an “interested” person of the Trust or an adviser to the Trust as defined in the Investment Company Act of 1940. The Chair shall have no greater liability as a result of serving as Chair and will have no greater responsibility for overseeing the affairs of the trust than that of other trustees other than with respect to specific responsibilities of the Chair as set forth in these Bylaws or as assigned by the Trustees.

Section 1. Executive and Other Committee . The Trustees by vote of a majority of all the Trustees may elect from their own number an Executive Committee to consist of not less than three (3) Trustees to hold office at the pleasure of the Trustees, which shall have the power to conduct the current and ordinary business of the Trust while the Trustees are not in session, including the purchase and sale of securities and the designation of securities to be delivered upon redemption of Shares of the Trust, and such other powers of the Trustees as the Trustees may, from time to time, delegate to them except those powers which by law, the Declaration or these By-Laws they are prohibited from delegating. The Trustees may also elect from their own number or otherwise other Committees from time to time, the number composing such Committees, the powers conferred upon the same

(subject to the same limitations as with respect to the Executive Committee) and the term of membership on such Committees to be determined by the Trustees. The Trustees may designate a chairman of any such Committee. In the absence of such designation the Committee may elect its own Chairman.

Section 2. Meetings, Quorum and Manner of Acting . The Trustees may (1) provide for stated meetings of any Committee, (2) specify the manner of calling and notice required for special meetings of any Committee, (3) specify the number of members of a Committee required to constitute a quorum and the number of members of a Committee required to exercise specified powers delegated to such Committee, (4) authorize the making of decisions to exercise specified powers by written assent of the requisite number of members of a Committee without a meeting, and (5) authorize the members of a Committee to meet by means of a telephone conference circuit.

Section 1. General Provisions . The officers of the Trust shall be a President, a Treasurer and a Secretary, who shall be elected by the Trustees. The Trustees may elect or appoint such other officers or agents as the business of the Trust may require, including one or more Vice Presidents, one or more Assistant Secretaries, and one or more Assistant Treasurers.

Section 2. Term of Office and Qualifications . Except as otherwise provided by law, the Declaration or these By-Laws, the President, the Treasurer and the Secretary shall each hold office until his or her successor shall have been duly elected and qualified, and all other officers shall hold office at the pleasure of the Trustees. The Secretary and Treasurer may be the same person. A Vice President and the Treasurer or a Vice President and the Secretary may be the same person, but the offices of Vice President, Secretary and Treasurer shall not be held by the

same person. The President shall hold no other office. Except as above provided, any two offices may be held by the same person. Any officer may be but none need be a Trustee or Shareholder.

Section 3. Removal . The Trustees, at any regular or special meeting of the Trustees, may remove any officer without cause, by a vote of a majority of the Trustees then in office. Any officer or agent appointed by an officer or committee may be removed with or without cause by such appointing officer or committee.

Section 4. Powers and Duties of the President . The President shall be the principal executive officer of the Trust. He or she may call meetings of the Trustees and of any Committee thereof when he or she deems it necessary and shall preside at all meetings of the Shareholders. Subject to the control of the Trustees and to the control of any Committees of the Trustees, within their respective spheres, as provided by the Trustees, the President shall at all times exercise a general supervision and direction over the affairs of the Trust. The President shall have the power to employ attorneys and counsel for the Trust and to employ such subordinate officers, agents, clerks and employees as he or she may find necessary to transact the business of the Trust. He or she shall also have the power to grant, issue, execute or sign such powers of attorney, proxies or other documents as may be deemed advisable or necessary in furtherance of the interests of the Trust. The President shall have such other powers and duties as from time to time may be conferred upon or assigned to him or her by the Trustees.

Section 5. Powers and Duties of Vice President . In the absence or disability of the President, the Vice President or, if there be more than one Vice President, any Vice President designated by the Trustees shall perform all the duties and may exercise any of the powers of the President, subject to the control of the Trustees. Each Vice President shall perform such other duties as may be assigned to him or her from time to time by the Trustees and the President.

Section 6. Powers and Duties of the Treasurer . The Treasurer shall be the principal financial and accounting officer of the Trust. The Treasurer shall deliver all funds of the Trust which may come into his or her hands to such Custodian as the Trustees may employ pursuant to Article X of these By-Laws. He or she shall render a statement of condition of the finances of the Trust to the Trustees as often as they shall require the same and he or she shall in general perform all the duties incident to the office of Treasurer and such other duties as from time to time may be assigned to him or her by the Trustees. The Treasurer shall give a bond for the faithful discharge of his

or her duties, if required so to do by the Trustees, in such sum and with such surety or sureties as the Trustees shall require.

Section 7. Powers and Duties of the Secretary . The Secretary shall keep the minutes of all meetings of the Trustees and of the Shareholders in proper books provided for that purpose; he or she shall have custody of the seal of the Trust; he or she shall have charge of the Share transfer books, lists and records unless the same are in the charge of the Transfer Agent. The Secretary shall attend to the giving and serving of all notices by the Trust in accordance with the provisions of these By-Laws and as required by law; and subject to these By-Laws, he or she shall in general perform all duties incident to the office of Secretary and such other duties as from time to time may be assigned to him or her by the Trustees.

Section 8. Powers and Duties of Assistant Treasurers . In the absence or disability of the Treasurer, any Assistant Treasurer designated by the Trustees shall perform all the duties, and may exercise any of the powers, of the Treasurer. Each Assistant Treasurer shall give a bond for the faithful discharge of his or her duties, if required so to do by the Trustees, in such sum and with such surety or sureties as the Trustees shall require.

Section 9. Powers and Duties of Assistant Secretaries . In the absence or disability of the Secretary, any Assistant Secretary designated by the Trustees shall perform all the duties, and may exercise any of the powers, of the Secretary. Each Assistant Secretary shall perform such other duties as from time to time may be assigned to him by the Trustees.

Section 10. Compensation of Officers and Trustees and Members of the Advisory Board . Subject to any applicable provisions of the Declaration, the compensation of the officers and Trustees and members of the Advisory Board shall be fixed from time to time by the Trustees or, in the case of officers, by any Committee or officer upon whom such power may be conferred by the Trustees. No officer shall be prevented from receiving such compensation as such officer by reason of the fact that he or she is also a Trustee.

Section 1. Employment of a Custodian . The Trust shall place and at all times maintain in the custody of a Custodian (including any sub-custodian for the Custodian) all funds securities and similar investments included in the Trust Properly. The Custodian (and any subcustodian) shall be a bank having not less than $20,000,000 aggregate capital, surplus and undivided profits and shall be appointed from time to time by the Trustees, who shall fix its remuneration.

Section 2. Action Upon Termination of Custodian Agreement . Upon termination of a Custodian Agreement or inability of the Custodian to continue to serve, the Trustees shall promptly appoint a successor custodian, but in the event that no successor custodian can be found who has the required qualifications and is willing to serve, the Trustees shall call as promptly as possible a special meeting of the Shareholders to determine whether the Trust shall function without a custodian or shall be liquidated. If so directed by a Majority Shareholder Vote, the Custodian shall deliver and pay over all Trust Property held by it as specified in such vote.

Section 3. Provisions of Custodian Contract . The following provisions shall apply to the employment of a Custodian and to any contract entered into with the Custodian so employed: The Trustees shall cause to be delivered to the Custodian all securities included in the Trust Property or to which the Trust may become entitled, and shall order the same to be delivered by the Custodian only in completion of a sale, exchange, transfer, pledge, loan of portfolio securities to another person, or other disposition thereof, all as the Trustees may generally or from time to time require or approve or to a successor Custodian; and the Trustees shall cause all funds included in the Trust Property or to which it may become entitled to be paid to the Custodian, and shall order the same disbursed only for investment against delivery of the securities acquired (including securities acquired under a repurchase agreement), or the return of cash held as collateral for loans of portfolio securities, or in payment of expenses, including management compensation, and liabilities of the Trust, including distributions to Shareholders, or to a successor Custodian. Notwithstanding anything to the contrary in these By-Laws, upon receipt of proper instructions, which may be standing instructions, the Custodian may deliver funds in the following cases. In connection with repurchase agreements, the Custodian shall transmit, prior to receipt on behalf of the Fund of any securities or other property, funds from the Fund’s custodian account to a special custodian approved by the Trustees of the Fund, which funds shall be used to pay for securities to be purchased by the Fund subject to the Fund’s obligation to sell and the seller’s obligation to repurchase such securities. In such case, the securities shall be held in the custody of the special custodian. In connection with the Trust’s purchase or sale of financial futures contracts, the Custodian shall transmit, prior to receipt on behalf of the Fund of any securities or other property, funds from the Trust’s custodian account in order to furnish to and maintain funds with brokers as margin to guarantee the performance of the Trust’s futures obligations in accordance with the applicable requirements of commodities exchanges and brokers.

Section 4. Central Certificate System . Subject to applicable rules, regulations and orders adopted by the Commission, the Trustees may direct the Custodian to deposit all or any part of the securities owned by the Trust in a system for the central handling of securities established by a national securities exchange or a national securities association registered with the Commission under the Securities Exchange Act of 1934, or such other person as may be permitted by the Commission, or otherwise in accordance with the 1940 Act, pursuant to which system all securities of any particular class or series of any issuer deposited within the system are treated as fungible and may

be transferred or pledged by bookkeeping entry without physical delivery of such securities, provided that all such deposits shall be subject to withdrawal only upon the order of the Trust.

1. “Authorized Person” shall be any person, whether or not an officer or employee of the Fund, duly authorized by the Fund’s board to execute any Certificate or to give any Oral Instruction with respect to one or more Accounts, such persons to be designated in a Certificate annexed hereto as Schedule I hereto or such other Certificate as may be received by Custodian from time to time.

2. “BNY Affiliate” shall mean any office, branch or subsidiary of The Bank of New York Company, Inc.

3. “Book-Entry System” shall mean the Federal Reserve/Treasury book-entry system for receiving and delivering securities, its successors and nominees.

4. “Business Day” shall mean any day on which Custodian and relevant Depositories are open for business.

5. “Certificate” shall mean any notice, instruction, or other instrument in writing, authorized or required by this Agreement to be given to Custodian, which is actually received by Custodian by letter or facsimile transmission and signed on behalf of the Fund by an Authorized Person or a person reasonably believed by Custodian to be an Authorized Person.

6. “Composite Currency Unit” shall mean the Euro or any other composite currency unit consisting of the aggregate of specified amounts of specified currencies, as such unit may be constituted from time to time.

7. “Depository” shall include (a) the Book-Entry System, (b) the Depository Trust Company, (c) any other clearing agency or securities depository registered with the Securities and Exchange Commission identified to the Fund from time to time, and (d) the respective successors and nominees of the foregoing.

8. “Foreign Depository” shall mean (a) Euroclear, (b) Clearstream Banking, societe anonyme, (c) each Eligible Securities Depository as defined in Rule 17f-7 under the Investment Company Act of 1940, as amended, identified to the Fund from time to time, and (d) the respective successors and nominees of the foregoing.

9. “Instructions” shall mean communications transmitted by electronic or telecommunications media, including S.W.I.F.T., computer-to-computer interface, or dedicated transmission lines.

10. “Oral Instructions” shall mean verbal instructions received by Custodian from an Authorized Person or from a person reasonably believed by Custodian to be an Authorized Person.

11. “Series” shall mean the various portfolios, if any, of the Funds listed on Schedule A hereto, and if none are listed references to Series shall be references to the Funds.

12. “Securities” shall include, without limitation, any common stock and other equity securities, bonds, debentures and other debt securities, notes, mortgages or other obligations, and any instruments representing rights to receive, purchase, or subscribe for the same, or representing any other rights or interests therein (whether represented by a certificate or held in a Depository or by a Subcustodian).

13. “Subcustodian” shall mean a bank (including any branch thereof) or other financial institution (other than a Foreign Depository) located outside the U.S. which is utilized by Custodian in connection with the purchase, sale or custody of Securities hereunder and identified to the Fund from time to time, and their respective successors and nominees.

1. (a) The Fund hereby appoints Custodian as custodian of all Securities and cash at any time delivered to Custodian during the term of this Agreement, and authorizes Custodian to hold Securities in registered form in its name or the name of its nominees. Custodian hereby accepts such appointment and agrees to establish and maintain one or more securities accounts and cash accounts for each Series in which Custodian will hold Securities and cash as provided herein. Custodian shall maintain books and records segregating the assets of each Series from the assets of any other Series. Such accounts (each, an “Account”; collectively, the “Accounts”) shall be in the name of the Fund.

2. The Fund hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be reaffirmed upon each delivery of a Certificate or each giving of Oral Instructions or Instructions by the Fund, that:

3. The Fund hereby covenants that it shall from time to time complete and execute and deliver to Custodian upon Custodian’s request a Form FR U-1 (or successor form) whenever the Fund borrows from Custodian any money to be used for the purchase or carrying of margin stock as defined in Federal Reserve Regulation U.

1. (a) Subject to the terms hereof, the Fund hereby authorizes Custodian to hold any Securities received by it from time to time for the Fund’s account. Custodian shall be entitled to utilize Depositories, Subcustodians, and, subject to subsection(c) of this Section 1, Foreign Depositories, to the extent possible in connection with its performance hereunder. Securities and cash held in a Depository or Foreign Depository will be held subject to the rules, terms and conditions of such entity. Securities and cash held through Subcustodians shall be held subject to the terms and conditions of Custodian’s agreements with such Subcustodians. Subcustodians may be authorized to hold Securities in Foreign Depositories in which such Subcustodians participate. Unless otherwise required by local law or practice or a particular subcustodian agreement, Securities deposited with a Subcustodian, a Depositary or a Foreign Depository will be held in a commingled account, in the name of Custodian, holding only Securities held by Custodian as custodian for its customers. Custodian shall identify on its books and records the Securities and cash belonging to the Fund, whether held directly or indirectly

through Depositories, Foreign Depositories, or Subcustodians. Custodian shall, directly or indirectly through Subcustodians, Depositories, or Foreign Depositories, endeavor, to the extent feasible, to hold Securities in the country or other jurisdiction in which the principal trading market for such Securities is located, where such Securities are to be presented for cancellation and/or payment and/or registration, or where such Securities are acquired. Custodian at any time may cease utilizing any Subcustodian and/or may replace a Subcustodian with a different Subcustodian (the “Replacement Subcustodian”). In the event Custodian selects a Replacement Subcustodian, Custodian shall not utilize such Replacement Subcustodian until after the Fund’s board or foreign custody manager has determined that utilization of such Replacement Subcustodian satisfies the requirements of the ‘40 Act and Rule 17f-5 thereunder.

2. Custodian shall furnish the Fund with an advice of daily transactions (including a confirmation of each transfer of Securities) and a monthly summary of all transfers to or from the Accounts.

3. With respect to all Securities held hereunder, Custodian shall, unless otherwise instructed to the contrary:

4. (a) Custodian shall promptly notify the Fund of rights or discretionary actions with respect to Securities held hereunder, and of the date or dates by when such rights must be exercised or such action must be taken, provided that Custodian has actually received, from the issuer or the relevant Depository (with respect to Securities issued in the United States) or from the relevant Subcustodian, Foreign Depository, or a nationally or internationally recognized bond or corporate action service to which Custodian subscribes, timely notice of such rights or discretionary corporate action or of the date or dates such rights must be exercised or such action must be taken. Absent actual receipt of such notice, Custodian shall have no liability for failing to so notify the Fund.

5. All voting rights with respect to Securities, however registered, shall be exercised by the Fund or its designee. For Securities issued in the United States, Custodian’s only duty shall be to mail to the Fund any documents (including proxy statements, annual reports and signed proxies) actually received by Custodian relating to the exercise of such voting rights. With respect to Securities issued outside of the United States, Custodian’s only duty shall be to

provide the Fund with access to a provider of global proxy services at the Fund’s request. The Fund shall be responsible for all costs associated with its use of such services.

6. Custodian shall promptly advise the Fund upon Custodian’s actual receipt of notification of the partial redemption, partial payment or other action affecting less than all Securities of the relevant class. If Custodian, any Subcustodian, any Depository, or any Foreign Depository holds any Securities in which the Fund has an interest as part of a fungible mass, Custodian, such Subcustodian, Depository, or Foreign Depository may select the Securities to participate in such partial redemption, partial payment or other action in any non-discriminatory manner that it customarily uses to make such selection.

7. Custodian shall not under any circumstances accept bearer interest coupons which have been stripped from United States federal, state or local government or agency securities unless explicitly agreed to by Custodian in writing.

8. The Fund shall be liable for all taxes, assessments, duties and other governmental charges, including any interest or penalty with respect thereto (“Taxes”), with respect to any cash or Securities held on behalf of the Fund or any transaction related thereto. The Fund shall indemnify Custodian and each Subcustodian for the amount of any Tax that Custodian, any such Subcustodian or any other withholding agent is required under applicable laws (whether by assessment or otherwise) to pay on behalf of, or in respect of income earned by or payments or distributions made to or for the account of the Fund (including any payment of Tax required by reason of an earlier failure to withhold). Custodian shall, or shall instruct the applicable Subcustodian or other withholding agent to, withhold the amount of any Tax which is required to be withheld under applicable law upon collection of any dividend, interest or other distribution made with respect to any Security and any proceeds or income from the sale, loan or other transfer of any Security. In the event that Custodian or any Subcustodian is required under applicable law to pay any Tax on behalf of the Fund, Custodian is hereby authorized to withdraw cash from any cash account in the amount required to pay such Tax and to use such cash, or to remit such cash to the appropriate Subcustodian or other withholding agent, for the timely payment of such Tax in the manner required by applicable law. If the aggregate amount of cash in all cash accounts is not sufficient to pay such Tax, Custodian shall promptly notify the Fund of the additional amount of cash (in the appropriate currency) required, and the Fund shall directly deposit such additional amount in the appropriate cash account promptly after receipt of such notice, for use by Custodian as specified herein. In the event that Custodian reasonably believes that Fund is eligible, pursuant to applicable law or to the provisions of any tax treaty, for a reduced rate of, or exemption from, any Tax which is otherwise required to be withheld or paid on behalf of the Fund under any applicable law, Custodian shall, or shall instruct the applicable Subcustodian or withholding agent to, either withhold or pay such Tax at such reduced rate or refrain from withholding or paying such Tax, as appropriate; provided that Custodian shall have received from the Fund all documentary evidence of residence or other qualification for such reduced rate or exemption required to be received under such applicable law or treaty. In the event that Custodian reasonably believes that a reduced rate of, or exemption from, any Tax is obtainable only by means of an application for refund, Custodian and the applicable Subcustodian shall have no responsibility for the accuracy or validity of any forms or documentation provided by the Fund to Custodian hereunder. The Fund hereby agrees to

indemnify and hold harmless Custodian and each Subcustodian in respect of any liability arising from any underwithholding or underpayment of any Tax which results from the inaccuracy or invalidity of any such forms or other documentation, and such obligation to indemnify shall be a continuing obligation of the Fund, its successors and assigns notwithstanding the termination of this Agreement.

9. (a) For the purpose of settling Securities and foreign exchange transactions, the Fund shall provide Custodian with sufficient immediately available funds for all transactions by such time and date as conditions in the relevant market dictate. As used herein, “sufficient immediately available funds” shall mean either (i) sufficient cash denominated in U.S. dollars to purchase the necessary foreign currency, or (ii) sufficient applicable foreign currency, to settle the transaction. Custodian shall provide the Fund with immediately available funds each day which result from the actual settlement of all sale transactions, based upon advices received by Custodian from Subcustodians, Depositories, and Foreign Depositories. Such funds shall be in U.S. dollars or such other currency as the Fund may specify to Custodian.

10. Custodian shall promptly send to the Fund (a) any reports it receives from a Depository on such Depository’s system of internal accounting control, and (b) such reports on its own system of internal accounting control as the Fund may reasonably request from time to time.

11. Until such time as Custodian receives a certificate to the contrary with respect to a particular Security, Custodian may release the identity of the Fund to an issuer which requests such information pursuant to the Shareholder Communications Act of 1985 for the specific purpose of direct communications between such issuer and shareholder.

1. Promptly after each purchase or sale of Securities by the Fund, the Fund shall deliver to Custodian a Certificate or Instructions, or with respect to a purchase or sale of a Security generally required to be settled on the same day the purchase or sale is made, Oral Instructions specifying all information Custodian may reasonably request to settle such purchase or sale. Custodian shall account for all purchases and sales of Securities on the actual settlement date unless otherwise agreed by Custodian.

2. The Fund understands that when Custodian is instructed to deliver Securities against payment, delivery of such Securities and receipt of payment therefor may not be completed

simultaneously. Notwithstanding any provision in this Agreement to the contrary, settlements, payments and deliveries of Securities may be effected by Custodian or any Subcustodian in accordance with the customary or established securities trading or securities processing practices and procedures in the jurisdiction in which the transaction occurs, including, without limitation, delivery to a purchaser or dealer therefor (or agent) against receipt with the expectation of receiving later payment for such Securities. The Fund assumes full responsibility for all risks, including, without limitation, credit risks, involved in connection with such deliveries of Securities.

3. Custodian may, as a matter of bookkeeping convenience or by separate agreement with the Fund, credit the Account with the proceeds from the sale, redemption or other disposition of Securities or interest, dividends or other distributions payable on Securities prior to its actual receipt of final payment therefor. All such credits shall be conditional until Custodian’s actual receipt of final payment and may be reversed by Custodian to the extent that final payment is not received. Payment with respect to a transaction will not be “final” until Custodian shall have received immediately available funds which under applicable local law, rule and/or practice are irreversible and not subject to any security interest, levy or other encumbrance, and which are specifically applicable to such transaction.

1. If Custodian should in its sole discretion advance funds on behalf of any Fund which results in an overdraft (including, without limitation, any day-light overdraft) because the money held by Custodian in an Account for such Fund shall be insufficient to pay the total amount payable upon a purchase of Securities specifically allocated to such Fund, as set forth in a Certificate, Instructions or Oral Instructions, or if an overdraft arises in the separate account of a Fund for some other reason, including, without limitation, because of a reversal of a conditional credit or the purchase of any currency, or if the Fund is for any other reason indebted to Custodian with respect to a Fund, including any indebtedness to The Bank of New York under the Fund’s Cash Management and Related Services Agreement, if any (except a borrowing for investment or for temporary or emergency purposes using Securities as collateral pursuant to a separate agreement and subject to the provisions of Section 2 of this Article), such overdraft or indebtedness shall be deemed to be a loan made by Custodian to the Fund payable on demand and shall bear interest from the date incurred at a rate per annum ordinarily charged by Custodian to its institutional customers, as such rate may be adjusted from time to time. In addition, the Fund hereby agrees that Custodian shall to the maximum extent permitted by law have a continuing lien, security interest, and security entitlement in and to any property, including, without limitation, any investment property or any financial asset, of such Fund at any time held by Custodian for the benefit of such Fund or in which such Fund may have an interest which is then in Custodian’s possession or control or in possession or control of any third party acting in Custodian’s behalf. The Fund authorizes Custodian, in its sole discretion, at any time to charge any such overdraft or indebtedness together with interest due thereon against any balance of account standing to such Funds’’ credit on Custodian’s books, provided that Custodian shall promptly notify the Fund of any such charges.

2. If the Fund borrows money from any bank (including Custodian if the borrowing is pursuant to a separate agreement) or from any other person (as may be permitted by an SEC exemptive order), for investment or for temporary or emergency purposes using Securities held by Custodian hereunder as collateral for such borrowings, the Fund shall deliver to Custodian a Certificate specifying with respect to each such borrowing: (a) the Series to which such borrowing relates; (b) the name of the bank, (c) the amount of the borrowing, (d) the time and date, if known, on which the loan is to be entered into, (e) the total amount payable to the Fund on the borrowing date, (f) the Securities to be delivered as collateral for such loan, including the name of the issuer, the title and the number of shares or the principal amount of any particular Securities, and (g) a statement specifying whether such loan is for investment purposes or for temporary or emergency purposes and that such loan is in conformance with the ‘40 Act and the Fund’s prospectus. Custodian shall deliver on the borrowing date specified in a Certificate the specified collateral against payment by the lending bank of the total amount of the loan payable, provided that the same conforms to the total amount payable as set forth in the Certificate. Custodian may, at the option of the lending bank, keep such collateral in its possession, but such collateral shall be subject to all rights therein given the lending bank by virtue of any promissory note or loan agreement. Custodian shall deliver such Securities as additional collateral as may be specified in a Certificate to collateralize further any transaction described in this Section. The Fund shall cause all Securities released from collateral status to be returned directly to Custodian, and Custodian shall receive from time to time such return of collateral as may be tendered to it. In the event that the Fund fails to specify in a Certificate the Series, the name of the issuer, the title and number of shares or the principal amount of any particular Securities to be delivered as collateral by Custodian, Custodian shall not be under any obligation to deliver any Securities.

1. Whenever the Fund shall sell any shares issued by the Fund (“Shares”) it shall deliver to Custodian a Certificate or Instructions specifying the amount of money and/or Securities to be received by Custodian for the sale of such Shares and specifically allocated to an Account for such Fund.

2. Upon receipt of such money, Custodian shall credit such money to an Account in the name of the Fund for which such money was received.

3. Except as provided hereinafter, whenever the Fund desires Custodian to make payment out of the money held by Custodian hereunder in connection with a redemption of any Shares, it shall furnish to Custodian a Certificate or Instructions specifying the total amount to be paid for such Shares. Custodian shall make payment of such total amount to the transfer agent specified in such Certificate or Instructions out of the money held in an Account of the appropriate Fund.

4. Notwithstanding the above provisions regarding the redemption of any Shares, whenever any Shares are redeemed pursuant to any check redemption privilege which may from time to time be offered by the Fund, Custodian, unless otherwise instructed by a Certificate or Instructions, shall, upon presentment of such check, charge the amount thereof against the money

held in the Account of the Fund of the Shares being redeemed, provided, that if the Fund or its agent timely advises Custodian that such check is not to be honored, Custodian shall return such check unpaid.

1. Whenever the Fund shall determine to pay a dividend or distribution on Shares it shall furnish to Custodian Instructions or a Certificate setting forth with respect to the Fund specified therein the date of the declaration of such dividend or distribution, the total amount payable, and the payment date.

2. Upon the payment date specified in such Instructions or Certificate, Custodian shall pay out of the money held for the account of such Fund the total amount payable to the dividend agent of the Fund specified therein.

1. (a) Except as otherwise expressly provided herein, Custodian shall not be liable for any costs, expenses, damages, liabilities or claims, including attorneys’ and accountants’ fees (collectively, “Losses”), incurred by or asserted against the Fund, except those Losses arising out of Custodian’s own negligence or willful misconduct. Custodian shall have no liability whatsoever for the action or inaction of any Depositories, or, except to the extent such action or inaction is a direct result of the Custodian’s failure to fulfill its duties hereunder, of any Foreign Depositories. With respect to any Losses incurred by the Fund as a result of the acts or any failures to act by any Subcustodian (other than a BNY Affiliate), Custodian shall take appropriate action to recover such Losses from such Subcustodian; and Custodian’s sole responsibility and liability to the Fund shall be limited to amounts so received from such Subcustodian (exclusive of costs and expenses incurred by Custodian). In no event shall Custodian be liable to the Fund or any third party for special, indirect or consequential damages, or lost profits or loss of business, arising in connection with this Agreement, nor shall BNY or any Subcustodian be liable: (i) for acting in accordance with any Certificate or Oral Instructions actually received by Custodian and reasonably believed by Custodian to be given by an Authorized Person; (ii) for acting in accordance with Instructions without reviewing the same; (iii) for conclusively presuming that all Instructions are given only by person(s) duly authorized; (iv) for conclusively presuming that all disbursements of cash directed by the Fund, whether by a Certificate, an Oral Instruction, or an Instruction, are in accordance with Section 2(i) of Article II hereof; (v) for holding property in any particular country, including, but not limited to, Losses resulting from nationalization, expropriation or other governmental actions; regulation of the banking or securities industry; exchange or currency controls or restrictions, devaluations or fluctuations; availability of cash or Securities or market conditions which prevent the transfer of property or execution of Securities transactions or affect the value of property; (vi) for any Losses due to forces beyond the control of Custodian, including without limitation strikes, work stoppages, acts of war or terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of God, or interruptions, loss or malfunctions of utilities, communications or computer (software and

hardware) services; (vii) for the insolvency of any Subcustodian (other than a BNY Affiliate), any Depository, or, except to the extent such action or inaction is a direct result of the Custodian’s failure to fulfill its duties hereunder, any Foreign Depository; or (viii) for any Losses arising from the applicability of any law or regulation now or hereafter in effect, or from the occurrence of any event, including, without limitation, implementation or adoption of any rules or procedures of a Foreign Depository, which may affect, limit, prevent or impose costs or burdens on, the transferability, convertibility, or availability of any currency or Composite Currency Unit in any country or on the transfer of any Securities, and in no event shall Custodian be obligated to substitute another currency for a currency (including a currency that is a component of a Composite Currency Unit) whose transferability, convertibility or availability has been affected, limited, or prevented by such law, regulation or event, and to the extent that any such law, regulation or event imposes a cost or charge upon Custodian in relation to the transferability, convertibility, or availability of any cash currency or Composite Currency Unit, such cost or charge shall be for the account of the Fund, and Custodian may treat any account denominated in an affected currency as a group of separate accounts denominated in the relevant component currencies.

2. Without limiting the generality of the foregoing, Custodian shall be under no obligation to inquire into, and shall not be liable for:

3. Custodian may, with respect to questions of law specifically regarding an Account, obtain the advice of counsel and shall be fully protected with respect to anything done or omitted by it in good faith in conformity with such advice.

4. Custodian shall be under no obligation to take action to collect any amount payable on Securities in default, or if payment is refused after due demand and presentment.

5. Custodian shall have no duty or responsibility to inquire into, make recommendations, supervise, or determine the suitability of any transactions affecting any Account.

6. The Fund shall pay to Custodian the fees and charges as may be specifically agreed upon from time to time and such other fees and charges at Custodian’s standard rates for such services as may be applicable. The Fund shall reimburse Custodian for all costs associated with

the conversion of the Fund’s Securities hereunder and the transfer of Securities and records kept in connection with this Agreement. The Fund shall also reimburse Custodian for out-of-pocket expenses which are a normal incident of the services provided hereunder.

7. Custodian has the right to debit any cash account for any amount payable by the Fund in connection with any and all obligations of the Fund to Custodian. In addition to the rights of Custodian under applicable law and other agreements, at any time when the Fund shall not have honored any of its obligations to Custodian, Custodian shall have the right without notice to the Fund to retain or set-off, against such obligations of the Fund, any Securities or cash Custodian or a BNY Affiliate may directly or indirectly hold for the account of the Fund, and any obligations (whether matured or unmatured) that Custodian or a BNY Affiliate may have to the Fund in any currency or Composite Currency Unit. Any such asset of, or obligation to, the Fund may be transferred to Custodian and any BNY Affiliate in order to effect the above rights.

8. The Fund agrees to forward to Custodian a Certificate or Instructions confirming Oral Instructions by the close of business of the same day that such Oral Instructions are given to Custodian. The Fund agrees that the fact that such confirming Certificate or Instructions are not received or that a contrary Certificate or contrary Instructions are received by Custodian shall in no way affect the validity or enforceability of transactions authorized by such Oral Instructions and effected by Custodian. If the Fund elects to transmit Instructions through an on-line communications system offered by Custodian, the Fund’s use thereof shall be subject to the Terms and Conditions attached as Appendix I hereto, and Custodian shall provide user and authorization codes, passwords and authentication keys only to an Authorized Person or a person reasonably believed by Custodian to be an Authorized Person.

9. The books and records pertaining to the Fund which are in possession of Custodian shall be the property of the Fund. Such books and records shall be prepared and maintained as required by the ‘40 Act and the rules thereunder. The Fund, or its authorized representatives, shall have access to such books and records during Custodian’s normal business hours. Upon the reasonable request of the Fund, copies of any such books and records shall be provided by Custodian to the Fund or its authorized representative. Upon the reasonable request of the Fund, Custodian shall provide in hard copy or on computer disc any records included in any such delivery which are maintained by Custodian on a computer disc, or are similarly maintained.

10. Custodian agrees that all non-public books, records and information prepared or maintained by it in connection with its performance of services under this Agreement shall remain confidential and shall not be voluntarily disclosed to any other person, entity or organization, except Custodian may disclose the same to its examiners, regulators, and its internal and external accountants, auditors and counsel, and to any other person, entity or organization if the Custodian is advised by its counsel that it could be liable for a failure to do so. In the event of any demand served on or received by Custodian for the production or release of any non-public books, records or information, Custodian shall endeavor where circumstances permit promptly to notify the Fund of such demand or request and to seek permission from the Fund.

11. It is understood that Custodian is authorized to supply any information regarding the Accounts which is required by any law, regulation or rule now or hereafter in effect. The Custodian shall provide the Fund with any report obtained by the Custodian on the system of internal accounting control of a Depository, and with such reports on its own system of internal accounting control as the Fund may reasonably request from time to time.

12. Custodian shall have no duties or responsibilities whatsoever except such duties and responsibilities as are specifically set forth in this Agreement, and no covenant or obligation shall be implied against Custodian in connection with this Agreement.

1. Either of the parties hereto may terminate this Agreement by giving to the other party a notice in writing specifying the date of such termination, which shall be not less than ninety (90) days after the date of giving of such notice. In the event such notice is given by the Fund, it shall be accompanied by a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, electing to terminate this Agreement and designating a successor custodian or custodians, each of which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits. In the event such notice is given by Custodian, the Fund shall, on or before the termination date, deliver to Custodian a copy of a resolution of the board of the Fund, certified by the Secretary or any Assistant Secretary, designating a successor custodian or custodians. In the absence of such designation by the Fund, Custodian may designate a successor custodian which shall be a bank or trust company having not less than $2,000,000 aggregate capital, surplus and undivided profits. Upon the date set forth in such notice this Agreement shall terminate, and Custodian shall upon receipt of a notice of acceptance by the successor custodian on that date deliver directly to the successor custodian all Securities and money then owned by the Fund and held by it as Custodian, after deducting all fees, expenses and other amounts for the payment or reimbursement of which it shall then be entitled.

2. If a successor custodian is not designated by the Fund or Custodian in accordance with the preceding Section, the Fund shall upon the date specified in the notice of termination of this Agreement and upon the delivery by Custodian of all Securities (other than Securities which cannot be delivered to the Fund) and money then owned by the Fund be deemed to be its own custodian and Custodian shall thereby be relieved of all duties and responsibilities pursuant to this Agreement, other than the duty with respect to Securities which cannot be delivered to the Fund to hold such Securities hereunder in accordance with this Agreement.

1. The Fund agrees to furnish to Custodian a new Certificate of Authorized Persons in the event of any change in the then present Authorized Persons. Until such new Certificate is received, Custodian shall be fully protected in acting upon Certificates or Oral Instructions of such present Authorized Persons.

2. Any notice or other instrument in writing, authorized or required by this Agreement to be given to Custodian, shall be sufficiently given if addressed to Custodian and received by it at its offices at 100 Church Street, New York, New York 10286, or at such other place as Custodian may from time to time designate in writing.

3. Any notice or other instrument in writing, authorized or required by this Agreement to be given to the Fund shall be sufficiently given if addressed to the Fund and received by it at its offices at 100 Mulberry Street, Newark, New Jersey 07102, or at such other place as the Fund may from time to time designate in writing.

4. Each and every right granted to either party hereunder or under any other document delivered hereunder or in connection herewith, or allowed it by law or equity, shall be cumulative and may be exercised from time to time. No failure on the part of either party to exercise, and no delay in exercising, any right will operate as a waiver thereof, nor will any single or partial exercise by either party of any right preclude any other or future exercise thereof or the exercise of any other right.

5. In case any provision in or obligation under this Agreement shall be invalid, illegal or unenforceable in any exclusive jurisdiction, the validity, legality and enforceability of the remaining provisions shall not in any way be affected thereby. This Agreement may not be amended or modified in any manner except by a written agreement executed by both parties, except that any amendment to the Schedule I hereto need be signed only by the Fund and any amendment to Appendix I hereto need be signed only by Custodian. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns; provided, however, that this Agreement shall not be assignable by either party without the written consent of the other.

6. This Agreement shall be construed in accordance with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof. The Fund and Custodian hereby consent to the jurisdiction of a state or federal court situated in New York City, New York in connection with any dispute arising hereunder. The Fund hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a court has been brought in an inconvenient forum. The Fund and Custodian each hereby irrevocably waives any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement.

7. Nothing combined in this Agreement shall affect the terms and conditions of that certain Foreign Custody Manager Agreement between The Bank of New York and the Fund of each date.

8. Custodian shall annually provide to the Fund its FAS 70 Report.

9. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one instrument.

10. All references herein to the “Fund” are to each of the Funds listed on the attached Schedule A individually, as if this Agreement were between such individual Fund and the Custodian. Without limiting the generality of the foregoing, no Fund or series of a Fund shall be liable for any obligations of any other Fund or series, as applicable.

11. With respect to each Fund listed on Schedule A that is a Massachusetts business trust, all persons dealing with the Fund must look solely to the property of the Fund for the enforcement of any claims against the Fund as neither the Directors/Trustees, officers, agents or shareholders assume any personal liability for obligations entered into on behalf of the Fund.

12. This Agreement contains the full and complete understanding between the parties with respect to the transactions covered and contemplated hereunder, and supersedes all prior agreements or understandings between the parties relating to the subject matter hereof, whether oral or written, express or implied.

13. The Custodian agrees to provide to the Fund such certifications with respect to the Sarbanes-Oxley Act of 2002, as Custodian generally provides to its mutual fund custodial customers.

8. EXPORT RESTRICTIONS . EXPORT OF THE SOFTWARE IS PROHIBITED BY UNITED STATES LAW. THE FUND MAY NOT UNDER ANY CIRCUMSTANCES RESELL, DIVERT, TRANSFER, TRANSSHIP OR OTHERWISE DISPOSE OF THE SOFTWARE (IN ANY FORM) IN OR TO ANY OTHER COUNTRY. IF CUSTODIAN DELIVERED THE SOFTWARE TO THE FUND OUTSIDE OF THE UNITED STATES, THE SOFTWARE WAS EXPORTED FROM THE UNITED STATES IN ACCORDANCE WITH THE EXPORTER ADMINISTRATION REGULATIONS. DIVERSION CONTRARY TO U.S. LAW IS PROHIBITED. The Fund hereby authorizes Custodian to report its name and address to government agencies to which Custodian is required to provide such information by law.

1. Schedule A of the Custody Agreement shall be amended as set forth in Exhibit I to this Amendment, attached hereto and made a part hereof.

2. Each party represents to the other that this Amendment has been duly executed.

3. This Amendment may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts, shall, together, constitute only one amendment.

A. Use of Material Nonpublic Information

B. Prudential Insider Trading Rules

C. What is Nonpublic Information?

D. What is Material Information?

E . “Front-running” and “Scalping”

F. Private Securities Transactions

G. Charitable Gifts

H. Penalties for Insider Trading(3)

A. The “SMARTS” System

B. Covered , Access and Supervised Persons

C. Trade Reporting Requirements

A. Designated Persons

B. Specific Trading Requirements

C. Supervisory Responsibilities

D. Violations to the Policy

A. Trade Monitoring for Associates of a Broker/Dealer

B. Restrictions on the Purchase and Sale of Initial Equity Public Offerings

C. Private Securities Transactions

D. Additional Restrictions for PEG Associates

A. Background

B. Definitions

C. Conflicts of Interest

D. Mutual Fund Reporting and Trading Restrictions

E. Additional Trading Restrictions for Access and Investment Personnel of PIM and Quantitative Management Associates LLC (“QMA”)

F. Investment Clubs

G. Prohibited Transactions Involving Securities Issued by Prudential

H. Preclearance

I. Exemptions

J. Personal Trade Reporting

K. Personal Securities Holdings

L. Service as a Director

M. Gifts

N. Code Violations and Sanctions

O. Reports to Clients

P. Additional Trading Requirements for Access Persons of Global Portfolio Strategies Inc. (“GPSI”)

A. Background

B. Conflicts of Interest

C. Requirements of Private-Side Associates

D. Private Side Monitored List & Global Real Estate Monitored List

E. Investment Clubs

F. Mutual Fund Reporting and Trading Restrictions

D. Personal Securities Holdings

E. Private Placements

F. Initial Public Offerings

G. Additional Restrictions for Certain Units

A. Associated Persons’ Securities Accounts

B. Definition of “Employee Account” and “Employee Related Account”

C. Investment Clubs

D. Personal Trading Restrictions

E. Restricted List

F. Additional Trading Restrictions for Certain PEG Departments

Exhibit 1 – Sample Letter to Brokerage Firm

Exhibit 2 – Acknowledgment of the Personal Securities Trading Policy

Exhibit 3 – Compliance and Reporting of Personal Transactions

Exhibit 4 – Index Options On a Broad-Based Index

Exhibit 5 – Personal Securities Holdings Report

Exhibit 6 — Section 16 Insiders and Designated Persons Preclearance Request Form

Exhibit 7 — Non Proprietary Subadvised Mutual Funds

Exhibit 8 – Initial Public Offering and Private Placement Preclearance Form for Access Persons and Private-Side Associates

Section 1. Principal Office . Until changed by the Trustees, the principal office of the Trust in The Commonwealth of Massachusetts shall be in the City of Boston, County of Suffolk.

Section 2. Other Offices . The Trust may have offices in such other places without as well as within the Commonwealth as the Trustees may from time to time determine.

to inform the Trust of his or her current address or if a written waiver of notice, executed before or after the meeting by the Shareholder or his or her attorney thereunto authorized, is filed with the records of the meeting.

charge or management of such Share, he or she may vote by his or her guardian or such other person appointed or having such control, and such vote may be given in person or by proxy.

Section 5. Inspection of Records . The records of the Trust shall be open to inspection by Shareholders to the same extent as is permitted shareholders of a Massachusetts business corporation.

(subject to the same limitations as with respect to the Executive Committee) and the term of membership on such Committees to be determined by the Trustees. The Trustees may designate a chairman of any such Committee. In the absence of such designation the Committee may elect its own Chairman.

same person. The President shall hold no other office. Except as above provided, any two offices may be held by the same person. Any officer may be but none need be a Trustee or Shareholder.

or her duties, if required so to do by the Trustees, in such sum and with such surety or sureties as the Trustees shall require.

be transferred or pledged by bookkeeping entry without physical delivery of such securities, provided that all such deposits shall be subject to withdrawal only upon the order of the Trust.

2. “BNY Affiliate” shall mean any office, branch or subsidiary of The Bank of New York Company, Inc.

3. “Book-Entry System” shall mean the Federal Reserve/Treasury book-entry system for receiving and delivering securities, its successors and nominees.

4. “Business Day” shall mean any day on which Custodian and relevant Depositories are open for business.

6. “Composite Currency Unit” shall mean the Euro or any other composite currency unit consisting of the aggregate of specified amounts of specified currencies, as such unit may be constituted from time to time.

9. “Instructions” shall mean communications transmitted by electronic or telecommunications media, including S.W.I.F.T., computer-to-computer interface, or dedicated transmission lines.

10. “Oral Instructions” shall mean verbal instructions received by Custodian from an Authorized Person or from a person reasonably believed by Custodian to be an Authorized Person.

11. “Series” shall mean the various portfolios, if any, of the Funds listed on Schedule A hereto, and if none are listed references to Series shall be references to the Funds.

2. The Fund hereby represents and warrants, which representations and warranties shall be continuing and shall be deemed to be reaffirmed upon each delivery of a Certificate or each giving of Oral Instructions or Instructions by the Fund, that:

2. Custodian shall furnish the Fund with an advice of daily transactions (including a confirmation of each transfer of Securities) and a monthly summary of all transfers to or from the Accounts.

3. With respect to all Securities held hereunder, Custodian shall, unless otherwise instructed to the contrary:

(b) Custodian may from time to time establish on its books and records such sub-accounts within each Account as the Fund and Custodian may agree upon (each a “Special

Account”), and Custodian shall reflect therein such assets as the Fund may specify in a Certificate or Instructions.

(c) Custodian may from time to time establish pursuant to a written agreement with and for the benefit of a broker, dealer, futures commission merchant or other third party identified in a Certificate or Instructions such accounts on such terms and conditions as the Fund and Custodian shall agree, and Custodian shall transfer to such account such Securities and money as the Fund may specify in a Certificate or Instructions.

(c) It is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted;

(d) It will not knowingly use the services provided by Custodian hereunder in any manner that is, or will result in, a violation of any law, rule or regulation applicable to the Fund;

(e) Unless The Bank of New York is the Fund’s foreign custody manager, as defined in Rule 17f-5 under the Investment Company Act of 1940, as amended (the “‘40 Act”), either its board or its foreign custody manager has determined that use of each Subcustodian (including any Replacement Custodian) and each Depository which Custodian or any Subcustodian is authorized to utilize in accordance with Section 1(a) of Article III hereof, satisfies the applicable requirements of the ‘40 Act and Rules 17f-4 or 17f-5 thereunder, as the case may be;

(f) The Fund or its investment adviser has determined that the custody arrangements of each Foreign Depository provide reasonable safeguards against the custody risks associated with maintaining assets with such Foreign Depository within the meaning of Rule 17f-7 under the ‘40 Act;

(g) It is fully informed of the protections and risks associated with various methods of transmitting Instructions and Oral Instructions and delivering Certificates to Custodian, understands that there may be more secure methods of transmitting or delivering the

same than the methods selected by the Fund, agrees that the security procedures (if any) to be utilized provide a commercially reasonable degree of protection in light of its particular needs and circumstances, and acknowledges and agrees that Instructions need not be reviewed by Custodian, may conclusively be presumed by Custodian to have been given by person(s) duly authorized, and may be acted upon as given;

(h) It shall manage its borrowings, including, without limitation, any advance or overdraft (including any day-light overdraft) in the Accounts, so that the aggregate of its total borrowings for each Fund does not exceed the amount such Fund is permitted to borrow under the ‘40 Act;

(i) Its transmission or giving of, and Custodian acting upon and in reliance on, Certificates, Instructions, or Oral Instructions pursuant to this Agreement shall at all times comply with the ‘40 Act;

(j) It shall impose and maintain restrictions on the destinations to which cash may be disbursed by Instructions to ensure that each disbursement is for a proper purpose; and

(k) It has the right to make the pledge and grant the security interest and security entitlement to Custodian contained in Section 1 of Article V hereof, free of any right of redemption or prior claim of any other person or entity, such pledge and such grants shall have a first priority subject to no setoffs, counterclaims, or other liens or grants prior to or on a parity therewith, and it shall take such additional steps as Custodian may require to assure such priority.

(b) Unless Custodian has received a Certificate or Instructions to the contrary, Custodian shall hold Securities indirectly through a Subcustodian only if (i) the Securities are not subject to any right, charge, security interest, lien or claim of any kind in favor of such Subcustodian or its creditors or operators, including a receiver or trustee in bankruptcy or similar authority, except for a claim of payment for the safe custody or administration of Securities on behalf of the Fund by such Subcustodian, and (ii) beneficial ownership of the Securities is freely transferable without the payment of money or value other than for safe custody or administration.

(c) With respect to each Foreign Depository, Custodian shall exercise reasonable care, prudence, and diligence (i) to provide the Fund with an analysis of the custody risks associated with maintaining assets with the Foreign Depository, and (ii) to monitor such custody risks on a continuing basis and promptly notify the Fund of any material change in such risks in accordance with the requirements of the ‘40 Act and Rule 17f-7 hereunder. The Fund acknowledges and agrees that such analysis and monitoring shall be made on the basis of, and limited by, information gathered from Subcustodians or through publicly available information otherwise obtained by Custodian, and shall not include any evaluation of Country Risks. As used herein the term “Country Risks” shall mean with respect to any Foreign Depository: (a) the financial infrastructure of the country in which it is organized, (b) such country’s prevailing custody and settlement practices, (c) nationalization, expropriation or other governmental actions, (d) such country’s regulation of the banking or securities industry, (e) currency controls, restrictions, devaluations or fluctuations, and (f) market conditions which affect the order execution of securities transactions or affect the value of securities. In the event that the Custodian shall determine that a Foreign Depository no longer meets the requirements of Rule 17f-7, the Fund’s assets maintained in such Foreign Depository shall be withdrawn as soon as reasonably practical, and the Custodian shall notify the Fund of any securities maintained in any such Foreign Depository which may not be withdrawn.

(b) Whenever Securities (including, but not limited to, warrants, options, tenders, options to tender or non-mandatory puts or calls) confer discretionary rights on the Fund or provide for discretionary action or alternative courses of action by the Fund, the Fund shall be responsible for making any decisions relating thereto and for directing Custodian to act. In order for Custodian to act, it must receive the Fund’s Certificate or Instructions at Custodian’s offices, addressed as Custodian may from time to time request, not later than noon (New York time) at least two (2) Business Days prior to the last scheduled date to act with respect to such Securities (or such earlier date or time as Custodian may specify in writing to the Fund). Absent Custodian’s timely receipt of such Certificate or Instructions, Custodian shall not be liable for failure to take any action relating to or to exercise any rights conferred by such Securities, provided that Custodian shall have provided prompt timely notice of any notice it actually received.

(b) Any foreign exchange transaction effected by Custodian in connection with this Agreement may be entered with Custodian or a BNY Affiliate acting as principal or otherwise through customary banking channels. The Fund may issue a standing Certificate or Instructions with respect to foreign exchange transactions, but Custodian may establish rules or limitations concerning any foreign exchange facility made available to the Fund. The Fund shall bear all risks of investing in Securities or holding cash denominated in a foreign currency.

(b) Custodian may enter into subcontracts, agreements and understandings with any BNY Affiliate, whenever and on such terms and conditions as it deems necessary or appropriate to perform its services hereunder. No such subcontract, agreement or understanding shall discharge Custodian from its obligations hereunder or result in any additional costs to a Fund except as otherwise provided in the Fee Schedule between the Funds and the Custodian.

(c) The Fund agrees to indemnify Custodian and hold Custodian harmless from and against any and all Losses sustained or incurred by or asserted against Custodian by reason of or as a result of any action or inaction, or arising out of Custodian’s performance hereunder, including reasonable fees and expenses of counsel incurred by Custodian in a successful defense of claims by the Fund; provided however, that the Fund shall not indemnify Custodian for those Losses arising out of Custodian’s own negligence or willful misconduct. This indemnity shall be a continuing obligation of the Fund, its successors and assigns, notwithstanding the termination of this Agreement.

1. Penalties for Individuals

2. Penalties for Supervisors

3. Penalties for Prudential

1. Authorized Broker-Dealer Requirements

2. Authorized Broker-Dealer Exceptions

3. Trade Reporting Requirements for Exception Accounts

4. Personal and Family Member Accounts

5. Reportable Securities Transactions

6. Confidentiality of Trading Information

7. Prohibited Transactions

8. Additional Requirements

1. Brokerage Account Requirements for Designated Persons

2. Trade Reporting Requirements for Accounts with Non-Authorized Broker-Dealers

3. Trading Windows/Blackout Periods

4. Preclearance of Trading in Securities Issued by Prudential

5. Prohibited Transactions

6. PESP

1. Notification Requirements for Personal Securities Accounts

2. Annual Compliance Training and Sign-off

3. Requirement for Supervised Persons

1. Advisers Act Requirements

2. Investment Company Act Requirements

1. Mutual Fund Holding Period

2. Policies Relating to Reporting and Trading Mutual Funds

1. Initial Public Offerings

2. Private Placements

3. Blackout Periods — “7 Day Rule”

4. Short -Term Trading Profits

5. Short Sales

6. Options

1. Ineligible securities.

2. Exercise of rights issued by issuer.

3. De minimis trades.

4. Discretionary accounts.

5. Index options.

6. Unit investment trusts and open-end mutual funds.

7. Non -volitional transactions and dividend reinvestment plans.

8. Exceptions by prior written approval.

9. Automatic Investment/Withdrawal Programs and Automatic Rebalancing.

1. Initial Public Offerings

2. Private Placements

3. Restricted Lists

1. Mutual Fund Holding Period

2. Policies Relating to Reporting and Trading Mutual Funds

1. Real Estate Units

2. Prudential Capital Group

1. Trade Monitoring at PEG

1. Purchases of Public Equity Offerings

2. Private Securities Transactions

3. Annual Compliance Training

4. 24 - Hour Research Report Restriction

1. Trading Restrictions

2. Preclearance Procedures

(b) Custodian may from time to time establish on its books and records such sub-accounts within each Account as the Fund and Custodian may agree upon (each a “Special

Account”), and Custodian shall reflect therein such assets as the Fund may specify in a Certificate or Instructions.

(c) It is conducting its business in substantial compliance with all applicable laws and requirements, both state and federal, and has obtained all regulatory licenses, approvals and consents necessary to carry on its business as now conducted;

(d) It will not knowingly use the services provided by Custodian hereunder in any manner that is, or will result in, a violation of any law, rule or regulation applicable to the Fund;

(f) The Fund or its investment adviser has determined that the custody arrangements of each Foreign Depository provide reasonable safeguards against the custody risks associated with maintaining assets with such Foreign Depository within the meaning of Rule 17f-7 under the ‘40 Act;

(g) It is fully informed of the protections and risks associated with various methods of transmitting Instructions and Oral Instructions and delivering Certificates to Custodian, understands that there may be more secure methods of transmitting or delivering the

(h) It shall manage its borrowings, including, without limitation, any advance or overdraft (including any day-light overdraft) in the Accounts, so that the aggregate of its total borrowings for each Fund does not exceed the amount such Fund is permitted to borrow under the ‘40 Act;

(i) Its transmission or giving of, and Custodian acting upon and in reliance on, Certificates, Instructions, or Oral Instructions pursuant to this Agreement shall at all times comply with the ‘40 Act;

(j) It shall impose and maintain restrictions on the destinations to which cash may be disbursed by Instructions to ensure that each disbursement is for a proper purpose; and

(a) It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement, and to perform its obligations hereunder;

(b) This Agreement has been duly authorized, executed and delivered by the Fund, approved by a resolution of its board, constitutes a valid and legally binding obligation of the Fund, enforceable in accordance with its terms, and there is no statute, regulation, rule, order or judgment binding on it, and no provision of its charter or by-laws, nor of any mortgage, indenture, credit agreement or other contract binding on it or affecting its property, which would prohibit its execution or performance of this Agreement;

(a) Receive all income and other payments and advise the Fund as promptly as practicable of any such amounts due but not paid;

(b) Present for payment and receive the amount paid upon all Securities which may mature and advise the Fund as promptly as practicable of any such amounts due but not paid;

(c) Forward to the Fund copies of all information or documents that it may actually receive from an issuer of Securities which, in the opinion of Custodian, are intended for the beneficial owner of Securities;

(d) Execute, as custodian, any certificates of ownership, affidavits, declarations or other certificates under any tax laws now or hereafter in effect in connection with the collection of bond and note coupons;

(e) Hold directly or through a Depository, a Foreign Depository, or a Subcustodian all rights and similar Securities issued with respect to any Securities credited to an Account hereunder; and

(f) Endorse for collection checks, drafts or other negotiable instruments.

(a) Any Losses incurred by the Fund or any other person as a result of the receipt or acceptance of fraudulent, forged or invalid Securities, or Securities which are otherwise not freely transferable or deliverable without encumbrance in any relevant market;

(b) The validity of the issue of any Securities purchased, sold, or written by or for the Fund, the legality of the purchase, sale or writing thereof, or the propriety of the amount paid or received therefor;

(c) The legality of the sale or redemption of any Shares, or the propriety of the amount to be received or paid therefor;

(d) The legality of the declaration or payment of any dividend or distribution by the Fund;

(e) The legality of any borrowing by the Fund;

(f) The legality of any loan of portfolio Securities, nor shall Custodian be under any duty or obligation to see to it that any cash or collateral delivered to it by a broker, dealer or financial institution or held by it at any time as a result of such loan of portfolio Securities is adequate security for the Fund against any loss it might sustain as a result of such loan, which duty or obligation shall be the sole responsibility of the Fund. In addition, Custodian shall be under no duty or obligation to see that any broker, dealer or financial institution to which portfolio Securities of the Fund are lent makes payment to it of any dividends or interest which are payable to or for the account of the Fund during the period of such loan or at the termination of such loan, provided, however that Custodian shall promptly notify the Fund in the event that such dividends or interest are not paid and received when due;

(g) The sufficiency or value of any amounts of money and/or Securities held in any Special Account in connection with transactions by the Fund; whether any broker, dealer, futures commission merchant or clearing member makes payment to the Fund of any variation margin payment or similar payment which the Fund may be entitled to receive from such broker, dealer, futures commission merchant or clearing member, or whether any payment received by Custodian from any broker, dealer, futures commission merchant or clearing member is the amount the Fund is entitled to receive, or to notify the Fund of Custodian’s receipt or non-receipt of any such payment; or

(h) Whether any Securities at any time delivered to, or held by it or by any Subcustodian, for the account of the Fund and specifically allocated to a Fund are such as properly may be held by the Fund or such Fund under the provisions of its then current prospectus and statement of additional information, or to ascertain whether any transactions by the Fund, whether or not involving Custodian, are such transactions as may properly be engaged in by the Fund.

Which accounts are restricted:

Example:

a. Research Department

b. Trading Department

(a) It is duly organized and existing under the laws of the jurisdiction of its organization, with full power to carry on its business as now conducted, to enter into this Agreement, and to perform its obligations hereunder;

(a) Receive all income and other payments and advise the Fund as promptly as practicable of any such amounts due but not paid;

(b) Present for payment and receive the amount paid upon all Securities which may mature and advise the Fund as promptly as practicable of any such amounts due but not paid;

(c) Forward to the Fund copies of all information or documents that it may actually receive from an issuer of Securities which, in the opinion of Custodian, are intended for the beneficial owner of Securities;

(d) Execute, as custodian, any certificates of ownership, affidavits, declarations or other certificates under any tax laws now or hereafter in effect in connection with the collection of bond and note coupons;

(e) Hold directly or through a Depository, a Foreign Depository, or a Subcustodian all rights and similar Securities issued with respect to any Securities credited to an Account hereunder; and

Trading Policy

As filed with the Securities and Exchange Commission
on June 29, 2005

Securities Act Registration No. 33-10649
Investment Company Act Registration No. 811-4930

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 o

PRE-EFFECTIVE AMENDMENT NO. o

POST-EFFECTIVE AMENDMENT NO. 27 x

  and/or
  REGISTRATION STATEMENT UNDER THE
  INVESTMENT COMPANY ACT OF 1940   o

Amendment No. 31 x

(Check appropriate box or boxes)

DRYDEN MUNICIPAL BOND FUND

(Exact name of registrant as specified in charter)

(formerly Prudential Municipal Bond Fund)

GATEWAY CENTER THREE
100 MULBERRY STREET
NEWARK, NEW JERSEY 07102

(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (973) 802-6469

Jonathan D. Shain, Esq.
Gateway Center Three
100 Mulberry Street
Newark, New Jersey 07102

(Name and Address of Agent for Service)

Approximate date of proposed public offering:

As soon as practicable after the effective
date of the Registration Statement.

It is proposed that this filing will become effective
(check appropriate box):

x immediately upon filing pursuant to paragraph (b)

o on (date) pursuant to paragraph (b)

o 60 days after filing pursuant to paragraph (a)(1)

o on (date) pursuant to paragraph (a)(1)

o 75 days after filing pursuant to paragraph (a)(2)

o on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:

o this post-effective amendment designates a new effective date
for a previously filed post-effective amendment.

Dryden Municipal Bond Fund
Insured Series
High Income Series

JUNE 29, 2005

PROSPECTUS

FUND TYPE

Municipal bond

OBJECTIVE

Insured Series:

Maximum amount of income that is eligible for exclusion from federal income taxes consistent with the preservation of capital High Income Series: Maximum amount of income that is eligible for exclusion from federal income taxes

As with all mutual funds, the Securities and Exchange Commission has not approved or disapproved the Fund's shares nor has the SEC determined that this prospectus is complete or accurate. It is a criminal offense to state otherwise.

JennisonDryden is a service mark of The Prudential Insurance Company of America, Newark, NJ, and its affiliates.

Table of Contents

1 Risk/Return Summary

Insured Series:

1 Investment Objective and Principal Strategies

2 Principal Risks

3 Evaluating Performance

5 Fees and Expenses of the Series

High Income Series:

7 Investment Objective and Principal Strategies

8 Principal Risks

9 Evaluating Performance

11 Fees and Expenses of the Series

13 How the Fund Invests

13 Insured Series: Investment Objective and Policies

14 High Income Series: Investment Objective and Policies

15 Other Investments and Strategies

19 Investment Risks

26 How the Fund is Managed

26 Board of Trustees

26 Manager

27 Investment Adviser

28 Distributor

28 Disclosure of Portfolio Holdings

29 Fund Distributions and Tax Issues

29 Distributions

30 Tax Issues

31 If You Sell or Exchange Your Shares

32 How to Buy, Sell and Exchange Shares of the Fund

32 How to Buy Shares

42 How to Sell Your Shares

45 How to Exchange Your Shares

49 Telephone Redemptions or Exchanges

50 Expedited Redemption Privilege

Table of Contents

51 Financial Highlights

Insured Series:

52 Class A Shares

53 Class B Shares

54 Class C Shares

55 Class Z Shares

High Income Series:

56 Class A Shares

57 Class B Shares

58 Class C Shares

59 Class Z Shares

A-1 Description of Security Ratings

For More Information (Back Cover)

Risk/Return Summary

This prospectus provides information about Dryden Municipal Bond Fund (the Fund), which consists of two separate series - the Insured Series and the High Income Series (each, a Series). While the two Series have some common attributes, each one has its own investment objective and policies, performance information, financial highlights and risks. Therefore, some sections of this prospectus deal with each Series separately, while other sections address both Series at the same time.

In sections that concern just the Insured Series, "the Series" refers to the Insured Series. In sections that concern just the High Income Series, "the Series" refers to the High Income Series.

This section highlights key information about each Series. Additional information follows this summary.

INSURED SERIES
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES

Our investment objective is to provide the maximum amount of income that is eligible for exclusion from federal income taxes, consistent with the preservation of capital. To achieve our objective, as a fundamental policy of the Series, we invest, under normal circumstances, at least 80% of the Series' investable assets in insured municipal bonds, which are fixed-income securities issued by states and municipalities. The Series' investments permitted by this policy may include certain municipal bonds, the interest on which is subject to the federal alternative minimum tax (AMT). The term "investable assets" in this prospectus refers to the Series' net assets plus any borrowings for investment purposes. The Series' investable assets will be less than its total assets to the extent that it has borrowed money for non-investment purposes, such as to meet anticipated redemptions. The Series' portfolio consists primarily of municipal bonds that are (1) insured by an entity whose claims-paying ability at the time of purchase is rated Aaa by Moody's Investors Service (Moody's) or AAA by Standard and Poor's Ratings Service (S&P) or comparably rated by another major rating service so that the bond is rated AAA or Aaa or meets the eligibility criteria imposed by such insurers or (2) backed by the full faith and credit of the U.S. Government. Under normal circumstances, at least 80% of the Series' investable assets will consist of insured municipal bonds, which are municipal bonds whose interest and/or principal payments are insured by the bond issuers or other parties.

Dryden Municipal Bond Fund 1

Risk/Return Summary

respect to insurers of municipal bonds. The investment adviser will also seek to take advantage of differentials in yields with respect to securities with similar credit ratings and maturities, but which vary according to the purpose for which they were issued, as well as securities issued for similar purposes with similar maturities, but which vary according to ratings. While we make every effort to achieve our objective, we can't guarantee success.

PRINCIPAL RISKS

Although we try to invest wisely, all investments involve risk. Since the Series invests at least 80% of its investable assets in insured municipal bonds, there is the risk that the bonds may lose value because interest rates rise or because there is a lack of confidence in the issuer or in the bond's insurer. Bonds with longer maturity dates typically produce higher yields and are subject to greater price fluctuations as a result of changes in interest rates than bonds with shorter maturity dates.

Bond prices and the Series' net asset value generally move in opposite directions from interest rates - if interest rates go up, the prices of the bonds in the Series' portfolio may fall because the bonds the Series holds won't, as a rule, yield as much as the newer bonds issued. Bonds that are issued when interest rates are high generally increase in value when interest rates fall.

In addition to interest rate changes, municipal bonds are subject to the risk that the issuer may be unable to make principal and interest payments when they are due. The Series may purchase municipal bonds that are insured to reduce such credit risks. Although insurance coverage reduces credit risks by providing that the insurer will make timely payment of interest and/or principal, it does not provide protection against market fluctuations of insured bonds or fluctuations in the price of the shares of the Series. An insured municipal bond fluctuates in value largely based on factors relating to the insurer's creditworthiness or ability to satisfy its obligations.

Municipal bonds and, in particular, municipal leases may be subject to the risk that the state or municipality may not set aside funds in future budgets to make the bond or lease payments.

Like any mutual fund, an investment in the Series could lose value, and you could lose money. For more detailed information about the risks associated with the Series, see "How the Fund Invests - Investment Risks."

An investment in the Series is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

2 Visit our website at www.jennisondryden.com

EVALUATING PERFORMANCE

A number of factors - including risk - can affect how the Insured Series performs. The following bar chart shows the Series' performance for each full calendar year of operation for the last 10 years. The bar chart and Average Annual Total Returns table below demonstrate the risk of investing in the Series by showing how its returns can change from year to year and by showing the Series' average annual total returns compared, both before and after taxes, with a broad-based securities market index and a group of similar mutual funds.

Past performance (before and after taxes) does not mean that the Series will achieve similar results in the future.

Annual Total Returns* (Class B shares)

BEST QUARTER: 6.25% (1st quarter of 1995) WORST QUARTER: -3.01% (2nd quarter of 2004)

* These annual total returns do not include sales charges. If the sales charges were included, the annual total returns would be lower than those shown. Without the management fee waiver, the annual total returns would have been lower, too. The return of the Class B shares for the quarter ended March 31, 2005 was -0.69%.

Dryden Municipal Bond Fund 3

Risk/Return Summary

Average Annual Total Returns ¹ (as of 12/31/04)

Return Before Taxes	One Year			Five Years			Ten Years			Since Inception ⁶
Class A shares		-1.43	%		5.61	%		5.74	%		6.05	%
Class C shares		1.09			5.94			5.58			5.14
Class Z shares		2.87			6.72			N/A			5.71
Class B Shares
Return Before Taxes		-2.58	%		6.05	%		5.84	%		6.52	%
Return After Taxes on Distributions ^2,3		-2.80			5.90			5.65			6.28
Return After Taxes on Distributions and Sale of Series Shares ^2,3		-0.39			5.73			5.57			6.23
Index and Average
Lehman Muni Bond Index ⁴		4.48	%		7.20	%		7.06	%		- ⁴
Lipper Insured Average ⁵		3.21			6.40			6.09			- ⁵

1 The Series' returns are after deduction of sales charges and expenses. Without the distribution and service (12b-1) fee waiver of 0.05% and 0.25% for Class A and Class C shares, respectively, the returns would have been lower. Without waiver of fees and/or expense subsidization, the Series' returns would have been lower, as indicated in parentheses.

2 After-tax returns are calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual after-tax returns depend on an investor's tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their Series shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. After-tax returns are shown only for Class B shares. After-tax returns for other classes will vary due to differing sales charges and expenses. Past performance, before and after taxes, does not mean that the Series will achieve similar results in the future.

3 The "Return After Taxes on Distributions and Sale of Series Shares" may be higher than certain return figures because when a capital loss occurs upon the redemption of Series shares, a tax deduction is provided that benefits the investor.

4 The Lehman Brothers Municipal Bond Index (Lehman Muni Bond Index) - an unmanaged index of over 39,000 long-term investment-grade municipal bonds - gives a broad look at how long-term investment-grade municipal bonds have performed. Index returns do not include the effect of any sales charges, mutual fund operating expenses or taxes. These returns would be lower if they included the effect of sales charges, mutual fund operating expenses or taxes. The Lehman Muni Bond Index returns since the inception of each class are 7.07% for Class A, 7.56% for Class B, 6.50% for Class C and 6.29% for Class Z shares. Source: Lehman Brothers.

5 The Lipper Insured Average is based on the average return of all mutual funds in the Lipper Insured Municipal Debt Funds Category. It reflects deductions for mutual fund operating expenses, but does not include the effect of sales charges or taxes. These returns would be lower if they included the effect of sales charges or taxes. Lipper returns since the inception of each class are 6.30% for Class A, 6.92% for Class B, 5.56% for Class C and 5.23% for Class Z shares. Source: Lipper Inc.

6 Inception dates: Class A, 1/22/90; Class B, 9/17/87; Class C, 8/1/94; Class Z, 9/16/96.

4 Visit our website at www.jennisondryden.com

FEES AND EXPENSES OF THE SERIES

This table shows the sales charges, fees and expenses that you may pay if you buy and hold shares of each class of the Insured Series - Classes A, B, C and Z. Each share class has different (or no) sales charges - known as loads - and expenses, but represents an investment in the same fund. Class Z shares are available only to a limited group of investors. For more information about which share class may be right for you, see "How to Buy, Sell and Exchange Shares of the Fund."

Shareholder Fees ¹ (paid directly from your investment)

Class A

Class B

Class C

Class Z

Maximum sales charge (load) imposed on
purchases (as a percentage of offering price)

4.00

None

Maximum deferred sales charge (load) (as a
percentage of the lower of original purchase
price or sale proceeds)

% ⁴

% ²

% ³

None

Maximum sales charge (load) imposed on
reinvested dividends and other distributions

None

Redemption fees

None

Exchange fee

None

Annual Series Operating Expenses (deducted from Series assets)

	Class A			Class B			Class C			Class Z
Management fees		.50	%		.50	%		.50	%		.50	%
+ Distribution and service (12b-1) fees		.30	% ⁵		.50	%		1.00	% ⁵		None
+ Other expenses		.16	%		.16	%		.16	%		.16	%
= Total annual Series operating expenses		.96	%		1.16	%		1.66	%		.66	%
– Fee waiver or expense reimbursement		.05	% ⁵		None			.25	% ⁵		None
= Net annual Series operating expenses		.91	%		1.16	%		1.41	%		.66	%

1 Your broker may charge you a separate or additional fee for purchases and sales of shares.

2 The Contingent Deferred Sales Charge (CDSC) for Class B shares decreases by 1% annually to 1% in the fifth and sixth years and 0% in the seventh year. Class B shares automatically convert to Class A shares approximately seven years after purchase.

3 The CDSC for Class C shares is 1% for shares redeemed within 12 months of purchase (within 18 months of purchase for Class C shares purchased prior to February 2, 2004).

4 Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a CDSC of 1%. The CDSC is waived for purchases by certain retirement and/or benefit plans affiliated with Prudential Financial, Inc. (Prudential).

5 For the fiscal year ending April 30, 2005, the Distributor of the Fund contractually agreed to reduce its distribution and service (12b-1) fees for Class A and Class C shares to .25 of 1% and .75 of 1% of the average daily net assets of Class A and Class C shares, respectively. This contractual waiver will remain in effect for the fiscal year ending April 30, 2006.

Dryden Municipal Bond Fund 5

Risk/Return Summary

Example

This example is intended to help you compare the fees and expenses of the Insured Series' different share classes and compare the cost of investing in the Series with the cost of investing in other mutual funds.

The example assumes that you invest $10,000 in the Series for the time periods indicated and then sell all of your shares at the end of those periods. The example also assumes that your investment has a 5% return each year and that the Series' operating expenses remain the same, except that the contractual waiver of distribution and service (12b-1) fees for Class A and Class C shares is effective in this example for the first year. Approximately seven years after purchase, Class B shares will automatically convert to Class A shares on a quarterly basis. The information in the ten years column reflects such conversion. Although your actual costs may be higher or lower, based on these assumptions, your costs would be:

	One Year		Three Years		Five Years		Ten Years
Class A shares	$	489	$	689	$	905	$	1,527
Class B shares		618		668		738		1,327
Class C shares		244		499		879		1,944
Class Z shares		67		211		368		822

You would pay the following expenses on the same investment if you did not sell your shares:

	One Year		Three Years		Five Years		Ten Years
Class A shares	$	489	$	689	$	905	$	1,527
Class B shares		118		368		638		1,327
Class C shares		144		499		879		1,944
Class Z shares		67		211		368		822

6 Visit our website at www.jennisondryden.com

HIGH INCOME SERIES
INVESTMENT OBJECTIVE AND PRINCIPAL STRATEGIES

Our investment objective is to provide the maximum amount of income that is eligible for exclusion from federal income taxes . To achieve our objective, as a fundamental policy of the Series, we invest, under normal circumstances, at least 80% of the Series' investable assets in municipal bonds, which are fixed-income securities issued by states and municipalities whose income is free from regular federal income tax. The Series' investments permitted by this policy may include certain municipal bonds, the interest on which is subject to the federal alternative minimum tax (AMT). The investment adviser normally invests the Series' investable assets in municipal bonds that it believes may provide above-average yields. The Series' portfolio consists primarily of municipal bonds which are rated B or better by Moody's or S&P or bonds either rated by another major rating service or unrated bonds of comparable quality. Bonds rated B or Ba by Moody's or B or BB by S&P are considered to be speculative with respect to their capacity to make interest and principal payments and are commonly referred to as junk bonds . Bonds rated Baa by Moody's or BBB by S&P have certain speculative characteristics. The municipal bonds in which the Series invests generally have maturities in excess of 10 years at the time of purchase, although the Series also will invest in municipal bonds having maturities ranging from one year to 10 years, provided that the dollar-weighted average maturity of the Series' investment portfolio generally remains within the 15- to 30- year range. As of April 30, 2005, the Series' weighted average maturity was 17.9 years.

In determining which securities to buy and sell, the investment adviser will consider, among other things, yield, maturity, issue, quality characteristics and expectations regarding economic and political developments, including movements in interest rates and demand for municipal bonds. The investment adviser will attempt to anticipate interest rate movements and will purchase and sell municipal bonds accordingly. The investment adviser will also seek to take advantage of differentials in yields with respect to securities with similar credit ratings and maturities, but which vary according to the purpose for which they were issued, as well as securities issued for similar purposes with similar maturities, but which vary according to ratings. While we make every effort to achieve our objective, we can't guarantee success.

Dryden Municipal Bond Fund 7

Risk/Return Summary

PRINCIPAL RISKS

Although we try to invest wisely, all investments involve risk. The securities in which the Series invests are generally subject to the risk that the issuer may be unable to make principal and interest payments when they are due, as well as the risk that the securities may lose value because interest rates rise or because there is a lack of confidence in the issuer or in the bond's insurer. Bonds with longer maturity dates typically produce higher yields and are subject to greater price fluctuations as a result of changes in interest rates than bonds with shorter maturity dates. Bonds rated Baa by Moody's or BBB by S&P have certain speculative characteristics and are subject to a greater degree of market fluctuation and greater risk that the issuer may be unable to make principal and interest payments when they are due than higher-quality securities. Since the Series invests in lower-rated bonds, commonly known as junk bonds, there is a higher risk of default of payment of principal and interest. Furthermore, junk bonds tend to be less liquid than higher-rated securities. Therefore, an investment in the Series may not be appropriate for short-term investing.

Municipal bonds and, in particular, municipal leases may be subject to the risk that the state or municipality may not set aside funds in future budgets to make the bond or lease payments.

An investment in the Series is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

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EVALUATING PERFORMANCE

A number of factors - including risk - can affect how the High Income Series performs. The following bar chart shows the Series' performance for each full calendar year of operation for the last 10 years. The bar chart and Average Annual Total Returns table below demonstrate the risk of investing in the Series by showing how its returns can change from year to year and by showing the Series' average annual total returns compared, both before and after taxes, with two broad-based securities market indexes and a group of similar mutual funds.

Past performance (before and after taxes) does not mean that the Series will achieve similar results in the future.

Annual Total Returns* (Class B shares)

BEST QUARTER: 5.86% (1st quarter of 1995) WORST QUARTER: –2.44% (1st quarter of 1996)

Dryden Municipal Bond Fund 9

Risk/Return Summary

Average Annual Total Returns ¹ (as of 12/31/04)

Return Before Taxes	One Year			Five Years			Ten Years			Since Inception ⁸
Class A shares		1.66	%		4.65	%		5.55	%		5.96	%
Class C shares		4.28			4.98			5.39			4.98
Class Z shares		6.16			5.78			N/A			5.45
Class B Shares
Return Before Taxes		0.54	%		5.08	%		5.66	%		6.61	%
Return After Taxes on Distributions ^2,3		0.50			5.06			5.65			6.59
Return After Taxes on Distributions and Sale of Series Shares ^2,3		2.02			5.12			5.68			6.61
Indexes and Average
Lehman Muni Bond Index ⁴		4.48	%		7.20	%		7.06	%		- ⁴
Lehman Non-Investment Grade Muni Bond Index ⁵		10.52			7.17			N/A ⁶			- ⁵
Lipper High Yield Average ⁷		6.10			5.87			5.78			- ⁷

1 The Series' returns are after deduction of sales charges and expenses. Without the distribution and service (12b-1) fee waiver of 0.05% and 0.25% for Class A and Class C shares respectively, the returns would have been lower. Without waiver of fees and/or expenses subsidization, the Series' returns would have been lower, as indicated in parentheses.

5 The Lehman Brothers Non-Investment Grade Municipal Bond Index (Lehman Non-Investment Grade Muni Bond Index) - an unmanaged index of non-rated or Ba1 or below-rated municipal bonds - gives a broad look at how non-investment-grade municipal bonds have performed. The bonds in this index must have an outstanding par value of at least $3 million and be issued as part of a transaction of at least $20 million. The bonds must also have a dated-date after December 31, 1990, and be at least one year from their maturity date. Index returns do not include the effect of any sales charges, mutual fund operating expenses or taxes. These returns would be lower if they included the effect of sales charges, mutual fund operating expenses or taxes. The Lehman Non-Investment Grade Muni Bond Index return since the inception of Class Z is 6.53%. This information is not available for the other classes since the inception date of the Lehman Non-Investment Grade Muni Bond Index is October 1995. Source: Lehman Brothers.

6 This information is not available since the inception date of the Lehman Non-Investment Grade Muni Bond Index is October 1995. Source: Lehman Brothers.

7 The Lipper High Yield Average is based on the average return of all mutual funds in the Lipper High Yield Municipal Debt Funds Category. It reflects deductions for mutual fund operating expenses, but does not include the effect of sales charges or taxes. These returns would be lower if they included the effect of sales charges or taxes. Lipper returns since the inception of each class are 6.14% for Class A, 6.66% for Class B, 5.39% for Class C and 5.03% for Class Z shares. Source: Lipper Inc.

8 Inception dates: Class A, 1/22/90; Class B, 9/17/87; Class C, 8/1/94; Class Z, 9/16/96.

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FEES AND EXPENSES OF THE SERIES

This table shows the sales charges, fees and expenses that you may pay if you buy and hold shares of each class of the High Income Series - Classes A, B, C and Z. Each share class has different (or no) sales charges - known as loads - and expenses, but represents an investment in the same fund. Class Z shares are available only to a limited group of investors. For more information about which share class may be right for you, see "How to Buy, Sell and Exchange Shares of the Fund."

Shareholder Fees ¹ (paid directly from your investment)

Class A

Class B

Class C

Class Z

Maximum sales charge (load) imposed on
purchases (as a percentage of offering price)

4.00

None

Maximum deferred sales charge (load) (as a
percentage of the lower of original purchase
price or sale proceeds)

% ⁴

% ²

% ³

None

Maximum sales charge (load) imposed on
reinvested dividends and other distributions

None

Redemption fees

None

Exchange fee

None

Annual Series Operating Expenses (deducted from Series assets)

	Class A			Class B			Class C			Class Z
Management fees		.50	%		.50	%		.50	%		.50	%
+ Distribution and service (12b-1) fees		.30	% ⁵		.50	%		1.00	% ⁵		None
+ Other expenses		.11	%		.11	%		.11	%		.11	%
= Total annual Series operating expenses		.91	%		1.11	%		1.61	%		.61	%
– Fee waiver or expense reimbursement		.05	% ⁵		None			.25	% ⁵		None
= Net annual Series operating expenses ⁶		.86	%		1.11	%		1.36	%		.61	%

1 Your broker may charge you a separate or additional fee for purchases and sales of shares.

3 The CDSC for Class C shares is 1% for shares redeemed within 12 months of purchase (within 18 months of purchase for Class C shares purchased prior to February 2, 2004).

4 Investors who purchase $1 million or more of Class A shares and sell those shares within 12 months of purchase are subject to a CDSC of 1%. The CDSC is waived for purchases by certain retirement and/or benefit plans affiliated with Prudential Financial, Inc. (Prudential).

Dryden Municipal Bond Fund 11

Risk/Return Summary

Example

This example is intended to help you compare the fees and expenses of the High Income Series' different share classes and compare the cost of investing in the Series with the cost of investing in other mutual funds.

	One Year		Three Years		Five Years		Ten Years
Class A shares	$	484	$	674	$	879	$	1,470
Class B shares		613		653		712		1,270
Class C shares		238		484		853		1,890
Class Z shares		62		195		340		762

You would pay the following expenses on the same investment if you did not sell your shares:

	One Year		Three Years		Five Years		Ten Years
Class A shares	$	484	$	674	$	879	$	1,470
Class B shares		113		353		612		1,270
Class C shares		138		484		853		1,890
Class Z shares		62		195		340		762

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How the Fund Invests

Each Series invests substantially all and, in any event, at least 80% of the value of the Series' investable assets in municipal bonds, which include municipal notes and other municipal securities. Municipal bonds pay interest that generally is eligible for exclusion from federal income taxation. Each Series, however, may hold certain private activity bonds, which are municipal bonds, the interest on which is subject to the federal alternative minimum tax (AMT). See "Fund Distributions and Tax Issues - Distributions." Municipal notes, like municipal bonds, are fixed-income securities issued by states and municipalities, except that municipal notes mature in one year or less.

Municipal bonds include general obligation bonds and revenue bonds . General obligation bonds are obligations supported by the credit of an issuer that has the power to tax and are payable from that issuer's general revenues and not from any specific source. Revenue bonds, on the other hand, are payable from revenues derived from a particular source or project.

INSURED SERIES: INVESTMENT OBJECTIVE AND POLICIES

The investment objective of this Series is to provide the maximum amount of income that is eligible for exclusion from federal income taxes, consistent with the preservation of capital. While we make every effort to achieve our objective, we can't guarantee success.

The Series' portfolio consists primarily of municipal bonds that are (1) insured by an entity whose claims-paying ability at the time of purchase is rated Aaa by Moody's or AAA by S&P, or comparably rated by another major rating service so that the bond is rated AAA or Aaa or meets the eligibility criteria imposed by such insurers or (2) backed by the full faith and credit of the U.S. Government. Under normal circumstances, at least 80% of the Series' investable assets will consist of insured municipal bonds. Generally, the yields on insured bonds are lower than the yields on uninsured bonds of comparable quality. Insurance reduces the insured bond's credit risk and may increase the bond's value.

A rating is an assessment of the likelihood of the timely payment of debt (with respect to a municipal bond) or claims (with respect to an insurer of a municipal bond), and can be useful when comparing different municipal bonds. These ratings are not a guarantee of quality. The opinions of the rating agencies do not reflect market risk and they may, at times, lag behind the current financial condition of an issuer or

Municipal Bonds

States and municipalities issue bonds in order to borrow money to finance a project. You can think of bonds as loans that investors make to the state, local government or other issuer. The government gets the cash needed to complete the project and investors earn income on their investment.

Dryden Municipal Bond Fund 13

How the Fund Invests

insurer. An investor can evaluate the expected likelihood of default by an issuer or an insurer by looking at its ratings as compared to another similar issuer or insurer. The Series may also invest in municipal bonds that are not rated if, based upon a credit analysis by the Series' investment adviser, the investment adviser believes that such securities are of comparable quality to other municipal bonds that the Series may purchase.

For more information, see "Investment Risks" below and the Statement of Additional Information (SAI), "Description of the Fund, Its Investments and Risks." The SAI contains additional information about the Series. To obtain a copy, see the back cover page of this prospectus.

The Series' investment objective and policy of investing at least 80% of its investable assets in insured municipal bonds are fundamental policies that cannot be changed without shareholder approval. The Board of Trustees of the Fund (the Board) can change investment policies of the Series that are not fundamental without shareholder approval.

HIGH INCOME SERIES: INVESTMENT OBJECTIVE AND POLICIES

The investment objective of this Series is to provide the maximum amount of income that is eligible for exclusion from federal income taxes . While we make every effort to achieve our objective, we can't guarantee success.

The Series' portfolio consists primarily of municipal bonds rated B or better by Moody's or S&P or bonds either rated by another major rating service or unrated bonds of comparable quality . Municipal bonds rated Ba or BB or lower by Moody's or S&P, respectively, are considered lower-rated or high-yield securities or junk bonds . Bonds rated Baa and higher by Moody's or BBB and higher by S&P are considered investment grade, with a range of adequate to very strong capacity for meeting their financial obligations, although municipal bonds rated Baa by Moody's or BBB by S&P have certain speculative characteristics and are riskier than higher-rated municipal bonds. A description of bond ratings is contained in Appendix A.

Lower-rated bonds tend to offer higher yields, but also offer greater risks, than higher-rated bonds. Under certain economic conditions, however, lower or medium-rated bonds might not yield significantly more than higher-rated bonds, or comparable unrated bonds. If that happens, the Series may invest in higher-rated bonds that offer similar yields but have less risk. Furthermore, if issuers redeem their high-yield bonds at a higher than expected rate, which might happen during periods of declining

14 Visit our website at www.jennisondryden.com

interest rates, the Series could be forced to buy higher-rated, lower-yielding securities, which would decrease the Series' return.

Although the investment adviser will consider ratings assigned to a security, it will perform its own investment analysis. In addition to investing in rated securities, the Series may invest in unrated securities that it determines are of comparable quality to the rated securities that are permissible investments. If the rating of a debt obligation is downgraded after the Series purchases it (or if the debt obligation is no longer rated), the Series will not have to sell the obligation, but the investment adviser will take this into consideration in deciding whether the Series should continue to hold the obligation.

During the fiscal year ended April 30, 2005, the monthly dollar-weighted average ratings of the securities held by the Series, expressed as a percentage of the Series' net assets, were as follows:

Ratings	Percentages of Net Assets
Aaa		23.9	%
Aa		5.8
A		9.6
Baa		19.4
Ba		7.2
B		3.6
Caa		1.7
NR		27.3
Total Investments		98.5
Other assets in excess of liabilities		1.5
Net Assets		100.0	%

Source: Moody's rating, defaulting to S&P when not rated.
Credit quality is subject to change.

For more information, see "Investment Risks" below and the Fund's SAI, "Description of the Fund, Its Investments and Risks." The SAI contains additional information about the Series. To obtain a copy, see the back cover page of this prospectus.

The Series' investment objective and policy of investing at least 80% of its investable assets in municipal bonds are fundamental policies that cannot be changed without shareholder approval. The Fund's Board can change investment policies of the Series that are not fundamental without shareholder approval.

OTHER INVESTMENTS AND STRATEGIES

In addition to the principal strategies, each Series also may use the following investment strategies to increase the Series' returns or protect its assets if market conditions warrant.

Dryden Municipal Bond Fund 15

How the Fund Invests

Floating Rate Bonds, Variable Rate Bonds, Inverse Floaters and
Secondary Inverse Floaters

Each Series may invest in floating rate bonds, variable rate bonds, inverse floaters and secondary inverse floaters. Floating rate bonds are municipal bonds that have an interest rate that is set as a specific percentage of a designated rate, such as the rate on Treasury bonds. The interest rate on floating rate bonds changes when there is a change in the designated rate. Variable rate bonds are municipal bonds that have an interest rate that is adjusted periodically based on the market rate at a specified time. They generally allow a Series to demand full payment of the bond on short notice. At times each Series may receive an amount that may be more or less than the amount paid for the bond. Inverse floaters are municipal bonds with a floating or variable interest rate that moves in the opposite direction of the interest rate on another security or the value of an index. Secondary inverse floaters are municipal asset-backed securities with a floating or variable interest rate that moves in the opposite direction of the interest rate on another security or the value of an index.

Municipal Lease Obligations

Each Series may invest in municipal lease obligations. Municipal lease obligations are obligations where the interest and principal are paid out of lease payments made by the party leasing the equipment or facilities that were acquired or built with the bonds. Typically, municipal lease obligations are issued by states or financing authorities to provide money for construction projects such as schools, offices or stadiums. The entity that leases the building or facility would be responsible for paying the interest and principal on the obligation.

Municipal Asset-Backed Securities

Each Series may invest in municipal asset-backed securities. A municipal asset-backed security is a type of pass-through instrument that pays interest which is eligible for exclusion from federal and state income taxation based upon the income from an underlying municipal bond or pool of municipal bonds.

When-Issued and Delayed-Delivery Securities

Each Series may purchase municipal bonds on a when-issued or delayed-delivery basis, without limit. When a Series makes this type of purchase, the price and interest rate are fixed at the time of purchase, but delivery and payment for the bonds take place at a later time. A Series does not earn interest income until the date the bonds are expected to be delivered.

Obtaining Securities Ratings

Each Series may obtain a rating for unrated securities that the Series owns if, in the investment adviser's judgment, liquidity or pricing of the security would be improved if

16 Visit our website at www.jennisondryden.com

the security was rated. Ratings will be obtained only from a Nationally Recognized Securities Rating Organization (NRSRO). Assets of the Series may be used to pay an NRSRO in connection with obtaining such ratings. The High Income Series may use up to 10% of its assets to obtain ratings for unrated securities that it owns. The Insured Series may use up to 5% of its assets to obtain ratings for unrated securities that it owns.

Credit-Linked Securities

The High Income Series may invest in credit-linked securities . Credit-linked securities are securities that are collateralized by one or more credit default swaps on corporate credits. The High Income Series has the right to receive periodic interest payments from the issuer of the credit-linked security at an agreed-upon interest rate, and a return of principal at the maturity date.

Distressed Securities

The High Income Series may invest up to 10% of its assets in distressed securities , that is, securities of issuers that are financially troubled and which the investment adviser believes are currently valued at less than their long-term potential. The High Income Series is also permitted to invest in defaulted bonds and in bonds having a rating of D or better by Moody's, S&P or another major rating service or unrated bonds of comparable quality.

Temporary Defensive Investments

In response to adverse market, economic or political conditions, each Series may hold up to 100% of its assets in cash, cash equivalents or investment-grade taxable bonds, including bonds that are generally exempt from state, but not federal, income taxation. Investing heavily in these securities limits our ability to achieve each Series' investment objective, but can help to preserve each Series' assets.

Derivative Strategies

We may use various derivative strategies to try to improve each Series' returns. We may also use hedging techniques to try to protect each Series' assets. We cannot guarantee that these strategies and techniques will work, that the instruments necessary to implement these strategies and techniques will be available, or that a Series will not lose money. Derivatives - such as futures contracts, options on futures, options on swaps (swap options) and various types of swaps - involve costs and can be volatile. With derivatives, the investment adviser tries to predict if the underlying investment, whether a security, market index, interest rate, or some other investment, will go up or down at some future date. We may use derivatives to try to reduce risk or to increase return consistent with a Series' overall investment objective. The investment adviser will consider other factors (such as cost) in deciding whether to employ any particular strategy or technique, or use any particular instrument. Any

Dryden Municipal Bond Fund 17

How the Fund Invests

derivatives we may use may not match or offset a Series' underlying positions and this could result in losses to a Series that would not otherwise have occurred. Derivatives that involve leverage (borrowing to take advantage of investment opportunities) could magnify losses. If a Series borrows money to purchase securities and those securities decline in value, then the value of the Series' shares will decline faster than if the Series were not leveraged. In addition, interest costs and investment fees relating to leverage may exceed potential investment gains.

Futures Contracts and Related Options

Each Series may purchase and sell financial futures contracts and related options on financial futures. A futures contract is an exchange-traded agreement to buy or sell a set quantity of an underlying asset at a future date, or to make or receive a cash payment based on the value of a securities index or some other asset on a stipulated future date. Each Series may also invest in futures contracts on 10-year interest rate swaps for hedging purposes only. The terms of futures contracts are standardized. In the case of a financial futures contract based upon a broad index, there is no delivery of the securities comprising the underlying index, margin is uniform, a clearing corporation or an exchange is the counterparty and each Series makes daily margin payments based on price movements in the index. An option gives the purchaser the right to buy or sell securities or, in the case of an option on a futures contract, the right to buy or sell a futures contract, in exchange for a premium.

Swap Transactions

Each Series may enter into swap transactions . Swap agreements are two-party contracts entered into primarily by institutional investors for periods typically ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on particular predetermined investments or instruments, which may be adjusted for an interest factor. There are various types of swaps, including but not limited to, credit default swaps, interest rate swaps, total return swaps and index swaps. Credit default swap transactions may only be used by the High Income Series.

Swap Options

Each Series may enter into swap options . A swap option is a contract that gives a counterparty the right (but not the obligation) to enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap agreement, at some designated future time on specified terms.

For more information about these strategies, see the SAI, "Description of the Fund, Its Investments and Risks."

18 Visit our website at www.jennisondryden.com

Additional Strategies

Each Series also follows certain policies when it borrows money (each Series can borrow up to 33 1 / 3 % of the value of its total assets and pledge up to 33 1 / 3 % of its total assets to secure these borrowings); purchases shares of unaffiliated investment companies (each Series may hold up to 10% of its total assets in such securities, which entail duplicate management and advisory fees to shareholders); purchases shares of affiliated investment companies (each Series may also invest up to 25% of its assets in shares of affiliated money market funds or open-ended short term bond funds with a portfolio maturity of three years or less); lends its securities to others for cash management purposes (each Series can lend up to 33 1 / 3 % of the value of its total assets); and holds illiquid securities (each Series may hold up to 15% of its net assets in illiquid securities, including securities with legal or contractual restrictions on resale, those without a readily available market and repurchase agreements with maturities longer than seven days).

Each Series is subject to certain other investment restrictions that are fundamental policies, which means they cannot be changed without shareholder approval. For more information about these restrictions, see the SAI "Investment Restrictions".

Portfolio Turnover

As a result of the investment policies described above, the Series may engage in a substantial number of portfolio transactions. The portfolio turnover rates for the Series for the fiscal years ended April 30, 2005 and 2004 were 15% and 71%, and 29% and 89% for the Insured Series and the High Income Series, respectively. The portfolio turnover rate is generally the percentage computed by dividing the lesser of portfolio purchases or sales (excluding all securities, including options, whose maturities or expiration date at acquisition were one year or less) by the monthly average value of the portfolio. High portfolio turnover (100% or more) involves correspondingly greater brokerage commissions and other transaction costs, which are borne directly by the Series. In addition, high portfolio turnover may also mean that a proportionately greater amount of distributions to shareholders will be taxed as ordinary income rather than long-term capital gains compared to investment companies with lower portfolio turnover.

INVESTMENT RISKS

As noted previously, all investments involve risk, and investing in a Series is no exception. Since each Series' holdings can vary significantly from broad market indexes, performance of the Series can deviate from performance of the indexes. This chart outlines the key risks and potential rewards of each Series' principal strategies and certain of the Series' other non-principal strategies. Generally, the investment types are listed in the order in which they normally will be used by the investment adviser. Unless otherwise noted, the Series' ability to engage in a particular type of investment is expressed as a percentage of investable assets. See, too, "Description of the Fund, Its Investments and Risks" in the SAI.

Dryden Municipal Bond Fund 19

How the Fund Invests

Investment Type

*% of each Series' Assets*	Risks	Potential Rewards
Municipal bonds Both Series: (Insured municipal bonds with respect to Insured Series) At least 80% of each Series' assets under normal circumstances	n Credit risk - the risk that the borrower can't pay back the money borrowed or make interest payments (lower for insured and higher rated bonds). The lower a bond's quality, the higher its potential volatility n Market risk - the risk that bonds will lose value in the market, sometimes rapidly or unpredictably, because interest rates rise or there is a lack of confidence in the borrower or the bond's insurer n Concentration risk - the risk that bonds may lose value because of political, economic or other events in the geographic region where a Series' investments are focused n Tax risk - the risk that federal income tax rates may decrease, which could decrease demand for municipal bonds or that a change in law may limit or eliminate exemption of interest on municipal bonds from such taxes n Illiquidity risk - the risk that bonds may be difficult to value precisely and sell at the time or price desired, in which case valuation would depend more on the investment adviser's judgment than is generally the case with other types of municipal bonds n Nonappropriation risk - the risk that the state or municipality may not include the bond obligations in future budgets	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the federal alternative minimum tax (AMT) n If interest rates decline, long-term yields should be higher than money market yields n Bonds have generally outperformed money market instruments over the long term n Most bonds rise in value when interest rates fall

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Investment Type (cont'd)

*% of each Series' Assets*	Risks	Potential Rewards
Higher yielding municipal bonds High Income Series only: At least 80% under normal circumstances	n See credit risk (particularly high), market risk (particularly high) illiquidity risk (particularly high) and tax risk n Are generally less secure than higher-quality debt securities	n May offer higher interest income and higher potential gains than higher-grade municipal bonds n Most bonds rise in value when interest rates fall

Municipal lease obligations Both Series: Percentage varies; usually less than 20%	n See credit risk, market risk, concentration risk, tax risk, illiquidity risk and nonappropriation risk n Abatement risk - the risk that the entity leasing the equipment or facility will not be required to make lease payments because it does not have full use of the equipment or facility	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the AMT n If interest rates decline, long-term yields should be higher than money market yields

Dryden Municipal Bond Fund 21

How the Fund Invests

Investment Type (cont'd)

*% of each Series' Assets*	Risks	Potential Rewards
Derivatives (including swaps) Both Series: Percentage varies; usually less than 20%, up to 15% for swaps (other than interest rate swaps)	n The value of derivatives (such as futures, options on futures, swap options and various types of swaps), that are used to hedge a portfolio security is determined independently from that security and could result in a loss to a Series when the price movement of a derivative does not correlate with a change in the value of the Series security n Derivatives may not have the intended effects and may result in losses or missed opportunities n The counterparty to a derivatives contract could default n Certain types of derivatives involve costs to a Series that can reduce returns n Derivatives can increase share price volatility and derivatives that involve leverage could magnify losses n May be difficult to value precisely or sell at the time or price desired	n Derivatives could make money and protect against losses if the investment analysis proves correct n One way to manage a Series' risk/return balance is to lock in the value of an investment ahead of time n Derivatives used for return enhancement purposes involve a type of leverage and could generate substantial gains at low cost n Hedges that correlate well with an underlying position can reduce or eliminate the volatility of investment income or capital gains at low cost

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Investment Type (cont'd)

*% of each Series' Assets*	Risks	Potential Rewards
When-issued and delayed-delivery securities Both Series: Percentage varies; usually less than 20%	n Value of securities may decrease before delivery occurs n Broker/dealer may become insolvent prior to delivery n Investment losses may exceed potential underlying investment gains n See tax risk	n May magnify underlying investment gains

Credit-linked securities High Income Series Only: Percentage varies; up to 15%	n The issuer of the credit-linked security may default or go bankrupt n Credit risk of the corporate credits underlying the credit default swaps n Typically privately negotiated transactions, resulting in limited liquidity or no liquidity n See market risk n Prepayment risk - the risk that the underlying securities may be prepaid, partially or completely, generally during periods of falling interest rates, which could adversely affect yield to maturity and could require the Series to reinvest in lower yielding securities	n Regular stream of payments n Pass-through instruments may provide greater diversification than direct investments n May offer higher yield due to their structure

Inverse floaters/secondary inverse floaters Both Series: Percentage varies; usually less than 15%	n High market risk - risk that inverse floaters will fluctuate in value more dramatically than other debt securities when interest rates change n See credit risk, illiquidity risk and tax risk n Secondary inverse floaters are subject to additional risks of municipal asset-backed securities	n Income generally will increase when interest rates decrease

Dryden Municipal Bond Fund 23

How the Fund Invests

Investment Type (cont'd)

*% of each Series' Assets*	Risks	Potential Rewards
Municipal asset-backed securities Both Series: Percentage varies; usually less than 15%	n Prepayment risk - the risk that the underlying bonds may be prepaid, partially or completely, generally during periods of falling interest rates, which could adversely affect yield to maturity and could require a Series to reinvest in lower yielding bonds n Credit risk - the risk that the underlying municipal bonds will not be paid by issuers or by credit insurers or guarantors of such instruments. Some municipal asset-backed securities are unsecured or secured by lower-rated insurers or guarantors and thus may involve greater risk n See market risk and tax risk	n A source of tax-exempt interest income, except with respect to certain bonds, such as private activity bonds, which are subject to the AMT n Pass-through instruments provide greater diversification than direct ownership of municipal bonds n May offer higher yield due to their structure

Illiquid securities Both Series: Up to 15% of net assets	n See illiquidity risk	n May offer a more attractive yield or potential for growth than more widely traded securities

24 Visit our website at www.jennisondryden.com

Investment Type (cont'd)

*% of each Series' Assets*	Risks	Potential Rewards
Distressed securities High Income Series only: Up to 10%	n See credit risk (particularly high), market risk (particularly high) and illiquidity risk (particularly high) n More likely to default, especially during economic downturns n Subject to greater volatility than securities of more stable companies n To the extent the Series invests in bankrupt issuers, the Series may be subject to litigation risks and costs	n May offer greater capital appreciation and a higher rate of return if issuers fulfill their anticipated potential

Variable/floating rate bonds Both Series: Percentage varies; usually less than 10%	n Value lags value of fixed-rate securities when interest rates change n See tax risk	n May offer protection against interest rate increases

Dryden Municipal Bond Fund 25

How the Fund is Managed

BOARD OF TRUSTEES

The Fund's Board oversees the actions of the Manager, investment adviser and Distributor and decides on general policies. The Board also oversees the Fund's officers, who conduct and supervise the daily business operations of the Fund.

MANAGER

Prudential Investments LLC (PI or the Manager)
Gateway Center Three, 100 Mulberry Street
Newark, NJ 07102

Under a Management Agreement with the Fund, PI manages the Fund's investment operations and administers its business affairs and is responsible for supervising the Fund's investment adviser. For the fiscal year ended April 30, 2005, the Insured Series and High Income Series paid PI management fees of .50% of their respective average daily net assets.

PI and its predecessors have served as manager or administrator to investment companies since 1987. As of March 31, 2005, PI, a wholly-owned subsidiary of Prudential Financial, Inc. (Prudential), served as the investment manager to all of the Prudential U.S. and offshore open-end investment companies, and as the administrator to closed-end investment companies, with aggregate assets of approximately $88.8 billion.

Subject to the supervision of the Board of the Fund, PI is responsible for conducting the initial review of prospective investment advisers for each Series. In evaluating a prospective investment adviser, PI considers many factors, including the firm's experience, investment philosophy and historical performance. PI is also responsible for monitoring the performance of the Series' investment adviser.

PI and the Fund operate under an exemptive order (the Order) from the Securities and Exchange Commission (the Commission or SEC) that generally permits PI to enter into or amend agreements with investment advisers without obtaining shareholder approval each time. This authority is subject to certain conditions, including the requirement that the Board must approve any new or amended agreements with an investment adviser. Shareholders of each Series still have the right to terminate these agreements at any time by a vote of the majority of outstanding shares of the applicable Series. The Fund will notify shareholders of any new investment advisers or material amendments to advisory agreements pursuant to the Order.

26 Visit our website at www.jennisondryden.com

INVESTMENT ADVISER

Prudential Investment Management, Inc. (PIM) is each Series' investment adviser and has served as an investment adviser to investment companies since 1984. Its address is Gateway Center Two, 100 Mulberry Street, Newark, NJ 07102. PI has responsibility for all investment advisory services, supervises PIM and pays PIM for its services.

A discussion regarding the basis for the Board's approval of the Fund's investment advisory agreements is available in the Fund's annual report (for any agreements approved during the six-month period ended April 30, 2005) and will be available in the Fund's semi-annual report (for any agreements approved during the six-month period ended October 31, 2005).

Robert Tipp, Susan Courtney, and Dennis Hepworth of PIM Fixed Income are responsible for the management of both Series of Dryden Municipal Bond Fund.

Robert Tipp, CFA, is Chief Investment Strategist of PIM Fixed Income Group. He has supervisory responsibility for PIM Fixed Income Group's portfolio managers who manage mutual funds and institutional client accounts in the Municipal Bond, U.S. Liquidity (U.S. government and mortgages), Money Market, and Global Bond sectors. He is also portfolio manager for asset liability strategies and co-portfolio manager of Core Plus, Government, and Global Bond strategies. Previously, Mr. Tipp served as co-head of Prudential Financial's institutional fixed income business. Before joining Prudential Financial in 1991, Mr. Tipp was a Director in the Portfolio Strategies Group at First Boston Corporation. Prior to that, he was a Senior Analyst at Allstate Research & Planning Center, and managed fixed income and equity derivative strategies at Wells Fargo Investment Advisors. Mr. Tipp has 21 years of investment experience. Mr. Tipp has managed the Fund since October 2004.

Susan Courtney is a Principal and Head of the Municipal Bond Team at PIM Fixed Income Group. She is responsible for developing, directing, and executing investment strategy for all municipal bond assets, including the Dryden municipal bond mutual funds. Ms. Courtney joined Prudential Financial in 2005 from GE Asset Management (GE), where for the prior 10 years she was a municipal bond portfolio manager responsible for $4.7 billion in tax-exempt assets for insurance companies. Prior to her career at GE, Ms. Courtney was Assistant Vice President of the Global Power Group at Fitch Investors Services, Inc., and a Senior Analyst in the Unit Investment Trust Department of Dean Witter Reynolds. Ms. Courtney has 19 years of investment experience. Ms. Courtney has managed the Fund since March 2005.

Dennis Hepworth is a Principal and municipal bond portfolio manager for PIM Fixed Income. He is also Head of Municipal Bond Research, where he covers real estate, housing, public power, cogeneration and unrated corporate backed bonds. Prior to joining PIM Fixed Income in 1997, Mr. Hepworth was a sell side municipal research analyst at Prudential Securities, and a senior analyst in the Capital Markets Credit and

Dryden Municipal Bond Fund 27

How the Fund is Managed

Private Client areas of Merrill Lynch. Mr. Hepworth is a member of the Municipal Analysts Group of New York and the National Federation of Municipal Analysts. He has 20 years of investment experience. Mr. Hepworth has managed the Fund since November 2004.

Additional information about the portfolio managers concerning their compensation, other accounts that they manage and ownership of securities in the Fund may be found in the SAI under "Investment Advisory and Other Services - Additional Information About the Portfolio Managers".

DISTRIBUTOR

Prudential Investment Management Services LLC (PIMS or the Distributor) distributes the Fund's shares under a Distribution Agreement with the Fund. The Fund also has a Distribution and Service Plan (the Plan) under Rule 12b-1 of the Investment Company Act with respect to each of the Class A, Class B and Class C shares. Under the Plans and the Distribution Agreement, PIMS pays the expenses of distributing the Fund's Class A, B, C and Z shares and provides certain shareholder support services. The Fund pays distribution and other fees to PIMS as compensation for its services for each class of shares other than Class Z. These fees - known as 12b-1 fees - are shown in the "Fees and Expenses of the Series" tables.

DISCLOSURE OF PORTFOLIO HOLDINGS

A description of the Fund's policies and procedures with respect to the disclosure of the Fund's portfolio securities is described in the Fund's SAI and on the Fund's website at www.jennisondryden.com. The Fund will provide a full list of its portfolio holdings as of the end of each month on its website within approximately 30 days after the end of the month. In addition, the Fund may release its top ten holdings, sector and country breakdowns, and largest industries on a monthly basis. Such information will be posted to the Fund's website no earlier than 15 days after the end of each month and will be available on the Fund's website for at least six months from the posting date. These postings can be located at www.jennisondryden.com.

28 Visit our website at www.jennisondryden.com

Fund Distributions and Tax Issues

Investors who buy shares of each Series should be aware of some important tax issues. For example, each Series distributes dividends of net investment income monthly and capital gains , if any, at least annually to shareholders. Dividends from net investment income generally will be exempt from federal income taxes. If, however, the Series invests in taxable obligations, it will pay dividends that are not exempt from federal income taxes. Dividends and distributions from each Series also may be subject to state and local income tax in the state where you live.

Also, if you sell shares of the Series for a profit, you may have to pay capital gains taxes on the amount of your profit. The following briefly discusses some of the important federal income tax issues you should be aware of, but is not meant to be tax advice. For tax advice and information concerning state or local taxes, please speak with your tax adviser.

DISTRIBUTIONS

Each Series distributes dividends out of any net investment income, plus short-term capital gains, to shareholders typically every month. For example, if the Series owns a City XYZ bond and the bond pays interest, the Series will pay out a portion of this interest as a dividend to its shareholders, assuming the Series' income is more than its costs and expenses. These dividends (paid out of tax-exempt interest) generally will be exempt from federal income taxes , as long as 50% or more of the value of the Series' assets at the end of each quarter is invested in state, municipal and other obligations. This interest is excluded from gross income for federal income tax purposes. As we mentioned before, at least 80% of each Series' investable assets will be invested in such obligations during normal market conditions. Dividends attributable to the taxable bonds held by the Series, to market discount and to short-term capital gains, however, will be subject to federal, state and local income tax at ordinary income tax rates. Corporate shareholders are generally not eligible for the 70% dividends-received deduction in respect of dividends paid by the Series. In addition, dividends from the Series will not qualify for the preferential rates of U.S. federal income tax applicable to certain dividends paid to non-corporate shareholders.

Some shareholders may be subject to federal alternative minimum tax liability. Tax exempt interest from certain bonds is treated as an item of tax preference, and may be attributed to shareholders. A portion of all tax-exempt interest is includable as an upward adjustment in determining a corporation's alternative minimum taxable income. These rules could make you liable for the alternative minimum tax (AMT).

Each Series also distributes long-term capital gains to shareholders - typically once a year. Long-term capital gains are generated when the Series sells for a profit assets that it held for more than 1 year. For non-corporate shareholders (including individuals), the maximum long-term federal capital gains rate generally is 15%. The maximum capital gains rate for corporate shareholders currently is the same as the maximum tax rate for ordinary income.

Dryden Municipal Bond Fund 29

Fund Distributions and Tax Issues

For your convenience, distributions of dividends and net capital gains are automatically reinvested in the respective Series without any sales charges. If you ask us to pay the distributions in cash, we will send you a check if your account is with the Transfer Agent. Otherwise, if your account is with a broker, you will receive a credit to your account. Either way, the distributions may be subject to income taxes. For more information about automatic reinvestment and other shareholder services, see "Step 4: Additional Shareholder Services" in the next section.

TAX ISSUES
Form 1099

Every year, you will receive a Form 1099, which reports the amount of dividends and long-term capital gains we distributed to you during the prior year.

Fund distributions are generally taxable to you in the calendar year in which they are received, except when we declare certain dividends in the fourth quarter, and actually pay them in January of the following year. In such cases, the dividends are treated as if they were paid on December 31 of the prior year.

Withholding Taxes

If federal law requires you to provide the Fund with your taxpayer identification number and certifications as to your tax status, and you fail to do this, or if you are otherwise subject to backup withholding, we will withhold and pay to the U.S. Treasury a portion (currently 28%) of your distributions and gross sale proceeds. Dividends of net investment income (other than dividends paid out of tax-exempt interest) and net short-term capital gains paid to a nonresident foreign shareholder generally will be subject to a U.S. withholding tax of 30%. This rate may be lower, depending on any tax treaty the U.S. may have with the shareholder's country.

However, pursuant to recently enacted legislation, for taxable years beginning after December 31, 2004 and before January 1, 2008, certain "interest-related dividends" and "short-term capital gain dividends" paid by the Fund to a non-resident foreign shareholder and designated as such would be eligible for an exemption from the 30% U.S. withholding tax. Interest-related dividends generally are dividends derived from certain interest income earned by the Fund that would not be subject to such tax if earned by a non-resident foreign shareholder directly. Short-term capital gain dividends generally are dividends derived from the excess of the Fund's net short-term capital gains over net long-term capital losses.

If You Purchase Just Before Record Date

If you buy shares of the Fund just before the record date for a distribution (the date that determines who receives the distribution), we will pay that distribution to you. As

30 Visit our website at www.jennisondryden.com

explained above, the distribution may be subject to ordinary income or capital gains taxes. You may think you've done well since you bought shares one day and soon thereafter received a distribution. That is not so because, when dividends are paid out, the value of each share of the Fund decreases by the amount of the dividend to reflect the payout although this may not be apparent because the value of each share of the Fund also will be affected by market changes, if any. The distribution you receive makes up for the decrease in share value. However, if the distribution is taxable, the timing of your purchase does mean that part of your investment came back to you as taxable income.

IF YOU SELL OR EXCHANGE YOUR SHARES

If you sell any shares of a Series for a profit, you will have realized a capital gain which is subject to tax. For individuals, the maximum capital gains tax rate is generally 15% for shares held for more than 1 year.

If you sell shares of a Series for a loss, you may have a capital loss, which you may use to offset capital gains you have, plus, in the case of non-corporate taxpayers, ordinary income of up to $3,000.

If you sell shares and realize a loss, you will not be permitted to use the loss to the extent you replace the shares (including pursuant to the reinvestment of a dividend) within a 61-day period (beginning 30 days before and ending 30 days after the sale of the shares). Under certain circumstances, if you acquire shares of a Series and sell or exchange your shares within 90 days, you may not be allowed to include certain charges incurred in acquiring the shares for purposes of calculating gain or loss realized upon the sale of the shares.

Exchanging your shares of a Series for the shares of another JennisonDryden or Strategic Partners mutual fund is considered a sale for federal tax purposes. In other words, it's a taxable event. Therefore, if the shares you exchanged have increased in value since you purchased them, you will have capital gains, which are subject to the federal income taxes described above.

Any gain or loss you may have from selling or exchanging a Series' shares will not be reported on Form 1099; however, proceeds from the sale or exchange will be reported on Form 1099-B. Therefore, you or your financial adviser should keep track of the dates on which you buy and sell - or exchange - Series shares, as well as the amount of any gain or loss on each transaction. For tax advice, please see your tax adviser.

Automatic Conversion of Class B Shares

We have obtained a legal opinion that the conversion of Class B shares into Class A shares - which happens automatically approximately seven years after purchase - is not a "taxable event" for federal income tax purposes. This opinion, however, is not binding on the Internal Revenue Service (IRS). For more information about the

Dryden Municipal Bond Fund 31

How to Buy, Sell and
Exchange Shares of the Fund

automatic conversion of Class B shares, see "Class B Shares Convert to Class A Shares After Approximately Seven Years" in the next section.

HOW TO BUY SHARES

In order to buy shares of a Series, the following steps need to be taken: Step 1: Open an Account; Step 2: Choose a Share Class; Step 3: Understanding the Price You'll Pay; Step 4: Additional Shareholder Services. Each of these steps is described below.

Step 1: Open an Account

If you don't have an account with us or a securities firm that is permitted to buy or
sell shares of a Series for you, call Prudential Mutual Fund Services LLC (PMFS) at (800) 225-1852 or contact:

Prudential Mutual Fund Services LLC
Attn: Investment Services
P.O. Box 8179
Philadelphia, PA 19176

You may purchase shares by check or wire. We do not accept cash or money orders. To purchase by wire, call the number above to obtain an application. After PMFS receives your completed application, you will receive an account number. For additional information about purchasing shares of a Series, see the back cover page of this prospectus. We have the right to reject any purchase order (including an exchange into a Series) or suspend or modify a Series' sale of its shares.

With certain limited exceptions, the Series are only available to be sold in the United States, U.S. Virgin Islands, Puerto Rico and Guam.

Step 2: Choose a Share Class

Individual investors can choose among Class A, Class B, Class C and Class Z shares of the Series, although Class Z shares are available only to a limited group of investors.

Multiple share classes let you choose a cost structure that meets your needs:

n Class A shares purchased in amounts of less than $1 million require you to pay a sales charge at the time of purchase, but the operating expenses of Class A shares are lower than the operating expenses of Class B and Class C shares. Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are also subject to a CDSC of 1%.

32 Visit our website at www.jennisondryden.com

n Class B shares do not require you to pay a sales charge at the time of purchase, but do require you to pay a sales charge if you sell your shares within six years (that is why it is called a CDSC). The operating expenses of Class B shares are higher than the operating expenses of Class A shares.

n Class C shares do not require you to pay a sales charge at the time of purchase, but do require you to pay a sales charge if you sell your shares within 12 months of purchase (18 months for Class C shares purchased prior to February 2, 2004). The operating expenses of Class C shares are higher than the operating expenses of Class A shares.

When choosing a share class, you should consider the following factors:

n The amount of your investment and any previous or planned future investments, which may qualify you for reduced sales charges for Class A shares under Rights of Accumulation or a Letter of Intent.

n The length of time you expect to hold the shares and the impact of varying distribution fees. Over time, these fees will increase the cost of your investment and may cost you more than paying other types of sales charges. For this reason, Class C shares may not be appropriate for investors who plan to hold their shares no more than 3 years.

n The different sales charges that apply to each share class - Class A's front-end sales charge vs. Class B's CDSC vs. Class C's low CDSC.

n The fact that Class B shares automatically convert to Class A shares approximately seven years after purchase.

n Class B shares purchased in amounts greater than $250,000 are generally less advantageous than purchasing Class A shares. Purchases of Class B shares exceeding these amounts generally will not be accepted.

n Class C shares purchased in amounts greater than $1 million are generally less advantageous than purchasing Class A shares. Purchases of Class C shares above these amounts generally will not be accepted.

n Because Class Z shares have lower operating expenses than Class A, Class B or Class C shares, you should consider whether you are eligible to purchase Class Z shares.

See "How to Sell Your Shares" for a description of the impact of CDSCs.

Some investors purchase or sell shares of the Series through financial intermediaries and omnibus accounts maintained by brokers that aggregate the orders of multiple investors and forward the aggregate orders to the Series. The Fund has advised each financial intermediary and broker of the share class guidelines explained above, and it is their responsibility to monitor and enforce these guidelines with respect to shareholders purchasing shares through financial intermediaries or omnibus accounts. You should consult your financial intermediary or broker for assistance in choosing a share class.

Dryden Municipal Bond Fund 33

How to Buy, Sell and
Exchange Shares of the Fund

Share Class Comparison. Use this chart to help you compare each Series' different share classes. The discussion following this chart will tell you whether you are entitled to a reduction or waiver of any sales charges.

Class A

Class B

Class C

Class Z

Minimum purchase amount ¹

1,000

2,500

None

Minimum amount for
subsequent purchases ¹

100

None

Maximum initial sales charge

4.00 % of the
public
offering price

None

Contingent Deferred
Sales Charge (CDSC) ²

% ³

If sold during:
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7

5 %
4 %
3 %
2 %
1 %
1 %
0 %

1 % on sales
made within
12 months of
purchase
(18 months for
shares purchased
prior to February 2
2004 )

None

Annual distribution and service (12b-1)
fees (shown as a percentage of
average daily net assets) ⁴

.30 of 1%
(.25 of 1%
currently) ⁵

.50

of 1%

1 %
(.75 of 1%
currently) ⁵

None

1 The minimum investment requirements do not apply to certain custodial accounts for minors. The minimum initial and subsequent investment for purchases made through the Automatic Investment Plan is $50. For more information, see "Step 4: Additional Shareholder Services - Automatic Investment Plan."

2 For more information about the CDSC and how it is calculated, see "How to Sell Your Shares - Contingent Deferred Sales Charge (CDSC)."

3 Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are not subject to an initial sales charge but are subject to a CDSC of 1%. (The CDSC is waived for purchases by certain retirement and/or benefit plans affiliated with Prudential).

4 These distribution and service (12b-1) fees are paid from the Series' assets on a continuous basis. Class A shares may pay a service fee of up to .25 of 1%. Class B and Class C shares will pay a service fee of .25 of 1%. The distribution fee for Class A shares is limited to .30 of 1% (including up to .25 of 1% as a service fee). Class B and Class C shares pay a distribution fee (in addition to the service fee), of .25 of 1% and .75 of 1%, respectively.

5 For the period ending April 30, 2006, the Distributor has contractually agreed to reduce its distribution and service (12b-1) fees for Class A and Class C shares to .25 of 1% and .75 of 1% of the average daily net assets of Class A and Class C shares, respectively.

34 Visit our website at www.jennisondryden.com

Reducing or Waiving Class A's Initial Sales Charge

The following describes the different ways investors can reduce or avoid paying Class A's sales charge.

Increase the Amount of Your Investment. You can reduce Class A's initial sales charge by increasing the amount of your investment. This table shows how the sales charge decreases as the amount of your investment increases.

Amount of Purchase	Sales Charge as % of Offering Price			Sales Charge as % of Amount Invested			Dealer Reallowance
Less than $100,000		4.00	%		4.17	%		4.00	%
$100,000 to $249,999		3.50			3.63			3.00
$250,000 to $499,999		2.50			2.56			2.00
$500,000 to $999,999		2.00			2.04			1.75
$1 million to $4,999,999 ¹		None ¹			None			0.70 ²

1 If you invest $1 million or more, you can buy only Class A shares, unless you qualify to buy Class Z shares. If you purchase $1 million or more of Class A shares, you will be subject to a 1% CDSC for shares redeemed within 12 months of purchase. (The CDSC is waived for purchases by certain retirement and/or benefit plans affiliated with Prudential).

2 For investments of $5 million to $9,999,999, the dealer allowance is 0.50%. For investments of $10 million and over, the dealer allowance is 0.25%.

To satisfy the purchase amounts above, you can:

n Use your Rights of Accumulation, which allow you or an eligible group of related investors to combine (1) the current value of JennisonDryden or Strategic Partners mutual fund shares you or the group already own (2) the value of money market shares you or an eligible group of related investors have received for shares of other JennisonDryden or Strategic Partners mutual funds in an exchange transaction and (3) the value of the shares you or an eligible group of related investors are purchasing;

n Sign a Letter of Intent, stating in writing that you or an eligible group of related investors will purchase a certain amount of shares in the Fund and other JennisonDryden or Strategic Partners mutual funds within 13 months; or

n Use your Combined Purchase and Cumulative Purchase Privilege, which allows you and an eligible group of related investors to combine the value of Class A shares of this Fund with the value of Class A shares of other JennisonDryden or Strategic Partners mutual funds that you or the group are purchasing at the same time.

Note: Class Z shares cannot be aggregated with any other share class for purposes of reducing or waiving Class A's initial sales charge.

Dryden Municipal Bond Fund 35

How to Buy, Sell and
Exchange Shares of the Fund

An eligible group of related investors includes any combination of the following:

n an individual;

n the individual's spouse, their children and parents;

n the individual's and spouse's Individual Retirement Account (IRA);

n any company controlled by the individual (a person, entity or group that holds 25% or more of the outstanding voting securities of a company will be deemed to control the company, and a partnership will be deemed to be controlled by each of its general partners), with the exception of employee benefit plans of a company controlled by the individual;

n a trust created by the individual, the beneficiaries of which are the individual, his or her spouse, parents or children; and

n a Uniform Gifts to Minors Act/Uniform Transfers to Minors Act account created by the individual or the individual's spouse.

The value of shares held by you or an eligible group of related investors will be determined as follows:

n for Class A shares, the value of existing shares is determined by the maximum offering price (Net Asset Value per share (NAV) plus maximum sales charge) as of the previous business day; and

n for Class B shares and Class C shares, the value of existing shares is determined by the NAV as of the previous business day.

If your shares are held directly by the Transfer Agent, and you believe you qualify for a reduction or waiver of Class A's initial sales charge, you must notify the Transfer Agent at the time of the qualifying share purchase in order to receive the applicable reduction or waiver. If your shares are held through a broker or other financial intermediary, and you believe you qualify for a reduction or waiver of Class A's initial sales charge, you must notify your broker or intermediary at the time of the qualifying purchase in order to receive the applicable reduction or waiver. Shares held through a broker or other financial intermediary will not be systematically aggregated with shares held directly by the Transfer Agent for purposes of receiving a reduction or waiver of Class A's initial sales charge. The reduced or waived sales charge will be granted subject to confirmation of account holdings.

If your shares are held directly by the Transfer Agent, you must identify the eligible group of related investors. Although the Transfer Agent does not require any specific form of documentation in order to establish your eligibility to receive a waiver or reduction of Class A's initial sales charge, you may be required to provide appropriate documentation if the Transfer Agent is unable to establish your eligibility.

36 Visit our website at www.jennisondryden.com

If your shares are held through a broker or other intermediary, the broker or intermediary is responsible for determining the specific documentation, if any, that you may need in order to establish your eligibility to receive a waiver or reduction of Class A's initial sales charge. Your broker or intermediary is also responsible for notifying the Transfer Agent if your share purchase qualifies for a reduction or waiver of Class A's initial sales charge.

Purchases of $1 million or more. If you purchase $1 million or more of Class A shares, you will not be subject to an initial sales charge, although a CDSC may apply, as previously noted.

Benefit Plans. Certain group retirement and savings plans may purchase Class A shares without paying the initial sales charge if they meet the required minimum for amount of assets, average account balance or number of eligible employees. For more information about these requirements, call Prudential at (800) 353-2847.

Mutual Fund Programs. The initial sales charge will be waived for investors in certain programs sponsored by broker-dealers, investment advisers and financial planners who have agreements with the Distributor relating to:

n Mutual fund "wrap" or asset allocation programs; where the sponsor places fund trades, links its clients' accounts to a master account in the sponsor's name and charges its clients a management, consulting or other fee for its services, or

n Mutual fund "supermarket" programs; where the sponsor links its clients' accounts to a master account in the sponsor's name and the sponsor charges a fee for its services.

Broker-dealers, investment advisers or financial planners sponsoring these mutual fund programs may offer their clients more than one class of shares in the Fund in connection with different pricing options for their programs. Investors should consider carefully any separate transaction and other fees charged by these programs in connection with investing in each available share class before selecting a share class.

Other Types of Investors. Certain other types of investors may purchase Class A shares without paying the initial sales charge, including:

n certain directors, officers, employees (and certain members of their families) of Prudential and its affiliates, the JennisonDryden or Strategic Partners mutual funds, and the investment advisers of the JennisonDryden or Strategic Partners mutual funds;

n persons who have retired directly from active service with Prudential or one of its subsidiaries;

n certain real estate brokers, agents and employees of real estate brokerage companies affiliated with the Prudential Real Estate Affiliates;

n registered representatives and employees of brokers that have entered into dealer agreements with the Distributor; and

Dryden Municipal Bond Fund 37

How to Buy, Sell and
Exchange Shares of the Fund

n investors in IRA accounts, provided that (a) the purchase is made either from a directed rollover to such Individual Retirement Account or with the proceeds of a tax-free rollover of assets from a Benefit Plan for which Prudential Retirement (the institutional Benefit Plan recordkeeping entity of Prudential) provides administrative or recordkeeping services, in each case provided that such purchase is made within 60 days of receipt of the Benefit Plan distribution, or (b) recordkeeping for the Individual Retirement Account is performed by Prudential Retirement as part of its "Rollover IRA" program (regardless of whether or not the assets of the Individual Retirement Account consist of proceeds of a tax-free rollover of assets from a Benefit Plan described in (a) above).

To qualify for a waiver of the Class A sales charge at the time of purchase, you must notify the Transfer Agent or the Distributor must be notified by the broker facilitating the purchase that the transaction qualifies for a waiver of the Class A sales charge. The waiver will be granted subject to confirmation of your account holdings.

Additional Information About Reducing or Waiving Class A's Sales Charge. Additional information concerning the reduction or waiver of Class A's initial sales charge is available in the SAI, which is available free of charge upon request. The Fund also makes available free of charge, on the Fund's website at www.jennisondryden.com, in a clear and prominent format, information relating to the Fund's Class A initial sales charge, and the different ways that investors can reduce or avoid paying the initial sales charge. The Fund's website includes hyperlinks that facilitate access to this information.

You may need to provide your broker-dealer or other financial intermediary through which you hold Fund shares with the information necessary to take full advantage of reduced or waived Class A sales charges.

The Distributor may reallow Class A's sales charge to dealers.

Qualifying for Class Z Shares

Mutual Fund Programs. Class Z shares also can be purchased by participants in any fee-based program or trust program sponsored by Prudential or an affiliate that includes the fund as an available option. Class Z shares also can be purchased by investors in certain programs sponsored by broker-dealers, investment advisers and financial planners who have agreements with Prudential Investments Advisory Group relating to:

n Mutual fund "wrap" or asset allocation programs, where the sponsor places fund trades, links its clients' accounts to a master account in the sponsor's name and charges its clients a management, consulting or other fee for its services, or

38 Visit our website at www.jennisondryden.com

n Mutual fund "supermarket" programs, where the sponsor links its clients' accounts to a master account in the sponsor's name and the sponsor charges a fee for its services.

Other Types of Investors. Class Z shares also can be purchased by any of the following:

n Certain participants in the MEDLEY Program (group variable annuity contracts) sponsored by Prudential for whom Class Z shares of the JennisonDryden or Strategic Partners mutual funds are an available option;

n Current and former Directors/Trustees of the JennisonDryden or Strategic Partners mutual funds (including the Fund);

n Prudential, with an investment of $10 million or more; and

n Qualified state tuition programs (529 plans).

Class B Shares Convert to Class A Shares After Approximately Seven Years

If you buy Class B shares and hold them for approximately seven years, we will automatically convert them into Class A shares without charge. At that time, we will also convert any Class B shares that you purchased with reinvested dividends and other distributions. Since the distribution and service (12b-1) fees for Class A shares are lower than for Class B shares, converting to Class A shares lowers your Series expenses. Class B shares acquired through the reinvestment of dividends or distributions will be converted to Class A shares according to the procedures utilized by the broker-dealer through which the Class B shares were purchased, if the shares are carried on the books of that broker-dealer and the broker-dealer provides subaccounting services to the Fund. Otherwise, the procedures utilized by PMFS or its affiliates will be used. The use of different procedures may result in a timing differential in the conversions of Class B shares acquired through the reinvestment of dividends and distributions.

When we do the conversion, you will get fewer Class A shares than the number of Class B shares converted if the price of the Class A shares is higher than the price of Class B shares. The total dollar value will be the same, so you will not have lost any money by getting fewer Class A shares. We do the conversions quarterly, not on the anniversary date of your purchase. For more information, see the SAI, "Purchase, Redemption and Pricing of Fund Shares - Conversion Feature - Class B Shares."

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How to Buy, Sell and
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Step 3: Understanding the Price You'll Pay

The price you pay for each share of a Series is based on the share value. The share value of a mutual fund - known as the net asset value or NAV - is determined by a simple calculation: it's the total value of a Series (assets minus liabilities) divided by the total number of shares outstanding. For example, if the value of the investments held by Fund XYZ (minus its liabilities) is $1,000 and there are 100 shares of Fund XYZ owned by shareholders, the value of one share of the fund - or the NAV - is $10 ($1,000 divided by 100).

Portfolio securities are valued based upon market quotations or, if not readily available, at fair value as determined in good faith under procedures established by the Board. With respect to any portion of a Series' assets that are invested in one or more open-end investment companies, the Series' net asset value will be calculated based upon the net asset value per share of the investment company in which the Series invests.

A Series may also use fair value pricing if it determines that a market quotation is not reliably based, among other things, on events or market conditions that occur after the quotation is derived or after the closing of the primary market on which the security is traded, but before the time that the Series' NAV is determined. This use of fair value pricing most commonly occurs with securities that are primarily traded outside the U.S. because such securities present time-zone arbitrage opportunities when events or conditions affecting the prices of specific securities or the prices of securities traded in such markets generally occur after the close of the foreign markets but prior to the time the Fund determines its NAV. The Series may also use fair value pricing with respect to U.S.-traded securities if, for example, trading in a particular security is halted and does not resume before the Series calculates its NAV or the exchange on which a security is traded closes early. In addition, fair value pricing is used for securities where the pricing agent or principal market maker does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Manager (or Subadviser) does not represent fair value. Different valuation methods may result in differing values for the same security. The fair value of a portfolio security that a Series uses to determine its NAV may differ from the security's quoted or published price. If the Series needs to implement fair value pricing after the NAV publishing deadline but before shares of the Series are processed, the NAV you receive or pay may differ from the published NAV price. For

Mutual Fund Shares

The NAV of mutual fund shares changes every day because the value of a fund's portfolio changes constantly. For example, if Fund XYZ holds City ABC bonds in its portfolio and the price of City ABC bonds goes up while the value of the fund's other holdings remains the same and expenses don't change, the NAV of Fund XYZ will increase.

40 Visit our website at www.jennisondryden.com

purposes of computing the Series' NAV, we will value the Series' futures contracts 15 minutes after the close of regular trading on the New York Stock Exchange (NYSE). Except when we fair value securities, we normally value each foreign security held by the Series as of the close of the security's primary market. Fair value pricing procedures are designed to result in prices for the Series' securities and its net asset value that are reasonable in light of the circumstances which make or have made market quotations unavailable or unreliable, and may have the effect of reducing arbitrage opportunities available to short-term traders. There is no assurance, however, that fair value pricing will more accurately reflect the market value of a security than the market price of such security on that day or that it will prevent dilution of the Series' NAV by short-term traders.

We determine the Series' NAV once each business day at the close of regular trading on the NYSE, usually 4:00 p.m. New York time. The NYSE is closed on most national holidays and Good Friday. We may not determine the NAV with respect to a Series on days when we have not received any orders to purchase, sell or exchange the Series' shares, or when changes in the value of the Series' portfolio do not materially affect its NAV.

Most national newspapers report the NAVs of larger mutual funds, which allows investors to check the prices of those funds daily.

What Price Will You Pay for Shares of the Fund?

For Class A shares, you'll pay the public offering price, which is the NAV next determined after we receive your order to purchase, plus an initial sales charge (unless you're entitled to a waiver). For Class B, Class C and Class Z shares, you will pay the NAV next determined after we receive your order to purchase (remember, there are no up-front sales charges for these share classes). Your broker may charge you a separate or additional fee for purchases of shares.

Unless regular trading on the NYSE closes before 4:00 p.m. New York time, your order to purchase must be received by the Transfer Agent 4:00 p.m. New York time in order to receive that day's NAV. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to purchase is received by the Transfer Agent after the close of regular trading on the NYSE.

Step 4: Additional Shareholder Services

As a Fund shareholder, you can take advantage of the following services and privileges:

Automatic Reinvestment. As we explained in the "Fund Distributions and Tax Issues" section, a Series pays out - or distributes - its net investment income and capital gains to all shareholders. For your convenience, we will automatically reinvest your distributions in the applicable Series at NAV, without any sales charge. If you want your distributions paid in cash, you can indicate this preference on your application,

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notify your broker or notify the Transfer Agent in writing (at the address below) at least five business days before the date we determine who receives dividends.

Prudential Mutual Fund Services LLC
Attn: Account Maintenance
P.O. Box 8159
Philadelphia, PA 19176

Automatic Investment Plan. You can make regular purchases of a Series for as little as $50 by having the money automatically withdrawn from your bank or brokerage account at specified intervals.

Systematic Withdrawal Plan. A Systematic Withdrawal Plan is available that will provide you with monthly, quarterly, semi-annual or annual redemption checks. Remember, the sale of Class A (in certain cases), Class B and Class C shares may be subject to a CDSC. The Systematic Withdrawal Plan is not available to participants in certain retirement plans. Please contact PMFS at (800) 225-1852 for more details.

Reports to Shareholders. Every year we will send you an annual report (along with an updated prospectus) and a semi-annual report, which contain important financial information about your Series. To reduce the Series' expenses, we may send one annual shareholder report, one semi-annual shareholder report and one annual prospectus per household, unless you instruct us or your broker otherwise. If each Series shareholder in your household would like to receive a copy of your Series' prospectus, shareholder report and proxy statement, please call us toll free at (800) 225-1852. We will begin sending additional copies of these documents within 30 days of receipt of your request.

HOW TO SELL YOUR SHARES

You can sell your shares of a Series for cash (in the form of a check) at any time, subject to certain restrictions. For more information about these restrictions, see "Restrictions on Sales" below.

When you sell shares of the Series - also known as redeeming your shares - the price you will receive will be the NAV next determined after the Transfer Agent, the Distributor or your broker receives your order to sell (less any applicable CDSC). If your broker holds your shares, your broker must receive your order to sell by 4:00 p.m. New York time, to process the sale on that day.

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In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to sell is received after the close of regular trading on the NYSE. Otherwise, contact:

Prudential Mutual Fund Services LLC
Attn: Redemption Services
P.O. Box 8149
Philadelphia, PA 19176

Generally, we will pay you for the shares that you sell within seven days after the Transfer Agent, the Distributor or your broker receives your sell order. If you hold shares through a broker, payment will be credited to your account. If you are selling shares you recently purchased with a check, we may delay sending you the proceeds until your check clears, which can take up to 10 days from the purchase date. You can avoid delay if you purchase shares by wire, certified check or cashier's check. Your broker may charge you a separate or additional fee for sales of shares.

Restrictions on Sales

There are certain times when you may not be able to sell shares of the Fund, or when we may delay paying you the proceeds from a sale. As permitted by the Commission, this may happen only during unusual market conditions or emergencies when the Fund can't determine the value of its assets or sell its holdings. For more information, see the SAI, "Purchase, Redemption and Pricing of Fund Shares - Sale of Shares."

If you hold your shares directly with the Transfer Agent, you will need to have the signature on your sell order signature guaranteed by an "eligible guarantor institution" if:

n You are selling more than $100,000 of shares,

n You want the redemption proceeds made payable to someone that is not in our records,

n You want the redemption proceeds sent to some place that is not in our records, or

n You are a business or a trust.

An "eligible guarantor institution" includes any bank, broker-dealer, savings association or credit union. For more information, see the SAI, "Purchase, Redemption and Pricing of Fund Shares - Sale of Shares - Signature Guarantee."

Contingent Deferred Sales Charge (CDSC)

If you sell Class B shares within six years of purchase or Class C shares within 12 months of purchase (18 months for Class C shares purchased prior to February 2, 2004), you will have to pay a CDSC. In addition, if you purchase $1 million or more of Class A shares although you are not subject to an initial sales charge, you are subject to a 1% CDSC for shares redeemed within 12 months of purchase. (The CDSC is waived for purchases by certain retirement and/or benefit plans affiliated with

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How to Buy, Sell and
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Prudential). To keep the CDSC as low as possible, we will sell amounts representing shares in the following order:

n Amounts representing shares you purchased with reinvested dividends and distributions,

n Amounts representing the increase in NAV above the total amount of payments for shares made during the past 12 months for Class A shares (in certain cases), 6 years for Class B shares and 12 months for Class C shares (18 months for Class C shares purchased prior to February 2, 2004), and

n Amounts representing the cost of shares held beyond the CDSC period (12 months for Class A shares (in certain cases), 6 years for Class B shares and 12 months for Class C shares (18 months for Class C shares purchased prior to February 2, 2004)).

Since shares that fall into any of the categories listed above are not subject to the CDSC, selling them first helps you to avoid - or at least minimize - the CDSC.

Having sold the exempt shares first, if there are any remaining shares that are subject to the CDSC, we will apply the CDSC to amounts representing the cost of shares held for the longest period of time within the applicable CDSC period.

As we noted before in the "Share Class Comparison" chart, if you purchase $1 million or more of Class A shares, although you are not subject to an initial sales charge, you are subject to a 1% CDSC for shares redeemed within 12 months of purchase. (The CDSC is waived for purchases by certain retirement and/or benefit plans affiliated with Prudential). The CDSC for Class B shares is 5% in the first year, 4% in the second, 3% in the third, 2% in the fourth and 1% in the fifth and sixth years. The rate decreases on the first day of the month following the anniversary date of your purchase, not on the anniversary date itself. The CDSC is 1% for Class C shares - which is applied to shares sold within 12 months of purchase. For Class A, Class B and Class C shares, the CDSC is calculated based on the lesser of the original purchase price or the redemption proceeds. For purposes of determining how long you've held your shares, all purchases during the month are grouped together and considered to have been made on the last day of the month.

The holding period for purposes of determining the applicable CDSC will be calculated from the first day of the month after purchase, excluding any time shares were held in a money market fund.

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Waiver of the CDSC - Class B Shares

The CDSC will be waived if the Class B shares are sold:

n After a shareholder is deceased or disabled (or, in the case of a trust account, the death or disability of the grantor). This waiver applies to individual shareholders, as well as shares held in joint tenancy, provided the shares were purchased before the death or disability, and

n On certain sales effected through the Systematic Withdrawal Plan.

For more information on the above and other waivers, see the SAI, "Purchase, Redemption and Pricing of Fund Shares - Contingent Deferred Sales Charge - Waiver of Contingent Deferred Sales Charge - Class B Shares."

Redemption in Kind

If the sales of Fund shares you make during any 90-day period reach the lesser of $250,000 or 1% of the value of the Fund's net assets, we can then give you securities from the Fund's portfolio instead of cash. If you want to sell the securities for cash, you would have to pay the costs charged by a broker.

Small Accounts

If you make a sale that reduces your account value to less than $500, we may sell the rest of your shares (without charging any CDSC) and close your account. We would do this to minimize the Fund's expenses paid by other shareholders. We will give you 60 days' notice, during which time you can purchase additional shares to avoid this action.

90-Day Repurchase Privilege

After you redeem your shares, you have a 90-day period during which you may reinvest back into your account any of the redemption proceeds in shares of the same Series without paying an initial sales charge. Also, if you paid a CDSC when you redeemed your shares, we will credit your account with the appropriate number of shares to reflect the amount of the CDSC you paid on that reinvested portion of your redemption proceeds. In order to take advantage of this one-time privilege, you must notify the Transfer Agent or your broker at the time of the repurchase. See the SAI, "Purchase, Redemption and Pricing of Fund Shares - Sale of Shares."

HOW TO EXCHANGE YOUR SHARES

You can exchange your shares of a Series for shares of the same class in certain other JennisonDryden or Strategic Partners mutual funds - including certain money market funds - if you satisfy the minimum investment requirements. For example, you can exchange Class A shares of a Series for Class A shares of another JennisonDryden mutual fund or Class A shares of certain of the Strategic Partners mutual funds, but you can't exchange Class A shares for Class B, Class C or Class Z shares. Class B and Class C shares may not be exchanged into money market funds other than Special

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How to Buy, Sell and
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Money Market Fund, Inc. (Special Money Fund). After an exchange, at redemption the CDSC will be calculated from the first day of the month after initial purchase, excluding any time shares were held in a money market fund. We may change the terms of any exchange privilege after giving you 60 days' notice.

If you hold shares through a broker, you must exchange shares through your broker. Otherwise contact:

Prudential Mutual Fund Services LLC
Attn: Exchange Processing
P.O. Box 8157
Philadelphia, PA 19176

There is no sales charge for exchanges. If, however, you exchange - and then sell -Class A shares within 12 months of your original purchase (in certain circumstances), Class B shares within approximately 6 years of your original purchase or Class C shares within 12 months of your original purchase (18 months for Class C shares purchased prior to February 2, 2004), you must still pay the applicable CDSC. If you have exchanged Class A, Class B or Class C shares into Special Money Fund, the time you hold the shares in the money market account will not be counted in calculating the required holding period for CDSC liability.

Remember, as we explained in the section entitled "Fund Distributions and Tax Issues - If You Sell or Exchange Your Shares," exchanging shares is considered a sale for federal income tax purposes. Therefore, if the shares you exchange are worth more than the amount that you paid for them, you may have to pay capital gains tax. For additional information about exchanging shares, see the SAI, "Shareholder Investment Account - Exchange Privilege."

Frequent Purchases and Redemptions of Series Shares

The Fund seeks to prevent patterns of frequent purchases and redemptions of Series shares by its shareholders. Frequent purchases and sales of shares of the Series may adversely affect Series performance and the interests of long-term investors. When a shareholder engages in frequent or short-term trading, the Series may have to sell portfolio securities to have the cash necessary to redeem the shareholder's shares. This can happen when it is not advantageous to sell any securities, so the Series' performance may be hurt. When large dollar amounts are involved, frequent trading can also make it difficult to use long-term investment strategies because the Series cannot predict how much cash it will have available to invest. In addition, if a Series is forced to liquidate investments due to short-term trading activity, it may incur increased brokerage and tax costs. Similarly, the Series may bear increased

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administrative costs as a result of the asset level and investment volatility that accompanies patterns of short-term trading. Moreover, frequent or short-term trading by certain shareholders may cause dilution in the value of Series shares held by other shareholders. Funds that invest in foreign securities may be particularly susceptible to frequent trading because time zone differences among international stock markets can allow a shareholder engaging in frequent trading to exploit fund share prices that may be based on closing prices of foreign securities established some time before the fund calculates its own share price. Funds that invest in certain fixed-income securities, such as high-yield bonds or certain asset-backed securities, may also constitute an effective vehicle for a shareholder's frequent trading strategy.

The Board has adopted policies and procedures designed to discourage or prevent frequent trading activities by Series shareholders. In an effort to prevent such practices, the Series' Transfer Agent monitors trading activity on a daily basis. The Series has implemented a trading policy that limits the number of times a shareholder may purchase Series shares or exchange into the Series and then sell those shares within a specified period of time (a "round-trip transaction") as established by the Series' Chief Compliance Officer (CCO). The CCO is authorized to set and modify the parameters of the trading policy at any time as required to prevent the adverse impact of frequent trading on Series shareholders. The CCO has defined frequent trading as one or more round-trip transactions in shares of the Series within a 30-day period. A second round-trip within 60 days will begin a warning period that will remain in effect for 90 days. If additional purchase activity is initiated during the warning period, the purchase activity will be cancelled. In addition, if two round-trips have already been completed within the past 90 days, a trading suspension will be placed on the account and will remain in effect for 90 days. Exceptions to the trading policy will not normally be granted. Transactions in the Prudential money market funds and the Dryden Ultra Short Bond Series are excluded from this policy.

The Series reserves the right to reject or cancel, without prior notice, all additional purchases or exchanges into the Series by a shareholder who has violated this policy. Moreover, the Series may direct a broker-dealer or other intermediary to block a shareholder account from future trading in the Series. The Transfer Agent will monitor trading activity over $25,000 per account on a daily basis for a rolling 30-day period. If a purchase into the Series is rejected or cancelled for violations of the trading policy, the shareholder will receive a return of the purchase amount.

If the Series is offered to qualified plans on an omnibus basis or if Series shares may be purchased through other omnibus arrangements ("Intermediaries"), Intermediaries maintain the individual beneficial owner records and submit to the Series only aggregate orders combining the transactions of many beneficial owners. The Series itself generally cannot monitor trading by particular beneficial owners. The Series communicates to Intermediaries in writing that it expects the Intermediaries to handle orders consistently with the Series' policies as set forth in the Series' prospectus and

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How to Buy, Sell and
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SAI on transfers by beneficial owners. Intermediaries may impose different or stricter restrictions on transfers by beneficial owners. Consistent with the restrictions described above, investments in the Series through retirement programs administered by Prudential Retirement will be similarly identified for frequent purchases and redemptions and appropriately restricted.

The Transfer Agent also reviews the aggregate net flows in excess of one million dollars. In those cases, the trade detail is reviewed to determine if any of the activity relates to previously identified policy offenders. In cases of omnibus orders, the Intermediary may be contacted by the Transfer Agent to obtain additional information. The Transfer Agent has the authority to cancel all or a portion of the trade if the information reveals that the activity relates to previously identified policy offenders. In that case, the shareholder will receive a return of the purchase amount. Where appropriate, the Transfer Agent may request that the Intermediary block a financial adviser or client from accessing the Series. If necessary, the Series may be removed from a particular Intermediary's platform.

Shareholders seeking to engage in frequent trading activities may use a variety of strategies to avoid detection and, despite the efforts of the Series to prevent such trading, there is no guarantee that the Series, the Transfer Agent or Intermediaries will be able to identify these shareholders or curtail their trading practices. The Series does not have any arrangements intended to permit trading of its shares in contravention of the policies described above.

Payments to Financial Services Firms

The Manager, Distributor or their affiliates have entered into revenue sharing or other similar arrangements with financial services firms, including affiliates of the Manager. These revenue sharing arrangements are intended to promote the sale of Fund shares or to compensate the financial services firms for marketing or marketing support activities in connection with the sale of Fund shares. Revenue sharing payments may be used by financial services firms in a variety of ways, including defraying costs incurred by the firms to educate their registered representatives about the Series, as well as defraying costs incurred by the firms in providing or facilitating shareholder recordkeeping as well as the servicing or maintenance of shareholder accounts.

In exchange for revenue sharing payments, the Fund may receive placement on a financial service firm's preferred or recommended product list. Financial services firms and registered representatives participating in a revenue sharing program may receive greater compensation for selling shares of the Fund than for selling other

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mutual funds, and your individual registered representative may receive some or all of the revenue sharing amounts paid to the firm that employs him or her. Revenue sharing payments may provide an incentive for financial services firms and their registered representatives to recommend or sell shares of the Fund to you and in doing so may create conflicts of interest between the firms' financial interests and their duties to customers. In exchange for revenue sharing payments, the Fund also may receive preferred access to registered representatives of a financial services firm (for example, the ability to make presentations in branch offices or at conferences) or preferred access to customers of the financial services firm (for example, the ability to advertise to the firm's customers).

Payments under revenue sharing arrangements are made out of the Manager's or Distributor's own resources and without additional direct cost to the Fund or its shareholders. Revenue sharing payments may be in addition to the sales charges (including Rule 12b-1 fees) or other amounts paid by the Fund, which are also used to compensate financial services firms and their registered representatives for the marketing and distribution of the Fund.

Revenue sharing payments are usually calculated based on a percentage of Fund sales and/or Fund assets attributable to a particular financial services firm. Revenue sharing payments may also be based on other criteria or factors, such as a percentage of a registered representative's charges applicable to the sale of Fund shares, a networking fee based on the number of accounts at the firm holding shares of the Fund, a periodic flat fee for set-up and maintenance of the Fund on the computer systems of a financial services firm, or a flat fee for marketing services, such as access to registered representatives. Specific payment formulas are negotiated based on a number of factors including, but not limited to, reputation in the industry, ability to attract and retain assets, target markets, customer relationships and scope and quality of services provided. The amount of revenue sharing also may vary based on the class of shares purchased.

No one factor is determinative of the type or amount of additional compensation to be provided. Please contact your financial services provider for details about any revenue sharing payments it may receive.

TELEPHONE REDEMPTIONS OR EXCHANGES

You may redeem your shares of the Fund if the proceeds of the redemption do not exceed $100,000 or exchange your shares in any amount by calling the Fund at (800) 225-1852 before 4:00 p.m. New York time. You will receive a redemption or exchange amount based on that day's NAV. Certain restrictions apply; please see the section entitled "How to Sell Your Shares - Restrictions on Sales" above for additional information. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to sell or exchange is received after the close of regular trading on the NYSE.

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The Transfer Agent will record your telephone instructions and request specific account information before redeeming or exchanging shares. The Fund will not be liable for losses due to unauthorized or fraudulent telephone instructions if it follows instructions that it reasonably believes are made by the shareholder. If the Fund does not follow reasonable procedures, it may be liable.

In the event of drastic economic or market changes, you may have difficulty in redeeming or exchanging your shares by telephone. If this occurs, you should consider redeeming or exchanging your shares by mail or through your broker.

The telephone redemption and exchange procedures may be modified or terminated at any time. If this occurs, you will receive a written notice from the Fund.

EXPEDITED REDEMPTION PRIVILEGE

If you have selected the Expedited Redemption Privilege, you may have your redemption proceeds sent directly to your bank account. Expedited redemption requests may be made by telephone or letter, must be received by the Fund prior to 4:00 p.m. New York time, to receive a redemption amount based on that day's NAV and are subject to the terms and conditions regarding the redemption of shares. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to sell is received after the close of regular trading on the NYSE. For more information, see "Purchase, Redemption and Pricing of Fund Shares - Sale of Shares - Expedited Redemption Privilege" in the SAI. The Expedited Redemption Privilege may be modified or terminated at any time without notice.

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Financial Highlights

The financial highlights below are intended to help you evaluate the financial performance of each Series for the past five fiscal years. The total return in each chart represents the rate that a shareholder would have earned (or lost) on an investment in that share class of the Series, assuming investment at the start of the period and reinvestment of all dividends and other distributions. The information is for each share class for the periods indicated.

A copy of the Fund's annual report, along with the Fund's audited financial statements and report of independent registered public accounting firm, is available, upon request, at no charge, as described on the back cover of this prospectus.

Dryden Municipal Bond Fund 51

Financial Highlights

The financial highlights for the fiscal years ended April 30, 2005 and 2004 were derived from the financial statements audited by KPMG LLP, independent registered public accounting firms, whose reports on those financial statements were unqualified. The financial highlights for the three fiscal years ended April 30, 2003 were derived from the financial statements audited by another independent registered public accounting firm whose reports thereon were unqualified.

Insured Series: Class A Shares (fiscal years ended 4-30)

Per Share Operating Performance	2005			2004			2003			2002 ^(b)			2001
Net asset value, beginning of year	$	10.90		$	11.59		$	11.08		$	10.91		$	10.40
Income (loss) from investment operations:
Net investment income		.41			.42			.49			.52			.51
Net realized and unrealized gain (loss) on investment transactions		.20			(.39	)		.51			.17			.51
Total from investment operations		.61			.03			1.00			.69			1.02
Less dividends and distributions:
Dividends from net investment income		(.41	)		(.42	)		(.49	)		(.52	)		(.51	)
Distributions from net realized capital gains		(.12	)		(.30	)		-			-			-
Total distributions		(.53	)		(.72	)		(.49	)		(.52	)		(.51	)
Net asset value, end of year	$	10.98		$	10.90		$	11.59		$	11.08		$	10.91
Total return ^(a)		5.74	%		.13	%		9.17	%		6.38	%		9.90	%
Ratios/Supplemental Data	2005			2004			2003			2002			2001
Net assets, end of year (000)	$	242,325		$	257,738		$	281,077		$	261,227		$	265,718
Average net assets (000)	$	249,074		$	271,328		$	272,608		$	269,146		$	254,718
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees ^(c)		.91	%		.90	%		.88	%		.87	%		.89	%
Expenses, excluding distribution and service (12b-1) fees		.66	%		.65	%		.63	%		.62	%		.64	%
Net investment income		3.72	%		3.72	%		4.35	%		4.64	%		4.72	%
For Class A, B, C and Z shares:
Portfolio turnover rate		15	%		71	%		59	%		22	%		38	%

(a) Total return does not consider the effects of sales loads. Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.

(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/Insured Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $0.005 and increase the ratio of net investment income from 4.62% to 4.64%. Per share amounts and ratios for the years ended prior to April 30, 2002 have not been restated to reflect this change in presentation.

(c) The Distributor of the Fund contractually agreed to limit its distribution and service (12b-1) fees to .25 of 1% on the average daily net assets of Class A shares.

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Insured Series: Class B Shares (fiscal years ended 4-30)

Per Share Operating Performance	2005			2004			2003			2002 ^(b)			2001
Net asset value, beginning of year	$	10.91		$	11.60		$	11.09		$	10.92		$	10.41
Income (loss) from investment operations:
Net investment income		.38			.40			.47			.49			.48
Net realized and unrealized gain (loss) on investment transactions		.20			(.40	)		.50			.17			.51
Total from investment operations		.58			-			.97			.66			.99
Less dividends and distributions:
Dividends from net investment income		(.38	)		(.39	)		(.46	)		(.49	)		(.48	)
Distributions from net realized capital gains		(.12	)		(.30	)		-			-			-
Total distributions		.50			(.69	)		(.46	)		(.49	)		(.48	)
Net asset value, end of year	$	10.99		$	10.91		$	11.60		$	11.09		$	10.92
Total return ^(a)		5.45	%		(.14	)%		8.90	%		6.12	%		9.63	%
Ratios/Supplemental Data	2005			2004			2003			2002			2001
Net assets, end of year (000)	$	42,363		$	51,432		$	60,724		$	55,145		$	55,459
Average net assets (000)	$	48,258		$	56,466		$	58,003		$	54,136		$	70,084
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		1.16	%		1.15	%		1.13	%		1.12	%		1.14	%
Expenses, excluding distribution and service (12b-1) fees		.66	%		.65	%		.63	%		.62	%		.64	%
Net investment income		3.46	%		3.47	%		4.10	%		4.40	%		4.48	%

(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/Insured Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $0.005 and increase the ratio of net investment income from 4.38% to 4.40%. Per share amounts and ratios for the years ended prior to April 30, 2002 have not been restated to reflect this change in presentation.

Dryden Municipal Bond Fund 53

Financial Highlights

Insured Series: Class C Shares (fiscal years ended 4-30)

Per Share Operating Performance	2005			2004			2003			2002 ^(b)			2001
Net asset value, beginning of year	$	10.91		$	11.60		$	11.09		$	10.92		$	10.41
Income (loss) from investment operations:
Net investment income		.35			.37			.44			.47			.45
Net realized and unrealized gain (loss) on investment transactions		.20			(.40	)		.50			.16			.51
Total from investment operations		.55			(.03	)		.94			.63			.96
Less dividends and distributions:
Dividends from net investment income		(.35	)		(.36	)		(.43	)		(.46	)		(.45	)
Distributions from net realized capital gains		(.12	)		(.30	)		-			-			-
Total distributions		(.47	)		(.66	)		(.43	)		(.46	)		(.45	)
Net asset value, end of year	$	10.99		$	10.91		$	11.60		$	11.09		$	10.92
Total return ^(a)		5.18	%		(.39	)%		8.63	%		5.86	%		9.37	%
Ratios/Supplemental Data	2005			2004			2003			2002			2001
Net assets, end of year (000)	$	7,538		$	7,629		$	8,457		$	6,456		$	4,085
Average net assets (000)	$	7,706		$	8,329		$	7,559		$	5,320		$	3,413
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees ^(c)		1.41	%		1.40	%		1.38	%		1.37	%		1.39	%
Expenses, excluding distribution and service (12b-1) fees		.66	%		.65	%		.63	%		.62	%		.64	%
Net investment income		3.22	%		3.21	%		3.85	%		4.17	%		4.23	%

(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/Insured Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income per share by $0.01, decrease net realized and unrealized gain (loss) per share by $0.01 and increase the ratio of net investment income from 4.14% to 4.17%. Per share amounts and ratios for the years ended prior to April 30, 2002 have not been restated to reflect this change in presentation.

(c) The Distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .75 of 1% of the average daily net assets of Class C shares.

54 Visit our website at www.jennisondryden.com

Insured Series: Class Z Shares (fiscal years ended 4-30)

Per Share Operating Performance	2005			2004			2003			2002 ^(b)			2001
Net asset value, beginning of year	$	10.89		$	11.58		$	11.07		$	10.91		$	10.40
Income (loss) from investment operations:
Net investment income		.44			.45			.52			.55			.53
Net realized and unrealized gain (loss) on investment transactions		.19			(.39	)		.50			.15			.51
Total from investment operations		.63			.06			1.02			.70			1.04
Less dividends and distributions:
Dividends from net investment income		(.44	)		(.45	)		(.51	)		(.54	)		(.53	)
Distributions from net realized capital gains		(.12	)		(.30	)		-			-			-
Total distributions		(.56	)		(.75	)		(.51	)		(.54	)		(.53	)
Net asset value, end of year	$	10.96		$	10.89		$	11.58		$	11.07		$	10.91
Total return ^(a)		5.94	%		.40	%		9.45	%		6.55	%		10.17	%
Ratios/Supplemental Data	2005			2004			2003			2002			2001
Net assets, end of year (000)	$	4,565		$	6,330		$	9,179		$	4,238		$	2,182
Average net assets (000)	$	5,265		$	7,365		$	6,605		$	3,152		$	1,993
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		.66	%		.65	%		.63	%		.62	%		.64	%
Expenses, excluding distribution and service (12b-1) fees		.66	%		.65	%		.63	%		.62	%		.64	%
Net investment income		3.96	%		3.98	%		4.61	%		4.91	%		4.99	%

(a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.

(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/Insured Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income per share by $0.01, decrease net realized and unrealized gain (loss) per share by $0.01 and increase the ratio of net investment income from 4.88% to 4.91%. Per share amounts and ratios for the years ended prior to April 30, 2002 have not been restated to reflect this change in presentation.

Dryden Municipal Bond Fund 55

Financial Highlights

High Income Series: Class A Shares (fiscal years ended 4-30)

Per Share Operating Performance	2005			2004			2003			2002 ^(b)			2001
Net asset value, beginning of year	$	9.99		$	10.11		$	10.06		$	10.11		$	10.22
Income (loss) from investment operations:
Net investment income		.51			.53			.56			.61			.61
Net realized and unrealized gain (loss) on investment transactions		.35			(.12	)		.04			(.06	)		(.12	)
Total from investment operations		.86			.41			.60			.55			.49
Less dividends:
Dividends from net investment income		(.52	)		(.53	)		(.55	)		(.60	)		(.60	)
Net asset value, end of year	$	10.33		$	9.99		$	10.11		$	10.06		$	10.11
Total return ^(a)		8.81	%		4.13	%		6.15	%		5.53	%		4.94	%
Ratios/Supplemental Data	2005			2004			2003			2002			2001
Net assets, end of year (000)	$	459,598		$	457,184		$	491,218		$	501,501		$	522,556
Average net assets (000)	$	458,739		$	479,691		$	496,597		$	517,930		$	527,117
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees ^(c)		.86	%		.87	%		.85	%		.84	%		.84	%
Expenses, excluding distribution and service (12b-1) fees		.61	%		.62	%		.60	%		.59	%		.59	%
Net investment income		5.03	%		5.25	%		5.53	%		5.87	%		6.05	%
For Class A, B, C and Z shares:
Portfolio turnover rate		29	%		89	%		88	%		58	%		46	%

(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/High Income Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income per share by $0.01, decrease net realized and unrealized gain (loss) per share by $0.01 and increase the ratio of net investment income from 5.84% to 5.87%. Per share amounts and ratios for the years ended prior to April 30, 2002 have not been restated to reflect this change in presentation.

(c) The Distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .25 of 1% on the average daily net assets of Class A shares.

56 Visit our website at www.jennisondryden.com

High Income Series: Class B Shares (fiscal years ended 4-30)

Per Share Operating Performance	2005			2004			2003			2002 ^(b)			2001
Net asset value, beginning of year	$	10.00		$	10.11		$	10.06		$	10.11		$	10.22
Income (loss) from investment operations:
Net investment income		.49			.51			.54			.58			.59
Net realized and unrealized gain (loss) on investment transactions		.34			(.12	)		.04			(.06	)		(.13	)
Total from investment operations		.83			.39			.58			.52			.46
Less dividends:
Dividends from net investment income		(.49	)		(.50	)		(.53	)		(.57	)		(.57	)
Net asset value, end of year	$	10.34		$	10.00		$	10.11		$	10.06		$	10.11
Total return ^(a)		8.53	%		3.95	%		5.88	%		5.27	%		4.68	%
Ratios/Supplemental Data	2005			2004			2003			2002			2001
Net assets, end of year (000)	$	141,832		$	192,517		$	241,311		$	285,581		$	324,299
Average net assets (000)	$	165,596		$	219,376		$	264,067		$	307,192		$	375,632
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		1.11	%		1.12	%		1.10	%		1.09	%		1.09	%
Expenses, excluding distribution and service (12b-1) fees		.61	%		.62	%		.60	%		.59	%		.59	%
Net investment income		4.78	%		5.00	%		5.31	%		5.62	%		5.78	%

(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/High Income Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $0.005 and increase the ratio of net investment income from 5.59% to 5.62%. Per share amounts and ratios for the years ended prior to April 30, 2002 have not been restated to reflect this change in presentation.

Dryden Municipal Bond Fund 57

Financial Highlights

High Income Series: Class C Shares (fiscal years ended 4-30)

Per Share Operating Performance	2005			2004			2003			2002 ^(b)			2001
Net asset value, beginning of year	$	10.00		$	10.11		$	10.06		$	10.11		$	10.22
Income (loss) from investment operations:
Net investment income		.46			.48			.51			.55			.56
Net realized and unrealized gain (loss) on investment transactions		.35			(.11	)		.04			(.05	)		(.12	)
Total from investment operations		.81			.37			.55			.50			.44
Less dividends:
Dividends from net investment income		(.47	)		(.48	)		(.50	)		(.55	)		(.55	)
Net asset value, end of year	$	10.34		$	10.00		$	10.11		$	10.06		$	10.11
Total return ^(a)		8.26	%		3.69	%		5.62	%		5.00	%		4.42	%
Ratios/Supplemental Data	2005			2004			2003			2002			2001
Net assets, end of year (000)	$	22,033		$	24,599		$	28,313		$	26,619		$	27,263
Average net assets (000)	$	23,042		$	26,968		$	27,121		$	27,814		$	28,028
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees ^(c)		1.36	%		1.37	%		1.35	%		1.34	%		1.34	%
Expenses, excluding distribution and service (12b-1) fees		.61	%		.62	%		.60	%		.59	%		.59	%
Net investment income		4.53	%		4.75	%		5.04	%		5.38	%		5.55	%

(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/High Income Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income and decrease net realized and unrealized gain (loss) per share by less than $0.005 and increase the ratio of net investment income from 5.35% to 5.38%. Per share amounts and ratios for the years ended prior to April 30, 2002 have not been restated to reflect this change in presentation.

(c) The Distributor of the Fund has contractually agreed to limit its distribution and service (12b-1) fees to .75 of 1% of the average daily net assets of Class C shares.

58 Visit our website at www.jennisondryden.com

High Income Series: Class Z Shares (fiscal years ended 4-30)

Per Share Operating Performance	2005			2004			2003			2002 ^(b)			2001
Net asset value, beginning of year	$	9.98		$	10.10		$	10.05		$	10.10		$	10.21
Income (loss) from investment operations:
Net investment income		.54			.56			.59			.63			.64
Net realized and unrealized gain (loss) on investment transactions		.34			(.12	)		.04			(.06	)		(.13	)
Total from investment operations		.88			.44			.63			.57			.51
Less dividends:
Dividends from net investment income		(.54	)		(.56	)		(.58	)		(.62	)		(.62	)
Net asset value, end of year	$	10.32		$	9.98		$	10.10		$	10.05		$	10.10
Total return ^(a)		9.09	%		4.41	%		6.41	%		5.79	%		5.19	%
Ratios/Supplemental Data	2005			2004			2003			2002			2001
Net assets, end of year (000)	$	12,379		$	14,087		$	15,361		$	7,000		$	5,966
Average net assets (000)	$	11,451		$	15,572		$	10,813		$	6,368		$	7,182
Ratios to average net assets:
Expenses, including distribution and service (12b-1) fees		.61	%		.62	%		.60	%		.59	%		.59	%
Expenses, excluding distribution and service (12b-1) fees		.61	%		.62	%		.60	%		.59	%		.59	%
Net investment income		5.29	%		5.51	%		5.78	%		6.14	%		6.32	%

(a) Total return is calculated assuming a purchase of shares on the first day and a sale on the last day of each year reported and includes reinvestment of dividends and distributions.

(b) Effective May 1, 2001, the Dryden Municipal Bond Fund/High Income Series has adopted the provisions of the AICPA Audit and Accounting Guide for Investment Companies and began accreting market discount on debt securities. The effect of this change for the year ended April 30, 2002 was to increase net investment income per share by $0.01 and decrease net realized and unrealized gain (loss) per share by less $0.01 and increase the ratio of net investment income from 6.11% to 6.14%. Per share amounts and ratios for the years ended prior to April 30, 2002 have not been restated to reflect this change in presentation.

Dryden Municipal Bond Fund 59

Appendix A: Description of Security Ratings

MOODY'S INVESTORS SERVICE, INC. (MOODY'S)

Long-Term Ratings

Aaa: Obligations rated Aaa are judged to be of the highest quality, with minimal credit risk.

Aa: Obligations rated Aa are judged to be of high quality and are subject to very low credit risk.

A: Obligations rated A are considered upper-medium grade and are subject to low credit risk.

Baa: Obligations rated Baa are subject to moderate credit risk. They are considered medium-grade and as such may possess certain speculative characteristics.

Ba: Obligations rated Ba are judged to have speculative elements and are subject to substantial credit risk.

B: Obligations rated B are considered speculative and are subject to high credit risk.

Caa: Obligations rated Caa are judged to be of poor standing and are subject to very high credit risk.

Ca: Obligations rated Ca are highly speculative and are likely in, or very near, default, with some prospect of recovery of principal and interest.

C: Obligations rated C are the lowest rated class of bonds and are typically in default, with little prospect for recovery of principal or interest.

Moody's appends numerical modifiers 1, 2 and 3 to each generic rating classification from Aa through Baa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of that generic rating category.

Short-Term Debt Ratings

Moody's short-term ratings are opinions of the ability of issuers to honor short-term financial obligations. Those obligations have an original maturity not exceeding thirteen months, unless explicitly noted.

P-1: Issuers (or supporting institutions) rated Prime-1 have a superior ability to repay short-term debt obligations.

Dryden Municipal Bond Fund A-1

Appendix A: Description of Security Ratings

P-2: Issuers (or supporting institutions) rated Prime-2 have a strong ability to repay short-term debt obligations.

P-3: Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to repay short-term obligations.

NP: Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime rating categories.

Canadian issuers rated P-1 or P-2 have their short-term ratings enhanced by the senior-most long-term rating of the issuer, its guarantor or support-provider.

STANDARD & POOR'S RATINGS SERVICES (S&P)

Long-Term Issue Credit Ratings

AAA: An obligation rated AAA has the highest rating assigned by S&P . The obligor's capacity to meet its financial commitment on the obligation is extremely strong.

AA: An obligation rated AA differs from the highest rated obligations only in small degree. The obligor's capacity to meet its financial commitment on the obligation is very strong.

A: An obligation rated A is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rated categories. However, the obligor's capacity to meet its financial commitment on the obligation is still strong.

BBB: An obligation rated BBB exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet the financial commitment on the obligation.

Obligations rated BB, B, CCC, CC, and C are regarded as having significant speculative characteristics. BB indicates the least degree of speculation and C the highest. While such obligations will likely have some quality and protective characteristics, these may be outweighed by large uncertainties or major exposures to adverse conditions.

BB: An obligation rated BB is less vulnerable to nonpayment than other speculative issues. However, it faces major ongoing uncertainties or exposure to adverse business, financial, or economic conditions which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

A-2 Visit our website at www.jennisondryden.com

B: An obligation rated B is more vulnerable to nonpayment than obligations rated BB, but the obligor currently has the capacity to meet its financial commitment on the obligation. Adverse business, financial, or economic conditions will likely impair the obligor's capacity or willingness to meet its financial commitment on the obligation.

CCC: An obligation rated CCC is currently vulnerable to nonpayment, and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation. In the event of adverse business, financial, or economic conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated CC is currently highly vulnerable to nonpayment.

C: A subordinated debt or preferred stock obligation rated C is CURRENTLY HIGHLY VULNERABLE to nonpayment. The C rating may be used to cover a situation where a bankruptcy petition has been filed or similar action taken, but payments on this obligation are being continued. A C also will be assigned to a preferred stock issue in arrears on dividends or sinking fund payments, but that is currently paying.

D: An obligation rated D is in payment default. The D rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

Plus (+) or Minus (-): The ratings from AA to BBB may be modified by the addition of a plus or minus sign to show relative standing within the major rating categories.

r: This symbol is attached to the ratings of instruments with significant noncredit risks. It highlights risks to principal or volatility of expected returns which are not addressed in the credit rating.

N.R: This indicates that no rating has been requested, that there is insufficient information on which to base a rating, or that S&P does not rate a particular obligation as a matter of policy.

Short-Term Issue Credit Paper Ratings

A S&P short-term issue credit rating is a current assessment of the likelihood of timely payment of debt having an original maturity of no more than three years.

A-1: A short-term obligation rated A-1 is rated in the highest category by S&P. The obligor's capacity to meet its financial commitment on the obligation is strong. Within this category, certain obligations are designated with a plus sign (+). This indicates

Dryden Municipal Bond Fund A-3

Appendix A: Description of Security Ratings

that the obligor's capacity to meet its financial commitment on these obligations is extremely strong.

A-2: A short-term obligation rated A-2 is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than obligations in higher rating categories. However, the obligor's capacity to meet its financial commitment on the obligation is satisfactory.

A-3: A short-term obligation rated A-3 exhibits adequate protection parameters. However, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the obligation.

B: A short-term obligation rated B is regarded as having significant speculative characteristics. The obligor currently has the capacity to meet its financial commitment on the obligation; however, it faces major ongoing uncertainties which could lead to the obligor's inadequate capacity to meet its financial commitment on the obligation.

C: A short-term obligation rated C is currently vulnerable to nonpayment and is dependent upon favorable business, financial, and economic conditions for the obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated D is in payment default. The D rating category is used when payments on an obligation are not made on the date due even if the applicable grace period has not expired, unless S&P believes that such payments will be made during such grace period. The D rating also will be used upon the filing of a bankruptcy petition or the taking of a similar action if payments on an obligation are jeopardized.

FITCH RATINGS

International Long-Term Credit Ratings

Investment Grade

AAA: Highest credit quality. AAA ratings denote the lowest expectation of credit risk. They are assigned only in case of exceptionally strong capacity for timely payment of financial commitments. This capacity is highly unlikely to be adversely affected by foreseeable events.

AA: Very high credit quality. AA ratings denote a very low expectation of credit risk. They indicate very strong capacity for timely payment of financial commitments. This capacity is not significantly vulnerable to foreseeable events.

A-4 Visit our website at www.jennisondryden.com

A: High credit quality. A ratings denote a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions that is the case for higher ratings.

BBB: Good credit quality. BBB ratings indicate that there is currently a low expectation of credit risk. The capacity for timely payment of financial commitments is considered adequate, but adverse changes in circumstances and in economic conditions are more likely to impair this capacity. This is the lowest investment-grade category.

Speculative Grade

BB: Speculative. BB ratings indicate that there is a possibility of credit risk developing, particularly as the result of adverse economic change over time; however, business or financial alternatives may be available to allow financial commitments to be met. Securities rated in this category are not investment grade.

B: Highly speculative. B ratings indicate that significant credit risk is present, but a limited margin of safety remains. Financial commitments are currently being met; however, capacity for continued payment is contingent upon a sustained, favorable business and economic environment.

CCC, CC, C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon sustained, favorable business or economic developments. A CC rating indicates that default of some kind appears probable. C ratings signal imminent default.

DDD, DD, D: Default. The ratings of obligations in this category are based on their prospects for achieving partial or full recovery in a reorganization or liquidation of the obligor. While expected recovery values are highly speculative and cannot be estimated with any precision, the following serve as general guidelines. DDD obligations have the highest potential for recovery, around 90%-100% of outstanding amounts and accrued interest. DD indicates potential recoveries in the range of 50%-90% and D the lowest recovery potential, i.e. , below 50%. Entities rated in this category have defaulted on some or all of their obligations.

Entities rated DDD have the highest prospect for resumption of performance or continued operation with or without a formal reorganization process. Entities rated DD and D are generally undergoing a formal reorganization or liquidation process; those rated DD are likely to satisfy a higher portion of their outstanding obligations, while entities rated D have a poor prospect of repaying all obligations.

Dryden Municipal Bond Fund A-5

Appendix A: Description of Security Ratings

Notes: "+" or "-" may be appended to a rating to denote relative status within major rating categories. Such suffixes are not added to the AAA category or to categories below CCC.

Short-Term Debt Ratings

A short-term rating has a time horizon of less than 12 months for most obligations, or up to three years for U.S. public finance securities, and thus places greater emphasis on the liquidity necessary to meet financial commitments in a timely manner.

F1: Highest credit quality. Indicates the strongest capacity for timely payment of financial commitments: may have an added "+" to denote any exceptionally strong credit feature.

F2: Good credit quality. A satisfactory capacity for timely payment of financial commitments, but the margin of safety is not as great as in the case of the higher ratings.

F3: Fair credit quality. The capacity for timely payment of financial commitments is adequate; however, near-term adverse changes could result in a reduction to non-investment grade.

B: Speculative. Minimal capacity for timely payment of financial commitments, plus vulnerability to near-term adverse changes in financial and economic conditions.

C: High default risk. Default is a real possibility. Capacity for meeting financial commitments is solely reliant upon a sustained, favorable business and economic environment.

D: Default. Denotes actual or imminent payment default.

NR: Indicates that Fitch does not rate the specific issue.

Withdrawn: A rating is withdrawn when Fitch Ratings deems the amount of information available to be inadequate for rating purposes, or when an obligation matures, is called, or refinanced.

FitchAlert: Ratings are placed on FitchAlert to notify investors of an occurrence that is likely to result in a rating change and the likely direction of such change. These are designated as "Positive," indicating a potential upgrade, "Negative," for potential downgrade, or "Evolving," where ratings may be raised or lowered. FitchAlert is relatively short term, and should be resolved within 12 months.

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Ratings Outlook: An outlook is used to describe the most likely direction of any rating change over the intermediate term. It is described as "Positive" or "Negative." The absence of a designation indicates a stable outlook.

Plus (+) or Minus (-): Plus and minus signs may be appended to a rating to denote relative status within major ratings categories. Such suffixes are not added to the AAA long-term rating category or to short-term ratings other than F1.

Dryden Municipal Bond Fund A-7

Notes

Visit our website at www.jennisondryden.com

Notes

Dryden Municipal Bond Fund

FOR MORE INFORMATION

Please read this prospectus before you invest in the Fund and keep it for future reference. For information or shareholder questions contact:

n MAIL

Prudential Mutual
Fund Services LLC
PO Box 8098
Philadelphia, PA 19176

n TELEPHONE

(800) 225-1852
(973) 367-3529 (from
outside the U.S.)

n WEBSITES

www.jennisondryden.com

E-DELIVERY

To receive your mutual fund documents online, go to www.icsdelivery.com/prudential/funds and enroll. Instead of receiving printed documents by mail, you will receive notification via e-mail when new materials are available. You can cancel your enrollment or change your e-mail address at any time by clicking on the change/cancel enrollment option at the icsdelivery website address.

n OUTSIDE BROKERS SHOULD CONTACT:

Prudential Investment
Management Services LLC
PO Box 8310
Philadelphia, PA 19176

n TELEPHONE

(800) 778-8769

You can also obtain copies of Fund documents from the SEC as follows:

n MAIL

Securities and Exchange Commission
Public Reference Section
Washington, DC 20549-0102

n ELECTRONIC REQUEST

publicinfo@sec.gov
Note: The SEC charges a fee to copy documents

n IN PERSON

Public Reference Room in Washington, DC
For hours of operation and location, call (202) 942-8090

n VIA THE INTERNET

on the EDGAR database at http://www.sec.gov

Additional information about the Fund's investments is included in the Annual and Semiannual Reports . These reports and the Statement of Additional Information contain additional information. Sharehol ders may obtain free copies of the SAI, Annual Report and Semiannual Report as well as other informa tion about the Fund and may make other shareholder inquiries through the telephone number, address a nd website listed above.

n STATEMENT OF ADDITIONAL INFORMATION (SAI)

(incorporated by reference into this prospectus)

n ANNUAL REPORT

(contains a discussion of the market conditions and investment strategies that significantly affected the Fund's performance during the last fiscal year)

n SEMIANNUAL REPORT

Dryden Municipal Bond Fund

Insured Series

Share Class

Nasdaq

PMIAX

PMINX

PMICX

PMIZX

CUSIP

262467509

262467608

262467707

262467806

Dryden Municipal Bond Fund

High Income Series

Share Class

Nasdaq

PRHAX

PMHYX

PHICX

PMIZX

CUSIP

262467103

262467202

262467301

262467400

MF133A Investment Company Act File No. 811-4930

DRYDEN MUNICIPAL BOND FUND

Statement of Additional Information
dated June 29, 2005

Dryden Municipal Bond Fund (the Fund) is an open-end, diversified management investment company, or mutual fund, consisting of two separate portfolios-the High Income Series and the Insured Series. The investment objectives of the Series are as follows: (1) the objective of the High Income Series is to provide the maximum amount of income that is eligible for exclusion from federal income taxes and (2) the objective of the Insured Series is to provide the maximum amount of income that is eligible for exclusion from federal income taxes consistent with the preservation of capital. Although each Series will seek income that is eligible for exclusion from federal income taxes, a portion of the dividends and distributions paid by each Series (and, in particular, the High Income Series) may be treated as a preference item for purposes of the alternative minimum tax. Each Series seeks to achieve its objective through the separate investment policies described under "Description of the Fund, Its Investments and Risks." There can be no assurance that a Series' investment objective will be achieved.

The Fund's address is Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102, and its telephone number
is (800) 225-1852.

This Statement of Additional Information (SAI) is not a prospectus and should be read in conjunction with the Fund's prospectus dated June 29, 2005, a copy of which may be obtained at no charge from the Fund upon request at the address or telephone number noted above. The Fund's audited financial statements for the fiscal year ended April 30, 2005, are incorporated into this SAI by reference to the Fund's 2005 annual report to shareholders (File No. 811-4930). You may obtain a copy of the Fund's annual report at no charge by request to the Fund at the address or telephone number noted above.

TABLE OF CONTENTS

				Page
Fund History				B-2

Description of the Fund, Its Investments and Risks				B-2

Investment Restrictions				B-20

Management of the Fund				B-22

Control Persons and Principal Holders of Securities				B-28

Investment Advisory and Other Services				B-29

Brokerage Allocation and Other Practices				B-36

Disclosure of Portfolio Holdings				B-37

Capital Shares, Other Securities and Organization				B-38

Purchase, Redemption and Pricing of Fund Shares				B-39

Shareholder Investment Account				B-45

Net Asset Value				B-48

Taxes, Dividends and Distributions				B-50

Performance Information				B-53

Financial Statements				B-54

Appendix I-General Investment Information				I-1

Appendix II-Proxy Voting Policies of the Subadviser				II-1

MF133B

FUND HISTORY

The Fund was organized in Massachusetts on November 3, 1986. On May 3, 1995, the Trustees approved a change in the name of the Modified Term Series to the Intermediate Series, effective June 29, 1995. On June 23, 1998, the Trustees approved a change in the name of the High Yield Series to the High Income Series, effective July 1, 1998. On January 22, 1999, shareholders of Intermediate Series received shares of Prudential National Municipals Fund, Inc. pursuant to an Agreement and Plan of Reorganization, approved by shareholders at a Special Meeting of Shareholders of Intermediate Series held on January 14, 1999, under which the assets of Intermediate Series were transferred to the Prudential National Municipals Fund, Inc. in exchange for shares of Prudential National Municipals Fund, Inc. and Prudential National Municipals Fund, Inc. assumed the liabilities, if any, of Intermediate Series. Shares of Intermediate Series are no longer offered pursuant to the Fund's Prospectus. Currently, the Fund consists of two separate portfolios-the High Income Series and the Insured Series. The Board of Trustees (the Board) approved changing the name of the Fund to Dryden Municipal Bond Fund, and approved changing the names of the Series to Dryden Municipal Bond Fund-Insured Series and Dryden Municipal Bond Fund-High Income Series, which became effective on July 7, 2003.

DESCRIPTION OF THE FUND, ITS INVESTMENTS AND RISKS

(a) Classification. The Fund is a diversified, open-end management investment company.

(b) and (c) Investment Strategies, Policies and Risks. The investment objectives of the Series are as follows: (i) the objective of the High Income Series is to provide the maximum amount of income that is eligible for exclusion from federal income taxes and (ii) the objective of the Insured Series is to provide the maximum amount of income that is eligible for exclusion from federal income taxes consistent with the preservation of capital. There can be no assurance that either Series will achieve its objective. Although each Series will seek income that is eligible for exclusion from federal income taxes, a portion of the dividends and distributions paid by each Series (and, in particular, the High Income Series) may be treated as a preference item for purposes of the alternative minimum tax. See "Fund Distributions and Tax Issues" in the Prospectus.

Each Series will seek to achieve its investment objective by investing in a diversified portfolio of obligations issued by or on behalf of states, territories and possessions of the United States and the District of Columbia and their political subdivisions, agencies and instrumentalities, the interest on which is eligible for exclusion from federal income taxation (municipal obligations or municipal securities). From time to time, a Series may own the majority of a municipal obligation. Such majority-owned holdings may present additional market and credit risks.

While the principal investment policies and strategies for seeking to achieve each Series' objective are described in the Series' Prospectus, a Series may from time to time also use the securities, instruments, policies and principal and non-principal strategies described below in seeking to achieve its objective.

General

Prudential Investment Management, Inc., doing business as Prudential Investments (PI, the Subadviser or the investment adviser), maintains a fixed-income research group which provides credit analysis and research on fixed-income securities. The portfolio manager consults routinely with the research group in managing the Fund's portfolios. The fixed-income research group, which currently maintains a staff of credit analysts, reviews on an ongoing basis issuers of fixed-income obligations, including prospective purchases and portfolio holdings of the Series. Credit analysts have broad access to research and financial reports, data retrieval services and industry analysts. They review financial and operating statements supplied by state and local governments and other issuers of municipal securities to evaluate revenue projections and the financial soundness of municipal issuers. They study the impact of economic and political developments on state and local governments, evaluate industry sectors and meet periodically with public officials and other representatives of state and local governments and other tax-exempt issuers to discuss such matters as budget projections, debt policy, the strength of the regional economy and, in the case of revenue bonds, the demand for facilities. They also make site inspections to review specific projects and to evaluate the progress of construction or the operation of a facility.

Each Series may invest in municipal securities which are not rated if, based upon a credit analysis by the Subadviser, the Subadviser believes that the securities are of comparable quality to other municipal securities that the Series may purchase. A description of the ratings is set forth under the heading "Description of Security Ratings" in the Fund's Prospectus. The ratings of Moody's Investors Service (Moody's) and Standard & Poor's Ratings Group (S&P) represent the respective opinions of those firms of the quality of the securities each undertakes to rate. The ratings are general and are not absolute standards of quality. In determining the suitability for investment in a particular unrated security, the Subadviser will take into consideration asset and debt service coverage, the purpose of the financing, the history of the issuer, the existence of other

B-2

rated securities of the issuer, any credit enhancement by virtue of a letter of credit or other financial guaranty deemed suitable by the investment adviser and other factors as may be relevant, including comparability to other issuers.

After its purchase by a Series of the Fund, an issue of municipal bonds or notes may cease to be rated or its rating(s) may be reduced. Neither event requires the elimination of that obligation from the portfolio of the Series, but each event will be a factor in determining whether the Series should continue to hold that issue in its portfolio.

Each Series will attempt to invest substantially all of its investable assets in municipal securities. To achieve each Series' respective objective, as a fundamental policy, under normal circumstances, each Series anticipates that its assets will be invested so that at least 80% of its investable assets will be invested in municipal securities (insured municipal securities with respect to the Insured Series). The term "investable assets" in this SAI refers to the Series' net assets plus any borrowings for investment purposes. The Series' investable assets will be less than its total assets to the extent that it has borrowed money for non-investment purposes, such as to meet anticipated redemptions. Each Series will continuously monitor its portfolio to ensure that the asset investment test is met at all times, except for temporary defensive positions during abnormal market conditions.

A Series may invest its assets from time to time on a temporary basis in debt securities, the interest on which is subject to federal, state or local income tax: (1) pending the investment or reinvestment in municipal securities of the proceeds from the sale of shares of the Series or sales of portfolio securities, (2) in order to avoid the necessity of liquidating portfolio investments to meet redemptions of shares by investors, or (3) where market conditions due to rising interest rates or other adverse factors warrant temporary investing. Investments in taxable securities may include: obligations of the U.S. Government, its agencies or instrumentalities; commercial paper rated in the two highest grades by either Moody's or S&P (A-1 and A-2, or P-1 and P-2, respectively), except that the Insured Series may invest only in commercial paper rated A-1 or P-1; certificates of deposit and bankers' acceptances; other debt securities rated within the three highest grades by either Moody's or S&P or, if unrated, judged by the Subadviser to possess comparable creditworthiness; and repurchase agreements with respect to any of the foregoing investments. Each Series does not intend to invest more than 5% of its assets in any one category of the foregoing taxable securities. A Series may also hold its assets in other cash equivalents or in cash.

U.S. Government securities are instruments issued or guaranteed by the U.S. Treasury or by an agency or instrumentality of the U.S. Government. U.S. Government guarantees do not extend to the yield or value of the Fund's portfolio securities or the Fund's shares. Not all U.S. Government securities are backed by the full faith and credit of the United States. Some are supported only by the credit of the issuing agency.

The Fund, as well as each Series of the Fund, is classified as diversified under the Investment Company Act of 1940, as amended (the Investment Company Act or the 1940 Act). This means that with respect to 75% of the assets of a Series, (i) the Series may not invest more than 5% of its total assets in the securities of any one issuer (except U.S. Government obligations) and (ii) the Series may not own more than 10% of the outstanding voting securities of any one issuer. For purposes of diversification and concentration under the Investment Company Act, the identification of the issuer of the municipal obligation depends upon the terms and conditions of the obligation. If the assets and revenues of an agency, authority, instrumentality or other political subdivision are separate from those of the government creating the subdivision and the obligation is backed only by the assets and revenues of the subdivision, the subdivision is regarded as the sole issuer. Similarly, in the case of an industrial development revenue bond or pollution control revenue bond, if the bond is backed only by the assets and revenues of the non-governmental user, the non-governmental user is regarded as the sole issuer. If, in either case, the creating government or another entity guarantees an obligation, the guaranty may be regarded as a separate security and treated as an issue of the guarantor.

Each Series will treat an investment in a municipal bond refunded with escrowed U.S. Government securities as U.S. Government securities for purposes of the Investment Company Act's diversification requirements provided: (1) the escrowed securities are "government securities" as defined in the Investment Company Act, (2) the escrowed securities are irrevocably pledged only to payment of debt service on the refunded bonds, except to the extent there are amounts in excess of funds necessary for such debt service, (3) principal and interest on the escrowed securities will be sufficient to satisfy all scheduled principal, interest and any premiums on the refunded bonds and a verification report prepared by a party acceptable to a nationally recognized statistical rating agency, or counsel to the holders of the refunded bonds, so verifies, (4) the escrow agreement provides that the issuer of the refunded bonds grants and assigns to the escrow agent, for the equal and ratable benefit of the holders of the refunded bonds, an express first lien on, pledge of and perfected security interest in the escrowed securities and the interest income thereon, (5) the escrow agent had no lien of any type with respect to the escrowed securities for payment of its fees or expenses except to the extent there are excess securities, as described in (2) above.

B-3

Since securities issued or guaranteed by states or municipalities are not voting securities, there is no limitation on the percentage of a single issuer's securities which a Series may own so long as, with respect to 75% of its assets, it does not invest more than 5% of its total assets in the securities of that issuer (except obligations issued or guaranteed by the U.S. Government). As for the other 25% of the assets of a Series not subject to the limitation described above, there is no minimum limitation as to the number of issuers in whose securities these assets may be invested.

The Fund expects that normally a Series will not invest 25% or more of its total assets in any one industry.

A portion of the dividends and distributions paid on the shares of each Series of the Fund may be treated as a preference item for purposes of the alternate minimum tax for individuals and corporations. Such treatment may cause certain investors, depending upon other aspects of their individual tax situation, to incur some federal income tax liability. In addition, corporations are subject to an alternative minimum tax which generally treats as a tax preference item 75% of the excess of a corporation's adjusted current earnings over its alternative minimum taxable income. A corporation's adjusted current earnings generally would include interest paid on municipal obligations and dividends paid on shares of the Fund. See "Taxes, Dividends and Distributions."

From time to time, proposals have been introduced to limit the use, or tax and other advantages, of municipal securities which, if enacted, could adversely affect each Series' net asset value (NAV) and investment practices. Such proposals could also adversely affect the secondary market for high yield municipal securities, the financial condition of issuers of these securities and the value of outstanding high yield municipal securities. Reevaluation of each Series' investment objective and structure might be necessary in the future due to market conditions which may result from future changes in state or federal law.

Unlike many issues of common and preferred stock and corporate bonds which are traded between brokers acting as agents for their customers on securities exchanges, municipal obligations are customarily purchased from or sold to dealers who are selling or buying for their own account. Most municipal obligations are not required to be registered with or qualified for sale by federal or state securities regulators. Since there are large numbers of municipal obligation issues of many different issuers, most issues do not trade on any single day. On the other hand, most issues are always marketable, since a major dealer will normally, on request, bid for any issue, other than obscure ones. Regional municipal securities dealers are frequently more willing to bid on issues of municipalities in their geographic area.

Although almost all municipal obligations are marketable, the structure of the market introduces its own element of risk; a seller may find, on occasion, that dealers are unwilling to make bids for certain issues that the seller considers reasonable. If the seller is forced to sell, he or she may realize a capital loss that would not have been necessary in different circumstances. Because the net asset value of a Series' shares reflects the degree of willingness of dealers to bid for municipal obligations, the price of a Series' shares may be subject to greater fluctuation than shares of other investment companies with different investment policies.

Municipal Securities

Municipal securities include notes and bonds issued by or on behalf of states, territories and possessions of the United States and their political subdivisions, agencies and instrumentalities and the District of Columbia, the interest on which is generally eligible for exclusion from federal income tax and, in certain instances, applicable state or local income and personal property taxes. Such securities are traded primarily in the over-the-counter market.

Municipal Bonds. Municipal bonds are issued to obtain funds for various public purposes, including the construction of a wide range of public facilities such as airports, bridges, highways, housing, hospitals, mass transportation, schools, streets, water and sewer works and gas and electric utilities. Municipal bonds also may be issued in connection with the refunding of outstanding obligations and obtaining funds to lend to other public institutions or for general operating expenses.

The two principal classifications of municipal bonds are general obligation and revenue. General obligation bonds are secured by the issuer's pledge of its full faith, credit and taxing power for the payment of principal and interest. Revenue bonds are payable only from the revenues derived from a particular facility or class of facilities or, in some cases, from the proceeds of a special excise tax or other specific revenue source. Private activity bonds that are municipal bonds are in most cases revenue bonds and do not generally constitute the pledge of the credit of the issuer of such bonds. The credit quality of private activity revenue bonds is usually directly related to the credit standing of the industrial user involved. There are, in addition, a variety of hybrid and special types of municipal obligations as well as numerous differences in the security of municipal bonds, both within and between the two principal classifications described above.

Industrial development bonds (IDBs) are issued by or on behalf of public authorities to obtain funds to provide various privately-operated facilities for business and manufacturing, housing, sports, sewage and pollution control, and for airport,

B-4

mass transit, port and parking facilities. The Internal Revenue Code restricts the types of industrial development bonds (IDBs) which qualify to pay interest exempt from federal income tax, and interest on certain IDBs issued after August 7, 1986 is subject to the alternative minimum tax. Although IDBs are issued by municipal authorities, they are generally secured by the revenues derived from payments of the industrial user. The payment of the principal and interest on IDBs is dependent solely on the ability of the user of the facilities financed by the bonds to meet its financial obligations and the pledge, if any, of real and personal property so financed as security for the payment.

The interest rates payable on certain municipal bonds and municipal notes are not fixed and may fluctuate based upon changes in market rates. Municipal bonds and notes of this type are called "variable rate" obligations. The interest rate payable on a variable rate obligation is adjusted either at predesignated intervals or whenever there is a change in the market rate of interest on which the interest rate payable is based. Other features may include the right whereby the Fund may demand prepayment of the principal amount of the obligation prior to its stated maturity (a demand feature) and the right of the issuer to prepay the principal amount prior to maturity. The principal benefit of a variable rate obligation is that the interest rate adjustment minimizes changes in the market value of the obligation. As a result, the purchase of variable rate obligations should enhance the ability of a Series to maintain a stable NAV per share and to sell an obligation prior to maturity at a price approximating the full principal amount of the obligation. For further discussion, see "Floating Rate and Variable Rate Municipal Securities" below.

Municipal Notes. Municipal notes generally are used to provide for short-term capital needs and generally have maturities of one year or less. Municipal notes include:

1. Tax Anticipation Notes. Tax Anticipation Notes are issued to finance working capital needs of municipalities. Generally, they are issued in anticipation of various seasonal tax revenues, such as income, sales, use and business taxes, and are payable from these specific future taxes.

2. Revenue Anticipation Notes. Revenue Anticipation Notes are issued in the expectation of reception of other kinds of revenue, such as federal revenues available under the Federal Revenue Sharing Programs.

3. Bond Anticipation Notes. Bond Anticipation Notes are issued to provide interim financing until long-term financing can be arranged. In most cases, the long-term bonds then provide the money for the repayment of the Notes.

4. Construction Loan Notes. Construction Loan Notes are sold to provide construction financing. Permanent financing, the proceeds of which are applied to the payment of Construction Loan Notes, is sometimes provided by a commitment by the Government National Mortgage Association (GNMA) to purchase the loan, accompanied by a commitment by the Federal Housing Administration to insure mortgage advances thereunder. In other instances, permanent financing is provided by commitments of banks to purchase the loan.

Tax-Exempt Commercial Paper. Issues of tax-exempt commercial paper, the interest on which is generally exempt from federal income taxes, typically are represented by short-term, unsecured, negotiable promissory notes. These obligations are issued by agencies of state and local governments to finance seasonal working capital needs of municipalities or to provide interim construction financing and are paid from general revenues of municipalities or are refinanced with long-term debt. In most cases, tax-exempt commercial paper is backed by letters of credit, lending agreements, note repurchase agreements or other credit facility agreements offered by banks or other institutions and is actively traded.

The High Income Series

The High Income Series will invest primarily in municipal obligations which are rated B or better by Moody's or S&P or a similar nationally recognized statistical rating organization (NRSRO) and which generally have maturities in excess of ten years at the time of purchase, although the Series also will invest in municipal obligations having maturities ranging from one year to ten years, provided that the dollar-weighted average maturity of the Series' investment portfolio generally remains within the fifteen to thirty-year range. Securities rated Baa by Moody's or BBB by S&P, although considered to be investment grade, lack outstanding investment characteristics and in fact have speculative characteristics as well. Securities rated Ba or BB or lower by Moody's or S&P, respectively, are generally considered to be predominantly speculative with respect to the issuer's capacity to pay interest and repay principal and are commonly referred to as junk bonds. While such securities may have some quality and protective characteristics, those are outweighed by large uncertainties or major risk exposures to adverse conditions. See "Description of Security Ratings" in the Prospectus.

The Series may also invest in municipal securities which are not rated if, based upon a credit analysis by the Fund's investment adviser, the investment adviser believes that such securities are of comparable quality to rated municipal securities

B-5

in which the Series may invest. The High Income Series normally can be expected to offer the highest yields of the two Series, but it will also be subject to the greatest market and credit risk.

The Series also may invest in short-term municipal obligations (that is, cash equivalents) that are, at the time of purchase, rated within the four highest quality grades as determined by either Moody's (currently MIG 1, MIG 2, MIG 3 and MIG 4 for notes and P-1, P-2 and P-3 for commercial paper) or S&P (currently A-1, A-2 and A-3 for commercial paper and SP-1 and SP-2 for notes).

Risk Factors Relating to Investing in High-Yield (Junk) Debt Securities. Fixed-income securities are subject to the risk of an issuer's inability to meet principal and interest payments on the obligations (credit risk) and may also be subject to price volatility due to such factors as interest rate sensitivity and the market perception of the creditworthiness of the issuer (market risk). Lower rated (that is, high-yield or junk) securities or non-rated securities of comparable quality are more likely to react to developments affecting market and credit risk than are more highly rated securities, which react primarily to movements in the general level of interest rates. Lower-rated and comparable unrated securities tend to offer higher yields than higher rated securities with the same maturities because the historical financial condition of the issuers of such securities may not have been as strong as that of other issuers. Fluctuations in the prices of fixed-income securities may be caused by, among other things, the supply and demand for similarly rated securities. Fluctuations in the prices of portfolio securities subsequent to their acquisition will not affect cash income from such securities but will be reflected in the Series' NAV. The investment adviser considers both credit risk and market risk in making investment decisions for the Series. The achievement of the Series' investment objective may be more dependent on the investment adviser's credit analysis and rating assignment than is the case when investing in only higher quality bonds. Since lower rated securities generally involve greater risks of loss of income and principal than higher-rated securities, investors should consider carefully the relative risks associated with investments in securities which carry lower ratings and in comparable unrated securities and understand that such securities are not generally meant for short term investing and that yields on junk bonds will fluctuate over time.

An economic downturn could severely affect the ability of highly leveraged issuers to service their debt obligations or to repay their obligations upon maturity. Furthermore, changes in economic conditions and other circumstances are more likely to lead to a weakened capacity to make principal and interest payments than in the case of higher grade bonds. In addition to the risk of default, there are the related costs of recovery on defaulted issues. In addition, the secondary market for high-yield securities, which is concentrated in relatively few market makers, may not be as liquid as the secondary market for more highly rated securities. Under adverse market or economic conditions, the secondary market for high-yield securities could contract further, independent of any specific adverse changes in the condition of a particular issuer. As a result, the investment adviser could find it more difficult to sell these securities or may be able to sell the securities only at prices lower than if such securities were widely traded. Prices realized upon the sale of such lower rated or unrated securities, under these circumstances, may be less than the prices used in calculating the Series' NAV. Under circumstances where the Series owns the majority of an issue, market and credit risks may be greater. Moreover, from time to time, it may be more difficult to value high-yield securities than more highly rated securities.

Debt rated Ba, B, Caa, Ca and C by Moody's, and debt rated BB, B, CCC, CC and C by S&P is regarded by the rating agency, on balance, as predominantly speculative with respect to the issuer's capacity to pay interest and repay principal in accordance with the terms of the obligation. Among junk bonds, Ba/BB indicates the lowest degree of speculation and C/D the highest degree of speculation. While such debt will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions. Debt rated C by S&P is the lowest rated debt that is not in default as to principal or interest and such issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing. Such securities are also generally considered to be subject to greater risk than securities with higher ratings with regard to a deterioration of general economic conditions. Debt rated D by S&P is in payment default. Moody's does not have a D rating. See the "Description of Security Ratings" in the Prospectus.

Lower rated or unrated debt obligations also present risks based on payment expectations. If an issuer calls the obligation for redemption, the Series may have to replace the security with a lower yielding security, resulting in a decreased return for investors. If the Series experiences unexpected net redemptions, it may be forced to sell its higher rated securities, resulting in a decline in the overall credit quality of the portfolio and increasing the exposure of the Series to the risks of high-yield securities.

Since investors generally perceive that there are greater risks associated with the medium to lower rated securities of the type in which the Series may invest, the yields and prices of such securities may tend to fluctuate more than those for higher rated securities. In the lower quality segments of the fixed-income securities market, changes in perceptions of issuers' creditworthiness tend to occur more frequently and in a more pronounced manner than do changes in higher quality segments of the fixed-income securities which, as a general rule, fluctuate in response to the general level of interest rates.

B-6

Credit-Linked Securities

The Series may invest in credit-linked securities. Credit-linked securities are securities that are collateralized by one or more credit default swaps on corporate credits. The Series has the right to receive periodic interest payments from the issuer of the credit-linked security at an agreed-upon interest rate, and a return of principal at the maturity date.

Credit-linked securities are typically privately negotiated transactions between two or more parties. The Series bears the risk that the issuer of the credit-linked security will default or become bankrupt. The Series bears the risk of loss of its principal investment, and the periodic interest payments expected to be received for the duration of its investment in the credit-linked security.

Credit-linked securities are also subject to credit risk of the corporate credits underlying the credit default swaps. If one of the underlying corporate credits defaults, the Series may receive the security that has defaulted, and the Series' principal investment would be reduced by the corresponding face value of the defaulted security.

The market for credit-linked securities may be, or suddenly can become, illiquid. The other parties to the transaction may be the only investors with sufficient understanding of the derivative to be interested in bidding for it. Changes in liquidity may result in significant, rapid and unpredictable changes in the prices for credit-linked securities. In certain cases, a market price for a credit-linked security may not be available.

The collateral for a credit-linked security is one or more credit default swaps. See "Description of the Fund, Its Investments and Risks-Hedging Strategies-Swap Transactions-Credit Default Swap Transactions" for a description of additional risks associated with credit default swaps.

Securities of Financially and Operationally Troubled Obligors

The Series may also invest up to 10% of its total assets in debt securities of financially troubled and operationally troubled obligors (collectively, distressed securities). Financially troubled obligors include obligors involved in bankruptcy or reorganization proceedings or financial restructurings or otherwise in default on their obligations. Operationally troubled obligors are ones experiencing poor operating results that may have severely depressed earnings or have special competitive or product obsolescence problems.

The Series' portfolio manager may consult the Subadviser's fixed-income research group in managing the portfolio and in researching financially troubled and operationally troubled obligors. The Series' portfolio manager reviews on an ongoing basis financially troubled and operationally troubled obligors, including prospective purchases and portfolio holdings of the Series. The portfolio manager has broad access to research and financial reports, data retrieval services and industry analysts.

The Series is permitted to invest in defaulted securities and in low quality debt securities having a rating of D or better as determined by S&P or Moody's or having a comparable rating determined by another NRSRO, or in unrated securities which, in the opinion of the investment adviser, are of equivalent quality. See "Description of Security Ratings" in the Prospectus. Such lower-quality debt securities are considered to have speculative characteristics, and involve greater risk of default or price changes due to changes in the obligor's creditworthiness, or they may already be in default. The market prices of these securities may fluctuate more than higher-quality securities and may decline significantly in periods of general or regional economic difficulty.

The securities of financially and operationally troubled obligors may require active monitoring and at times may require the Series' investment adviser to participate in bankruptcy or reorganization proceedings on behalf of the Series. To the extent the investment adviser becomes involved in such proceedings, the Series may have a more active participation in the affairs of the issuer than is generally assumed by an investor and such participation may subject the Series to the litigation risks described below. However, the Series does not invest in the securities of financially or operationally troubled obligors for the purpose of exercising day-to-day management of any obligor's affairs.

Risks of Financially and Operationally Troubled Obligors

Investment in the securities of financially and operationally troubled obligors involves a high degree of credit and market risk. See "Risk Factors Relating to Investing in High-Yield Securities" above. There is a possibility that the Series may incur substantial or total losses on its investments. During an economic downturn or recession, securities of financially troubled obligors are more likely to go into default than securities of other obligors. In addition, it may be difficult to obtain information about financially and operationally troubled obligors.

Investment in the securities of financially and operationally troubled obligors is a long-term investment strategy and, accordingly, investors in the Series should have the financial ability and willingness to remain invested for the long term.

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Securities of financially troubled obligors are less liquid and more volatile than securities of companies not experiencing financial difficulties. The market prices of such securities are subject to erratic and abrupt market movements and the spread between bid and asked prices may be greater than normally expected. In addition, it is anticipated that many of these investments may not be widely traded and that the Series' position in such securities may be substantial relative to the market for such securities. As a result, the Series may experience delays and incur losses and other costs in connection with the sale of its portfolio securities.

The Series may invest in the securities of companies involved in bankruptcy proceedings, reorganizations and financial restructurings and may have a more active participation in the affairs of the obligor than is generally assumed by an investor. This may subject the Series to litigation risks or prevent the Series from disposing of securities. In a bankruptcy or other proceeding, the Series as a creditor may be unable to enforce its rights in any collateral or may have its security interest in any collateral challenged, disallowed or subordinated to the claims of other creditors. While the Series will attempt to avoid taking the types of actions that would lead to equitable subordination or creditor liability, there can be no assurance that such claims will not be asserted or that the Series will be able to successfully defend against them. Because (unlike the Series) other investors may purchase the securities of these companies for the purpose of exercising control or management, the Series may be at a disadvantage to the extent that the Series' interests differ from the interests of these other investors.

The Insured Series

The Insured Series will invest primarily in municipal obligations which are (1) insured by an entity whose claims-paying ability at the time of purchase is rated Aaa by Moody's or AAA by S&P, or a similar NRSRO, so that the obligation is rated AAA or Aaa or meets the eligibility criteria imposed by such insurers or (2) backed by the full faith and credit of the U.S. Government. The Series may also invest up to 5% of its investable assets in municipal obligations which are rated A/A or Aa/AA by Moody's or S&P, respectively, or a similar NRSRO. See "Description of Security Ratings" in the Prospectus. The Series may also invest in municipal securities which are not rated if, based upon a credit analysis by the Fund's investment adviser, the investment adviser believes that such securities are of comparable quality to other municipal securities that the Series may purchase.

Under normal circumstances, at least 80% of the Series' investable assets will consist of insured municipal obligations. This insurance may be provided either (1) under a new issue insurance policy obtained by the issuer or underwriter of a bond or note or (2) under a secondary market insurance policy on a particular bond or note purchased either by the Series or a previous bondholder or noteholder. See "Insurance" below. As noted above, the Series will acquire insurance only from, and purchase municipal bonds and notes insured by, insurers whose claims-paying ability is rated AAA or Aaa at the time of purchase. Changes in the financial condition of an insurer could result in a subsequent reduction or withdrawal of this rating. In each case, the insurance policies protect only against the timely payment of principal and interest on the insured municipal bonds and notes. The price of the municipal obligations, which may fluctuate due to changes in interest rates generally or factors affecting the credit of the insurer, and the stability of the Series' NAV are not insured.

The Insured Series and the High Income Series

Insurance. Each Series may at times purchase secondary market insurance on municipal bonds and notes which it holds or acquires. Secondary market insurance would be reflected in the market value of the municipal obligation and may enable the Series to dispose of a defaulted obligation at a price similar to that of comparable municipal obligations which are not in default.

Insurance is not a substitute for the basic credit of an issuer, but supplements the existing credit and provides additional security therefor. While insurance coverage for the municipal bonds and notes held by a Series reduces credit risk by providing that the insurance company will make timely payment of principal and interest if the issuer defaults on its obligation to make such payment, it does not afford protection against fluctuation in the price, that is, the market value, of the municipal obligations caused by changes in interest rates and other factors, nor in turn against fluctuations in the NAV of the shares of the Series. The ratings of insured municipal obligations depend, in substantial part, on the creditworthiness of the insurer; thus their value will fluctuate largely on the basis of factors relating to the insurer's ability to satisfy its obligations, as well as on market factors generally. New issue insurance is obtained by the issuer or underwriter upon issuance of a bond or note, and the insurance premiums are reflected in the price of such bond or note. Insurance premiums with respect to secondary insurance may, on the other hand, be paid by a Series. Premiums paid for secondary market insurance will be treated as capital costs, increasing the cost basis of the investment and thereby reducing the effective yield of the investment. No Series will invest in obligations insured by The Prudential Insurance Company of America, except as may be permitted by applicable law, nor will a Series settle any claim under portfolio insurance provided by an insurer whose insurance obligations are reinsured by an affiliate of Prudential for less than full payment except in accordance with an exemptive order, if any, obtained from the Securities and Exchange Commission (Commission or SEC).

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The Insured Series. It is anticipated that, under current market conditions, a great majority of the municipal obligations held by the Insured Series will be insured by the following entities: MBIA Insurance Corporation (MBIA Corp.) (formerly known as Municipal Bond Investors Assurance Corporation), AMBAC Assurance Corporation (AMBAC) (formerly known as AMBAC Indemnity Corporation), Financial Guaranty Insurance Company (FGIC) and Financial Security Assurance Inc. (FSA). S&P and Moody's rates the claims paying ability of such insurers AAA and Aaa, respectively. The Insured Series may, from time to time, purchase municipal securities insured by other entities or acquire insurance coverage for individual uninsured municipal securities directly from another insurer provided any such entity has a claims-paying ability rated AAA or Aaa by S&P or Moody's, respectively.

High Income Series. It is anticipated that, under current market conditions, certain of the municipal obligations held by the High Income Series will be insured by the entities described above. The High Income Series may also purchase secondary market insurance from insurers whose claims paying ability is rated AAA/Aaa, or lower, by various credit rating agencies. Certain insurers whose claims paying ability is lower than AAA/Aaa, may subject the Series to greater credit risk.

Floating Rate and Variable Rate Securities. Each Series may invest more than 5% of its investable assets in floating rate and variable rate securities, including participation interests therein and inverse floaters. Floating rate securities normally have a rate of interest that is set as a specific percentage of a designated base rate, such as the rate on Treasury Bonds or Bills. The interest rate on floating rate securities changes whenever there is a change in the designated base interest rate. Variable rate securities provide for a specific periodic adjustment in the interest rate based on prevailing market rates and generally would allow a Series to demand payment of the obligation on short notice at par plus accrued interest, which amount may be more or less than the amount the Series paid for them. Floating rate and variable rate securities typically have long maturities but afford the holder the right to demand payment at earlier dates. Such floating rate and variable rate securities will be treated as having maturities equal to the period of adjustment of the interest rate.

Each Series may invest in participation interests in variable rate tax-exempt securities (such as certain IDBs) owned by banks. A participation interest gives a Series an undivided interest in the tax-exempt security in the proportion that a Series' participation interest bears to the total principal amount of the tax-exempt security and generally provides that the holder may demand repurchase within one to seven days. Participation interests frequently are backed by an irrevocable letter of credit or guarantee of a bank that the investment adviser, under the supervision of the Trustees, has determined meets the prescribed quality standards for a Series. A Series generally has the right to sell the instrument back to the bank and draw on the letter of credit on demand, on seven days' notice, for all or any part of a Series' participation interest in the par value of the tax-exempt security, plus accrued interest. A Series intends to exercise the demand under the letter of credit only (1) upon a default under the terms of the documents of the tax-exempt security, (2) as needed to provide liquidity in order to meet redemptions or (3) to maintain a high quality investment portfolio. Banks will retain a service and letter of credit fee and a fee for issuing repurchase commitments in an amount equal to the excess of the interest paid by the issuer on the tax-exempt securities over the negotiated yield at which the instruments were purchased from the bank by a Series. The investment adviser will monitor the pricing, quality and liquidity of the variable rate demand instruments held by a Series, including the IDB's supported by bank letters of credit or guarantees, on the basis of published financial information, reports of rating agencies and other bank analytical services to which the investment adviser may subscribe. Participation interests will be purchased only if, in the opinion of counsel, interest income on such interests will be tax-exempt when distributed as dividends to shareholders.

Inverse and Secondary Inverse Floaters. Each Series may invest in inverse floaters and secondary inverse floaters. An inverse floater is a debt instrument with a floating or variable interest rate that moves in the opposite direction of the interest rate on another security or the value of an index. A secondary inverse floater is an asset-backed security, generally evidenced by a trust or custodial receipt, the interest rate on which moves in the opposite direction of the interest rate on another security or the value of an index. Changes in the interest rate on the other security or index inversely affect the residual interest rate paid on such instruments. Generally, income from inverse floating rate bonds will decrease when short-term interest rates increase, and will increase when short-term interest rates decrease. Such securities have the effect of providing a degree of investment leverage, since they may increase or decrease in value in response to changes, as an illustration, in market interest rates at a rate that is a multiple (typically two) of the rate at which fixed-rate, long-term, tax-exempt securities increase or decrease in response to such changes. As a result, the market values of such securities generally will be more volatile than the market values of fixed-rate tax-exempt securities. To seek to limit the volatility of these securities, a Series may, but is not required to, purchase inverse floating obligations with shorter-term maturities or which contain limitations on the extent to which the interest rate may vary. Inverse floaters represent a flexible portfolio management instrument that allows us to vary the degree of investment leverage relatively efficiently under different market conditions.

When-Issued and Delayed-Delivery Securities. Each Series may purchase municipal obligations on a when-issued or delayed-delivery basis and may from time to time sell obligations on a delayed delivery basis, in each case without limit. When

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municipal obligations are offered on a when-issued or delayed-delivery basis, the price and coupon rate are fixed at the time the commitment to purchase is made, but delivery and payment for the when-issued securities take place at a later date. During the period between purchase and settlement, no interest accrues to the purchaser. In the case of purchases by a Series, the price that the Series is required to pay on the settlement date may be in excess of the market value of the municipal obligations on that date and an increase in the percentage of the Series' assets committed to the purchase of securities on a when-issued or delayed-delivery basis may increase the volatility of the Series' NAV. While securities may be sold prior to the settlement date, each Series intends to purchase these securities with the purpose of actually acquiring them unless a sale would be desirable for investment reasons. At the time a Series makes the commitment to purchase a municipal obligation on a when-issued or delayed-delivery basis, it will record the transaction and thereafter reflect the value of the obligation, each day, in determining its NAV. This value may fluctuate from day to day in the same manner as values of municipal obligations otherwise held by the Series. If the seller defaults in the sale, the Series could fail to realize the appreciation, if any, that had occurred. If a Series chooses to dispose of the right to acquire a when-issued security prior to its acquisition, it could, as with the disposition of any other portfolio security, incur a gain or loss due to market fluctuations. Each Series will establish a segregated account in which it will maintain cash or other liquid assets having a value equal to or greater than the Series' purchase commitments.

As in the case of purchases, the price of the municipal obligations sold on a delayed delivery basis is determined at the time of the commitment. The price that a Series may be required to accept on the settlement date may be less than the market value of the obligation on that date.

Each Series may also purchase municipal forward contracts. A municipal forward contract is a municipal security which is purchased on a when-issued basis with delivery taking place up to five years from the date of purchase. The investment adviser will monitor the liquidity, value, credit quality and delivery of the security under the supervision of the Trustees.

Municipal Lease Obligations. Each Series may invest in municipal lease obligations. A municipal lease obligation is a municipal security the interest on and principal of which is payable out of lease payments made by the party leasing the facilities financed by the issue. Typically, municipal lease obligations are issued by a state or municipal financing authority to provide funds for the construction of facilities (for example, schools, dormitories, office buildings or prisons) or the acquisition of equipment. The facilities are typically used by the state or municipality pursuant to a lease with a financing authority. Certain municipal lease obligations may trade infrequently. Accordingly, the investment adviser will monitor the liquidity of municipal lease obligations under the supervision of the Board. See "Illiquid Securities" below.

In addition to the risks relating to municipal obligations, municipal lease obligations also expose a Series to abatement risk. Abatement risk is the risk that the entity leasing the equipment or facility will not be required to make lease payments because it does not have full use and possession of the equipment or facility.

Municipal Asset-Backed Securities. Each Series may invest in municipal asset-backed securities. A municipal asset-backed security is a debt or equity interest in a trust, special purpose corporation or other pass-through structure, the interest or income on which generally is eligible for exclusion from federal income taxation based upon the income from an underlying municipal bond or pool of municipal bonds.

Lending of Securities. Consistent with applicable regulatory requirements, each Series may lend its portfolio securities to brokers, dealers and financial institutions, provided that outstanding loans do not exceed in the aggregate 33 1 / 3 % of the value of the Series' total assets and provided that such loans are callable at any time by the Series and are at all times secured by cash or other liquid assets or an irrevocable letter of credit in favor of the Series that is equal to at least 100% of the market value, determined daily of the loaned securities. The advantage of such loans is that the Series continues to receive payments in lieu of the interest and dividends on the loaned securities, while at the same time earning interest either directly from the borrower or on the collateral which will be invested in short-term obligations.

A loan may be terminated by the Series any time. If the borrower fails to maintain the requisite amount of collateral, the loan automatically terminates, and the Series could use the collateral to replace the securities while holding the borrower liable for any excess of replacement cost over collateral. As with any extensions of credit, there are risks of delay in recovery and in some cases loss of rights in the collateral should the borrower of the securities fail financially. However, these loans of portfolio securities will only be made to firms determined to be creditworthy pursuant to procedures approved by the Board. On termination of the loan, the borrower is required to return the securities to the Series, and any gain or loss in the market price during the loan would inure to the Series.

Since voting or consent rights that accompany loaned securities pass to the borrower, the Series will follow the policy of calling the loan, in whole or in part as may be appropriate, to permit the exercise of such rights if the matters involved would have a material effect on the Series' investment in the securities that are the subject of the loan. The Series will pay reasonable finders', administrative and custodial fees in connection with a loan of its securities or may share the interest earned on collateral with the borrower.

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Liquidity Puts. Each Series may purchase and exercise puts on municipal bonds and notes. Puts give the Series the right to sell securities held in the portfolio at a specified exercise price on a specified date. Puts may be acquired to reduce the volatility of the market value of securities subject to puts. The acquisition of a put may involve an additional cost to a Series compared to the cost of securities with similar credit ratings, stated maturities and interest coupons but without applicable puts. This increased cost may be paid either by way of an initial or periodic premium for the put or by way of a higher purchase price for securities to which the put is attached. In addition, there is a credit risk associated with the purchase of puts in that the issuer of the put may be unable to meet its obligation to purchase the underlying security. Accordingly, each Series will acquire a put only under the following circumstances: (1) the put is written by the issuer of the underlying security and the security is rated within the quality grades in which the Series is permitted to invest; (2) the put is written by a person other than the issuer of the underlying security and that person has securities outstanding which are rated within the quality grades in which the Series is permitted to invest; or (3) the put is backed by a letter of credit or similar financial guaranty issued by a person having securities outstanding which are rated within the quality grades in which the Series is permitted to invest.

Puts will be valued at an amount equal to the difference between the value of the underlying security taking the put into consideration and the value of the same or a comparable security without taking the put into consideration.

Hedging Strategies

Each Series is authorized to purchase and sell certain derivatives, including financial futures contracts (futures contracts), options on futures contracts, options on swaps (swap options), interest rate swaps, total return swaps and index swaps, for the purpose of attempting to hedge its investment in municipal obligations against fluctuations in value caused by changes in prevailing market interest rates, attempting to hedge against increases in the cost of securities the Series intends to purchase and in certain cases, attempting to enhance return. A Series, and thus an investor, may lose money through unsuccessful use of these strategies. The successful use of futures contracts, options on futures contracts, swap options, interest rate swaps, total return swaps, index swaps and credit default swaps (with respect to the High Income Series) by a Series involves additional transaction costs, is subject to various risks and depends upon the investment adviser's ability to predict the direction of the market and interest rates. A Series' ability to use these strategies may be limited by various factors, such as market conditions, regulatory limits and tax considerations, and there can be no assurance that any of these strategies will succeed. If new financial products and risk management techniques are developed, a Series may use them to the extent consistent with its investment objective and policies.

Each Series intends to engage in futures contracts and options thereon as a hedge against changes, resulting from market conditions, in the value of securities which are held in the Series' portfolio or which the Series intends to purchase. The Series also intend to engage in such transactions when they are economically appropriate for the reduction of risks inherent in the ongoing management of the Series. A Series may not purchase or sell futures contracts or purchase or sell options thereon if, immediately thereafter, the sum of initial and net cumulative variation margin on outstanding futures contracts and sold options thereon, together with premiums paid on purchased options thereon, would exceed 20% of the total assets of the Series. There are no limitations on the percentage of a portfolio which may be hedged and no limitations on the use of a Series' assets to cover futures contracts and options thereon, except that (1) the aggregate value of the obligations underlying put options sold by a Series will not exceed 50% of a Series' assets and (2) a Series will not sell futures contracts if the value of such futures contracts exceeds the total market value of the securities of the Series.

Futures Contracts. A futures contract that provides for cash settlement obligates the party to the contract to deliver to the other party to the contract cash equal to a specific dollar amount times the difference between the value of the underlying fixed-income security or index at the time of settlement or offset of the contract and the price at which the agreement is made. A futures contract that provides for physical settlement obligates the seller of the contract to deliver to the purchaser of the contract the underlying fixed income security in exchange for the price at which the agreement is made. Although some interest rate futures contracts call for actual delivery or acceptance of debt securities at settlement, in most cases the contracts are closed out before the settlement date without the making or taking of delivery. A Series will engage in transactions in only those futures contracts and options thereon that are traded on a commodities exchange or a board of trade.

Each Series may engage in transactions in financial futures contracts as a hedge against interest rate related fluctuations in the value of securities which are held in the investment portfolio or which the Series intends to purchase. A clearing corporation associated with the commodities exchange on which a futures contract trades assumes responsibility for the completion of transactions and, to a certain extent, guarantees that open futures contracts will be closed.

A Series neither pays nor receives money upon the purchase or sale of a futures contract. Instead, when the futures contract is entered into, each party deposits in a segregated account approximately 5% of the contract amount, called the initial margin. Initial margin in futures transactions is different from margin in securities transactions in that futures contract initial

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margin does not involve the borrowing of funds by the customer to finance the transactions. Rather, initial margin is in the nature of a good faith deposit on the contract which is returned to a Series upon termination of the futures contract, assuming all contractual obligations have been satisfied. Subsequent payments to and from the broker, called variation margin, will be made on a daily basis as the price of the underlying security or index fluctuates, making the long and short positions in the futures contracts more or less valuable, a process known as "marking to market."

When a Series purchases a futures contract, it will maintain an amount of cash or other liquid assets in a segregated account so that the amount so segregated plus the amount of initial and variation margin held in the account of its broker equals the market value of the futures contract, thereby ensuring that the use of such futures contract is unleveraged. A Series that has sold a futures contract may cover that position by owning the instruments underlying the futures contract or by holding a call option on such futures contract. A Series will not sell futures contracts if the value of such futures contracts exceeds the total market value of the securities of the Series. It is not anticipated that transactions in futures contracts will have the effect of increasing portfolio turnover.

Currently, futures contracts are available on several types of fixed-income securities, including U.S. Treasury Bonds and Notes, Government National Mortgage Association modified pass-through mortgage-backed securities, three-month U.S. Treasury Bills and bank certificates of deposit. Futures contracts are also available on a municipal bond index, based on The Bond Buyer Municipal Bond Index, an index of 40 actively traded municipal bonds. Each Series may also engage in transactions in other futures contracts that become available, from time to time, in other fixed-income securities or municipal bond indexes and in other options on such contracts if the investment adviser believes such contracts and options would be appropriate for hedging investments in municipal obligations.

Futures Contracts on 10-Year Interest Rate Swaps (Swap Futures)

Swap Futures, introduced by the Chicago Board of Trade in October 2001, enable purchasers to cash settle at a future date at a price determined by the International Swaps and Derivatives Association Benchmark Rate for a 10-year U.S. dollar interest rate swap on the last day of trading, as published on the following business day by the Federal Reserve Board in its Daily Update to the H. 15 Statistical Release. Swap Futures attempt to replicate the pricing of interest rate swaps.

The $100,000 par value trading units of Swap Futures represent the fixed-rate side of a 10-year interest rate swap that exchanges semiannual fixed-rate payments at a 6% annual rate for floating-rate payments based on 3-month LIBOR. Swap Futures trade in price terms quoted in points ($1,000) and 32nds ($31.25) of the $100,000 notional par value. The contract settlement-date cycle is March, June, September and December, which is comparable to other fixed-income futures contracts.

The structure of Swap Futures blends certain characteristics of existing over-the-counter (OTC) swaps and futures products. Unlike most swaps traded in the OTC Market that are so-called "par" swaps with a fixed market value trading on a rate basis, Swap Futures have fixed notional coupons and trade on a price basis. In addition, Swap Futures are constant maturity products that will not mature like OTC swaps, but rather represent a series of 10-year instruments expiring quarterly. Because Swap Futures are traded on an exchange, there is minimal counterparty or default risk, although, like all futures contracts, a Series could experience delays and/or losses associated with the bankruptcy of a broker through which a Series engages in futures transactions. Investing in Swap Futures is subject to the same risks of investing in futures, which are described below.

A Series may invest in Swap Futures for hedging purposes only.

Options on Futures Contracts.- Each Series may purchase put and call options and write put and call options on futures contracts and enter into closing transactions with respect to such options to terminate an existing position. Each Series will use options on futures in connection with hedging strategies.

An option on a futures contract gives the purchaser the right, but not the obligation, in return for the premium paid, to assume a position in a futures contract (a long position if the option is a call or a short position if the option is a put) at a specified exercise price at any time during the period of the option. Upon exercise of the option, the delivery of the futures position by the writer of the option to the holder of the option will be accompanied by delivery of the accumulated balance in the writer's futures margin account which represents the amount by which the market price of the futures contract, at exercise, exceeds, in the case of a call, or is less than, in the case of a put, the exercise price of the option on the futures contract. If an option is exercised on the last trading day prior to the expiration date of the option, the settlement will be made entirely in cash equal to the difference between the exercise price of the option and the closing price of the futures contract on the expiration date. Currently options can be purchased or written with respect to futures contracts on U.S. Treasury Bonds, among other fixed-income securities, and on municipal bond indices on the Chicago Board of Trade. As with options on debt securities, the holder or writer of an option on a future may terminate his or her position by selling or purchasing (respectively) an option of the same series. There is no guaranty that such closing transactions can be effected.

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When a Series hedges its portfolio by purchasing a put option, or writing a call option, on a futures contract, it will own a long futures position or an amount of debt securities corresponding to the open option position. When a Series writes a put option on a futures contract, it may, rather than establish a segregated account, sell the futures contract underlying the put option or purchase a similar put option.

Limitations on the Purchase and Sale of Futures Contracts and Related Options

Limitation on Purchase and Sale. Each Series intends to limit its futures-related investment activity so that, other than with respect to bona fide hedging activity (as defined in Commodity Futures Trading Commission (CFTC) Rule 1.3(z)):

(i) the aggregate initial margin and premiums paid to establish commodity futures and commodity option contract positions (determined at the time the most recent position was established) does not exceed 5% of the liquidation value of the Series' portfolio, after taking into account unrealized profits and unrealized losses on any such contracts it has entered into (provided that, in the case of an option that is in-the-money at the time of purchase, the in-the-money amount may be excluded in calculating such 5% limitation) or

(ii) the aggregate net "notional value" (i.e., the size of a commodity futures or commodity option contract in contract units (taking into account any multiplier specified in the contract), multiplied by the current market price (for a futures contract) or strike price (for an option contract) of each such unit) of all non-hedge commodity futures and commodity option contracts that the Series has entered into (determined at the time the most recent position was established) does not exceed the liquidation value of the Series' portfolio, after taking into account unrealized profits and unrealized losses on any such contracts that the Series has entered into.

No Commodity Pool Operator Registration or Regulation. Each Series is operated by a person who has claimed an exclusion from the definition of the term "commodity pool operator" under the Commodity Exchange Act ("CEA") and therefore, is not subject to registration or regulation as a pool operator under the CEA.

Each Series will use financial futures in a manner consistent with these requirements. Each Series will continue to invest at least 80% of its investable assets in municipal bonds and municipal notes (insured municipal bonds and municipal notes, with respect to the Insured Series) except in certain circumstances, as described in the Prospectus under "How the Fund Invests-Investment Objective and Policies." In addition, a Series may not purchase or sell futures contracts or purchase or sell options thereon if, immediately thereafter, the sum of initial and net cumulative variation margin on outstanding futures contracts and sold options thereon, together with premiums paid on purchased options thereon, would exceed 20% of the total assets of the Series. There are no limitations on the percentage of a portfolio which may be hedged and no limitations on the use of a Series' assets to cover futures contracts and options thereon, except that (1) the aggregate value of the obligations underlying put options sold by a Series will not exceed 50% of a Series' assets and (2) a Series will not sell futures contracts if the value of such futures contracts exceeds the total market value of the securities of the Series. As discussed above, a Series may invest in Swap Futures for hedging purposes only.

Swap Transactions

Each Series may enter into swap transactions, including interest rate and total return and index swap agreements. The High Income Series may also enter into credit default swap agreements. In addition, each Series may also enter into swap options. These swap transactions are entered into in an attempt to obtain a particular return when it is considered desirable to do so, possibly at a lower cost to a Series than if the Series had invested directly in an instrument that yielded that desired return. Investments in each of credit default swaps, total return swaps, index swaps and swap options are limited to 15% of a Series' investable assets, as applicable.

Swap agreements are two-party contracts entered into primarily by institutional investors for periods typically ranging from a few weeks to more than one year. In a standard "swap" transaction, two parties agree to exchange the returns (or differentials in rates of return) earned or realized on or calculated with respect to particular predetermined investments or instruments, which may be adjusted for an interest factor. The gross returns to be exchanged or "swapped" between the parties are generally calculated with respect to a "notional amount," that is, the return on or increase in value of a particular dollar amount invested at a particular interest rate or in a "basket" of securities representing a particular index or other investments or instruments.

Most swap agreements entered into by a Series would calculate the obligations of the parties to the agreement on a "net basis." Consequently, a Series' current obligations (or rights) under a swap agreement will generally be equal only to the net amount to be paid or received under the agreement based on the relative values of the positions held by each party to the agreement (the "net amount"). A Series' current obligations under a swap agreement will be accrued daily (offset against any

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amounts owed to the Series) and any accrued but unpaid net amounts owed to a swap counterparty will be covered by the segregation of liquid assets.

To the extent that a Series enters into swaps on other than a net basis, the amount maintained in a segregated account will be the full amount of the Series' obligations, if any, with respect to such swaps, accrued on a daily basis. Inasmuch as segregated accounts are established for these hedging transactions, the investment adviser and each Series believe such obligations do not constitute senior securities and, accordingly, will not treat them as being subject to its borrowing restrictions. If there is a default by the other party to such a transaction, each Series will have contractual remedies pursuant to the agreement related to the transaction. Since swaps are individually negotiated, each Series expects to achieve an acceptable degree of correlation between its rights to receive a return on its portfolio securities and its rights and obligations to receive and pay a return pursuant to swaps. A Series will enter into swaps only with parties meeting creditworthiness standards approved by the Series' Board. The investment adviser will monitor the creditworthiness of such parties under the supervision of the Board.

For purposes of applying the Series' investment policies and restrictions (as stated in the Prospectus and SAI) swap agreements are generally valued by a Series at market value. In the case of a credit default swap sold by the High Income Series ( i.e. , where the Series is selling credit default protection) however, the Series will generally value the swap at its notional amount. The manner in which certain securities or other instruments are valued by a Series for purposes of applying investment policies and restrictions may differ from the manner in which those investments are valued by other types of investors.

Whether a Series' use of swap agreements or swap options will be successful in furthering its investment objective will depend on the investment adviser's ability to predict correctly whether certain types of investments are likely to produce greater returns than other investments. Because they are two-party contracts and because they may have terms of greater than seven days, swap agreements may be considered to be illiquid. Moreover, each Series bears the risk of loss of the amount expected to be received under a swap agreement in the event of the default or bankruptcy of a swap agreement counterparty.

A Series will enter into swap agreements only with counterparties that meet certain standards of creditworthiness (generally, such counterparties would have to be eligible counterparties under the terms of the Series' repurchase agreement guidelines). Certain restrictions imposed on a Series by the Internal Revenue Code may limit the Series' ability to use swap agreements. It is possible that developments in the swap market, including potential government regulation, could adversely affect the Series' ability to terminate existing swap agreements or to realize amounts to be received under such agreements.

Depending on the terms of the particular option agreement, a Series will generally incur a greater degree of risk when it writes a swap option than it will incur when it purchases a swap option. When a Series purchases a swap option, it risks losing only the amount of the premium it hedged should it decide to let the option expire unexercised. However, when a Series writes a swap option upon exercise of the option the Series will become obligated according to the terms of the underlying agreement.

Certain swap agreements are exempt from most provisions of the Commodity Exchange Act (CEA) and, therefore, are not regulated as futures or commodity option transactions under the CEA, pursuant to regulations approved by the CFTC. To qualify for this exemption, a swap agreement must be entered into by "eligible contract participants", which includes the following, provided the participants' total assets exceed established levels: a bank or trust company, savings association or credit union, insurance company, investment company subject to regulation under the 1940 Act, commodity pool, corporation, partnership, proprietorship, organization, trust or other entity, employee benefit plan, governmental entity, broker-dealer, futures commission merchant, natural person, or regulated foreign person. To be eligible, natural persons and most other entities must have total assets exceeding $10 million; commodity pools and employee benefit plans must have assets exceeding $5 million. In addition, the swap agreement must be subject to individual negotiation by the parties and not be executed or transacted on a trading facility.

Interest Rate Swap Transactions. Each Series may enter into interest rate swaps. Interest rate swaps involve the exchange by a Series with another party of their respective commitments to pay or receive interest, e.g. , an exchange of floating rate payments for fixed rate payments. Each Series expects to enter into these transactions primarily to preserve a return or spread on a particular investment or portion of its portfolio or to protect against any increase in the price of securities the Series anticipates purchasing at a later date. Each Series may enter into interest rate swaps for credit enhancement or to hedge its portfolio.

A Series may enter into interest rate swaps traded on an exchange or in the over-the-counter market. Interest rate swaps do not involve the delivery of securities or other underlying assets or principal. Accordingly, the risk of loss with respect to interest rate swaps is limited to the net amount of interest payments that the Series is contractually obligated to make. If the other party to an interest rate swap defaults, the Series' risk of loss consists of the net amount of interest payments that the Series is contractually entitled to receive. The use of interest rate swaps is a highly speculative activity which involves investment techniques and risks different form those associated with ordinary portfolio transactions. If the investment adviser

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is incorrect in its forecast of market values, interest rates and other applicable factors, the investment performance of the Series would diminish compared to what it would have been if this investment technique was never used.

A Series may enter into interest rate swaps as a hedge against changes in the interest rate of a security in its portfolio or that of a security the Series anticipates buying. If a Series purchases an interest rate swap to hedge against a change in an interest rate of a security the Series anticipates buying, and such interest rate changes unfavorably for the Series, then the Series may determine not to invest in the securities as planned and will realize a loss on the interest rate swap that is not offset by a change in the interest rates or the price of the securities.

A Series may enter into interest rate swap transactions (including interest rate swaps with embedded options) on either an asset-based or liability-based basis, depending on whether it is hedging its assets or its liabilities.

Credit Default Swap Transactions. The High Income Series may enter into credit default swap transactions. The "buyer" in a credit default contract is obligated to pay the "seller" a periodic stream of payments over the term of the contract provided that no event of default on an underlying reference obligation has occurred. If an event of default occurs, the seller must pay the buyer the full notional value, or "par value", of the reference obligation in exchange for the reference obligation. The Series may be either the buyer or seller in a credit default swap transaction. If the Series is a buyer and no event of default occurs, the Series will lose its investment and recover nothing. However, if an event of default occurs, the Series (if the buyer) will receive the full notional value of the reference obligation that may have little or no value. As a seller, the Series receives a fixed rate of income throughout the term of the contract, which typically is between six months and three years, provided that there is no default event. If an event of default occurs, the seller must pay the buyer the full notional value of the reference obligation. Credit default swap transactions involve greater risks than if the Series had invested in the reference obligation directly.

The Series may also purchase credit default swap contracts in order to hedge against the risk of default of debt securities they hold, in which case the Series would function as the counterparty referenced in the preceding paragraph. This would involve the risk that the swap may expire worthless and would only generate income in the event of an actual default by the issuer of the underlying obligation (as opposed to a credit downgrade or other indication of financial instability). It would also involve credit risk-that the seller may fail to satisfy its payment obligations to the Series in the event of a default.

Total Return & Index Swaps. Each Series may enter into total return and index swaps. Total return and index swaps are used as substitutes for owning the physical securities that comprise a given market index, or to obtain non-leveraged exposure in markets where no physical securities are available such as an interest rate index. Total return refers to the payment (or receipt) of an index's total return, which is then exchanged for the receipt (or payment) of a floating interest rate. Total return swaps provide the Series with the additional flexibility of gaining exposure to a market or sector index by using the most cost-effective vehicle available. For example, a Series can gain exposure to the broad mortgage sector by entering into a swap agreement, whereby the Series receives the total return of the Lehman Brothers Mortgage Index in exchange for a short-term floating interest rate, such as the three-month LIBOR. This is fundamentally identical to purchasing the underlying securities that comprise the index, which requires an investor to pay cash, thereby surrendering the short-term interest rate to be earned from cash holdings, in order to receive the return of the index. Total return swaps provide each Series with the opportunity to actively manage the cash maintained by the Series as a result of not having to purchase securities to replicate a given index. Similar to interest rate swaps, the cash backing total return swaps is actively managed to earn a premium in excess of the floating rate paid on the swap.

Swap Option Agreements. A swap option is a contract that gives a counterparty the right (but not the obligation) to enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap agreement, at some designated future time on specified terms. Each Series may write (sell) and purchase put and call swap options.

See "Risks of Hedging Strategies" for additional risks associated with swap transactions.

Risks of Hedging Strategies

Participation in the swap, options or futures markets involves investment risks and transaction costs to which a Series would not be subject absent the use of these strategies. Each Series, and thus its investors, may lose money through the unsuccessful use of these strategies. If the investment adviser's predictions of movements in the direction of the securities and interest rate markets are inaccurate, the adverse consequences to the Series may leave the Series in a worse position than if such strategies were not used. Risks inherent in the use of swaps, futures contracts and options on futures contracts include (but are not limited to) (1) dependence on the investment adviser's ability to predict correctly movements in the direction of interest rates and securities prices; (2) imperfect correlation between the price of swaps, options and futures contracts and options thereon and movements in the prices of the securities or currencies being hedged; (3) the fact that skills needed to use these strategies are different from those needed to select portfolio securities; (4) the possible absence of a liquid

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secondary market for any particular instrument at any time; and (5) the possible inability of the Series to purchase or sell a portfolio security at a time that otherwise would be favorable for it to do so, or the possible need for the fund to sell a portfolio security at a disadvantageous time, due to the need for the Series to maintain cover or to segregate securities in connection with hedging transactions. See "Swap Transactions" for additional risks associated with Swap Transactions.

A Series may sell a futures contract to protect against the decline in the value of securities held by the Series. However, it is possible that the futures market may advance and the value of securities held in the Series' portfolio may decline. If this were to occur, the Series would lose money on the futures contracts and also experience a decline in value in its portfolio securities.

When a Series purchases a futures contract to hedge against the increase in value of securities it intends to buy, and the value of such securities decreases, then the Series may determine not to invest in the securities as planned and will realize a loss on the futures contract that is not offset by a reduction in the price of the securities.

There is a risk that the prices of securities subject to futures contracts (and thereby the futures contract prices) may correlate imperfectly with the behavior of the cash prices of the Series' portfolio securities. Another such risk is that prices of futures contracts may not move in tandem with the changes in prevailing interest rates against which the Series seeks a hedge. A correlation may also be distorted by the fact that the futures market is dominated by short-term traders seeking to profit from the difference between a contract or security price objective and their cost of borrowed funds. Such distortions are generally minor and would diminish as the contract approached maturity.

There may exist an imperfect correlation between the price movements of futures contracts purchased by the Series and the movements in the prices of the securities which are the subject of a hedge. If participants in the futures market elect to close out their contracts through offsetting transactions rather than meet margin deposit requirements, distortions in the normal relationships between the debt securities and futures market could result. Price distortions could also result if investors in futures contracts elect to make or take delivery of underlying securities rather than engage in closing transactions due to the resultant reduction in the liquidity of the futures market. In addition, due to the fact that, from the point of view of speculators, the deposit requirement in the futures markets are less onerous than margin requirements in the cash market, increased participation by speculators in the futures markets could cause temporary price distortions. Due to the possibility of price distortions in the futures market and because of the imperfect correlation between movements in the prices of securities (or currencies) and movements in the prices of futures contracts, a correct forecast of interest rate trends by the investment adviser may still not result in a successful hedging transaction.

The risk of imperfect correlation increases as the composition of a Series' securities portfolio diverges from the securities that are the subject of the futures contract, for example, those included in the municipal index. Because the change in price of the futures contract may be more or less than the change in prices of the underlying securities, even a correct forecast of interest rate changes may not result in a successful hedging transaction.

Pursuant to the requirements of the CEA, all futures contracts and options thereon must be traded on an exchange. Each Series intends to purchase and sell futures contracts only on exchanges where there appears to be a market in such futures sufficiently active to accommodate the volume of its trading activity. The Series' ability to establish and close out positions in futures contracts and options on futures contracts would be impacted by the liquidity of these exchanges. Although the Series generally would purchase or sell only those futures contracts and options thereon for which there appeared to be a liquid market, there is no assurance that a liquid market on an exchange will exist for any particular futures contract or option at any particular time. In the event no liquid market exists for a particular futures contract or option thereon in which the Series maintains a position, it would not be possible to effect a closing transaction in that contract or to do so at a satisfactory price and the Series would have to either make or take delivery under the futures contract or, in the case of a written call option, wait to sell underlying securities until the option expired or was exercised or, in the case of a purchased option, exercise the option and comply with the margin requirements for the underlying futures contract to realize any profit. In the case of a futures contract or an option on a futures contract which the Series had written and which the Series was unable to close, the Series would be required to maintain margin deposits on the futures contract or option and to make variation margin payments until the contract was closed. In the event futures contracts have been sold to hedge portfolio securities, such securities will not be sold until the offsetting futures contracts can be executed. Similarly, in the event futures have been bought to hedge anticipated securities purchases, such purchases will not be executed until the offsetting futures contracts can be sold.

Successful use of futures contracts by a Series is subject to, among other things, the ability of the Series' investment adviser to predict correctly movements in the direction of interest rates and other factors affecting markets for securities. For example, if a Series has hedged against the possibility of an increase in interest rates which would adversely affect the price of securities in its portfolio and the price of such securities increases instead, a Series will lose part or all of the benefit of the increased value of its securities because it will have offsetting losses in its futures positions. In addition, in such situations,

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if a Series has insufficient cash to meet daily variation margin requirements, it may have to sell securities to meet such requirements. Such sales of securities may be, but will not necessarily be, at increased prices which reflect the rising market. A Series may have to sell securities at a time when it is disadvantageous to do so.

Exchanges on which futures and related options trade may impose limits on the positions that a Series may take in certain circumstances. In addition, the hours of trading of financial futures contracts and options thereon may not conform to the hours during which the Series may trade the underlying securities. To the extent the futures markets close before the securities markets, significant price and rate movements can take place in the securities markets that cannot be reflected in the futures markets.

If a Series maintains a short position in a futures contract, it will cover this position by segregating cash or liquid assets equal in value (when added to any initial or variation margin on deposit) to the market value of the securities underlying the futures contract. Such a position may also be covered with an offsetting position such as owning the securities underlying the futures contract, or by holding a call option permitting the Series to purchase the same contract at a price no higher than the price at which the short position was established. If a Series holds a long position in a futures contract, it will segregate cash or liquid assets equal to the purchase price of the contract (less the amount of initial or variation margin on deposit). Alternatively, the Series could cover its long position with an offsetting position such as by purchasing a put option on the same futures contract with an exercise price as high or higher than the price of the contract held by the Series.

Exchanges limit the amount by which the price of a futures contract may move on any day. If the price moves equal the daily limit on successive days, then it may prove impossible to liquidate a futures position until the daily limit moves have ceased. In the event of adverse price movements, the Series would continue to be required to make daily cash payments of variation margin on open futures positions. In such situations, if the Series has insufficient cash, it may be disadvantageous to do so. In addition, the Series may be required to take or make delivery of the instruments underlying futures contracts it holds at a time when it is disadvantageous to do so. The ability to close out options and futures positions could also have an adverse impact on the Series' ability to effectively hedge its portfolio.

In the event of the bankruptcy of a broker through which the Series engages in transactions in futures or options thereon, the Series could experience delays and/or losses in liquidating open positions purchased or sold through the broker and/or incur a loss of all or part of its margin deposits with the broker. Transactions are entered into by the Series only with brokers or financial institutions deemed creditworthy by the investment adviser.

Risks of Transactions in Options on Futures Contracts. In addition to the risks which apply to all options transactions, there are several special risks relating to options on futures. The ability to establish and close out positions on such options will be subject to the maintenance of a liquid secondary market. Compared to the purchase or sale of futures contracts, the purchase of put options on futures contracts involves less potential risk to a Series because the maximum amount at risk is the premium paid for the options (plus transaction costs). However, there may be circumstances when the purchase of a put option on a futures contracts would result in a loss to a Series when the sale of a futures contracts would not result in a loss, such as when there is no movement in the price of the debt or index underlying the futures contracts.

An option position may be closed out only on an exchange which provides a market for an option of the same series. As described above, although a Series generally will purchase only those options for which there appears to be an active market, there is no assurance that a liquid market on an exchange will exist for any particular option, or at any particular time, and for some options, no market on an exchange may exist. In such event, it might not be possible to effect closing transactions in particular options with the result that a Series would have to exercise its options in order to realize any profit and would incur transaction costs upon the sale of underlying securities pursuant to the exercise of put options.

Reasons for the absence of a liquid market on an exchange include the following: (1) there may be insufficient trading interest in certain options; (2) restrictions may be imposed by an exchange on opening transactions or closing transactions or both; (3) trading halts, suspensions or other restrictions may be imposed with respect to particular classes or series of options or underlying securities; (4) unusual or unforeseen circumstances may interrupt normal operations on an exchange; (5) the facilities of an exchange may not at all times be adequate to handle current trading volume; or (6) one or more exchanges could, for economic or other reasons, decide or be compelled at some future date to discontinue the trading of options (or a particular class or series of options), in which event the market on that exchange in options (or in that class or series of options) would cease to exist, although outstanding options on that exchange could continue to be exercisable in accordance with their terms.

There is no assurance that higher than anticipated trading activity or other unforeseen events might not, at times, render certain clearing facilities inadequate, and thereby result in the institution by an exchange of special procedures which may interfere with the timely execution of customers' orders.

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Repurchase Agreements. Each Series may on occasion enter into repurchase agreements, whereby the seller of a security agrees to repurchase that security from the Series at a mutually agreed-upon time and price. The period of maturity is usually quite short, possibly overnight or a few days, although it may extend over a number of months. The resale price is in excess of the purchase price, reflecting an agreed-upon rate of return effective for the period of time the Series' money is invested in the repurchase agreement. The Series' repurchase agreements will at all times be fully collateralized by cash or other liquid assets in an amount at least equal to the resale price. The instruments held as collateral are valued daily and, if the value of the instruments declines, the Series will require additional collateral. If the seller defaults and the value of the collateral securing the repurchase agreement declines, the Series may incur a loss.

Each Series participates in a joint repurchase account with other investment companies managed by Prudential Investments LLC (PI or the Manager) pursuant to an order of the Commission. On a daily basis, any uninvested cash balances of the Series may be aggregated with those of such investment companies and invested in one or more repurchase agreements. Each fund participates in the income earned or accrued in the joint account based on the percentage of its investment.

Securities of Other Investment Companies. Each Series may invest up to 10% of its total assets in securities of other non-affiliated investment companies, subject to any other limitations in its investment restrictions. If a Series does invest in securities of other investment companies, shareholders of the Series may be subject to duplicate management and advisory fees. In addition, each Series may purchase shares of affiliated investment companies in amounts up to 25% of its total assets. See "Investment Restrictions" below.

Illiquid Securities. Each Series may hold up to 15% of its net assets in illiquid securities. If a Series were to exceed this limit, the investment adviser would take prompt action to reduce a Series' holdings in illiquid securities to no more than 15% of its net assets, as required by applicable law. Illiquid securities include repurchase agreements which have a maturity of longer than seven days, securities with legal or contractual restrictions on resale (restricted securities) and securities that are not readily marketable either within or outside of the United States. Securities, including municipal lease obligations, that have a readily available market are not considered illiquid for purposes of this limitation. The Subadviser (as defined below) will monitor the liquidity of such restricted securities under the supervision of the Trustees. Repurchase agreements subject to demand are deemed to have a maturity equal to the applicable notice period.

Historically, illiquid securities have included securities subject to contractual or legal restrictions on resale because they have not been registered under the Securities Act of 1933, as amended (the Securities Act), securities which are otherwise not readily marketable and repurchase agreements having a maturity of longer than seven days. Securities which have not been registered under the Securities Act are referred to as private placements or restricted securities and are purchased directly from the issuer or in the secondary market. Mutual funds do not typically hold a significant amount of these restricted or other illiquid securities because of the potential for delays on resale and uncertainty in valuation. Limitations on resale may have an adverse effect on the marketability of portfolio securities and a mutual fund might be unable to dispose of restricted or other illiquid securities promptly or at reasonable prices and might thereby experience difficulty satisfying redemptions within seven days. A mutual fund might also have to register such restricted securities in order to dispose of them resulting in additional expense and delay. Adverse market conditions could impede such a public offering of securities.

A large institutional market has developed for certain securities that are not registered under the Securities Act including repurchase agreements, commercial paper, foreign securities, municipal securities, convertible securities and corporate bonds and notes. Institutional investors depend on an efficient institutional market in which the unregistered security can be readily resold or on an issuer's ability to honor a demand for repayment. The fact that there are contractual or legal restrictions on resale to the general public or to certain institutions may not be indicative of the liquidity of such investments.

Rule 144A under the Securities Act allows for an institutional trading market for securities otherwise subject to restriction on resale to the general public. Rule 144A establishes a "safe harbor" from the registration requirements of the Securities Act for resales of certain securities to qualified institutional buyers. A Series' investment in Rule 144A securities could have the effect of increasing illiquidity to the extent that qualified institutional buyers become, for a time, uninterested in purchasing Rule 144A securities.

Municipal lease obligations and certain other securities for which there is a readily available market will not be considered illiquid for purposes of each Series' 15% limitation on illiquid securities only when deemed liquid under procedures established by the Fund. In reaching liquidity decisions, the investment adviser will consider, among others, the following factors: (1) the frequency of trades and quotes for the security; (2) the number of dealers wishing to purchase or sell the security and the number of other potential purchasers; (3) dealer undertakings to make a market in the security; and (4) the nature of the security and the nature of the marketplace trades (for example, the time needed to dispose of the security, the method of soliciting offers and the mechanics of the transfer). With respect to municipal lease obligations, the investment adviser also

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considers: (1) the willingness of the municipality to continue, annually or biannually, to appropriate funds for payment of the lease; (2) the general credit quality of the municipality and the essentiality to the municipality of the property covered by the lease; (3) in the case of unrated municipal lease obligations, an analysis of factors similar to that performed by nationally recognized statistical rating organizations in evaluating the credit quality of a municipal lease obligation, including (i) whether the lease can be cancelled; (ii) if applicable, what assurance there is that the assets represented by the lease can be sold; (iii) the strength of the lessee's general credit (for example, its debt, administrative, economic and financial characteristics); (iv) the likelihood that the municipality will discontinue appropriating funding for the leased property because the property is no longer deemed essential to the operations of the municipality (for example, the potential for an event of nonappropriation); (v) the legal recourse in the event of failure to appropriate; and (4) any other factors unique to municipal lease obligations as determined by the investment adviser.

Obtaining Securities Ratings. A Series may obtain a rating for unrated securities that the Series owns if, in the investment adviser's judgment, liquidity or pricing of the security would be improved if the security was rated. Ratings will be obtained only from an NRSRO. Assets of a Series may be used to pay an NRSRO in connection with obtaining such ratings. A Series may use up to 5% of its assets to obtain ratings for unrated securities that it owns.

Borrowing. Each Series may borrow an amount equal to no more than 33 1 / 3 % of the value of its total assets (calculated at the time of the borrowing). However, a Series will not purchase portfolio securities when borrowing exceeds 5% of the value of the Series' total assets unless this policy is changed by the Board. The Series may pledge up to 33 1 / 3 % of their respective total assets to secure these borrowings. If a Series' asset coverage for borrowings falls below 300%, the Series will take prompt action to reduce its borrowings as required by applicable law. If the 300% asset coverage should decline as a result of market fluctuations or other reasons, the Series may be required to sell portfolio securities to reduce the debt and restore the 300% asset coverage, even though it may be disadvantageous from an investment standpoint to sell securities at that time.

Borrowing for investment purposes is generally known as "leveraging." Leveraging exaggerates the effect on net asset value of any increase or decrease in the market value of a Series' portfolio. Money borrowed for leveraging will be subject to interest costs which may or may not be recovered by appreciation of the securities purchased and may exceed the income from the securities purchased. In addition, the Series may be required to maintain minimum average balances in connection with such borrowing or pay a commitment fee to maintain a line of credit which would increase the cost of borrowing over the stated interest rate.

(d) Temporary Defensive Strategy

When the investment adviser believes that market, economic or political conditions warrant a temporary defensive investment posture or when necessary to meet large redemptions, a Series may hold more than 20% of its net assets in cash, cash equivalents or investment-grade taxable obligations, including obligations that are generally exempt from state, but not federal, income taxation. Investing heavily in these securities is not consistent with each Series' investment objective and limits our ability to achieve each Series' investment objective, but can help to preserve each Series' assets.

(e) Portfolio Turnover

A Series may engage in short-term trading consistent with its investment objective. Portfolio transactions will be undertaken in response to anticipated movements in the general level of interest rates. Municipal securities or futures contracts may be sold in anticipation of a market decline (resulting from a rise in interest rates) or purchased in anticipation of a market rise (resulting from a decline in interest rates) and later sold. In addition, a security may be sold and another purchased at approximately the same time to take advantage of what the investment adviser believes to be a temporary disparity in the normal yield relationship between the two securities. Yield disparities may occur for reasons not directly related to the investment quality of particular issues or the general movement of interest rates, due to factors such as changes in the overall demand for or supply of various types of municipal securities or changes in the investment objectives of investors.

The portfolio turnover rate is generally the percentage computed by dividing the lesser of portfolio purchases or sales (excluding all securities, including options, whose maturities or expiration date at acquisition were one year or less) by the monthly average value of the portfolio. A 100% turnover rate would occur, for example, if all of the securities held in a Series' portfolio were sold and replaced within one year. High portfolio turnover (over 100%) involves correspondingly greater brokerage commissions and other transaction costs, which are borne directly by a Series. In addition, high portfolio turnover may also mean that a proportionately greater amount of distributions to interest holders will be taxed as ordinary income rather than long-term capital gains compared to investment companies with lower portfolio turnover. For the fiscal years ended April 30, 2005 and 2004, the portfolio turnover rates for the High Income Series were 29% and 89%, respectively. For the fiscal

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years ended April 30, 2005 and 2004, the portfolio turnover rates for the Insured Series were 15% and 71%, respectively. See "Taxes, Dividends and Distributions" below.

Segregated Accounts

When the Fund is required to segregate assets in connection with certain transactions, it will maintain cash or other liquid assets in a segregated account. "Liquid assets" means cash, U.S. Government securities, foreign securities, equity securities, debt obligations or other liquid, unencumbered assets marked-to-market daily.

INVESTMENT RESTRICTIONS

Each Series has adopted the restrictions listed below as fundamental policies. Under the 1940 Act, a fundamental policy is one which cannot be changed without the approval of the holders of a majority of a Series' outstanding voting securities. A "majority of the outstanding voting securities" of a Series, when used in this SAI, means the lesser of (i) 67% of the voting shares represented at a meeting at which more than 50% of the outstanding voting shares are present in person or represented by proxy or (ii) more than 50% of the outstanding voting shares.

Each Series may not:

1. Purchase the securities of any issuer if, as a result, the Series would fail to be a diversified company within the meaning of the 1940 Act, and the rules and regulations promulgated thereunder, as each may be amended from time to time, except to the extent that the Series may be permitted to do so by exemptive order, SEC release, no-action letter or similar relief or interpretations (collectively, the 1940 Act Laws, Interpretations and Exemptions).

2. Issue senior securities or borrow money or pledge its assets, except as permitted by the 1940 Act Laws, Interpretations and Exemptions. For purposes of this restriction, the purchase or sale of securities on a when-issued or delayed delivery basis, reverse repurchase agreements, dollar rolls, short sales, derivative and hedging transactions such as interest rate swap transactions, and collateral arrangements with respect thereto, and transactions similar to any of the foregoing and collateral arrangements with respect thereto, and obligations of each Series to Trustees pursuant to deferred compensation arrangements are not deemed to be a pledge of assets or the issuance of a senior security.

3. Buy or sell real estate, except that investment in securities of issuers that invest in real estate and investments in mortgage-backed securities, mortgage participations or other instruments supported or secured by interests in real estate are not subject to this limitation, and except that each Series may exercise rights relating to such securities, including the right to enforce security interests and to hold real estate acquired by reason of such enforcement until that real estate can be liquidated in an orderly manner.

4. Buy or sell physical commodities or contracts involving physical commodities. Each Series may purchase and sell (i) derivative, hedging and similar instruments such as financial futures contracts and options thereon, and (ii) securities or instruments backed by, or the return from which is linked to, physical commodities or currencies, such as forward currency exchange contracts, and each Series may exercise rights relating to such instruments, including the right to enforce security interests and to hold physical commodities and contracts involving physical commodities acquired as a result of the Series' ownership of instruments supported or secured thereby until they can be liquidated in an orderly manner.

5. Act as underwriter, except to the extent that, in connection with the disposition of portfolio securities, it may be deemed to be an underwriter under certain federal securities laws.

6. Purchase securities (other than municipal obligations and obligations guaranteed as to principal and interest by the U.S. Government or its agencies or instrumentalities) if, as a result of such purchase, 25% or more of the total assets of the Series (taken at current market value) would be invested in any one industry or group of industries, except for temporary defensive purposes. (For purposes of this restriction, industrial development bonds, where the payment of the principal and interest is the ultimate responsibility of companies within same industry, are grouped together as an "industry.")

7. Each Series may make loans, including loans of assets of the Series, repurchase agreements, trade claims, loan participations or similar investments, or as permitted by the 1940 Act Laws, Interpretations and Exemptions. The acquisition of bonds, debentures, other debt securities or instruments, or participations or other interests therein and investments in government obligations, commercial paper, certificates of deposit, banker's acceptances or instruments similar to any of the foregoing will not be considered the making of a loan, and is permitted if consistent with the Fund's investment objective.

For purposes of Investment Restriction 1, each Series will currently not purchase any security (other than obligations of the U.S. Government, its agencies or instrumentalities) if as a result, with respect to 75% of each Series' total assets, (i) more

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than 5% of the Series' total assets (determined at the time of investment) would be invested in securities of a single issuer and (ii) the Series would own more than 10% of the outstanding voting securities of any single issuer.

For purposes of Investment Restriction 2, under the 1940 Act, each Series can borrow money from a bank provided that immediately after such borrowing there is asset coverage of at least 300% for all borrowings. If the asset coverage falls below 300%, the Series must, within three business days, reduce the amount of its borrowings to satisfy the 300% requirement.

For purposes of Investment Restriction 7, each Series will currently lend up to 33 1 / 3 % of the value of its total assets.

Whenever any fundamental Investment policy or investment restriction states a maximum percentage of the Series' assets, it is intended that, if the percentage limitation is met at the time the investment is made, a later change in percentage resulting from changing total asset values will not be considered a violation of such policy. However, if the Series' asset coverage for borrowings permitted by Investment Restriction 2 falls below 300%, the Series will take prompt action to reduce its borrowings, as required by the 1940 Act Laws, Interpretations and Exemptions.

Although not fundamental, the Series has the following additional investment restrictions.

Each Series may not:

1. Invest for the purpose of exercising control or management of another company.

2. Purchase securities of other investment companies, except in the open market involving only customary brokerage commissions and as a result of which no more than 10% of its total assets (determined at the time of investment) would be invested in such securities, or except in connection with merger, consolidation, reorganization or acquisition of assets. The Series may invest up to 25% of its total assets in shares of an affiliated mutual fund.

3. Purchase or write puts, calls or combinations thereof, except as described in the Prospectus and this Statement of Additional Information with respect to puts and options on future contracts. Notwithstanding the foregoing, each Series is authorized to invest in options on swaps, and the High Income Series is authorized to invest in credit default swaps and credit-linked securities.

The Fund will provide 60 days' prior written notice to Insured Series shareholders of a change in that Series' non-fundamental policy of investing at least 80% of its investable assets in insured municipal bonds and will provide 60 days' prior written notice to High Income Series shareholders of a change in that Series' non-fundamental policy of investing at least 80% of its investable assets in municipal bonds.

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MANAGEMENT OF THE FUND

Information pertaining to the Trustees of the Fund is set forth below. Trustees who are not deemed to be "interested persons" of the Fund, as defined in the 1940 Act are referred to as "Independent Trustees." Trustees who are deemed to be "interested persons" of the Fund are referred to as "Interested Trustees." "Fund Complex" ^† consists of the Fund and any other investment companies managed by Prudential Investments LLC (the Manager or PI).

Independent Trustees

Name, Address** and Age

Position
with Fund

Term of
Office***
and Length
of Time
Served

Principal Occupations
During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Trustee

Other
Directorships Held
by the Trustee****

Linda W. Bynoe (52)

Trustee

Since 2005

President and Chief Executive Officer (since March 1995) of Telemat Ltd.; formerly Vice President at Morgan Stanley & Co.

Director of Dynegy Inc. (since September 2002) and Simon Property Group, Inc. (since May 2003).

David E. A. Carson (70)

Trustee

Since 2003

Director (January 2000-May 2000), Chairman (January 1999-December 1999), Chairman and Chief Executive Officer (January 1998-December 1998) and President, Chairman and Chief Executive Officer of People's Bank (1983-1997).

Robert E. La Blanc (71)

Trustee

Since 2003

President (since 1981) of
Robert E. La Blanc Associates, Inc. (telecommunications); formerly General Partner at Salomon Brothers and Vice-Chairman of Continental Telecom; Trustee of Manhattan College.

Director of Chartered Semiconductor Manufacturing, Ltd. (since 1998); Titan Corporation (electronics) (since 1995); Computer Associates International, Inc. (since 2002) (software company); FiberNet Telecom Group, Inc. (since 2003) (telecom company); Director (since April 1999) of the High Yield Plus Fund, Inc.

Douglas H. McCorkindale (66)

Trustee

Since 2003

Chairman (since February 2001), Chief Executive Officer (since June 2000) and President (since September 1997) of Gannett Co. Inc. (publishing and media); formerly Vice Chairman (March 1984-May 2000) of Gannett Co. Inc.

Director of Gannett Co., Inc.; Director of Continental Airlines, Inc. (since May 1993); Director of Lockheed Martin Corp. (since May 2001) (aerospace and defense); Director of the High Yield Plus Fund, Inc. (since 1996).

Richard A. Redeker (61)

Trustee

Since 1993

Management Consultant; Director of Invesmart, Inc. (since 2001) and Director of Penn Tank Lines, Inc. (since 1999).

Robin B. Smith (65)

Trustee

Since 2003

Chairman of the Board (since January 2003) of Publishers Clearing House (direct marketing); formerly Chairman and Chief Executive Officer (August 1996-January 2003) of Publishers Clearing House.

Director of BellSouth Corporation (since 1992).

B-22

Name, Address** and Age

Position
with Fund

Term of
Office***
and Length
of Time
Served

Principal Occupations
During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Trustee

Other
Directorships Held
by the Trustee****

Stephen G. Stoneburn (61)

Trustee

Since 2003

President and Chief Executive Officer (since June 1996) of Quadrant Media Corp. (a publishing company); formerly President (June 1995-June 1996) of Argus Integrated Media, Inc.; Senior Vice President and Managing Director (January 1993-1995) of Cowles Business Media and Senior Vice President of Fairchild Publications, Inc. (1975-1989).

Clay T. Whitehead (66)

Trustee

Since 2003

President (since 1983) of National Exchange Inc. (new business development firm).

Director (since 2000) of the High Yield Plus Fund, Inc.

Interested Trustees

Name, Address** and Age

Position
with Fund

Term of
Office***
and Length
of Time
Served

Principal Occupations
During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Trustee

Other
Directorships Held
by the Trustee****

Judy A. Rice (57)*

President and Trustee

Trustee since 2000 and President since 2003

President, Chief Executive Officer, Chief Operating Officer and Officer-in-Charge (since 2003) of PI; Director, Officer-in-Charge, President, Chief Executive Officer and Chief Operating Officer (since May 2003) of American Skandia Advisory Services, Inc. and American Skandia Investment Services, Inc.; Director, Officer-in-Charge, President, Chief Executive Officer (since May 2003) of American Skandia Fund Services, Inc.; Vice President (since February 1999) of Prudential Investment Management Services LLC (PIMS); President, Chief Executive Officer and Officer-In-Charge (since April 2003) of Prudential Mutual Fund Services LLC (PMFS); formerly various positions to Senior Vice President (1992-1999) of Prudential Securities Incorporated (Prudential Securities); and various positions to Managing Director (1975-1992) of Salomon Smith Barney; Member of Board of Governors of the Money Management Institute.

B-23

Name, Address** and Age

Position
with Fund

Term of
Office***
and Length
of Time
Served

Principal Occupations
During Past 5 Years

Number of
Portfolios in
Fund Complex
Overseen by
Trustee

Other
Directorships Held
by the Trustee****

Robert F. Gunia (58)*

Vice President and Trustee

Since 1996

Chief Administrative Officer (since June 1999) of PI; Executive Vice President (since January 1996) of PI; President (since April 1999) of PIMS; Director, Executive Vice President and Chief Administrative Officer (since May 2003) of American Skandia Investment Services, Inc., American Skandia Advisory Services, Inc. and American Skandia Fund Services, Inc.; Executive Vice President (since March 1999) of PMFS; formerly Senior Vice President (March 1987-May 1999) of Prudential Securities.

166

Vice President and Director (since May 1989) and Treasurer (since 1999) of The Asia Pacific Fund, Inc.

Information pertaining to the Officers of the Fund who are not also Trustees is set forth below.

Officers

Name, Address** and Age

Position
with Fund

Term of
Office and
Length of
Time
Served***

Principal Occupations
During Past Five Years

Grace C. Torres (46)

Treasurer and Principal Financial and Accounting Officer

Since 1996

Senior Vice President (since January 2000) of PI; Senior Vice President and Assistant Treasurer (since May 2003) of American Skandia Investment Services, Inc. and American Skandia Advisory Services, Inc.; formerly First Vice President (December 1996-January 2000) of PI and First Vice President (March 1993-May 1999) of Prudential Securities.

Deborah A. Docs (47)

Secretary

Since 1996

Vice President and Corporate Counsel (since January 2001) of Prudential; Vice President and Assistant Secretary (since December 1996) of PI; Vice President and Assistant Secretary (since May 2003) of American Skandia Investment Services, Inc.

Jonathan D. Shain (46)

Assistant Secretary

Since 2004

Vice President and Corporate Counsel (since August 1998) of Prudential; Vice President and Assistant Secretary (since May 2003) of American Skandia Investment Services, Inc. and American Skandia Fund Services, Inc.

Maryanne Ryan (40)

Anti-Money Laundering Compliance Officer

Since 2002

Vice President, Prudential (since November 1998); First Vice President, Prudential Securities (March 1997-May 1998); Anti-Money Laundering Officer of American Skandia Investment Services, Inc., American Skandia Advisory Services, Inc. and American Skandia Marketing, Inc.

Helene Gurian (51)

Acting Anti-Money Laundering Compliance Officer

Since 2004

Vice President, Prudential (since July 1997). Vice President, Compliance (July 1997-January 2001); Vice President, Compliance and Risk Officer, Retail Distribution (January 2001-May 2002); Vice President, Corporate Investigations (May 2002-date) responsible for supervision of Prudential's fraud investigations, anti-money laundering program and high technology investigation unit.

Lee D. Augsburger (46)

Chief Compliance Officer

Since 2004

Vice President and Chief Compliance Office (since May 2003) of Pl; Vice President and Chief Compliance Officer (since October 2000) of Prudential Investment Management, Inc.; formerly Vice President and Chief Legal Officer-Annuities (August 1999-October 2000) of Prudential Insurance Company of America; Vice President and Corporate Counsel (November 1997-August 1999) of Prudential Insurance Company of America

B-24

Name, Address** and Age

Position
with Fund

Term of
Office and
Length of
Time
Served***

Principal Occupations
During Past Five Years

William V. Healey (51)

Chief Legal Officer

Since 2004

Vice President and Associate General Counsel (since 1998) of Prudential; Executive Vice President and Chief Legal Officer (since February 1999) of Prudential Investments LLC; Senior Vice President, Chief Legal Officer and Secretary (since December 1998) of Prudential Investment Management Services LLC; Executive Vice President and Chief Legal Officer (since February 1999) of Prudential Mutual Fund Services LLC; Vice President and Secretary (since October 1998) of Prudential Investment Management, Inc.; Executive Vice President and Chief Legal Officer (since May 2003) of American Skandia Investment Services, Inc., American Skandia Fund Services, Inc. and American Skandia Advisory Services, Inc.; Director (June 1999-June 2002 and June 2003-present) of ICI Mutual Insurance Company; prior to August 1998, Associate General Counsel of the Dreyfus Corporation (Dreyfus), a subsidiary of Mellon Bank, N.A. (Mellon Bank), and an officer and/or director of various affiliates of Mellon Bank and Dreyfus.

^† The Fund Complex consists of all investment companies managed by PI. The Funds for which PI serves as manager include JennisonDryden Mutual Funds, Strategic Partners Funds, The Prudential Variable Contract Accounts 2, 10 and 11, The Target Portfolio Trust, The Prudential Series Fund, Inc., American Skandia Trust, and Prudential's Gibraltar Fund.

* "Interested" Trustee, as defined in the 1940 Act, by reason of employment with the Manager (Prudential Investments LLC or PI), the Subadviser
(Prudential Investment Management, Inc. or PIM) or the Distributor (Prudential Investment Management Services LLC or PIMS).

** Unless otherwise noted, the address of the Trustees and Officers is c/o: Prudential Investments LLC, Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102.

*** There is no set term of office for Trustees and Officers. The Independent Trustees have adopted a retirement policy, which calls for the retirement of Trustees on December 31 of the year in which they reach the age of 75. The table shows the individuals' length of service as Trustee and/or Officer.

**** This column includes only directorships of companies required to register, or file reports with the SEC under the Securities and Exchange Act of 1934 (that is, "public companies") or other investment companies registered under the 1940 Act.

The Fund has Trustees who, in addition to overseeing the actions of the Fund's Manager, Subadviser and Distributor, decide upon matters of general policy in accordance with Massachusetts law and the 1940 Act. In addition to their functions set forth under "Investment Advisory and Other Services-Manager and Investment Adviser" and "Principal Underwriter, Distributor and Rule 12b-1 Plans," the Trustees also review the actions of the Fund's Officers, who conduct and supervise the daily business operations of the Fund. Pursuant to the Fund's Management Agreement and Declaration of Trust, the Board may contract for advisory and management services for the Fund or for either of its series. Any such contract may permit the Manager to delegate certain or all of its duties under such contract to the Subadviser.

Trustees and Officers of the Fund are also trustees, directors and officers of some or all of the other investment companies advised by the Fund's Manager and distributed by PIMS.

The Board has appointed a Chief Compliance Officer, Lee D. Augsburger, on behalf of the Fund. Mr. Augsburger oversees the implementation of policies and procedures for the Fund to ensure compliance with the applicable federal securities laws, and related rules. Mr. Augsburger serves in this capacity for all of the funds in the Fund Complex. In addition, Mr. Augsburger serves as Chief Compliance Officer of the Manager.

Standing Board Committees

The Board has established three standing committees in connection with the governance of the Fund-Audit, Nominating and Governance, and Valuation.

Audit Committee. The Audit Committee consists of the following Independent Trustees: Ms. Bynoe, Messrs. Carson (Chair), Stoneburn and Whitehead. The Board has determined that each member of the Audit Committee is not an "interested person" as defined in the 1940 Act. The responsibilities of the Audit Committee are to assist the Board in overseeing the Fund's independent registered public accounting firm, accounting policies and procedures, and other areas relating to the Fund's auditing processes. The scope of the Audit Committee's responsibilities is oversight. It is management's responsibility to maintain appropriate systems for accounting and internal control and the independent registered public accounting firm's responsibility to plan and carry out an audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). The Audit Committee met four times during the fiscal year ended April 30, 2005.

Nominating and Governance Committee. The Nominating and Governance Committee of the Board is responsible for nominating trustees and making recommendations to the Board concerning Board composition, committee structure and governance, trustee education, and governance practices. The members of the Nominating and Governance Committee are Mr. Redeker (Chair), Mr. LaBlanc, Mr. McCorkindale and Ms. Smith (ex-officio). The Board has determined that each member

B-25

of the Nominating and Governance Committee is not an "interested person" as defined in the 1940 Act. The Nominating and Governance Committee met three times during the fiscal year ended April 30, 2005. The Nominating and Governance Committee Charter is available on the Fund's website at www.jennisondryden.com.

Selection of Trustee Nominees. The Nominating and Governance Committee is responsible for considering nominees for trustees at such times as it considers electing new members to the Board. The Nominating and Governance Committee may consider recommendations by business and personal contacts of current Board members, and by executive search firms which the Committee may engage from time to time and will also consider shareholder recommendations. The Nominating and Governance Committee has not established specific, minimum qualifications that it believes must be met by a nominee. In evaluating nominees, the Nominating and Governance Committee considers, among other things, an individual's background, skills, and experience; whether the individual is an "interested person" as defined in the 1940 Act; and whether the individual would be deemed an "audit committee financial expert" within the meaning of applicable SEC rules. The Nominating and Governance Committee also considers whether the individual's background, skills, and experience will complement the background, skills, and experience of other nominees and will contribute to the diversity of the Board. There are no differences in the manner in which the Nominating and Governance Committee evaluates nominees for the Board based on whether the nominee is recommended by a shareholder.

A shareholder who wishes to recommend a trustee nominee should submit his or her recommendation in writing to the Chair of the Board (Robin Smith) or the Chair of the Nominating and Governance Committee (Richard Redeker), in either case at Dryden Municipal Bond Fund, P.O. Box 13964, Philadelphia, PA 19176. At a minimum, the recommendation should include:

• the name, address, and business, educational, and/or other pertinent background of the person being recommended;

• a statement concerning whether the person is an "interested person" as defined in the 1940 Act;

• any other information that the Fund would be required to include in a proxy statement concerning the person if he or she was nominated; and

• the name and address of the person submitting the recommendation, together with the number of Fund shares held by such person and the period for which the shares have been held.

The recommendation also can include any additional information which the person submitting it believes would assist the Nominating and Governance Committee in evaluating the recommendation.

Shareholders should note that a person who owns securities issued by Prudential Financial, Inc. (the parent company of the Series' investment adviser) would be deemed an "interested person" under the 1940 Act. In addition, certain other relationships with Prudential Financial, Inc. or its subsidiaries, with registered broker-dealers, or with the Fund's outside legal counsel may cause a person to be deemed an "interested person."

Before the Nominating and Governance Committee decides to nominate an individual to the Board, Committee members and other Board members customarily interview the individual in person. In addition, the individual customarily is asked to complete a detailed questionnaire which is designed to elicit information which must be disclosed under SEC and stock exchange rules and to determine whether the individual is subject to any statutory disqualification from serving on the board of a registered investment company.

Valuation Committee. The Valuation Committee consists of at least two Board members or an officer of the Fund and one Board member (in both instances the Valuation Committee may include employees of the Manager who may constitute a majority of the Valuation Committee). The Valuation Committee supervises the valuation of each of the Series' portfolio securities and other assets and meets on an as needed basis. There are no appointed members of the Valuation Committee. If there is a need for a Valuation Committee decision to be made, the Manager will determine the composition of the Valuation Committee based on Board member and Fund officer availability. The Valuation Committee did not meet during the fiscal year ended April 30, 2005. For more information about the Valuation Committee, see "Net Asset Value" below.

Shareholder Communications with Trustees

Shareholders of the Fund can communicate directly with the Board by writing to the Chair of the Board, Dryden Municipal Bond Fund, P.O. Box 13964, Philadelphia, PA 19176. Shareholders can communicate directly with an individual Trustee by writing to that trustee at Dryden Municipal Bond Fund, Philadelphia, PA 19176. Such communications to the Board or individual trustees are not screened before being delivered to the addressee.

Compensation

Pursuant to the Management Agreement with the Fund, the Manager pays all compensation of Officers and employees of the Fund as well as the fees and expenses of all Interested Trustees of the Fund.

B-26

The Fund pays each of its Independent Trustees annual compensation in addition to certain out-of-pocket expenses. Trustees who serve on the Committees may receive additional compensation. The amount of compensation paid to each Independent Trustee may change as a result of the introduction of additional funds upon whose boards the Trustees may be asked to serve.

Independent Trustees may defer receipt of their Trustees' fees pursuant to a deferred fee agreement with the Fund. Under the terms of such agreement, the Fund accrues deferred Trustees' fees daily which, in turn, accrues interest at a rate equivalent to the prevailing rate of 90-day U.S. Treasury bills at the beginning of each calendar quarter or, at the daily rate of return of any JennisonDryden or Strategic Partners mutual fund chosen by the Trustee. The Fund's obligation to make payments of deferred Trustees' fees, together with interest thereon, is a general obligation of the Fund.

The Fund has no retirement or pension plan for its Trustees.

The following table sets forth the aggregate compensation paid by the Fund to the Independent Trustees for the fiscal year ended April 30, 2005 and the aggregate compensation paid to the Independent Trustees for service on the Fund's Board and the board of any other investment company in the Fund Complex, for the calendar year ended December 31, 2004.

Compensation Table ¹

Name and Position

Aggregate
Compensation
from Fund

Pension or
Retirement Benefits
Accrued as Part of
Fund Expenses

Estimated
Annual
Benefits Upon
Retirement

Total 2004
Compensation From
Fund and Fund
Complex Paid to
Independent Trustees

Linda W. Bynoe*

$ N /A

None

$ N /A

David E.A. Carson

4,326

None

$ 199,750 (38/92) ³

Robert E. La Blanc

4,127

None

$ 204,500 (38/92) ³

Douglas H. McCorkindale ²

4,063

None

$ 176,916 (38/92) ³

Richard A. Redeker

4,215

None

$ 184,833 (37/91) ³

Robin B. Smith ²

4,558

None

$ 206,500 (37/91) ³

Stephen G. Stoneburn ²

4,238

None

$ 194,000 (37/91) ³

Nancy H. Teeters ⁴

7,600

None

$ 160,000 (37/91) ³

Clay T. Whitehead

4,314

None

$ 201,500 (38/92) ³

* Ms. Bynoe became a Trustee on March 2, 2005.

¹ Interested Trustees and Officers do not receive any compensation from the Fund or the Fund Complex and therefore are not shown in the Compensation Table.

² Although the last column shows the total amount paid to Trustees from the Fund Complex during the calendar year ended December 31, 2004, such compensation was deferred at the election of this Trustee, in total or in part, under the Fund's deferred fee agreements. Including accrued interest and the selected fund's rate of return on amounts deferred through December 31, 2004, the total amount of compensation for the year amounted to $291,729, $423,670 and $195,039 for Mr. McCorkindale, Ms. Smith and Mr. Stoneburn, respectively.

³ Number of funds/portfolios which existed at December 31, 2004 and excludes funds/portfolios which liquidated/merged out of existence during 2004.

⁴ Effective April 23, 2003, Ms. Teeters became a Trustee Emeritus.

The following table sets forth the dollar range of equity securities in each Series beneficially owned by a Trustee, and, on an aggregate basis, in all registered investment companies overseen by a Trustee in the Fund Complex as of December 31, 2004.

Trustee Share Ownership Table

Independent Trustees

Name of Trustee	Dollar Range of Equity Securities in High Income Series		Dollar Range of Equity Securities in Insured Series		Aggregate Dollar Range of Equity Securities in All Registered Investment Companies Overseen by Trustee in Fund Complex
David E.A. Carson		-		-	Over $100,000
Robert E. La Blanc	$	10,001-$50,000		-	Over $100,000
Douglas H. McCorkindale		-		-	Over $100,000
Richard A. Redeker		-		-	Over $100,000
Robin B. Smith		-		-	Over $100,000
Stephen G. Stoneburn		-		-	Over $100,000
Clay T. Whitehead		-		-	Over $100,000

B-27

Interested Trustees

Name of Trustee

Dollar Range of
Equity Securities in
High Income Series

Dollar Range of
Equity Securities in
Insured Series

Aggregate Dollar Range
of Equity Securities in
All Registered
Investment Companies
Overseen by Trustee in
Fund Complex

Robert F. Gunia

Over $100,000

Judy A. Rice

Over $100,000

None of the Independent Trustees, or any member of his/her immediate family owned beneficially or of record any securities, in an investment adviser or principal underwriter of the Fund or a person (other than a registered investment company) directly or indirectly controlling, controlled by, or under common control with an investment adviser or principal underwriter of the Fund as of December 31, 2004.

Trustees of the Fund are eligible to purchase Class Z shares of each Series, which are sold without an initial sales charge or contingent deferred sales charge.

CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES

As of June 17, 2005, the Trustees and Officers of the Fund, as a group, owned beneficially less than 1% of the outstanding shares of beneficial interest of each Class of each Series of the Fund.

As of June 17, 2005, the beneficial owners, directly or indirectly, of more than 5% of the outstanding shares of any class of beneficial interest of a Series were:

Name

Address

Series /
Class

No. Shares /
% of Class

Insured

Donald J Laughlin
Riverside Resort and Casino
Attn: Frank Tokas

1650 South Casino Drive
Laughlin NV 89029

1,510,855 /6.9%

Merrill Lynch, Pierce Fenner &
Smith for the Sole Benefit of its
Customers

4800 Deer Lake Drive East
Jacksonville FL 32246

109,139 /16.1%

Prudential Investment
FBO Mutual Fund Clients
Attn: PRUCHOICE Unit

100 Mulberry Street
Newark, NJ 07102

235,109 /57.4%

Reliance Trust Company C/F
FBO Conversion 30

PO Box 48529
Atlanta GA 30362

52,044 /12.7%

Charles Schwab Co

101 Montgomery St
San Francisco, CA 94104

103,645 /25.3%

High Income

Prudential Investment
FBO Mutual Fund Clients
Attn: PRUCHOICE Unit

100 Mulberry Street
Newark, NJ 07102

961,504 /76.9%

Charles Schwab Co
101 Montgomery St

San Francisco, CA 94104

253,466 /20.3%

As of June 17, 2005, Wachovia Securities LLC (Wachovia Securities) was record holder for other beneficial owners of the following:

Series / Class				No. Shares / % of Class
Insured
A				7,278,604 /33.4%
B				1,426,454 /38.6%
C				444,844 /65.4%
High Income
A				25,493,424 /57.3%
B				8,188,461 /66.0%
C				1,800,044 /82.3%

In the event of any meetings of shareholders, Wachovia Securities will forward, or cause the forwarding of, proxy material to the beneficial owners for which it is the record holder.

B-28

INVESTMENT ADVISORY AND OTHER SERVICES

Manager and Investment Adviser

The Manager of the Fund is Prudential Investments LLC (PI or the Manager), Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102. PI serves as manager to all of the other investment companies that, together with the Fund, comprise the JennisonDryden and Strategic Partners mutual funds. See "How the Fund is Managed-Manager" in the Prospectus. As of March 31, 2005, PI served as the investment manager to all of the Prudential U.S. and offshore open-end investment companies, and as administrator to closed-end investment companies, with aggregate assets of approximately $88.8 billion.

PI is a wholly-owned subsidiary of PIFM HoldCo., Inc., which is a wholly-owned subsidiary of Prudential Asset Management Holding Company, which is a wholly-owned subsidiary of Prudential Financial, Inc. (Prudential). Prudential Mutual Fund Services LLC (PMFS or the Transfer Agent), an affiliate of PI, serves as the transfer agent and dividend distribution agent for the JennisonDryden and Strategic Partners mutual funds and, in addition, provides customer service, record keeping and management and administrative services to qualified plans.

Pursuant to the Management Agreement with the Fund (the Management Agreement), PI, subject to the supervision of the Fund's Board and in conformity with the stated policies of the Fund, manages both the investment operations of each Series and the composition of each Series' portfolio, including the purchase, retention, disposition and loan of securities and other assets. In connection therewith, PI is obligated to keep certain books and records of the Fund. PI is authorized to enter into subadvisory agreements for investment advisory services in connection with the management of the Fund. PI will continue to have responsibility for all investment advisory services performed pursuant to any such subadvisory agreements. PI will review the performance of all investment advisers and make recommendations to the Board with respect to the retention of investment advisers and the renewal of contracts. PI also administers the Fund's business affairs and, in connection therewith, furnishes the Fund with office facilities, together with those ordinary clerical and bookkeeping services which are not being furnished by the Fund's custodian (the Custodian), and PMFS. The management services of PI to the Fund are not exclusive under the terms of the Management Agreement and PI is free to, and does, render management services to others.

For its services, PI receives, pursuant to the Management Agreement, a fee at an annual rate of 0.50 of 1% of the average daily net assets of each Series up to $1 billion and .45 of 1% of the average daily net assets of the Fund in excess of $1 billion. The fee is computed daily and payable monthly.

PI may from time to time waive all or a portion of its management fee and subsidize all or a portion of the operating expenses of the Fund. Fee waivers and subsidies will increase the Fund's total return. These voluntary waivers may be terminated at any time without notice.

In connection with its management of the corporate affairs of the Fund, PI bears the following expenses:

(1) the salaries and expenses of all personnel of the Fund and the Manager except the fees and expenses of Independent Trustees;

(2) all expenses incurred by the Manager in connection with managing the ordinary course of the Fund's business, other than those assumed by the Fund as described below; and

(3) the fees, costs and expenses payable to any investment adviser pursuant to a Subadvisory Agreement between PI and such investment adviser (collectively, the Subadvisory Agreements).

Under the terms of the Management Agreement, the Fund is responsible for the payment of the following expenses: (1) the fees and expenses incurred by the Fund in connection with the management of the investment and reinvestment of the Fund's assets payable to the Manager; (2) the fees and expenses of Independent Trustees; (3) the fees and certain expenses of the custodian and transfer and dividend disbursing agent, including the cost of providing records to the Manager in connection with its obligation of maintaining required records of the Fund and of pricing the Fund's shares; (4) the charges and expenses of the Fund's legal counsel and independent auditors; (5) brokerage commissions and any issue or transfer taxes chargeable to the Fund in connection with its securities and futures transactions; (6) all taxes and corporate fees payable by the Fund to governmental agencies; (7) the fees of any trade associations of which the Fund may be a member; (8) the cost of share certificates representing and/or non-negotiable share deposit receipts evidencing shares of the Fund; (9) the cost of fidelity, directors and officers and errors and omissions insurance; (10) the fees and expenses involved in registering and maintaining registration of the Fund and of its shares with the Commission and paying notice filing fees under state securities laws, including the preparation and printing of the Fund's registration statements and prospectuses for such purposes; (11) allocable communications expenses with respect to investor services and all expenses of shareholders' and Trustees' meetings and of

B-29

preparing, printing and mailing reports and notices to shareholders; (12) litigation and indemnification expenses and other extraordinary expenses not incurred in the ordinary course of the Fund's business and (13) distribution and service (12b-1) fees.

The Management Agreement provides that PI will not be liable for any error of judgment by PI or for any loss suffered by the Fund in connection with the matters to which the Management Agreement relates, except a loss resulting from a breach of fiduciary duty with respect to the receipt of compensation for services (in which case any award of damages shall be limited to the period and the amount set forth in Section 36(b) 3 of the 1940 Act) or loss resulting from willful misfeasance, bad faith or gross negligence or reckless disregard of duties. The Management Agreement provides that it will terminate automatically, if assigned (as defined in the 1940 Act), and that it may be terminated without penalty by either PI or the Fund, by the Board or vote of a majority of the outstanding voting securities of the Fund (as defined in the 1940 Act) of such Series upon not more than 60 days' nor less than 30 days' written notice. The Management Agreement will continue in effect for a period of more than two years from the date of execution only so long as such continuance is specifically approved at least annually in accordance with the requirements of the 1940 Act.

For the fiscal years ended April 30, 2005, 2004 and 2003, the Fund paid PI management fees of $1,551,516, $1,717,443 and $1,723,876, respectively, for the Insured Series. For the fiscal years ended April 30, 2005, 2004 and 2003, the Fund paid PI management fees of $3,294,146, $3,708,037 and $3,992,990, respectively, for the High Income Series.

PI has entered into a Subadvisory Agreement with Prudential Investment Management, Inc. (PIM or the Subadviser), a wholly-owned subsidiary of Prudential. The Subadvisory Agreement provides that PIM will furnish investment advisory services in connection with the management of the Fund. In connection therewith, PIM is obligated to keep certain books and records of the Fund. Under the Subadvisory Agreement, the Subadviser, subject to the supervision of PI, is responsible for managing the assets of the Series in accordance with each Series' investment objectives, investment program and policies. The Subadviser determines what securities and other instruments are purchased and sold for the Series and is responsible for obtaining and evaluating financial data relevant to each Series. PI continues to have responsibility for all investment advisory services pursuant to the Management Agreement. As discussed in the Prospectus, PI employs each investment adviser under a "manager of managers" structure that allows PI to replace the investment adviser or amend a Subadvisory Agreement without seeking shareholder approval. Under its Subadvisory Agreement with PI, PIM was reimbursed by PI for the reasonable costs and expenses it incurred in furnishing those services. PIM is paid by PI at an annual rate of .250 of 1% of the average daily net assets of each Series up to and including $1 billion, and .214 of 1% of over $1 billion of each Series' average daily net assets. For the fiscal years ended April 30, 2005, 2004 and 2003, PI paid PIM $775,758, $858,722 and $861,938, respectively, for its investment advisory services to the Insured Series. For the fiscal years ended April 30, 2005, 2004 and 2003, PI paid PIM $1,647,073, $1,854,019 and $1,996,495, respectively, for its investment advisory services to the High Income Series.

The Subadvisory Agreement provides that it will terminate in the event of its assignment (as defined in the 1940 Act) or upon the termination of the Management Agreement. The Subadvisory Agreement may be terminated by the Fund, PI or PIM upon not more than 60 days', nor less than 30 days', written notice. The Subadvisory Agreement provides that it will continue in effect for a period of more than two years from its execution only so long as such continuance is specifically approved by the Board at least annually in accordance with the requirements of the 1940 Act.

Additional Information About the Portfolio Managers

The following tables set forth certain additional information with respect to the portfolio managers for the Fund. Unless noted otherwise, all information is provided as of April 30, 2005.

Other Accounts Managed by Portfolio Managers. The table below identifies, for each portfolio manager, the number of accounts managed and the total assets in such accounts, within each of the following categories: registered investment companies, other pooled investment vehicles, and other accounts. For each category, the number of accounts and total assets in the accounts whose fees are based on performance is indicated in italics typeface .

Portfolio Manager

Registered Investment
Companies

Other Pooled
Investment Vehicles

Other Accounts

Robert Tipp, CFA

17 Registered Mutual Funds with $5,446,362 in total assets under management.

17 Unregistered Pooled Investment Vehicles with $1,769,486 in assets under management.

28 Other Accounts with $16,350,189 in total assets under management.

Susan Courtney

8 Registered Mutual Funds with $2,018,868 in total assets under management.

No Unregistered Pooled Investment Vehicles with $0 in assets under management.

2 Other Accounts with $58,819 in total assets under management.

Dennis Hepworth

8 Registered Mutual Funds with $2,018,868 in total assets under management.

No Unregistered Pooled Investment Vehicles with $0 in assets under management.

2 Other Accounts with $58,819 in total assets under management.

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Portfolio Manager Compensation / Material Conflicts of Interest. Set forth below is an explanation of the structure of, and method(s) used by PIM to determine portfolio manager compensation. Also set forth below is an explanation of any material conflicts of interest that may arise between a portfolio manager's management of the Fund's investments and investments in other accounts.

Portfolio Manager Compensation:

Prudential Fixed Income, a unit of PIM, seeks to maintain a highly competitive compensation program designed to attract and retain outstanding investment professionals, which includes portfolio managers and research analysts, and to align the interests of its investment professionals with that of its clients and overall firm results. Prudential Fixed Income's investment professionals are compensated through a combination of base salary, a performance-based annual cash incentive bonus and a long-term incentive grant. The long-term incentive grant is generally divided between stock options and restricted stock of Prudential Financial, Inc., providing investment professionals with an ownership stake. Investment professionals are all covered by the same general compensation structure although they manage multiple accounts. All investment compensation is paid by the investment adviser and not from any assets of the investment company or other managed accounts.

The salary component is based on market data relative to similar positions within the industry as well as the past performance, experience and responsibility of the individual.

Investment professional's incentive compensation payments, including their annual bonus and long-term incentive grant, are paid from an annual incentive pool. The size of the annual incentive pool is determined quantitatively based on three factors:

1) investment performance (pre-tax) of portfolios on a 1-year and 3-year basis relative to appropriate market peer groups or benchmarks, such as the market-based benchmark specified in this prospectus,

2) Prudential Fixed Income's business results as measured by financial indicators such as asset growth, operating margin and earnings growth, and

3) market-based data indicating trends and levels of overall compensation in the asset management industry in a given year. Prudential Fixed Income regularly benchmarks its compensation program against leading asset management firms in the industry to monitor competitiveness.

Each investment professional's incentive compensation payment including the annual bonus and long-term incentive grant from the incentive pool is primarily determined by how significantly he/she contributes to delivering investment performance to clients consistent with portfolio objectives, guidelines, and risk parameters, as well as the individual's qualitative contributions to the organization.

Conflicts of Interest:

PIM is an indirect, wholly-owned subsidiary of Prudential Financial, Inc. and as such is part of a full-scale global financial services organization, affiliated with insurance companies, investment advisers and registered broker/dealers. PIM portfolio managers are often responsible for managing one or more Funds, in addition to other accounts, including accounts of affiliates, insurance company separate accounts, institutional accounts and other pooled investment vehicles, such as commingled trust funds and unregistered hedge funds. These affiliations and portfolio management responsibilities may cause potential and actual conflicts of interest. PIM aims to conduct itself in a manner it considers to be the most fair and consistent with its fiduciary obligations to all of its clients including the Fund.

Management of multiple accounts and funds side-by-side may raise potential conflicts of interest relating to the allocation of investment opportunities, the aggregation and allocation of trades, and cross trading. PIM has developed policies and procedures designed to address these potential conflicts of interest.

The Fund may be prohibited from engaging in transactions with its affiliates even when such transactions may be beneficial for the Fund. Certain affiliated transactions are permitted in accordance with procedures adopted by the Fund and reviewed by the independent directors of the Fund.

There may be restrictions imposed by law, regulation or contract regarding how much, if any, of a particular security PIM may purchase or sell on behalf of the Fund, and as to the timing of such purchase or sale. PIM may come into possession of material, non-public information with respect to a particular issuer and as a result be unable to execute purchase or sale transactions in securities of such issuer for the Fund. This is particularly true for fixed income investments because PIM has a bank loan unit that generally invests in private loans that often require the issuer to provide material non-public information. PIM is able to avoid certain other potential conflicts due to the possession of material, non-public information by maintaining an "Information Barrier" to prevent the transfer of this information between units of PIM as well as between affiliates and PIM.

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Additionally, in an effort to avoid potential conflicts of interest, PIM Fixed Income has procedures in place to carefully consider whether or not to accept material non-public information with respect to certain issuers, where appropriate.

Regulation may also prevent the Fund from participating in transactions that could be viewed as a joint transaction of the adviser. PIM would not be able to purchase for the Fund securities newly offered by an issuer if the proceeds from such new offering are to be used by the issuer to pay off a private loan that an affiliate of PIM may have made to the issuer.

Certain affiliates of PIM develop and publish credit research that is independent from the research developed within PIM. PIM may hold different opinions on the investment merits of a given security or industry such that PIM may be purchasing or holding a security for the Fund and an affiliated entity may be selling or recommending a sale of the same security. Conversely, PIM may be selling a security for the Fund and an affiliated entity may be purchasing or recommending a buy of the same security. In addition, PIM's affiliated brokers or investment advisers may be executing transactions in the market in the same securities as the Fund at the same time.

With respect to the management of the Fund, PIM may cause securities transactions to be executed concurrently with authorizations to purchase or sell the same securities for other accounts managed by PIM, including proprietary accounts or accounts of affiliates. In these instances, the executions of purchases or sales, where possible, are allocated equitably among the various accounts (including the Fund).

PIM may buy or sell, or may direct or recommend that another person buy or sell, securities of the same kind or class that are purchased or sold for the Fund, at a price which may or may not differ from the price of the securities purchased or sold for the Fund. In addition, PIM may, at any time, execute trades of securities of the same kind or class in one direction for an account and trade in the opposite direction or not trade for any other account, including the Fund, due to differences in investment strategy or client direction.

The fees charged to advisory clients by PIM may differ depending upon a number of factors including, but not limited to, the unit providing the advisory services, the particular strategy, the size of a portfolio being managed, the relationship with the client, the origination and service requirements and the asset class involved. Fees may also differ based on account type (e.g., commingled accounts, trust accounts, insurance company separate accounts, and corporate, bank or trust-owned life insurance products). Fees are negotiable so one client with similar investment objectives or goals may be paying a higher fee than another client. Fees paid by certain clients may also be higher due to performance based fees which increase based on the performance of a portfolio above an established benchmark. Also, large clients generate more revenue for PIM than do smaller accounts. A portfolio manager may be faced with a conflict of interest when allocating scarce investment opportunities given the benefit to PIM of favoring accounts that pay a higher fee or generate more income for PIM. To address this conflict of interest, PIM has adopted an Allocation Policy as well as supervisory procedures that attempt to fairly allocate investment opportunities among competing client accounts.

Conflicts of interest may also arise regarding proxy voting. A committee of senior business representatives together with relevant regulatory personnel oversees the proxy voting process and monitors potential conflicts of interest relating to proxy voting.

In addition, portfolio managers may advise proprietary accounts, affiliates' accounts, and the general account of The Prudential Insurance Company of America ("Prudential's General Account," and together with PIM's proprietary accounts and affiliates' accounts, the "Affiliated Accounts"). PIM portfolio manager(s) may have a financial interest in the accounts they advise, either directly or indirectly. To address potential conflicts of interest, PIM has procedures, including supervisory review procedures, designed to ensure that, including to the extent that client accounts are managed differently from the Affiliated Accounts, each of the client accounts including the Fund, and each Affiliated Account, is managed in a manner that is consistent with its investment objectives, investment strategies and restrictions, as well as with PIM's fiduciary obligations.

Potential conflicts of interest may exist in instances in which PIM or its affiliates determine that a specific transaction in a security is appropriate for a specific account, including the Affiliated Accounts, based upon numerous factors including, among other things, investment objectives, investment strategies or restrictions, while other accounts (including the Affiliated Accounts) may hold or take the opposite position in the security in accordance with those accounts' investment objectives, investment strategies and restrictions (these conflicting positions and transactions are collectively referred to as "Differing Positions"). PIM periodically conducts reviews of these accounts and assesses the appropriateness of these Differing Positions.

Because of the substantial size of Prudential's General Account, trading by Prudential's General Account in certain securities, particularly certain fixed income securities may result in market changes in response to the trade. Although PIM expects that Prudential's General Account will execute transactions that will move a market in a security infrequently, and generally in response to unusual market or issuer events, the execution of these transactions could have an adverse effect on transactions for or positions held by other clients including the Fund.

PIM has adopted Prudential Financial's Policy Statement on Business Ethics, a Personal Securities Trading Policy for investment personnel, Information Barrier Policy, Allocation Policy, Supervisory Procedures and a Conflicts of Interest Policy, among other policies and procedures, which are designed to ensure that clients are not harmed by these potential or actual

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conflicts of interests; however, there is no guarantee that such procedures will detect each and every situation in which a conflict may arise.

Portfolio Manager Securities Ownership. The table below identifies, for each portfolio manager, ownership of Fund securities by each portfolio manager.

Portfolio Manager				Ownership of Fund Securities
Robert Tipp				None
Susan Courtney				None
Dennis Hepworth				None

Principal Underwriter, Distributor and Rule 12b-1 Plans

Prudential Investment Management Services LLC (PIMS or the Distributor) Gateway Center Three, 14th Floor, Newark, NJ 07102, acts as the distributor of the shares of the Fund. PIMS is a subsidiary of Prudential. See "How the Fund is Managed-Distributor" in the prospectus.

Pursuant to separate Distribution and Service Plans (the Class A Plan, the Class B Plan and the Class C Plan, collectively, the Plans) adopted by the Fund pursuant to Rule 12b-1 under the 1940 Act and a distribution agreement (the Distribution Agreement), the Distributor incurs the expenses of distributing the Fund's Class A, Class B and Class C shares. The Distributor incurs the expenses of distributing the Fund's Class Z shares under a Distribution Agreement, none of these expenses of distribution are reimbursed by or paid for by the Fund. See "How the Fund is Managed-Distributor" in the Prospectus.

The expenses incurred under the Plans include commissions and account servicing fees paid to or on account of brokers or financial institutions that have entered into agreements with the Distributor, advertising expenses, the cost of printing and mailing prospectuses to potential investors and indirect and overhead costs of the Distributor associated with the sale of Fund shares including lease, utility, communications and sales promotion expenses.

Under the Plans, the Fund is obligated to pay distribution and/or service fees to the Distributor as compensation for its distribution and service activities, not as reimbursement for specific expenses incurred. If the Distributor's expenses exceed its distribution and service fees, the Fund will not be obligated to pay any additional expenses. If the Distributor's expenses are less than such distribution and service fees, it will retain its full fees and realize a profit.

The distribution and/or service fees may also be used by the Distributor to compensate on a continuing basis brokers in consideration for the distribution, marketing, administrative and other services and activities provided by brokers with respect to the promotion of the sale of the Fund's shares and the maintenance of related shareholder accounts.

Class A Plan. Under the Class A Plan, the Fund may pay the Distributor for its distribution-related activities with respect to Class A shares at an annual rate of up to .30 of 1% of the average daily net assets of the Class A shares of each Series. The Class A Plan provides that (1) up to .25 of 1% of the average daily net assets of the Class A shares of each Series may be used to pay for personal service and/or the maintenance of shareholder accounts (service fee) and (2) total distribution fees (including the service fee of .25 of 1%) may not exceed .30 of 1% of each Series. For the period ending April 30, 2006, the Distributor has contractually agreed to limit its distribution and service (12b-1) related fees payable under the Class A Plan to .25 of 1% of the average daily net assets of the Class A shares of each Series.

For the fiscal year ended April 30, 2005, the Distributor received payments of $1,146,849 and $622,686 from the Fund on behalf of the High Income Series and the Insured Series, respectively, under the Class A Plan and spent approximately $1,122,728 and $577,688 in distributing the High Income Series' and the Insured Series' Class A shares, respectively. These amounts were primarily expended for payments of account servicing fees to financial advisers and other persons who sell Class A shares. For the fiscal year ended April 30, 2005, the Distributor also received approximately $146,400 and $74,600 from the Fund on behalf of the High Income Series and the Insured Series, respectively, in initial sales charges attributable to Class A shares.

Class B and Class C Plans. Under the Class B and Class C Plans, the Fund may pay the Distributor for its distribution-related activities with respect to Class B and Class C shares at an annual rate of up to .50 of 1% and up to 1% of the average daily net asset of the Class B and Class C shares, respectively, of each Series. The Class B Plan provides for the payment to the Distributor of (1) an asset-based sales charge of up to .50 of 1% of the average daily net assets of the Class B shares of each Series, and (2) a service fee of up to .25 of 1% of the average daily net assets of the Class B shares of each Series, provided that the total distribution-related fee does not exceed .50 of 1% of each Series. The Class C Plan provides for the payment to the Distributor of (1) an asset-based sales charge of up to .75 of 1% of the average daily net assets of the Class C shares of each Series, and (2) a service fee of up to .25 of 1% of the average daily net assets of the Class C shares of each Series. The service fee is used to pay for personal service and/or the maintenance of shareholder accounts. The Distributor

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also receives contingent deferred sales charges from certain redeeming shareholders and, with respect to certain Class C shareholders, initial sales charges until February 2, 2004. For the period ending April 30, 2006, the Distributor has contractually agreed to limit its distribution and service (12b-1) related fees payable under the Class C Plan to .75 of 1% of the average daily net assets of the Series.

Class B Plan. For the fiscal year ended April 30, 2005, the Distributor received $827,978 and $241,291 from the Fund on behalf of the High Income Series and the Insured Series, respectively, under the Class B Plan. For the fiscal year ended April 30, 2005, the Distributor spent approximately the following amounts on behalf of each Series of the Fund:

Series	Printing and Mailing Prospectuses to Other Than Current Shareholders			Commission Payments to Financial Advisers of Distributor			Overhead Costs of Distributor*			Compensation to Distributor for Commission Payments to Representatives and Other Expenses*			Approximate Total Amount Spent By Distributor on Behalf of Series
High Income Series	$	6,600	(0.90%)	$	413,600	(56.03%)	$	213,400	(28.91%)	$	104,500	(14.16%)	$	738,100
Insured Series	$	3,500	(1.47%)	$	119,900	(50.18%)	$	22,000	(9.21%)	$	93,500	(39.14%)	$	238,900

* Including lease, utility and sales promotion expenses.

The Distributor also receives the proceeds of contingent deferred sales charges paid by shareholders of Class B shares upon certain redemptions of Class B shares. See "How to Buy, Sell and Exchange Shares of the Fund-How to Sell Your Shares-Contingent Deferred Sales Charge (CDSC)" in the Prospectus. For the fiscal year ended April 30, 2005, the Distributor received approximately $222,200 and $98,000 on behalf of the High Income Series and the Insured Series, respectively, in contingent deferred sales charges attributable to Class B shares.

Class C Plan. For the fiscal year ended April 30, 2005, the Distributor received $172,817 and $57,792 from the Fund on behalf of the High Income Series and the Insured Series, respectively, under the Class C Plan. For the fiscal year ended April 30, 2005, the Distributor spent approximately the following amounts on behalf of each Series of the Fund:

Series	Printing and Mailing Prospectuses to Other Than Current Shareholders			Commission Payments to Financial Advisers of Distributor			Overhead Costs of Distributor*			Compensation to Distributor for Commission Payments to Representatives and Other Expenses*			Approximate Total Amount Spent By Distributor on Behalf of Series
High Income Series	$	1,100	(0.60%)	$	154,400	(83.01%)	$	28,600	(15.36%)	$	1,900	(1.03%)	$	186,000
Insured Series	$	700	(1.32%)	$	44,900	(86.91%)	$	1,900	(3.74%)	$	4,100	(8.03%)	$	51,600

* Including lease, utility and sales promotion expenses.

The Distributor also receives the proceeds of contingent deferred sales charges paid by shareholders upon certain redemptions of Class C shares. See "How to Buy, Sell and Exchange Shares of the Fund-How to Sell Your Shares-Contingent Deferred Sales Charge (CDSC)" in the prospectus. For the fiscal year ended April 30, 2005, the Distributor received approximately $7,200 and $1,700 on behalf of the High Income Series and Insured Series, respectively, in contingent deferred sales charges attributable to Class C shares.

Distribution expenses attributable to the sale of Class A, Class B and Class C shares of each Series are allocated to each such class based upon the ratio of each such class to the sales of Class A, Class B and Class C shares of the Series other than expenses allocable to a particular class. The distribution fee and sales charge of one class will not be used to subsidize the sale of another class.

The Class A, Class B and Class C Plans continue in effect from year to year, provided that each such continuance is approved at least annually by a vote of the Board, including a majority vote of the Independent Trustees who have no direct or indirect financial interest in the Class A, Class B or Class C Plan or on any agreement related to the Plans (Rule 12b-1 Trustees) cast in person at a meeting called for the purpose of voting on such continuance. A Plan may be terminated at any time, without penalty, by the vote of a majority of the Rule 12b-1 Trustees or by the vote of the holders of a majority of the outstanding shares of the applicable class on not more than 30 days' written notice to any other party to the Plan. The Plans may not be amended to increase materially the amounts to be spent for the services described therein without approval by the shareholders of the applicable class, and all material amendments are required to be approved by the Board in the manner described above. Each Plan will automatically terminate in the event of its assignment. The Fund will not be contractually obligated to pay expenses incurred under any Plan if it is terminated or not continued.

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Pursuant to each Plan, the Board will review at least quarterly a written report of the distribution expenses incurred on behalf of each class of shares of the Fund by the Distributor. The report will include an itemization of the distribution expenses and the purposes of such expenditures. In addition, as long as the Plans remain in effect, the selection and nomination of the Rule 12b-1 Trustees shall be committed to the Rule 12b-1 Trustees.

Pursuant to the Distribution Agreement, the Fund has agreed to indemnify the Distributor to the extent permitted by applicable law against certain liabilities under federal securities law.

In addition to distribution and service fees paid by the Fund under the Class A, Class B and Class C Plans, the Manager (or one of its affiliates) may make payments out of its own resources to dealers (including Wachovia Securities) and other persons which distribute shares of the Fund (including Class Z shares). Such payments may be calculated by reference to the net asset value of shares sold by such persons or otherwise.

Fee Waivers/Subsidies

PI may from time to time waive all or a portion of its management fee and subsidize all or a portion of the operating expenses of the Fund. In addition, for the period ending June 30, 2005, the Distributor has contractually agreed to waive a portion of its distribution and service (12b-1) fees for Class A and Class C shares of each Series, respectively. Fee waivers and subsidies will increase a Series' total return.

NASD Maximum Sales Charge Rule. Pursuant to rules of the National Association of Securities Dealers (NASD), Conduct Rules, the Distributor is required to limit aggregate initial sales charges, deferred sales charges and asset-based sales charges to 6.25% of total gross sales of each class of shares. Interest charges on unreimbursed distribution expenses equal to the prime rate plus one percent per annum may be added to the 6.25% limitation. Sales from the reinvestment of dividends and distributions are not included in the calculation of the 6.25% limitation. The annual asset-based sales charge on shares of a Series may not exceed .75 of 1% per class. The 6.25% limitation applies to each class of each Series of the Fund rather than on a per shareholder basis. If aggregate sales charges were to exceed 6.25% of total gross sales of any class, all sales charges on shares of that class would be suspended.

Other Service Providers

The Bank of New York (BNY or the Custodian), One Wall Street, New York, NY 10286, serves as custodian for the Fund's portfolio securities and cash and, in that capacity, maintains certain financial and accounting books and records pursuant to an agreement with the Fund. Subcustodians provide custodial services for the Fund's foreign assets held outside the United States.

Prudential Mutual Fund Services LLC (PMFS), Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102, serves as the transfer and dividend disbursing agent of the Fund. It is a wholly owned subsidiary of PIFM Holdco Inc., the parent of PI, the Manager. PMFS provides customary transfer agency services to the Fund, including the handling of shareholder communications, the processing of shareholder transactions, the maintenance of shareholder account records, the payment of dividends and distributions and related functions. For these services, PMFS receives an annual fee of $13.00 per shareholder account, a new account set-up fee of $2.00 for each manually established shareholder account and a monthly inactive zero balance account fee of $0.20 per shareholder account. PMFS is also reimbursed for its out-of-pocket expenses, including but not limited to postage, stationery, printing, allocable communication expenses and other costs.

For the fiscal year ended April 30, 2005, the Fund incurred expenses of approximately $154,200 and $111,000 for the services of PMFS on behalf of the High Income Series and the Insured Series, respectively.

KPMG LLP, 345 Park Avenue, New York, NY 10154, serves as the Fund's independent registered public accounting firm, and in that capacity audited the Fund's annual financial statements for the fiscal year ended April 30, 2005.

Code of Ethics

The Board has adopted a Code of Ethics. In addition, the Manager, Subadviser and Distributor have each adopted a Code of Ethics (the Codes). The Codes apply to access persons (generally persons who have access to information about a funds' investment program) and permit personnel subject to the Codes to invest in securities, including securities that may be purchased or held by the Fund. However, the protective provisions of the Codes prohibit certain investments and limit such personnel from making investments during periods when the Fund is making such investments. The Codes are on public file with, and are available from, the Commission.

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Description of Proxy Voting Policies and Recordkeeping Procedures

The Board has delegated to PI the responsibility for voting any proxies and maintaining proxy recordkeeping with respect to the Fund. The Fund authorized PI to delegate, in whole or in part, its proxy voting authority to its investment advisers (currently, PIM) or third party vendors, consistent with the policies set forth below. The proxy voting process shall remain subject to the supervision of the Board, including any committee thereof established for that purpose.

PI and the Board view the proxy voting process as a component of the investment process and, as such, seek to ensure that all proxy proposals are voted with the primary goal of seeking the optional benefit for the Fund. Consistent with this goal, the Board views the proxy voting process as a means to encourage strong corporate governance practices and ethical conduct by corporate management. PI and the Board maintain a policy of seeking to protect the best interests of the Fund should a proxy issue potentially implicate a conflict of interest between the Fund and PI or its affiliates.

PI delegates to PIM the responsibility for voting the Fund's proxies. PIM is expected to identify and seek to obtain the optional benefit for the Fund, and to adopt written policies that meet certain minimum standards, including that the policies be reasonably designed to protect the best interests of the Fund and delineate procedures to be followed when a proxy vote presents a conflict between the interests of the Fund and the interests of PIM or its affiliates. PI and the Board expect that PIM will notify PI and the Board at least annually of any such conflicts identified and confirm how the issue was resolved. In addition, PI expects that PIM will deliver to PI, or its appointed vendor, information required for filing the Form N-PX with the Commission.

A summary of the proxy voting policies of PIM is set forth in Appendix II of this SAI.

Information about how the Fund voted proxies relating to portfolio securities during the most recent 12-month period ended June 30 is available, without charge, upon request, by calling (800) 225-1852 or by visiting the Commission's website, http://www.sec.gov.

BROKERAGE ALLOCATION AND OTHER PRACTICES

The Fund has adopted a policy pursuant to which the Fund and its Manager, Subadviser, and principal underwriter are prohibited from directly or indirectly compensating a broker-dealer for promoting or selling Fund shares by directing brokerage transactions to that broker. The Fund has adopted procedures for the purpose of deterring and detecting any violations of the policy. The policy permits the Fund, the Manager, and the Subadviser to use selling brokers to execute transactions in portfolio securities so long as the selection of such selling brokers is the result of a decision that executing such transactions is in the best interest of the Fund and is not influenced by considerations about the sale of Fund shares.

The Manager is responsible for decisions to buy and sell securities and financial futures for each Series of the Fund, the selection of brokers, dealers and futures commission merchants to effect the transactions and the negotiation of brokerage commissions. For purposes of this section, the term "Manager", as used in this section, includes the Subadviser. Purchases and sales of securities on a securities exchange, which are not expected to be a significant portion of the portfolio securities of any Series, are effected through brokers who charge a commission for their services. Orders may be directed to any broker or futures commission merchant including, to the extent and in the manner permitted by applicable law, affiliated brokers. Brokerage commissions on United States securities, options and futures exchanges or boards of trade are subject to negotiation between the Manager and the broker or futures commission merchant.

In the over-the-counter market, securities are generally traded on a "net" basis with dealers acting as principal for their own accounts without a stated commission, although the price of the security usually includes a profit to the dealer. In underwritten offerings, securities are purchased at a fixed price which includes an amount of compensation to the underwriter, generally referred to as the underwriter's concession or discount. On occasion, certain money market instruments may be purchased directly from an issuer, in which case no commissions or discounts are paid. The Fund will not deal with an affiliate in any transaction in which an affiliated broker acts as principal. Thus it will not deal in over-the-counter securities with an affiliated broker acting as a market-maker, and it will not execute a negotiated trade with an affiliated broker if the execution involves an affiliated broker acting as principal with respect to any part of the Fund's order.

In placing orders for portfolio securities for the Fund, the Manager's overriding objective is to obtain the best possible combination of price and efficient execution. The Manager seeks to affect each transaction at a price and commission, if any, which provides the most favorable total cost or proceeds reasonably attainable under the circumstances. The factors that the Manager may consider in selecting a particular broker, dealer or futures commission merchant firm are the Manager's knowledge of negotiated commission rates currently available and other current transaction costs; the nature of the portfolio transaction; the size of the transaction; the desired timing of the trade; the activity existing and expected in the market for the

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particular transaction; confidentiality; the execution, clearance and settlement capabilities of the firms; the availability of research and research related services provided through such firms; the Manager's knowledge of the financial stability of the firms; the Manager's knowledge of actual or apparent operational problems of firms; and the amount of capital, if any, that would be contributed by firms executing the transaction. Given these factors, the Fund may pay transaction costs in excess of that which another firm might have charged for effecting the same transaction.

When the Manager deems the purchase or sale of securities to be in the best interests of the Fund or its other clients, including Prudential, the Manager may, but is under no obligation to, aggregate the transactions in order to obtain the most favorable price or lower brokerage commissions and efficient execution. In such event, allocation of the transactions, as well as the expenses incurred in the transaction, will be made by the Manager in the manner it considers to be most equitable and consistent with its fiduciary obligations to its clients. The allocation of orders among firms and the commission rates paid are reviewed periodically by the Board.

Subject to the above considerations, an affiliated broker may act as a broker or futures commission merchant for the Fund. In order for an affiliated broker to effect any portfolio transactions for the Fund, the commissions, fees or other remuneration received by an affiliated broker must be reasonable and fair compared to the commissions, fees or other remuneration paid to other firms in connection with comparable transactions involving similar securities or futures being purchased or sold on an exchange during a comparable period of time. This standard would allow the affiliated broker to receive no more than the remuneration which would be expected to be received by an unaffiliated firm in a commensurate arm's-length transaction. Furthermore, the Board, including a majority of the Independent Trustees, have adopted procedures which are reasonably designed to provide that any commissions, fees or other remuneration paid to the affiliated broker are consistent with the foregoing standard. In accordance with Section 11(a) of the Securities Exchange Act of 1934, as amended, Wachovia Securities may not retain compensation for effecting transactions on a national securities exchange for the Fund unless the Fund has expressly authorized the retention of such compensation. Wachovia Securities must furnish to the Fund at least annually a statement setting forth the total amount of all compensation retained by Wachovia Securities from transactions effected for the Fund during the applicable period. Brokerage and futures transactions with Wachovia Securities are also subject to such fiduciary standards as may be imposed upon it by applicable law.

During the fiscal years ended April 30, 2005, 2004 and 2003, the Fund paid $14,451, $342,983 and $89,034, respectively, in brokerage commissions on certain options and/or futures transactions. No such brokerage commissions were paid to any of the Fund's affiliates, including Wachovia Securities, for the fiscal years ended April 30, 2005, 2004 and 2003.

The Fund is required to disclose its holdings of securities of its regular brokers and dealers (as defined under Rule 10b-1 of the Investment Company Act) and their parents at April 30, 2005. As of April 30, 2005, the Fund did not hold any securities of its regular brokers and dealers.

DISCLOSURE OF PORTFOLIO HOLDINGS

The Series' portfolio holdings are made public, as required by law, in the Series' annual and semi-annual reports. These reports are filed with the SEC and mailed to shareholders within 60 days after the end of the relevant period. In addition, as required by law, the Series' portfolio holdings as of the fiscal quarter end are reported to the SEC within approximately 60 days after the end of the Series' first and third fiscal quarters. The Fund will provide a full list of its portfolio holdings as of the end of each month on its website within approximately 30 days after the end of the month. In addition, a Series may release its top ten holdings, sector and country breakdowns, and largest industries on a monthly basis, with the information as of a date 15 days prior to the release. Such information will be posted to the Series' website within 15 days after the end of each month. These postings can be located at www.jennisondryden.com, and are available for at least six months from the date of their posting.

When authorized by the Chief Compliance Officer of the Series and an officer of the Series, portfolio holdings information may be disseminated more frequently or at different periods than those described above to intermediaries that distribute shares of the Series, third-party providers of auditing, custody, proxy voting and other services for the Series, rating and ranking organizations, and certain affiliated persons of the Series, as described below. The procedures used to determine eligibility are set forth below:

Procedures for Release of Portfolio Holdings Information:

1. A request for release of the holdings of the Series' portfolios shall be prepared setting forth a legitimate business purpose for such release which shall specify the Portfolio(s), the terms of such release and frequency (e.g., level of detail staleness). Such request shall address whether there are any conflicts of interest between the Series and the

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investment adviser, sub-adviser, principal underwriter or any affiliated person thereof and how such conflicts shall be dealt with to demonstrate that the disclosure is in the best interests of the shareholders of the Series.

2. The request shall be forwarded to the Chief Compliance Officer of the Series, or his delegate, for review and approval.

3. A confidentiality agreement in the form approved by an officer of the Series must be executed with the recipient of the holdings information.

4. An officer of the Series shall approve the release agreement. Copies of the release and agreement shall be sent to PI's law department.

5. Written notification of the approval shall be sent by such officer to PI's Fund Administration Department to arrange the release of holdings information.

6. PI's Fund Administration Department shall arrange for the release of holdings information by the custodian banks.

As of the date of this Statement of Additional Information, the Series will provide:

1. Traditional External Recipients / Vendors

• Full holdings on a daily basis to Investor Responsibility Research Center (IRRC), Institutional Shareholder Services (ISS) and Automatic Data Processing, Inc. (ADP) (proxy voting agents) at the end of each day.

• Full holdings on a daily basis to the Series' subadviser, custodian, sub-custodians (if any) and accounting agents at the end of each day.

• Full holdings to the Series' independent registered public accounting firm as soon as practicable following the Series' fiscal year-end or on an as-needed basis.

• Full holdings to financial printers as soon as practicable following the end of the Series' quarterly, semi and annual period-ends.

2. Analytical Service Providers

• All Series trades on a quarterly basis to Abel/Noser Corp. (an agency-only broker and transaction cost analysis company) as soon as practicable following the Series' fiscal quarter-end.

• Full holdings on a daily basis to FT Interactive Data (a fair value information service) at the end of each day.

• Full holdings on a daily basis to FactSet (an online investment research provider) at the end of each day.

In each case, the information disclosed must be for a legitimate business purpose and is subject to a confidentiality agreement intended to prohibit the recipient from trading on or further disseminating such information. Such arrangements will be monitored on an ongoing basis and will be reviewed by the Series' Chief Compliance Officer and PI's Law Department on an annual basis.

In addition, certain authorized employees of PI receive portfolio holdings information on a quarterly, monthly or daily basis or upon request, in order to perform their business functions. All PI employees are subject to the requirements of the personal securities trading policy of Prudential Financial, Inc., which prohibits employees from trading on, or further disseminating confidential information, including portfolio holdings information.

The Board of the Series has approved PI's Policy for the Dissemination of Portfolio Holdings. The Board shall, on a quarterly basis, receive a report from PI detailing the recipients of the portfolio holdings information and the reason for such disclosure. The Board has delegated oversight of the Series' disclosure of portfolio holdings to the Chief Compliance Officer.

There can be no assurance that the Series' policies and procedures on portfolio holdings information will protect the Series from the potential misuse of such information by individuals or entities that come into possession of the information.

CAPITAL SHARES, OTHER SECURITIES AND ORGANIZATION

The Fund is authorized to issue an unlimited number of shares of beneficial interest, divided into four classes, designated as Class A, Class B, Class C and Class Z. Each class of beneficial interest with respect to each Series represents an interest in the same assets of the Series and is identical in all respects except that (1) each class is subject to different (or no) sales charges and distribution and/or service fees (except for Class Z shares, which are not subject to any sales charge or distribution and/or service fees), which may affect performance, (2) each class has exclusive voting rights on any matter submitted to

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shareholders that relates solely to its arrangement and has separate voting rights on any matter submitted to shareholders in which the interests of one class differ from the interests of any other class, (3) each class has a different exchange privilege and (4) only Class B shares have a conversion feature. Class Z shares are offered exclusively for sale to a limited group of investors. Currently, the Fund is offering Class A, Class B, Class C and Class Z shares of beneficial interest. In accordance with the Fund's Declaration of Trust, the Board may authorize the creation of additional series and classes within such series, with such preferences, privileges, limitations and voting and dividend rights as the Board may determine.

Shares of the Fund, when issued, are fully paid, nonassessable, fully transferable and redeemable at the option of the holder. Shares are also redeemable at the option of the Fund under certain circumstances. Each share of each class of each Series is equal as to earnings, assets and voting privileges, except as noted above, and each class (with the exception of Class Z shares, which are not subject to any distribution and/or service fees) bears the expenses related to the distribution of its shares. Except for the conversion feature applicable to the Class B shares, there are no conversion, preemptive or other subscription rights. In the event of liquidation, each share of beneficial interest of each Series is entitled to its portion of all of the Series' assets after all debts and expenses of the Series have been paid. Since Class B and Class C shares generally bear higher distribution expenses than Class A shares, the liquidation proceeds to shareholders of those classes are likely to be lower than to Class A shareholders and to Class Z shareholders, whose shares are not subject to any distribution and/or service fees. The Fund's shares do not have cumulative voting rights for the election of Directors.

The Fund does not intend to hold annual meetings of shareholders unless otherwise required by law. The Fund will not be required to hold meetings of shareholders unless, for example, the election of Trustees is required to be acted on by shareholders under the 1940 Act. Shareholders have certain rights, including the right to call a meeting upon a vote of 10% or more of the Fund's outstanding shares for the purpose of voting on the removal of one or more Trustees or to transact any other business.

PURCHASE, REDEMPTION AND PRICING OF FUND SHARES

Shares of each Series of the Fund may be purchased at a price equal to the next determined NAV per share plus a sales charge which, at the election of the investor, may be imposed either (1) at the time of purchase (Class A shares) or (2) on a deferred basis (Class B, Class C and Class A shares, (in certain cases)). Class Z shares of the Fund are offered to a limited group of investors at NAV without any sales charges. See "How to Buy, Sell and Exchange Shares of the Fund-How to Buy Shares" in the Prospectus.

Purchase by Wire. For an initial purchase of shares of the Fund by wire, you must complete an application and telephone PMFS at (800) 225-1852 (toll-free) to receive an account number. The following information will be requested: your name, address, tax identification number, fund, series, and class election, dividend distribution election, amount being wired and wiring bank. Instructions should then be given by you to your bank to transfer funds by wire to the Fund's Custodian, as directed to you by PMFS, specifying on the wire the account number assigned by PMFS and your name and identifying the Series (Insured or High Income) and the class in which you are investing (Class A, Class B, Class C or Class Z shares).

If you arrange for receipt by the Custodian of federal funds prior to the calculation of NAV (once each business day at the close of regular trading on the NYSE, usually 4:00 p.m. New York time) on a business day, you may purchase shares of the Fund as of that day. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to purchase is received after the close of regular trading on the NYSE.

In making a subsequent purchase by wire, you should wire the Custodian directly and should be sure that the wire specifies Dryden Municipal Bond Fund, the Series (Insured or High Income) and Class A, Class B, Class C or Class Z shares and your name and individual account number. It is not necessary to call PMFS to make subsequent purchase orders using federal funds.

Issuance of Fund Shares for Securities

Transactions involving the issuance of Fund shares for securities (rather than cash) will be limited to (1) reorganizations, (2) statutory mergers, or (3) other acquisitions of portfolio securities that: (a) meet the investment objectives and policies of the Fund, (b) are liquid and not subject to restrictions on resale, (c) have a value that is readily ascertainable via listing on or trading in a recognized United States or international exchange or market, and (d) are approved by the Fund's investment adviser.

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Specimen Price Make-Up

Under the current distribution arrangements between the Fund and the Distributor, Class A* shares are sold at a maximum initial sales charge of 4%, and Class B*, Class C* and Class Z shares are sold at NAV. Using the Fund's NAV at April 30, 2005, the maximum offering prices of the Fund's shares are as follows:

	High Income Series		Insured Series
Class A
NAV and redemption price per Class A share*	$	10.33	$	10.98
Maximum sales charge (4% of offering price) .		0.43		0.46
Maximum Offering price to public	$	10.76	$	11.44
Class B
NAV, redemption price and offering price to public per Class B share*	$	10.34	$	10.99
Class C
NAV, redemption price and offering price to public per Class C share*	$	10.34	$	10.99
Class Z
NAV, redemption price and offering price to public per Class Z share	$	10.32	$	10.96

* Class A, Class B and Class C shares are subject to a contingent deferred sales charge on certain redemptions. See "How to Buy, Sell and Exchange Shares of the Fund-How to Sell Your Shares-Contingent Deferred Sales Charge (CDSC)" in the prospectus.

Selecting a Purchase Alternative

The following is provided to assist you in determining which share class of the Fund best suits your individual circumstances and is based on current fees and expenses being charged to the Fund.

If you intend to hold your investment in the Fund for less than 6 years and do not qualify for a reduced sales charge on Class A shares, since Class A shares are subject to a maximum initial sales charge of 4% and Class B shares are subject to a CDSC of 5% which declines to zero over a 6 year period, you should consider purchasing Class C shares over either Class A or Class B shares.

If you qualify for a reduced sales charge on Class A shares, you may benefit by purchasing Class A shares over either Class B or Class C shares regardless of how long you intend to hold your investment. See "Reduction and Waiver of Initial Sales Charge-Class A Shares" below. However, unlike Class B shares, you would not have all of your money invested initially because the sales charge on Class A shares is deducted at the time of purchase.

Class B Shares

The offering price of Class B shares for investors choosing one of the deferred sales charge alternatives is the NAV next determined following receipt of an order in proper form by the transfer agent, your broker or the Distributor. Redemptions of Class B shares may be subject to a CDSC. See "Contingent Deferred Sales Charge" below.

The Distributor will pay, from its own resources, sales commissions of up to 4% of the purchase price of Class B shares to brokers, financial advisers and other persons who sell Class B shares at the time of sale. This facilitates the ability of the Fund to sell the Class B shares without an initial sales charge being deducted at the time of purchase. The Distributor anticipates that it will recoup its advancement of sales commissions from the combination of the CDSC and the distribution fee.

Class C Shares

The offering price of Class C shares is the next determined NAV. Redemptions of Class C shares may be subject to a CDSC. In connection with the sale of Class C shares, the Distributor will pay, from its own resources, brokers, financial advisers and other persons which distribute Class C shares a sales commission of up to 2% of the purchase price at the time of the sale.

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Class Z Shares

Mutual Fund Programs. Class Z shares also can be purchased by participants in any fee-based program or trust program sponsored by Prudential or an affiliate that includes mutual funds as investment options and the Fund as an available option. Class Z shares also can be purchased by investors in certain programs sponsored by broker-dealers, investment advisers and financial planners who have agreements with Prudential Investments Advisory Group relating to:

• mutual fund "wrap" or asset allocation programs, where the sponsor places fund trades, links its clients' accounts to a master account in the sponsor's name and charges its clients a management, consulting or other fee for its services

• mutual fund "supermarket" programs where the sponsor links its clients' accounts to a master account in the sponsor's name and the sponsor charges a fee for its services.

Other Types of Investors. Class Z shares currently also are available for purchase by the following categories of investors:

• certain participants in the MEDLEY Program (group variable annuity contracts) sponsored by Prudential for whom Class Z shares of the JennisonDryden or Strategic Partners mutual funds are an available investment option

• current and former Directors/Trustees of JennisonDryden or Strategic Partners mutual funds (including the Fund)

• Prudential, with an investment of $10 million or more

Class Z shares may also be purchased by qualified state tuition programs (529 plans).

In connection with the sale of Class Z shares, the Manager, the Distributor or one of their affiliates may pay dealers, financial advisers and other persons which distribute shares a finders' fee from their own resources based on a percentage of the net asset value of shares sold by such persons.

Rights of Accumulation. Reduced sales charges are also available through Rights of Accumulation, under which an investor or an eligible group of related investors, as described under "Reducing or Waiving Class A's Initial Sales Charge" in the Prospectus, may aggregate the value of their existing holdings of shares of the Fund and shares of other JennisonDryden and Strategic Partners mutual funds (excluding money market funds other than those acquired pursuant to the exchange privilege) to determine the reduced sales charge. However, the value of shares held directly with the Transfer Agent and through your broker will not be aggregated to determine the reduced sales charge. The value of existing holdings for purposes of determining the reduced sales charge is calculated using the maximum offering price (NAV plus maximum sales charge) as of the previous business day. The Distributor, your broker or the Transfer Agent must be notified at the time of purchase that the investor is entitled to a reduced sales charge. Reduced sales charges will be granted subject to confirmation of the investor's holdings.

Sale of Shares

You can redeem your shares at any time for cash at the NAV next determined after the redemption request is received in proper form (in accordance with procedures established by the transfer agent in connection with investors' accounts) by the transfer agent, the Distributor or your broker. See "Net Asset Value" below. In certain cases, however, redemption proceeds will be reduced by the amount of any applicable CDSC, as described below. See "Contingent Deferred Sales Charge" below. If you are redeeming your shares through a broker, your broker must receive your sell order before the Fund computes its NAV for the day (at the close of regular trading on the NYSE, usually 4:00 p.m. New York time) in order to receive that day's NAV. In the event that regular trading on the NYSE closes before 4:00 p.m. New York time, you will receive the following day's NAV if your order to sell is received after the close of regular trading on the NYSE. Your broker will be responsible for furnishing all necessary documentation to the Distributor and may charge you for its services in connection with redeeming shares of the Fund.

If you hold shares of the Fund through Wachovia Securities, you must redeem your shares through Wachovia Securities. Please contact your Wachovia Securities financial adviser.

In order to redeem shares, a written request for redemption signed by you exactly as the account is registered is required. If you hold certificates, the certificates must be received by the transfer agent, the Distributor or your broker in order for the redemption request to be processed. If redemption is requested by a corporation, partnership, trust or fiduciary, written

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evidence of authority acceptable to the transfer agent must be submitted before such request will be accepted. All correspondence and documents concerning redemptions should be sent to the Fund in care of its transfer agent, Prudential Mutual Fund Services LLC, Attention: Redemption Services, P.O. Box 8310, Philadelphia, PA 19101, to the Distributor, or to your broker.

Payment for redemption of recently purchased shares will be delayed until the Fund or its Transfer Agent has been advised that the purchase check has been honored, which may take up to 10 calendar days from the time of receipt of the purchase check by the Transfer Agent. Such delay may be avoided by purchasing shares by wire or by certified or cashier's check.

Signature Guarantee. If the proceeds of the redemption (1) exceed $100,000, (2) are to be paid to a person other than the record owner, (3) are to be sent to an address other than the address on the transfer agent's records, or (4) are to be paid to a corporation, partnership, trust or fiduciary, and your shares are held directly with the transfer agent, the signature(s) on the redemption request or stock power must be signature guaranteed by an "eligible guarantor institution." An "eligible guarantor institution" includes any bank, broker-dealer, savings association or credit union. The transfer agent reserves the right to request additional information from, and make reasonable inquires of, any eligible guarantor institution. In the case of redemptions from a PruArray Plan, if the proceeds of the redemption are invested in another investment option of the plan in the name of the record holder and at the same address as reflected in the transfer agent's records, a signature guarantee is not required.

Payment for shares presented for redemption will be made by check within seven days after receipt by the transfer agent, the Distributor or your broker of the written request and certificates, if issued, except as indicated below. If you hold shares through a broker payment for shares presented for redemption will be credited to your account at your broker, unless you indicate otherwise. Such payment may be postponed or the right of redemption suspended at times (1) when the NYSE is closed for other than customary weekends and holidays, (2) when trading on the NYSE is restricted, (3) when an emergency exists as a result of which disposal by the Fund of securities owned by it is not reasonably practicable or it is not reasonably practicable for the Fund fairly to determine the value of its net assets, or (4) during any other period when the Commission, by order, so permits; provided that applicable rules and regulations of the Commission shall govern as to whether the conditions prescribed in (2), (3) or (4) exist.

Payment for redemption of recently purchased shares will be delayed until the Fund or its transfer agent has been advised that the purchase check has been honored, which may take up to 10 calendar days from the time of receipt of the purchase check by the transfer agent. Such delay may be avoided by purchasing shares by wire or by certified or cashier's check.

Expedited Redemption Privilege. By electing the Expedited Redemption Privilege, you may arrange to have redemption proceeds sent to your bank account. The Expedited Redemption Privilege may be used to redeem shares in an amount of $200 or more, except if any account for which an expedited redemption is requested has a net asset value of less than $200, the entire account will be redeemed. Redemption proceeds in the amount of $500 or more will be remitted by wire to your bank account at a domestic commercial bank which is a member of the Federal Reserve System. Redemption proceeds of less than $500 will be mailed by check to your designated bank account. Any applicable CDSC will be deducted from the redemption proceeds. Expedited redemption requests may be made by telephone or letter, must be received by the Fund prior to 4:00 p.m. to receive a redemption amount based on that day's NAV and are subject to the terms and conditions as set forth in the prospectus regarding redemption of shares. In the event that regular trading on the NYSE closes before 4:00 p.m., you will receive the following day's NAV if your order to sell is received after the close of regular trading on the NYSE. For more information, see "How to Buy, Sell and Exchange Shares of the Fund-Telephone Redemptions or Exchanges" in the prospectus. The Expedited Redemption Privilege may be modified or terminated at any time without notice. To receive further information, shareholders should contact PMFS at (800) 225-1852.

Redemption in Kind. If the Board determines that it would be detrimental to the best interests of the remaining shareholders of the Fund to make payment wholly or partly in cash, the Fund may pay the redemption price in whole or in part by a distribution in kind of securities from the investment portfolio of the Fund, in lieu of cash, in conformity with applicable rules of the Commission. Securities will be readily marketable and will be valued in the same manner as in a regular redemption. If your shares are redeemed in kind, you would incur transaction costs in converting the assets into cash. The Fund, however, has elected to be governed by Rule 18f-1 under the 1940 Act, under which the Fund is obligated to redeem shares solely in cash up to the lesser of $250,000 or 1% of the NAV of the Fund during any 90-day period for any one shareholder.

Involuntary Redemption. In order to reduce expenses of the Fund, the Board may redeem all of the shares of any shareholder whose account has an account value of less than $500 due to a redemption. The Fund will give such shareholders 60 days' prior written notice in which to purchase sufficient additional shares to avoid such redemption. No CDSC will be imposed on any such involuntary redemption.

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90-Day Repurchase Privilege. If you redeem your shares and have not previously exercised the repurchase privilege, you may reinvest back into your account any portion or all of the proceeds of such redemption in shares of the Fund at the NAV next determined after the order is received, which must be within 90 days after the date of the redemption. Any CDSC paid in connection with such redemption will be credited (in shares) to your account. (If less than a full repurchase is made, the credit will be on a pro rata basis). You must notify the transfer agent, either directly or through the Distributor or your broker, at the time the repurchase privilege is exercised, to adjust your account for the CDSC you previously paid. Thereafter, any redemptions will be subject to the CDSC applicable at the time of the redemption. See "Contingent Deferred Sales Charge" below.

Contingent Deferred Sales Charge

Investors who purchase $1 million or more of Class A shares and sell these shares within 12 months of purchase are subject to a 1% CDSC. (The CDSC is waived for certain retirement and/or benefit plans affiliated with Prudential.) Redemptions of Class B shares will be subject to a CDSC declining from 5% to zero over a six-year period. Class C shares redeemed within 12 months of purchase will be subject to a 1% CDSC (18 months for Class C shares purchased prior to February 2, 2004). The CDSC will be deducted from the redemption proceeds and reduce the amount paid to you. The CDSC will be imposed on any redemption that reduces the current value of your Class A, Class B or Class C shares to an amount which is lower than the amount of all payments by you for shares during the preceding 12 months in the case of Class A shares (in certain cases), 6 years in the case of Class B shares, and 12 months, in the case of Class C shares. A CDSC will be applied on the lesser of the original purchase price or the current value of the shares being redeemed. Increases in the value of your shares or shares acquired through reinvestment of dividends or distributions are not subject to a CDSC. The amount of any CDSC will be paid to and retained by the Distributor. If you purchased or hold your shares through a broker, third party administrator or other authorized entity that maintains subaccount recordkeeping, any applicable CDSC that you will pay will be calculated and reported to PMFS by such broker, administrator or other authorized entity.

The amount of the CDSC, if any, will vary depending on the number of years from the time of payment for the purchase of shares until the time of redemption of such shares. Solely for purposes of determining the number of years from the time of any payment for the purchase of shares, all payments during a month will be aggregated and deemed to have been made on the last day of the month. The CDSC will be calculated from the first day of the month after the initial purchase, excluding the time shares were held in a money market fund. See "Shareholder Investment Account-Exchange Privilege" below.

The following table sets forth the rates of the CDSC applicable to redemption of Class B shares:

Year Since Purchase Payment Made	Contingent Deferred Sales Charge as a Percentage of Dollars Invested or Redemption Proceeds
First		5.0	%
Second		4.0	%
Third		3.0	%
Fourth		2.0	%
Fifth		1.0	%
Sixth		1.0	%
Seventh		None

In determining whether a CDSC is applicable to redemption, the calculation will be made in a manner that results in the lowest possible rate. It will be assumed that the redemption is made first of amounts representing shares acquired pursuant to the reinvestment of dividends and distributions; then of amounts representing the increase in NAV above the total amount of payments for the purchase of Class A shares made during the preceding 12 months (in certain cases), 6 years for Class B shares and 12 months for Class C shares; then of amounts representing the cost of shares held beyond the applicable CDSC period; and finally, of amounts representing the cost of shares held for the longest period of time within the applicable CDSC period.

For example, assume you purchased 100 Class B shares at $10 per share for a cost of $1,000. Subsequently, you acquired 5 additional Class B shares through dividend reinvestment. During the second year after the purchase you decided to redeem $500 of your investment. Assuming at the time of the redemption the NAV had appreciated to $12 per share, the value of your Class B shares would be $1,260 (105 shares at $12 per share). The CDSC would not be applied to the value of the reinvested dividend shares and the amount which represent appreciation ($260). Therefore, $240 of the $500 redemption proceeds ($500 minus $260) would be charged at a rate of 4% (the applicable rate in the second year after purchase) for a total CDSC of $9.60.

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For federal income tax purposes, the amount of the CDSC will reduce the gain or increase the loss, as the case may be, on the amount recognized on the redemption of shares.

Waiver of Contingent Deferred Sales Charge-Class B Shares

The CDSC will be waived in the case of a redemption following the death or disability of a shareholder or, in the case of a trust account, following the death or disability of the grantor. The waiver is available for total or partial redemptions of shares owned by a person, either individually or in joint tenancy, at the time of death or initial determination of disability, provided that the shares were purchased prior to death or disability.

In addition, the CDSC will be waived on redemptions of shares held by Trustees of the Fund.

You must notify the Fund's transfer agent either directly or through your broker, at the time of redemption, that you are entitled to waiver of the CDSC and provide the transfer agent with such supporting documentation as it may deem appropriate. The waiver will be granted subject to confirmation of your entitlement.

In connection with these waivers, the transfer agent will require you to submit the supporting documentation set forth below.

Category of Waiver				Required Documentation
Death				A copy of the shareholder's death certificate or, in the case of a trust, a copy of the grantor's death certificate, plus a copy of the trust agreement identifying the grantor.

Disability - An individual will be considered disabled if he or she is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or to be of long-continued and indefinite duration.				A copy of the Social Security Administration award letter or a letter from a physician on the physician's letterhead stating that the shareholder (or, in the case of a trust, the grantor (a copy of the trust agreement identifying the grantor will be required as well)) is permanently disabled. The letter must also indicate the date of disability.

PMFS reserves the right to request such additional documents as it may deem appropriate.

Systematic Withdrawal Plan.

The CDSC will be waived (or reduced) on certain redemptions effected through the Systematic Withdrawal Plan. On an annual basis, up to 12% of the total dollar amount subject to the CDSC may be redeemed without charge. The transfer agent will calculate the total amount available for this waiver annually on the anniversary date of your purchase or, for shares purchased prior to March 1, 1998, on March 1 of the current year. The CDSC will be waived (or reduced) on redemptions until this threshold 12% is reached. The Systematic Withdrawal Plan is not available to participants in certain retirement plans. Please contact PMFS for more details.

Automatic Conversion Feature-Class B Shares

Class B shares will automatically convert to Class A shares on a quarterly basis approximately seven years after purchase. Conversions will be effected at relative net asset value without the imposition of any additional sales charge.

Since the Fund tracks amounts paid rather than the number of shares bought on each purchase of Class B shares, the number of Class B shares eligible to convert to Class A shares (excluding shares acquired through the automatic reinvestment of dividends and other distributions) (the Eligible Shares) will be determined on each conversion date in accordance with the following formula: (1) the ratio of (a) the amounts paid for Class B shares purchased at least seven years prior to the conversion date to (b) the total amount paid for all Class B shares purchased and then held in your account (2) multiplied by the total number of Class B shares purchased and then held in your account. Each time any Eligible Shares in your account convert to Class A shares, all shares or amounts representing Class B shares then in your account that were acquired through the automatic reinvestment of dividends and other distributions will convert to Class A shares.

For purposes of determining the number of Eligible Shares, if the Class B shares in your account on any conversion date are the result of multiple purchases at different net asset values per share, the number of Eligible Shares calculated as described above will generally be either more or less than the number of shares actually purchased approximately seven years before such conversion date. For example, if 100 shares were initially purchased at $10 per share (for a total of $1,000) and a second purchase of 100 shares was subsequently made at $11 per share (for a total of $1,100), 95.24 shares would convert approximately seven years from the initial purchase (that is, $1,000 divided by $2,100 (47.62%), multiplied by 200 shares

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equals 95.24 shares). The Manager reserves the right to modify the formula for determining the number of Eligible Shares in the future as it deems appropriate on notice to shareholders.

Since annual distribution-related fees are lower for Class A shares than Class B shares, the per share NAV of the Class A shares may be higher than that of the Class B shares at the time of conversion. Thus, although the aggregate dollar value will be the same, you may receive fewer Class A shares than Class B shares converted.

For purposes of calculating the applicable holding period for conversions, all payments for Class B shares during a month will be deemed to have been made on the last day of the month, or for Class B shares acquired through exchange, or a series of exchanges, on the last day of the month in which the original payment for purchases of such Class B shares was made. For Class B shares previously exchanged for shares of a money market fund, the time period during which such shares were held in the money market fund will be excluded. For example, Class B shares held in a money market fund for one year would not convert to Class A shares until approximately eight years from purchase. For purposes of measuring the time period during which shares are held in a money market fund, exchanges will be deemed to have been made on the last day of the month. Class B shares acquired through exchange will convert to Class A shares after expiration of the conversion period applicable to the original purchase of such shares.

Class B shares acquired through the reinvestment of dividends or distributions will be converted to Class A shares according to the procedures utilized by the broker-dealer through which the Class B shares were purchased, if the shares are carried on the books of that broker-dealer and the broker-dealer provides subaccounting services to the Fund. Otherwise, the procedures utilized by PMFS, or its affiliates, will be used. The use of different procedures may result in a timing differential in the conversion of Class B shares acquired through the reinvestment of dividends and distributions.

The conversion feature may be subject to the continuing availability of opinions of counsel or rulings of the Internal Revenue Service (1) that the dividends and other distributions paid on Class A, Class B, Class C and Class Z shares will not constitute "preferential dividends" under the Internal Revenue Service Code and (2) that the conversion of shares does not constitute a taxable event. The conversion of Class B shares into Class A shares may be suspended if such opinions or rulings are no longer available. If conversions are suspended, Class B shares of the Fund will continue to be subject, possibly indefinitely, to their higher annual distribution and service fee. Shareholders should consult their tax advisers regarding the state and local tax consequences of the conversion or exchange of shares.

SHAREHOLDER INVESTMENT ACCOUNT

Upon the initial purchase of Fund shares, a Shareholder Investment Account is established for each investor under which a record of the shares held is maintained by the transfer agent. If a share certificate is desired, it must be requested in writing for each transaction. Certificates are issued only for full shares and may be redeposited in the account at any time. There is no charge to the investor for issuance of a certificate. The Fund makes available to its shareholders the following privileges and plans.

Automatic Reinvestment of Dividends and/or Distributions

For the convenience of investors, all dividends and distributions are automatically reinvested in full and fractional shares of the Fund at net asset value per share. An investor may direct the transfer agent in writing not less than five full business days prior to the record date to have subsequent dividends and/or distributions sent in cash rather than reinvested. In the case of recently purchased shares for which registration instructions have not been received by the record date, cash payment will be made directly to the broker. Any shareholder who receives dividends or distributions in cash may subsequently reinvest any such dividend or distribution at NAV by returning the check to the transfer agent within 30 days after the payment date. Such reinvestment will be made at the NAV per share next determined after receipt of the check by the transfer agent. Shares purchased with reinvested dividends and/or distributions will not be subject to CDSC upon redemption.

Exchange Privilege

The Fund makes available to its shareholders the privilege of exchanging their shares of the Fund for shares of certain other JennisonDryden or Strategic Partners mutual funds, including one or more specified money market funds, subject in each case to the minimum investment requirements of such funds. Shares of such other JennisonDryden or Strategic Partners mutual funds may also be exchanged for shares of the Fund. All exchanges are made on the basis of the relative NAV next determined after receipt of an order in proper form. An exchange will be treated as a redemption and purchase for tax purposes. Shares may be exchanged for shares of another fund only if shares of such fund may legally be sold under applicable state laws.

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It is contemplated that the Exchange Privilege may be applicable to new JennisonDryden or Strategic Partners mutual funds whose shares may be distributed by the Distributor.

In order to exchange shares by telephone, you must authorize telephone exchanges on your initial application form or by written notice to the transfer agent and hold shares in non-certificate form. Thereafter, you may call the Fund at (800) 225-1852 to execute a telephone exchange of shares, on weekdays, except holidays, between the hours of 8:00 a.m. and 6:00 p.m., New York time. For your protection and to prevent fraudulent exchanges, your telephone call will be recorded and you will be asked to provide your personal identification number. A written confirmation of the exchange transaction will be sent to you. Neither the Fund nor its agents will be liable for any loss, liability or cost which results from acting upon instructions reasonably believed to be genuine under the foregoing procedures. All exchanges will be made on the basis of the relative NAV of the two funds next determined after the request is received in good order.

If you hold shares through Wachovia Securities, you must exchange your shares by contacting your Wachovia Securities financial adviser.

If you hold certificates, the certificates must be returned in order for the shares to be exchanged.

You may also exchange shares by mail by writing to Prudential Mutual Fund Services LLC, Attention: Exchange Processing, P.O. Box 8157, Philadelphia, PA 19101.

In periods of severe market or economic conditions the telephone exchange of shares may be difficult to implement and you should make exchanges by mail by writing to Prudential Mutual Fund Services LLC at the address noted above.

Class A. Shareholders of the Fund may exchange their Class A shares for Class A shares of certain other JennisonDryden or Strategic Partners mutual funds and shares of the money market funds specified below. No fee or sales load will be imposed upon the exchange. Shareholders of money market funds who acquired such shares upon exchange of Class A shares may use the exchange privilege only to acquire Class A shares of the JennisonDryden or Strategic Partners mutual funds participating in the exchange privilege.

The following money market funds participate in the Class A exchange privilege:

Dryden Government Securities Trust
(Money Market Series)
MoneyMart Assets, Inc.
Dryden Tax-Free Money Fund

Class B and Class C. Shareholders of the Fund may exchange their Class B and Class C shares of the Fund for Class B and Class C shares, respectively, of certain other JennisonDryden or Strategic Partners mutual funds and shares of Special Money Market Fund, Inc. (Special Money Fund), a money market mutual fund. No CDSC will be payable upon such exchange, but a CDSC may be payable upon the redemption of the Class B and Class C shares acquired as a result of the exchange. The applicable sales charge will be that imposed by the fund in which shares were initially purchased and the purchase date will be deemed to be the first day of the month after the initial purchase, rather than the date of the exchange.

Class B and Class C shares of the Fund may also be exchanged for shares of MoneyMart Assets, Inc., without imposition of any CDSC at the time of exchange. Upon subsequent redemption from such money market fund or after re-exchange into the Fund, such shares will be subject to the CDSC calculated by excluding the time such shares were held in the money market fund. In order to minimize the period of time in which shares are subject to a CDSC, shares exchanged out of the money market fund will be exchanged on the basis of their remaining holding periods, with the longest remaining holding periods being exchanged first. In measuring the time period shares are held in a money market fund and "tolled" for purposes of calculating the CDSC holding period, exchanges are deemed to have been made on the last day of the month. Thus, if shares are exchanged into the Fund from a money market fund during the month (and are held in the Fund at the end of the month), the entire month will be included in the CDSC holding period. Conversely, if shares are exchanged into a money market fund prior to the last day of the month (and are held in the money market fund on the last day of the month), the entire month will be excluded from the CDSC holding period. For purposes of calculating the seven year holding period applicable to the Class B conversion feature, the time period during which Class B shares were held in a money market fund will be excluded.

At any time after acquiring shares of other funds participating in the Class B or Class C Exchange Privilege, a shareholder may again exchange those shares (and any reinvested dividends and distributions) for Class B or Class C shares of the Fund, respectively, without subjecting such shares to any CDSC. Shares of any fund participating in the Class B or Class C exchange privilege that were acquired through reinvestment of dividends or distributions may be exchanged for Class B or Class C shares, respectively, of other funds without being subject to any CDSC.

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Class Z. Class Z shares may be exchanged for Class Z shares of other JennisonDryden or Strategic Partners mutual funds.

Special Exchange Privileges. A special exchange privilege is available for shareholders who qualify to purchase Class Z shares. Shareholders who qualify to purchase Class Z shares will will have their Class B and Class C shares which are not subject to a CDSC and their Class A shares exchanged for Class Z shares on a quarterly basis. Eligibility for this exchange privilege will be calculated on the business day prior to the date of the exchange.

Participants in any fee-based program for which a Series is an available option will have their Class A shares, if any, exchanged for Class Z shares when they elect to have those assets become a part of the fee-based program. Upon leaving the program (whether voluntarily or not), such Class Z shares (and, to the extent provided for in the program, Class Z shares acquired through participation in the program) will be exchanged for Class A shares at net asset value.

Additional details about the exchange privilege and prospectuses for each of the JennisonDryden or Strategic Partners mutual funds are available from the Fund's transfer agent, the Distributor or your broker. The exchange privilege may be modified, terminated or suspended on sixty days' notice and any fund, including the Fund, or the Distributor, has the right to reject any exchange application relating to such fund's shares. See "How to Buy, Sell and Exchange Shares of the Fund-Frequent Trading" in the prospectus.

Dollar Cost Averaging

Dollar cost averaging is a method of accumulating shares by investing a fixed amount of dollars in shares at set intervals. An investor buys more shares when the price is low and fewer shares when the price is high. The average cost per share is lower than it would be if a constant number of shares were bought at set intervals.

Dollar cost averaging may be used, for example, to plan for retirement, to save for a major expenditure, such as the purchase of a home, or to finance a college education. The cost of a year's education at a four-year college averages around $24,728 at a private college and around $9,663 at a public university. Assuming these costs increase at a rate of 7% a year, as has been projected, the cost of one year at a private college could reach $45,463 and over $17,765 at a public university in 10 years. ¹

The following chart shows how much you would need in monthly investments to achieve specified lump sums to finance your investment goals. ²

Period of Monthly Investments:	$100,000		$150,000		$200,000		$250,000
25 years	$	105	$	158	$	210	$	263
20 years		170		255		340		424
15 years		289		438		578		722
10 years		547		820		1,093		1,366
5 years		1,361		2,041		2,721		3,402

See "Automatic Investment Plan (AIP)" below.

¹ Source: The College Board, Trends in College Pricing 2002 . Average costs include tuition, fees, room and board for the 2002-2003 academic year.

² The chart assumes an effective rate of return of 8% (assuming monthly compounding). This example is for illustrative purposes only and is not intended to reflect the performance of an investment in shares of the Fund. The investment return and principal value of an investment will fluctuate so that an investor's shares when redeemed may be worth more or less than their original cost.

Automatic Investment Plan (AIP)

Under AIP, an investor may arrange to have a fixed amount automatically invested in shares of a Series of the Fund by authorizing his or her bank account or affiliated broker dealer account (including a Wachovia Securities Command Account) to be debited to invest specified dollar amounts for subsequent investment into the Fund. The investor's bank must be a member of the Automated Clearing House System.

Further information about this program and an application form can be obtained from the transfer agent, the Distributor or your broker.

Systematic Withdrawal Plan

A systematic withdrawal plan is available to shareholders through the Distributor, the transfer agent or your broker. The Systematic Withdrawal Plan provides for monthly, quarterly, semi-annual or annual redemption checks in any amount, except as provided below, up to the value of the shares in the shareholder's account. Systematic withdrawals of Class A (in certain cases),

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Class B or Class C shares may be subject to a CDSC. See "How to Buy, Sell and Exchange Shares of the Fund-How to Sell Your Shares-Contingent Deferred Sales Charge (CDSC)" in the prospectus.

In the case of shares held through the transfer agent, all dividends and/or distributions must be automatically reinvested in additional full and fractional shares of the Fund in order for the shareholder to participate in the plan. See "Automatic Reinvestment of Dividends and/or Distributions" above.

The transfer agent or your broker acts as agent for the shareholder in redeeming sufficient full and fractional shares to provide the amount of the systematic withdrawal. The Systematic Withdrawal Plan may be terminated at any time, and the Distributor reserves the right to initiate a fee of up to $5 per withdrawal, upon 30 days' written notice to the shareholder.

Systematic withdrawals should not be considered as dividends, yield or income. If systematic withdrawals continuously exceed reinvested dividends and distributions, the shareholder's original investment will be correspondingly reduced and ultimately exhausted.

Furthermore, each withdrawal constitutes a redemption of shares, and any gain or loss realized must be recognized for federal income tax purposes. In addition, withdrawals made concurrently with purchases of additional shares are inadvisable because of the sales charge applicable to (i) the purchase of Class A shares and (ii) the redemption of Class A (in certain cases), Class B and Class C shares. Each shareholder should consult his or her own tax adviser with regard to the tax consequences of the Systematic Withdrawal Plan, particularly if used in connection with a retirement plan.

Mutual Fund Programs

From time to time, the Fund may be included in a mutual fund program with other JennisonDryden or Strategic Partners mutual funds. Under such a program, a group of portfolios will be selected and thereafter marketed collectively. Typically, these programs are marketed with an investment theme, such as pursuit of greater diversification, protection from interest rate movements or access to different management styles. In the event such a program is instituted, there may be a minimum investment requirement for the program as a whole. The Fund may waive or reduce the minimum initial investment requirements in connection with such a program.

The mutual funds in the program may be purchased individually or as a part of a program. Since the allocation of portfolios included in the program may not be appropriate for all investors, investors should consult their Wachovia Securities Financial Advisor, or Prudential/Pruco Financial Professional, or other broker concerning the appropriate blends of portfolios for them. If investors elect to purchase the individual mutual funds that constitute the program in an investment ratio different from that offered by the program, the standard minimum investment requirements for the individual mutual funds will apply.

NET ASSET VALUE

The price an investor pays for each share is based on the share value. Each Series' share value-known as the net asset value per share or NAV-is determined by subtracting its liabilities from the value of its assets and dividing the remainder by the number of outstanding shares. NAV is calculated separately for each class. Each Series will compute its NAV once each business day at the close of regular trading on the NYSE, usually 4:00 p.m. New York time. For purposes of computing the Series' NAV, the Series will value the Series' futures contracts generally 15 minutes after the close of regular trading on the NYSE. A Series may not compute its NAV on days on which no orders to purchase, sell or exchange shares of the Series have been received or on days on which changes in the value of the Series' portfolio securities do not materially affect its NAV. The NYSE is closed on the following holidays: New Year's Day, Martin Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

In accordance with procedures adopted by the Board, the value of investments listed on a securities exchange and Nasdaq National Market System securities (other than options on stock and stock indices) are valued at the last sale price on the day of valuation or, if there was no sale on such day, the mean between the last bid and asked prices on such day, as provided by a pricing service or principal market marker. Securities included on the Nasdaq Market are valued at the Nasdaq Official Closing Price (NOCP) on the day of valuation, or if there was no NOCP, at the last sale price. Nasdaq Market Securities for which there was no NOCP or last sale price are valued at the mean between the last bid and asked prices on the day of valuation, or the last bid price in the absence of an asked price. Corporate bonds (other than convertible debt securities) and U.S. Government securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, are valued on the basis of valuations provided by a pricing service which uses information with respect to transactions in bonds, quotations from bond dealers, agency ratings, market transactions in comparable securities and various relationships between securities in determining value. Convertible debt securities that are actively traded in the over-the-counter market, including listed securities for which the primary market is believed to be over-the-counter, are valued at the mean between the last reported bid and asked prices provided by principal market makers.

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Options on stock and stock indices traded on an exchange are valued at the mean between the most recently quoted bid and asked prices on the respective exchange and futures contracts and options thereon are valued at their last sale prices as of the close of trading on the applicable commodities exchange. Quotations of foreign securities in a foreign currency are converted to U.S. dollar equivalents at the current rate obtained from a recognized bank or dealer, and forward currency exchange contracts are valued at the current cost of covering or offsetting such contacts. Should an extraordinary event, which is likely to affect the value of the security, occur after the close of an exchange on which a portfolio security is traded, such security will be valued at fair value considering factors determined in good faith by the investment adviser under procedures established by and under the general supervision of the Fund's Board.

Under the 1940 Act, the Board is responsible for determining in good faith the fair value of securities of the Series. Portfolio securities for which reliable market quotations are not readily available or for which the pricing agent or principal market maker does not provide a valuation or methodology or provides a valuation or methodology that, in the judgment of the Manager or Subadviser (or Valuation Committee or Board) does not represent fair value (Fair Value Securities), are valued by the Valuation Committee or Board in consultation with the Subadviser or Manager, including, as applicable, their portfolio managers, traders, research and credit analysts, and legal and compliance personnel, on the basis of the following factors: the nature of any restrictions on disposition of the securities; assessment of the general liquidity/illiquidity of the securities; the issuer's financial condition and the markets in which it does business; the cost of the investment; the size of the holding and the capitalization of issuer; the prices of any recent transactions or bids/offers for such securities or any comparable securities; any available analyst, media or other reports or information deemed reliable by the Manager or Subadviser regarding the issuer or the markets or industry in which it operates; other analytical data; consistency with valuation of similar securities held by other JennisonDryden or Strategic Partners mutual funds; and such other factors as may be determined by the Subadviser, Manager, Board or Valuation Committee to materially affect the value of the security. Fair Value Securities may include, but are not limited to, the following: certain private placements and restricted securities that do not have an active trading market; securities whose trading has been suspended or for which market quotes are no longer available; debt securities that have recently gone into default and for which there is no current market; securities whose prices are stale; securities affected by significant events; and securities that the Subadviser or Manager believes were priced incorrectly.

A "significant event" (which includes, but is not limited to, an extraordinary political or market event) is an event that the Subadviser or Manager believes with a reasonably high degree of certainty has caused the closing market prices of a Series' portfolio securities to no longer reflect their value at the time of the Series' NAV calculation. On a day that the Manager may determine that one or more of the Series' portfolio securities constitute Fair Value Securities, the Manager may determine the fair value of these securities without the supervision of the Series' Valuation Committee if the fair valuation of all such securities results in a change of less than $0.01 to the Series' NAV and the Manager presents these valuations to the Board for its ratification. Short-term debt securities are valued at cost, with interest accrued of discount amortized to the date of maturity, if their original maturity was 60 days or less, unless this is determined by the Board not to represent fair value. Short-term securities with remaining maturities of more than 60 days, for which market quotations are readily available are valued at their current market quotations as supplied by an independent pricing agent or more than one principal market maker (if available otherwise a primary market maker).

Securities for which reliable market quotations are not available or for which the pricing agent or principal market maker does not provide a valuation or provides a valuation that, in the judgement of the Subadviser or Manager, does not present fair value, shall be valued in accordance with the following procedures: At the time of purchase, the duration of the security is to be determined. A Treasury issue (or similar security or index for which market quotes are readily available) (the "Proxy") of similar duration will then be selected to serve as a Proxy for the price movements of the security. The price of the security will fluctuate exactly as does the Proxy while maintaining the initial price spread constant. The duration of the security will be reviewed once a month by one or more of the portfolio managers, and at any other time that a portfolio manager believes that there may have been a material change in the duration of the security. Should the duration change, another security or index of similar duration will be chosen to serve as proxy, at which point the price spread will be determined. In addition, the validity of the pricing methodology will be monitored by (1) comparing the actual sales proceeds of the security to its price reported by the Series at the time of the sale and (2) periodically obtaining actual market quotes for the security.

As long as a Series declares dividends daily, the net asset value of the Class A, Class B, Class C and Class Z shares of the Series will generally be the same. It is expected, however, that the dividends, if any, will differ by approximately the amount of the distribution and/or service fee expense accrual differential among the classes.

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TAXES, DIVIDENDS AND DISTRIBUTIONS

The following is intended to be a general summary of certain U.S. federal income tax consequences of investing in a Series. It is not intended to be a complete discussion of all such federal income tax consequences, nor does it purport to deal with all categories of investors. INVESTORS ARE THEREFORE ADVISED TO CONSULT WITH THEIR OWN TAX ADVISERS BEFORE MAKING AN INVESTMENT IN A SERIES.

Each Series of the Fund is qualified as, intends to remain qualified as, and has elected to be treated as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the "Code"). In general, such election relieves each Series (but not its shareholders) from paying federal income tax on net investment income and net capital gains which is distributed to shareholders, and permits net capital gains of the Series (that is, the excess of net capital gains from the sale of assets held for more than one year over net short-term capital losses) to be treated as long-term capital gains of the shareholders, regardless of how long shares in the Series are held provided that it distributes at least 90% of its net investment income for the year and satisfies certain other requirements of the Code.

Qualification of the Fund as a regulated investment company under the Code requires, among other things, that (a) at least 90% of the annual gross income of each Series be derived from interest, dividends, payments with respect to certain securities loans and gains from the sale or other disposition of stock, securities or foreign currencies, or other income (including but not limited to gains from options, futures, or forward contracts) derived with respect to its business of investing in such stock or securities or currencies; (b) each Series diversify its holdings so that, at the end of each quarter of the taxable year, (i) at least 50% of the value of the assets of the Series is represented by cash, U.S. Government securities and other stock or securities limited, in respect of any one issuer, to an amount not greater than 5% of the market value of the assets of the Series and not more than 10% of the outstanding voting securities of the issuer, and (ii) not more than 25% of the value of the assets of the Series is invested in the securities of any one issuer (other than U.S. Government securities or securities of other regulated investment companies) and the securities (other than securities of other regulated investment companies) of two or more issuers which the taxpayer controls and which are determined, under regulations prescribed by the Secretary, to be engaged in the same or similar trades or businesses; and (c) each Series distribute to its shareholders at least 90% of each of (i) its net tax-exempt interest income and (ii) its net investment income and net short-term capital gains (that is, the excess of net short-term capital gains over net long-term capital losses) in each taxable year.

Qualification as a regulated investment company will be determined at the level of each Series and not at the level of the Fund. Accordingly, the determination of whether any particular Series qualifies as a regulated investment company will be based on the activities of that Series, including the purchases and sales of securities and the income received and expenses incurred by that Series. Net capital gains of a Series which are available for distribution to shareholders will be computed by taking into account any capital loss carryforward of that Series.

Each Series is required under the Code to distribute 98% of its (taxable) ordinary income in the same calendar year in which it is earned. Each Series is also required to distribute during the calendar year 98% of the capital gain net income it earned during the twelve months ending on October 31 of such calendar year. In addition, the Series must distribute during the calendar year any undistributed ordinary income and undistributed capital gain net income from the prior year or the 12 month period ending on October 31 of such prior calendar year, respectively. For purposes of the excise tax, the amount of dividends paid during the calendar year shall not include tax-exempt interest dividends. To the extent it does not meet these distribution requirements, a Series will be subject to a non-deductible 4% excise tax on the undistributed amount. For purposes of this excise tax, income on which a Series pays income tax is treated as distributed.

Subchapter M of the Code permits the character of tax-exempt interest distributed by a regulated investment company to flow through as tax-exempt interest to its shareholders provided that 50% or more of the value of its assets at the end of each quarter of its taxable year is invested in state, municipal or other obligations the interest on which is exempt for federal income tax purposes. Distributions to shareholders of tax-exempt interest earned by any Series of the Fund for the taxable year are generally not subject to federal income tax (see the discussion of the alternative minimum tax below). Distributions of taxable net investment income (including market discount on municipal obligations) and of the excess of net short-term capital gain over net long-term capital loss are taxable to shareholders as ordinary income.

The federal alternative minimum tax may affect corporations and other shareholders in the Fund. Interest on certain categories of tax-exempt obligations (that is, most private activity bonds issued after August 7, 1986) will constitute a preference item for purposes of the alternative minimum tax. Each Series has invested in such obligations and, therefore, receives interest that will be treated as a preference item. Preference items received by a Series will be allocated between the Series and its shareholders. It is possible that a Series will incur some liability under the alternative minimum tax to the extent preference items are allocated to it. Corporate shareholders in any of the Series will also have to take into account interest on all municipal obligations for purposes of the adjustment for current earnings for alternative minimum tax purposes.

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For federal income tax purposes the High Income Series has a net capital loss carryforward as of April 30, 2005 of approximately $47,661,000, of which $554,000 expires in 2006, $3,137,000 expires in 2007, $5,906,000 expires in 2008, $20,095,000 expires in 2009, $13,512,000 expires in 2010 and $4,457,000 expires in 2011. The High Income Series and Insured Series elected to treat post-October capital losses of approximately $3,146,500 and $4,400, respectively, incurred in the six months ended April 30, 2005 as having been incurred in the next fiscal year. In addition the High Income Series utilized approximately $2,175,000 of its capital loss carryforward to offset net taxable gains realized in the fiscal year ended April 30, 2005. Accordingly, no capital gains distributions are expected to be paid to shareholders until net gains have been realized in excess of such carryforwards. The tax basis differs from the amount on the Statement of Assets and Liabilities primarily due to differences in the treatment of discount and premium amortization for book and tax purposes.

Each Series may purchase debt securities (such as zero coupon bonds) that contain original issue discount. Original issue discount that accrues in a taxable year is treated as income earned by the Series and therefore is subject to the distribution requirements of the Code. Because the original issue discount income earned by the Series in a taxable year may not be represented by cash income, the Series may have to dispose of other securities or borrow and use the proceeds to make distributions to satisfy the Internal Revenue Code's distribution requirements. Debt securities acquired by a Series also may be subject to the market discount rules.

Special rules will apply to futures contracts and options thereon in which the Series invest. These investments will generally constitute "Section 1256 contracts" and will be required to be "marked to market" for federal income tax purposes at the end of each Series' taxable year; that is, treated as having been sold at market value. Sixty percent of any gain or loss recognized on such "deemed sales" and on actual dispositions will be treated as long-term capital gain or loss, and the remainder will be treated as short-term capital gain or loss. A Series may be required to defer the recognition of losses on certain of its positions to the extent of any unrecognized gain on a related position held by the Series.

Each Series' gains and losses on the sale, lapse, or termination of call options it holds on financial futures contracts (other than Section 1256 contracts) will generally be treated as gains and losses from the sale of financial futures contracts. If call options written by a Series expire unexercised, the premiums received by the Series may give rise to short-term capital gains at the time of expiration. Each Series may also have short-term gains and losses associated with closing transactions with respect to call options written by such Series. If call options written by a Series are exercised, the selling price of the financial futures contract is increased by the amount of the premium received by the Series, and the character of the capital gain or loss on the sale of the futures contract depends on the contract's holding period.

Upon the exercise of a put held by a Series, the premium initially paid for the put is offset against the amount received for the futures contract, bond or note sold pursuant to the put thereby decreasing any gain (or increasing any loss) realized on the sale. Generally, such gain or loss is capital gain or loss, the character of which depends on the holding period of the futures contract, bond or note. However, in certain cases in which the put is not acquired on the same day as the underlying securities identified to be used in the put's exercise, gain on the exercise, sale or disposition of the put is short-term capital gain. If a put acquired by a Series is sold prior to exercise, any gain or loss recognized by a Series would be long-term or short-term capital gain or loss, depending on the holding period of the put. If a put expires unexercised, a Series would realize short-term or long-term capital loss, depending on the holding period of the put, in an amount equal to the premium paid for the put. In certain cases in which the put and securities identified to be used upon its exercise are acquired on the same day, however, the premium paid for the unexercised put is added to the basis of the identified securities.

Distributions of taxable net investment income and of the excess of net short-term capital gains over net long-term capital losses are taxable to shareholders as ordinary income and will not constitute "qualified dividend income" eligible for long-term capital gain rates. None of the income distributions of a Series will be eligible for the deduction for dividends received by corporations.

Any net capital gains (that is, the excess of net capital gains from the sale of assets held for more than one year over net short-term capital losses) distributed to shareholders will be taxable as capital gains to the shareholders, whether or not reinvested and regardless of the length of time a shareholder has owned his or her shares. The maximum long-term federal capital gains rate for individuals with respect to capital gains recognized by a Series is generally 15%. The maximum capital gains rate for corporate shareholders currently is the same as the maximum tax rate for ordinary income.

If any net capital gains are retained by a Series for investment, requiring federal income taxes to be paid thereon by the Series, the Series will elect to treat these capital gains as having been distributed to shareholders. As a result, these amounts will be taxed to shareholders as capital gains, and shareholders will be able to claim their proportionate share of the federal income taxes paid by the Series on the gains as a credit against their own federal income tax liabilities and will be entitled to increase the adjusted tax basis of their shares in that Series or refund by the difference between their pro rata share of such gains and of the federal income taxes paid by the Series on such gains.

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Distributions of taxable net investment income and net capital gains will be taxable as described above, whether made in shares or in cash. Shareholders electing to receive distributions in the form of additional shares will have a cost basis for federal income tax purposes in each share so received equal to the NAV of a share of the applicable Series of the Fund on the distribution date.

Any gain or loss realized upon a sale or redemption of shares of a Series by a shareholder who is not a dealer in securities will be treated as capital gain or loss. Any such capital gain or loss will be treated as a long-term capital gain or loss if the shares were held for more than one year.

Any loss realized on a sale, redemption or exchange of shares of the Fund by a shareholder will be disallowed to the extent the shares are replaced within a 61-day period (beginning 30 days before and ending 30 days after the disposition of shares). Shares purchased pursuant to the reinvestment of a dividend or distribution will constitute a replacement of shares.

Any short-term capital loss realized upon the sale or redemption of shares within six months (or such shorter period as may be established by Treasury regulations) from the date of purchase of such shares and following receipt of an exempt-interest dividend will be disallowed to the extent of such tax-exempt dividend. Any loss realized upon the redemption of shares within 6 months from the date of purchase of the shares and following receipt of a capital gain distribution from the sale of assets held more than one year will be treated as long-term capital loss to the extent of the capital gain distribution.

Substitute payments in lieu of interest received with respect to loaned tax-exempt securities will not be tax exempt.

Interest on indebtedness and other expenses incurred by shareholders to purchase or carry shares of the Fund will generally not be deductible for federal income tax purposes under Section 265 of the Internal Revenue Code. In addition, under rules used by the Internal Revenue Service for determining when borrowed funds are considered to be used for the purpose of purchasing or carrying particular assets, the purchase of shares may be considered to have been made with borrowed funds even though the borrowed funds are not directly traceable to the purchase of shares.

Persons holding certain municipal obligations who are also substantial users (or persons related thereto) of facilities financed by such obligations may not exclude interest on such obligations from their gross income. No investigation as to the users of the facilities financed by municipal obligations in the portfolios of the Series has been made by the Fund. Potential investors should consult their tax advisers with respect to this matter before purchasing shares of the Fund.

From time to time, proposals have been introduced before Congress for the purpose of restricting or eliminating the federal income tax exemption for interest on certain state and municipal obligations. It can be expected that similar proposals may be introduced in the future. If such a proposal were enacted, the availability of state or municipal obligations for investment by each Series of the Fund and the value of portfolio securities held by the Series would be affected. In addition, each Series of the Fund would reevaluate its investment objective and policies.

All distributions of taxable net investment income and net capital gains, whether received in shares or cash, must be reported by each shareholder on his or her federal income tax return. In addition, each shareholder must disclose on his or her return the amount of tax-exempt dividends received from the Fund. Under federal income tax law, each Series of the Fund will be required to report to the Internal Revenue Service all distributions of taxable income and capital gains as well as gross proceeds from the redemption or exchange of shares of such Series, except in the case of certain exempt shareholders. Under the backup withholding provisions of the Internal Revenue Code, all such distributions and proceeds from the redemption or exchange of shares are subject to withholding of federal income tax currently at a rate of 28% in the case of nonexempt shareholders who fail to furnish the appropriate Series of the Fund with their correct taxpayer identification numbers on IRS Form W-9 and with required certifications regarding their status under the federal income tax law. If the withholding provisions are applicable, any such taxable distributions and proceeds, whether taken in cash or reinvested in shares, will be reduced by the amounts required to be withheld. Investors may wish to consult their tax advisers about the applicability of the backup withholding provisions.

Under certain circumstances, a shareholder who acquires shares of the Fund and sells or otherwise disposes of such shares within 90 days of acquisition may not be allowed to include certain sales charges incurred in acquiring such shares for purposes of calculating gain or loss realized upon a sale or exchange of shares of the Fund.

Dividends of net investment income (other than dividends paid out of tax-exempt income) and distributions of net short-term capital gains paid to a shareholder (including a shareholder acting as a nominee or fiduciary) who is a nonresident alien individual, or a foreign entity (foreign shareholder) are subject to a 30% (or lower treaty rate) withholding tax upon the gross amount of the dividends unless the dividends are effectively connected with a U.S. trade or business conducted by the foreign shareholder. Capital gain dividends paid to a foreign shareholder are generally not subject to withholding tax. A foreign shareholder will, however, be required to pay U.S. income tax on any dividends and capital gain distributions which are effectively connected with a U.S. trade or business of the foreign shareholder.

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Each Series may be subject to state or local tax in certain other states where it is deemed to be doing business. Further, in those states which have income tax laws, the tax treatment of a Series and of its shareholders with respect to distributions by such Series may differ from federal tax treatment. The exemption of interest income for federal income tax purposes may not result in a similar exemption under the laws of a particular state or local taxing authority. Each Series will report annually to its shareholders the percentage and source, on a state-by-state basis, of interest income on municipal obligations received by such Series during the preceding year and on other aspects of the federal income tax status of distributions made by such Series. Shareholders are urged to consult their own tax advisers regarding specific questions as to federal, state or local taxes.

The per share dividends on Class B and Class C shares will generally be lower than the per share dividends on Class A and Class Z shares as a result of the higher distribution-related fee applicable with respect to the Class B and Class C shares. The per share dividends on Class A shares will be lower than the per share dividends on Class Z shares, as a result of the distribution-related fees applicable to Class A shares and since Class Z shares bear no distribution-related fee. The per share distributions of net capital gains, if any, will be paid in the same amount for each class of shares.

Prospective investors in a Series, including foreign persons, are urged to consult their own tax advisers regarding specific questions as to federal, state or local tax consequences resulting from their investment in the Fund.

PERFORMANCE INFORMATION

Average Annual Total Return.

Each Series may from time to time advertise its average annual total return. Average annual total return is determined separately for Class A, Class B, Class C and Class Z shares. See "Risk/Return Summary-Evaluating Performance" in the prospectus.

Average annual total return is computed according to the following formula:

Where: P = a hypothetical initial payment of $1000.

T = average annual total return.

n = number of years.

ERV = Ending Redeemable Value at the end of the 1, 5 or 10 year periods (or fractional portion thereof) of a hypothetical $1000 payment made at the beginning of the 1, 5 or 10 year periods.

Average Annual Total Return (After Taxes on Distributions).

Average annual total return (after taxes on distributions) assumes reinvestment of all distributions (less taxes on such distributions) and takes into account any applicable initial or contingent deferred sales charges but does not take into account any federal or state income taxes that may be payable upon redemption. Federal income taxes are calculated using the highest individual marginal income tax rates in effect on the reinvestment date.

Average annual total return (after taxes on distributions) is computed according to the following formula:

Where: P = a hypothetical initial payment of $1000.

T = average annual total return (after taxes on distributions).

n = number of years.

ATV _D = ending value of a hypothetical $1,000 payment made at the beginning of the 1-, 5- or 10-year periods at the end of the 1-, 5- or 10-year periods (or fractional portion), after taxes on fund distributions but not after taxes on redemption.

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Average Annual Total Return (After Taxes on Distributions and Redemption).

Average annual total return (after taxes on distributions and redemption) is computed according to the following formula:

Where: P = a hypothetical initial payment of $1,000.

T = average annual total return (after taxes on distributions and redemption).

n = number of years.

ATV _DR = ending value of a hypothetical $1,000 payment made at the beginning of the 1-, 5- or 10-year periods at the end of the 1-, 5- or 10-year periods (or fractional portion thereof), after taxes on fund distributions and redemptions.

Aggregate Total Return. Each Series may also advertise its aggregate total return. Aggregate annual total return is determined separately for Class A, Class B, Class C and Class Z shares.

Aggregate total return represents the cumulative change in the value of an investment in a Series and is computed according to the following formula:

Where: P = a hypothetical initial payment of $1000.

ERV = Ending Redeemable Value at the end of the 1, 5 or 10 year periods (or fractional portion thereof) of a hypothetical $1000 payment made at the beginning of the 1, 5 or 10 year periods.

FINANCIAL STATEMENTS

The Fund's financial statements for the fiscal year ended April 30, 2005, incorporated into this SAI by reference to the Fund's 2005 annual report to shareholders (File No. 811-4930), have been so incorporated in reliance on the report of
KPMG LLP , independent registered public accounting firm.

You may obtain a copy of the Fund's annual report at no charge by request to the Fund by calling (800) 225-1852, or by writing to the Fund at Gateway Center Three, 100 Mulberry Street, Newark, New Jersey 07102.

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APPENDIX I-GENERAL INVESTMENT INFORMATION

The following terms are used in mutual fund investing.

Asset Allocation

Asset allocation is a technique for reducing risk and providing balance. Asset allocation among different types of securities within an overall investment portfolio helps to reduce risk and to potentially provide stable returns, while enabling investors to work toward their financial goal(s). Asset allocation is also a strategy to gain exposure to better performing asset classes while maintaining investment in other asset classes.

Diversification

Diversification is a time-honored technique for reducing risk, providing "balance" to an overall portfolio and potentially achieving more stable returns. Owning a portfolio of securities mitigates the individual risks (and returns) of any one security. Additionally, diversification among types of securities reduces the risks (and general returns) of any one type of security.

Duration

Debt securities have varying levels of sensitivity to interest rates. As interest rates fluctuate, the value of a bond (or a bond portfolio) will increase or decrease. Longer term bonds are generally more sensitive to changes in interest rates. When interest rates fall, bond prices generally rise. Conversely, when interest rates rise, bond prices generally fall.

Duration is an approximation of the price sensitivity of a bond (or a bond portfolio) to interest rate changes. It measures the weighted average maturity of a bond's (or a bond portfolio's) cash flows, i.e., principal and interest payments. Duration is expressed as a measure of time in years-the longer the duration of a bond (or a bond portfolio), the greater the impact of interest rate changes on the bond's (or the bond portfolio's) price. Duration differs from effective maturity in that duration takes into account call provisions, coupon rates and other factors. Duration measures interest rate risk only and not other risks, such as credit risk and, in the case of non-U.S. dollar denominated securities, currency risk. Effective maturity measures the final maturity dates of a bond (or a bond portfolio).

Market Timing

Market timing-buying securities when prices are low and selling them when prices are relatively higher-may not work for many investors because it is impossible to predict with certainty how the price of a security will fluctuate. However, owning a security for a long period of time may help investors offset short-term price volatility and realize positive returns.

Power of Compounding

Over time, the compounding of returns can significantly impact investment returns. Compounding is the effect of continuous investment on long-term investment results, by which the proceeds of capital appreciation (and income distributions, if elected) are reinvested to contribute to the overall growth of assets. The long-term investment results of compounding may be greater than that of an equivalent initial investment in which the proceeds of capital appreciation and income distributions are taken in cash.

Standard Deviation

Standard deviation is an absolute (non-relative) measure of volatility that, for a mutual fund, depicts how widely the returns varied over a certain period of time. When a fund has a high standard deviation, its range of performance has been very wide, implying greater volatility potential. Standard deviation is only one of several measures of a fund's volatility.

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APPENDIX II-PROXY VOTING POLICIES OF THE SUBADVISER

A summary of the proxy voting policy of the Fund's Subadviser follows:

Summary of PIM Proxy Voting Policy

The overarching goal of each of the asset management units within Prudential Investment Management, Inc. ("PIM") is to vote proxies in the best interests of their respective clients based on the clients' priorities. Client interests are placed ahead of any potential interest of PIM or its Asset Management Units.

Because the various asset management units within PIM manage distinct classes of assets with differing management styles, some units will consider each proxy on its individual merits while other units may adopt a pre-determined set of voting guidelines. The specific voting approach of each unit is noted below.

A committee comprised of senior business representatives from each of the asset management units together with relevant regulatory personnel oversees the proxy voting process and monitors potential conflicts of interests. The committee is responsible for interpretation of the proxy voting policy and periodically assess the policy's effectiveness. In addition, should the need arise, the committee is authorized to handle any proxy matter involving an actual or apparent conflict of interest that cannot be resolved at the level of an individual asset management business unit.

In all cases, clients may obtain the proxy voting policies and procedures of the various PIM asset management units, and information is available to each client concerning the voting of proxies with respect to the client's securities, simply by contacting the client service representative of the respective unit.

Voting Approach of PIM Asset Management Units

Prudential Public Fixed Income

As this asset management unit invests almost exclusively in public debt, there are few traditional proxies voted in this unit. Generally, when a proxy is received, this unit will vote with management on routine matters such as the appointment of accountants or the election of directors. With respect to non-routine matters such as proposed anti-takeover provisions or mergers the financial impact will be analyzed and the proxy will be voted on a case-by-case basis. Specifically, if a proxy involves:

• a proposal regarding a merger, acquisition or reorganization,

• a proposal that is not addressed in the unit's detailed policy statement, or

• circumstances that suggest a vote not in accordance with the detailed policy,

the proxy will be referred to the applicable portfolio manager(s) for individual consideration.

Prudential Real Estate Investors

As this asset management unit invests primarily in real estate and real estate related interests, there are few traditional proxies voted in this unit. Generally, when a proxy is received, this unit will vote with management on routine matters such as the appointment of accountants or the election of directors. With respect to non-routine matters such as proposed anti-takeover provisions or mergers the financial impact will be analyzed and the proxy will be voted on a case-by-case basis. Specifically, if a proxy involves:

• a proposal regarding a merger, acquisition or reorganization,

• a proposal that is not addressed in the unit's detailed policy statement, or

• circumstances that suggest a vote not in accordance with the detailed policy,

the proxy will be referred to the relevant portfolio manager(s) for individual consideration.

Prudential Capital Group

As this asset management unit invests almost exclusively in privately placed debt, there are few, if any, traditional proxies voted in this unit. As a result, this unit evaluates each proxy it receives and votes on a case-by-case basis. Considerations will include the detailed knowledge of the issuer's financial condition, long- and short-term economic outlook for the issuer, its capital structure and debt-service obligations, the issuer's management team and capabilities, as well as other pertinent factors. In short, this unit attempts to vote all proxies in the best economic interest of its clients based on the clients' expressed priorities, if any.

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PART C

OTHER INFORMATION

Item 23. Exhibits.

(a) (1) Amended and Restated Declaration of Trust, incorporated by reference to Exhibit 1(a) to Post-Effective Amendment No. 12 to the Registration Statement on Form N-1A filed via EDGAR on May 5, 1995 (File No. 33-10649).

(2) Amended and Restated Certificate of Designation, incorporated by reference to Exhibit 1(b) to Post-Effective Amendment No. 12 to the Registration Statement on Form N-1A filed via EDGAR on May 5, 1995 (File No. 33-10649).

(3) Amended Certificate of Designation, incorporated by reference to Exhibit 1(c) to Post-Effective Amendment No. 14 to the Registration Statement on Form N-1A filed via EDGAR on June 27, 1996 (File No. 33-10649).

(4) Amended and Restated Certificate of Designation, incorporated by reference to Exhibit (a)(4) to Post-Effective Amendment No. 20 to the Registration Statement on Form N-1A filed via EDGAR on June 29, 1999 (File No. 33-10649).

(5) Certificate of Amendment of Declaration of Trust, incorporated by reference to Exhibit (a)(5) to Post-Effective Amendment No. 21 to the Registration Statement on Form N-1A filed via EDGAR onApril 30, 2004 (File No. 33-10649).

(b) Amended and Restated By-Laws of the Registrant dated November 16, 2004.*

(c) Specimen receipt for shares of beneficial interest, incorporated by reference to Exhibit 4 to Post-Effective Amendment No. 16 to the Registration Statement on Form N-1A filed via EDGAR on July 1, 1998 (File No. 33-10649).

(d) (1) Management Agreement between the Registrant and Prudential Investments LLC, incorporated by reference to Exhibit (d)(1) to Post-Effective Amendment No. 21 to the Registration Statement on Form N-1A filed via EDGAR on April 30, 2004 (File No. 33-10649).

(2) Subadvisory Agreement between Prudential Investments LLC and Prudential Investment Management, Inc., incorporated by reference to Exhibit (d)(2) to Post-Effective Amendment No. 21 to the Registration Statement on Form N-1A filed via EDGAR on April 30, 2004 (File No. 33-10649).

(e) (1) Distribution Agreement between the Registrant and Prudential Investments Management Services LLC, incorporated by reference to Exhibit 6(b) to Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A filed via EDGAR on June 26, 1998 (File No. 33-10649).

(2) Form of Selected Dealer Agreement, incorporated by reference to Exhibit 6(c) to Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A filed via EDGAR on June 26, 1998 (File No. 33-10649).

(f) Not applicable.

(g) (1) Custody Agreement between the Registrant and The Bank of New York dated November 7, 2002.*

(2) Form of Amendment to Custody Agreement between the Registrant and The Bank of New York.*

(h) (1) Transfer Agency and Service Agreement between the Registrant and Prudential Mutual Fund Services, Inc., incorporated by reference to Exhibit 9 to Post-Effective Amendment No. 16 to the Registration Statement on Form N-1A filed via EDGAR on July 1, 1997 (File No. 33-10649).

(2) Amendment to Transfer Agency and Service Agreement dated as of August 24, 1999 by and between the Registrant and Prudential Mutual Fund Services LLC (successor to Prudential Mutual Fund Services, Inc.) Incorporated by reference to Exhibit (h)(2) to Post-Effective Amendment No. 21 to the Registration Statement on Form N-10649) filed via EDGAR on June 30, 2000.

(3) Amendment to Transfer Agency and Service Agreement dated as of September 4, 2002 by and between the Prudential and Strategic Partners Mutual Funds and Prudential Mutual Fund Services LLC (successor to Prudential Mutual Fund Services, Inc.). Incorporated by reference to Exhibit (h)(3) to Post-Effective Amendment No. 24 to the Registration Statement on Form N-1A filed via EDGAR on June 30, 2003 (File No. 33-10649).

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(i) (1) Opinion of Sullivan & Worcester LLP, incorporated by reference to Exhibit (i) to Post-Effective Amendment No. 22 to the Registration Statement on Form N-1A filed via EDGAR on June 29, 2001 (File No. 33-10649).

(2) Consent of Sullivan & Worcester LLP, incorporated by reference to corresponding exhibit to Post-Effective Amendment No. 26 to the Registration Statement on Form N-1A filed via EDGAR on June 29, 2004 (File No. 33-10649).

(j) Consent of independent registered public accounting firm.*

(k) Not applicable.

(l) Not applicable.

(m) (1) Amended and Restated Distribution and Service Plans for Class A, B and C shares, each incorporated by reference to Exhibit 15(d) to Post-Effective Amendment No. 18 to the Registration Statement on Form N-1A filed via EDGAR on June 26, 1998 (File No. 33-10649).

(2) 12b-1 Fee Waiver for Class A and Class C shares.*

(n) Amended and Restated Rule 18f-3 Plan of Registrant, incorporated by reference to Exhibit (n) to Post-Effective Amendment No. 21 to the Registration Statement on Form N-1A filed via EDGAR on April 30, 2004 (File No. 33-10649).

(p) (1) Code of Ethics of the Registrant dated April 6, 2005.*

(2) Code of Ethics and Personal Securities Trading Policy of Prudential Investment Management Services LLC, Prudential Investments LLC and Prudential Investment Management, Inc. dated January 1, 2005.*

(q) Powers of Attorney dated March 2, 2005.*

*Filed herewith.

Item 24. Persons Controlled by or under Common Control with Registrant.

None.

Item 25. Indemnification.

As permitted by Sections 17(h) and (i) of the the 1940 Act and pursuant to Article XI of the Fund's By-Laws (Exhibit (b) to the Registration Statement), in certain cases, any individual who is a present or former officer, Trustee, employee or agent of the Registrant or who serves or has served another trust, corporation, partnership, joint venture or other enterprise in one of such capacities at the request of the Registrant (a representative of the Trust), may be indemnified by the Registrant against certain liabilities in connection with the Registrant provided that such representative acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Registrant, subject to certain qualifications and exceptions including liabilities to the Registrant or to its shareholders to which such representative would otherwise be subject by reason of misfeasance, bad faith, gross negligence or reckless disregard of duties. As permitted by Section 17(i) of the 1940 Act, and pursuant to Section 10 of the Distribution Agreement (Exhibit (e)1 to the Registration Statement), in certain cases the Distributor of the Registrant may be indemnified against liabilities which it may incur, except liabilities arising from bad faith, gross negligence in the performance of its duties, willful misfeasance or reckless disregard of duties.

Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended (Securities Act) may be permitted to Trustees, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Commission such indemnification is against public policy as expressed in the 1940 Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a Trustee, officer, or controlling person of the Registrant in connection with the successful defense of any action, suit or proceeding) is asserted against the Registrant by such Trustee, officer or controlling person in connection with the shares being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the 1940 Act and will be governed by the final adjudication of such issue.

The Registrant maintains an insurance policy insuring its officers and Trustees against liabilities, and certain costs of defending claims against such officers and Trustees, to the extent such officers and Trustees are not found to have committed

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conduct constituting willful misfeasance, bad faith, gross negligence or reckless disregard in the performance of their duties. The insurance policy also insures the Registrant against the cost of indemnification payments to officers and Trustees under certain circumstances. Pursuant and subject to the provisions of Article XI of the Registrant's By-Laws, the Registrant shall indemnify each representative of the Trust against, or advance the expenses of a representative of the Trust for, the amount of any deductible provided in any liability insurance policy maintained by the Registrant.

Section 9 of the Management Agreement (Exhibit (d)1 to the Registration Statement) and Section 4 of the Subadvisory Agreement (Exhibit (d)2 to the Registration Statement) limit the liability of PI and PIM, respectively, to liabilities arising from willful misfeasance, bad faith or gross negligence in the performance of their respective duties or from reckless disregard by them of their respective obligations and duties under the agreements. Section 9 of the Management Agreement also holds PI liable for losses resulting from a breach of fiduciary duty with respect to the receipt of compensation for services.

The Registrant hereby undertakes that it will apply the indemnification provisions of its By-Laws and the Distribution Agreement in a manner consistent with Release No. 11330 of the Securities and Exchange Commission under the 1940 Act so long as the interpretation of Sections 17(h) and 17(i) of such Act remain in effect and are consistently applied.

Item 26. Business and other Connections of the Investment Adviser

(a) Prudential Investments LLC (PI)

See "How the Fund is Managed-Manager" in the Prospectus constituting Part A of this Registration Statement and "Investment Advisory and Other Services" in the Statement of Additional Information (SAI) constituting Part B of this Registration Statement.

The business and other connections of the officers of PI are listed in Schedules A and D of Form ADV of PI as currently on file with the Commission, the text of which is hereby incorporated by reference (File No. 801-31104).

The business and other connections of PI's directors and principal executive officers are set forth below. Except as otherwise indicated, the address of each person is Gateway Center Three, Newark, NJ 07102.

Name and Address	Position with PI	Principal Occupations
Robert F. Gunia	Executive Vice President and Chief Administrative Officer	Executive Vice President and Chief Administrative Officer, PI; Vice President, Prudential; President, PIMS; Executive Vice President, Chief Administrative Officer and Director of American Skandia Investment Services, Inc. and American Skandia Advisory Services, Inc.; Executive Vice President and Director of American Skandia Fund Services, Inc.

William V. Healey	Executive Vice President and Chief Legal Officer	Executive Vice President and Chief Legal Officer, PI; Vice President and Associate General Counsel, Prudential; Senior Vice President, Chief Legal Officer and Secretary, PIMS; Executive Vice President and Chief Legal Officer of American Skandia Investment Services, Inc., American Skandia Fund Services, Inc. and American Skandia Advisory Services, Inc.

Kevin B. Osborn	Executive Vice President	Executive Vice President of PI; Executive Vice President and Director of American Skandia Investment Services, Inc. and Executive Vice President and Director of American Skandia Advisory Services, Inc.

Stephen Pelletier	Executive Vice President	Executive Vice President, PI

Judy A. Rice	Officer in Charge, President, Chief Executive Officer and Chief Operating Officer.	Officer in Charge, President, Chief Executive Officer and Chief Operating Officer; Officer-In-Charge, Director, President, Chief Executive Officer and Chief Operating Officer of American Skandia Investment Services, Inc. and American Skandia Advisory Services, Inc., Officer-In-Charge, Director, President and Chief Executive Officer of American Skandia Fund Services, Inc.

(b) Prudential Investment Management, Inc. (PIM)

See "How the Fund is Managed-Investment Adviser" in the Prospectus constituting Part A of this Registration Statement and "Investment Advisory and Other Services-Manager and Investment Adviser" in the SAI constituting Part B of this Registration Statement.

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The business and other connections of the directors and executive officers of Prudential Investment Management, Inc. are included in Schedule A and D of Form ADV filed with the Securities and Exchange Commission (File No. 801-22808), as most recently amended, the text of which is hereby incorporated by reference.

Item 27. Principal Underwriters

(a) Prudential Investment Management Services LLC (PIMS)

PIMS is distributor for American Skandia Trust, Cash Accumulation Trust, Nicholas-Applegate Fund, Inc. (Nicholas-Applegate Growth Equity Fund), Dryden California Municipal Fund, Jennison Equity Fund, Inc., Prudential's Gibraltar Fund, Inc., Dryden Global Total Return Fund, Inc., Dryden Government Income Fund, Inc., Dryden Government Securities Trust, Dryden High Yield Fund, Inc., Dryden Index Series Fund, Prudential Institutional Liquidity Portfolio, Inc., MoneyMart Assets, Inc., Dryden Municipal Bond Fund, Dryden Municipal Series Fund, Jennison Natural Resources Fund, Inc., Strategic Partners Real Estate Fund, Jennison Sector Funds, Inc., Dryden Short-Term Bond Fund, Inc., Jennison Small Company Fund, Inc., Prudential Tax-Free Money Fund, Inc., Dryden Tax-Managed Funds, Dryden Small-Cap Core Equity Fund, Inc., Dryden Total Return Bond Fund, Inc., Jennison 20/20 Focus Fund, Jennison U.S. Emerging Growth Fund, Inc., Jennison Value Fund, Prudential World Fund, Inc., Strategic Partners Asset Allocation Funds, Strategic Partners Mutual Funds, Inc., Strategic Partners Opportunity Funds, Strategic Partners Style Specific Funds, The Prudential Investment Portfolios, Inc., The Prudential Series Fund, Inc. and The Target Portfolio Trust.

PIMS is also distributor of the following unit investment trusts: Separate Accounts: The Prudential Variable Contract Account-2, The Prudential Variable Contract Account-10, The Prudential Variable Contract Account-11, The Prudential Variable Contract Account-24, The Prudential Variable Contract G1-2, The Prudential Discovery Select Group Variable Contract Account, The Pruco Life Flexible Premium Variable Annuity Account, The Pruco Life of New Jersey Flexible Premium Variable Account, The Prudential Individual Variable Contract Account and the Prudential Qualified Individual Variable Contract Account.

(b) The business and other connections of PIMS' directors and principal executive officers are listed in its Form ADV as currently on file with the Securities and Exchange Commission (File No. 008-36540), the text of which is hereby incorporated by reference.

Item 28. Location of Accounts and Records

All accounts, books and other documents required to be maintained by Section 31(a) of the 1940 Act and the Rules thereunder are maintained at the offices of The Bank of New York, One Wall Street, New York, NY 10286; Prudential Investment Management, Inc., Gateway Center Two, Newark, NJ 07102, the Registrant, Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102; and Prudential Mutual Fund Services LLC, Gateway Center Three, 100 Mulberry Street, Newark, NJ 07102. Documents required by Rules 31a-1(b)(5),(6),(7),(9),(10) and (11) and 31a-1(f) will be kept at Three Gateway Center, documents required by Rules 31a-1(b)(4) and (11) and 31a-1(d) at Three Gateway Center, 100 Mulberry Street, Newark, New Jersey 07102 and the remaining accounts, books and other documents required by such other pertinent provisions of Section 31(a) and the Rules promulgated thereunder will be kept by The Bank of New York and Prudential Mutual Fund Services LLC.

Item 29. Management Services

Other than as set forth under the captions "How the Fund is Managed-Manager", "-Investment Adviser" and "-Distributor" in the Prospectus and the caption "Investment Advisory and Other Services-Manager and Investment Adviser" and "-Principal Underwriter, Distributor and Rule 12b-1 Plans" in the Statement of Additional Information, constituting Parts A and B, respectively, of this Post-Effective Amendment to the Registration Statement, Registrant is not a party to any management-related service contract.

Item 30. Undertakings

The Registrant hereby undertakes to furnish each person to whom a Prospectus is delivered with a copy of the Registrant's latest annual report to shareholders upon request and without charge.

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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant certifies that it meets all the requirements for effectiveness of this Post-Effective Amendment to the Registration Statement pursuant to Rule 485(b) under the Securities Act of 1933 and has duly caused this Post-Effective Amendment to the Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, in the City of Newark, and State of New Jersey, on the 29th day of June, 2005.

DRYDEN MUNICIPAL BOND FUND

By: *

Judy A. Rice, President

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment to the Registration Statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
* Linda W. Bynoe	Trustee

* David E. A. Carson	Trustee

* Robert F. Gunia	Trustee and Vice President

* Robert E. La Blanc	Trustee

* Douglas H. McCorkindale	Trustee

* Richard A. Redeker	Trustee

* Judy A. Rice	Trustee and President

* Robin B. Smith	Trustee

* Stephen G. Stoneburn	Trustee

* Clay T. Whitehead	Trustee

* Grace C. Torres	Treasurer and Principal Financial and Accounting Officer

By: /s/ JONATHAN D. SHAIN (Jonathan D. Shain Attorney-in-fact)		June 29, 2005

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EXHIBIT INDEX

Exhibit Description

(b) Amended and Restated By-Laws of the Registrant dated November 16, 2004.

(g) (1) Custody Agreement between the Registrant and The Bank of New York dated November 7, 2002.

(2) Form of Amendment to Custody Agreement between the Registrant and The Bank of New York.

(j) Consent of independent registered public accounting firm.

(m) (2) 12b-1 Fee Waiver for Class A and Class C shares.

(p) (1) Code of Ethics of the Registrant dated April 6, 2005.

(2) Code of Ethics and Personal Securities Trading Policy of Prudential Investment Management Services LLC, Prudential Investments LLC, and Prudential Investment Management, Inc. dated January 1, 2005.

(q) Powers of Attorney dated March 2, 2005.

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Exhibit 99.(b)

DRYDEN MUNICIPAL BOND FUND

BY-LAWS

AMENDED AND RESTATED AS OF NOVEMBER 16, 2004

DRYDEN MUNICIPAL BOND FUND

BY-LAWS

DRYDEN MUNICIPAL BOND FUND

The terms “ Administrator ,” “ Commission ,” “ Custodian ,” “ Declaration ,” “ Distributor ,” “ Investment Adviser ,” “ 1940 Act ,” “ Shareholder ,” “ Shares ,” “ Transfer ,” “ Transfer Agent ,” “ Trust ,” “ Trust Property ,” “ Trustees ,” and “ Majority Shareholder Vote ,” have the respective meanings given them in the Declaration of Trust of Prudential Municipal Bond Fund (formerly Prudential-Bache Municipal Bond Fund) dated November 3, 1986, as amended from time to time.

The Executive Committee shall keep regular minutes of its meetings and records of decisions taken without a meeting and cause them to be recorded in a book designated for that purpose and kept in the office of the Trust.

The Trustees may delegate to any officer or committee the power to appoint any subordinate officers or agents.

The fiscal year of the Trust shall begin on the first day of May in each year and shall end on the last day of April in each year, provided, however, that the Trustees may from time to time change the fiscal year.

The Trustees may adopt a seal which shall be in such form and shall have such inscription thereon as the Trustees may from time to time prescribe.

Whenever any notice whatever is required to be given by law, the Declaration or these By-Laws, a waiver thereof in writing, signed by the person or persons entitled to said notice, whether before or after the time stated therein, shall be deemed equivalent thereto. A notice shall be deemed to have been telegraphed, cabled or wired for the purposes of these By-Laws when it has been delivered to a representative of any telegraph, cable or wire company with instructions that it be telegraphed, cabled or wired.

A representative of the Trust shall be indemnified by the Trust with respect to each proceeding against such representative, except a proceeding brought by or on behalf of the Trust, against expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such representative in connection with such proceeding, provided that such representative acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Trust and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith in a manner which he or she reasonably believed to be in or not opposed to the best interests of the Trust and, with respect to any criminal proceeding, had reasonable cause to believe that his or her conduct was unlawful.

A representative of the Trust shall be indemnified by the Trust, with respect to each proceeding brought by or on behalf of the Trust to obtain judgment or decree in its favor, against expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection with the defense or settlement of such proceeding, if he or she acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the Trust; except that no indemnification shall be made in respect of any claim, issue, or matter as to which such representative has been adjudged to be liable for negligence or misconduct in the performance of his or her duty to the Trust, unless and only to the extent that the court in which the proceeding was brought, or a court of equity in the county in which the Trust has its principal office, determines upon application that, despite the adjudication of liability but in view of all circumstances of the case, such representative is fairly and reasonably entitled to indemnity for the expenses which the court considers proper.

To the extent that the representative of the Trust has been successful on the merits or otherwise in defense of any proceeding referred to in the preceding two paragraphs, or in defense of any claim, issue or matter therein, the

Trust shall indemnify him or her against all expenses (including attorneys’ fees) actually and reasonably incurred by him or her in connection therewith.

Except as provided in the preceding paragraph any indemnification under the first two paragraphs of this Article XI (unless ordered by a court) shall be made by the Trust only as authorized in the specific case upon a determination that indemnification of the representative of the Trust is proper in the circumstances because he or she has met the applicable standard of conduct set forth in such paragraphs. The determination shall be made (1) by the Trustees by a majority vote of a quorum consisting of Trustees who were not parties to the proceeding, or (2) if a quorum is not obtainable or if a quorum of disinterested Trustees so directs, by independent legal counsel in a written opinion, or (3) by a Majority Shareholder Vote.

The Trust shall advance the expenses (including attorneys’ fees) of a representative of the Trust who is a party to any proceeding to the fullest extent authorized, and in the manner permitted, hereby and by applicable federal and state law and if (1) authorized by the Trustees in the specific case, and (2) the Trust receives an undertaking by or on behalf of the representative of the Trust to repay the advance if it is not ultimately determined that he or she is entitled to be indemnified by the Trust as authorized in this Article XI.

The indemnification provided by this Article XI shall not be deemed exclusive of any other rights to which a representative of the Trust or other person may be entitled under any agreement, vote of Shareholders or disinterested Trustees or otherwise, both as to action in his or her official capacity and as to action in another capacity while holding the office, and shall continue as to a person who has ceased to be a Trustee, officer, employee or agent and inure to the benefit of his or her heirs and personal representatives.

The Trust may purchase and maintain insurance on behalf of any person who is or was a Trustee, officer, employee or agent of the Trust, or is or was ‘serving at the request of the Trust as a trustee, director, officer, employee or agent of another trust, corporation, partnership, joint venture or other enterprise, against any liability asserted against him or her and incurred by him or her in any such capacity or arising out of his or her status as such, regardless of whether the Trust would have the power to indemnify him or her against the liability under the provisions of this Article XI.

Pursuant and subject to the other provisions of this Article, the Trust shall indemnify each representative of the Trust against, or advance the expenses of a representative of the Trust for, the amount of any deductible provided in any liability insurance policy maintained by the Trust.

Nothing contained in this Article XI shall be construed to indemnify any representative of the Trust against any liability to the Trust or to its Shareholders to which he or she would otherwise be subject by reason of misfeasance, bad faith, gross negligence or reckless disregard of the duties involved in the conduct of his or her office.

As used in this Article XI, “representative of the Trust” means any individual (1) who is a present or former Trustee, officer, agent or employee of the Trust or who serves or has served another trust, corporation, partnership, joint venture or other enterprise in one of such capacities at the request of the Trust, and (2) who by reason of his or her position is, has been or is threatened to be made a party to a proceeding; and “proceeding” includes any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative.

These By-Laws, or any of them, may be altered, amended or repealed, or new By-Laws may be adopted by (a) a Majority Shareholder Vote or (b) by the Trustees, provided, however, that no By-Law may be amended, adopted or repealed by the Trustees if such amendment, adoption or repeal requires, pursuant to law, the Declaration or these By-Laws, a vote of the Shareholders.

Exhibit 99.(g)(1)

CUSTODY AGREEMENT

AGREEMENT, dated as of November 7, 2002 between each Fund listed on the attached Schedule A hereto, including any series thereof (each a “Fund”) each having its principal office and place of business at 100 Mulberry Street, Newark, New Jersey 07102 (the “Fund”) and The Bank of New York, a New York corporation authorized to do a banking business having its principal office and place of business at One Wall Street, New York, New York 10286 (“Custodian”).

W I T N E S S E T H:

that for and in consideration of the mutual promises hereinafter set forth the Fund and Custodian agree as follows:

Whenever used in this Agreement, the following words shall have the meanings set forth below:

IN WITNESS WHEREOF , the Fund and Custodian have caused this Agreement to be executed by their respective officers, thereunto duly authorized, as of the day and year first above written.

EACH FUND LISTED ON SCHEDULE A HERETO


By:	/s/ Robert F. Gunia


Title: Vice President

Tax Identification No:


THE BANK OF NEW YORK


By:	/s/ Edward G. McGann

Title:		Vice President

SCHEDULE I
CERTIFICATE OF AUTHORIZED PERSONS

(The Fund - Oral and Written Instructions)

The undersigned hereby certifies that he/she is the duly elected and acting of each Fund listed on Schedule A hereto (each a “Fund”), and further certifies that the following officers or employees of the Fund have been duly authorized in conformity with the Fund’s Declaration of Trust and By-Laws to deliver Certificates and Oral Instructions to The Bank of New York (“Custodian”) pursuant to the Custody Agreement between the Fund and Custodian dated , and that the signatures appearing opposite their names are true and correct:


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature


Name	Title	Signature

This certificate supersedes any certificate of Authorized Persons you may currently have on file.

[seal]	By:
		Title:

Date:

APPENDIX I

THE BANK OF NEW YORK

ON-LINE COMMUNICATIONS SYSTEM (THE “SYSTEM”)

TERMS AND CONDITIONS

1. License; Use . Upon delivery to an Authorized Person or a person reasonably believed by Custodian to be an Authorized Person of the Fund of software enabling the Fund to obtain access to the System (the “Software”), Custodian grants to the Fund a personal, nontransferable and nonexclusive license to use the Software solely for the purpose of transmitting Written Instructions, receiving reports, making inquiries or otherwise communicating with Custodian in connection with the Account(s). The Fund shall use the Software solely for its own internal and proper business purposes and not in the operation of a service bureau. Except as set forth herein, no license or right of any kind is granted to the Fund with respect to the Software. The Fund acknowledges that Custodian and its suppliers retain and have title and exclusive proprietary rights to the Software, including any trade secrets or other ideas, concepts, know-how, methodologies, or information incorporated therein and the exclusive rights to any copyrights, trademarks and patents (including registrations and applications for registration of either), or other statutory or legal protections available in respect thereof. The Fund further acknowledges that all or a part of the Software may be copyrighted or trademarked (or a registration or claim made therefor) by Custodian or its suppliers. The Fund shall not take any action with respect to the Software inconsistent with the foregoing acknowledgments, nor shall the Fund attempt to decompile, reverse engineer or modify the Software. The Fund may not copy, sell, lease or provide, directly or indirectly, any of the Software or any portion thereof to any other person or entity without Custodian’s prior written consent. The Fund may not remove any statutory copyright notice or other notice included in the Software or on any media containing the Software. The Fund shall reproduce any such notice on any reproduction of the Software and shall add any statutory copyright notice or other notice to the Software or media upon Custodian’s request.

2. Equipment . The Fund shall obtain and maintain at its own cost and expense all equipment and services, including but not limited to communications services, necessary for it to utilize the Software and obtain access to the System, and Custodian shall not be responsible for the reliability or availability of any such equipment or services.

3. Proprietary Information . The Software, any data base and any proprietary data, processes, information and documentation made available to the Fund (other than which are or become part of the public domain or are legally required to be made available to the public) (collectively, the “Information”), are the exclusive and confidential property of Custodian or its suppliers. The Fund shall keep the Information

confidential by using the same care and discretion that the Fund uses with respect to its own confidential property and trade secrets, but not less than reasonable care. Upon termination of the Agreement or the Software license granted herein for any reason, the Fund shall return to Custodian any and all copies of the Information which are in its possession or under its control.

4. Modifications . Custodian reserves the right to modify the Software from time to time and the Fund shall install new releases of the Software as Custodian may direct. The Fund agrees not to modify or attempt to modify the Software without Custodian’s prior written consent. The Fund acknowledges that any modifications to the Software, whether by the Fund or Custodian and whether with or without Custodian’s consent, shall become the property of Custodian.

5. NO REPRESENTATIONS OR WARRANTIES . CUSTODIAN AND ITS MANUFACTURERS AND SUPPLIERS MAKE NO WARRANTIES OR REPRESENTATIONS WITH RESPECT TO THE SOFTWARE, SERVICES OR ANY DATABASE, EXPRESS OR IMPLIED, IN FACT OR IN LAW, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE. THE FUND ACKNOWLEDGES THAT THE SOFTWARE, SERVICES AND ANY DATABASE ARE PROVIDED “AS IS.” OTHER THAN AS PROVIDED SECTION 5.1 BELOW, IN NO EVENT SHALL EITHER PARTY OR ANY SUPPLIER BE LIABLE FOR ANY DAMAGES, WHETHER DIRECT, INDIRECT SPECIAL, OR CONSEQUENTIAL, WHICH THE FUND MAY INCUR IN CONNECTION WITH THE SOFTWARE, SERVICES OR ANY DATABASE, EVEN IF SUCH PARTY OR SUCH SUPPLIER HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. IN NO EVENT SHALL CUSTODIAN OR ANY SUPPLIER BE LIABLE FOR ACTS OF GOD, MACHINE OR COMPUTER BREAKDOWN OR MALFUNCTION, INTERRUPTION OR MALFUNCTION OF COMMUNICATION FACILITIES, LABOR DIFFICULTIES OR ANY OTHER SIMILAR OR DISSIMILAR CAUSE BEYOND THEIR REASONABLE CONTROL.

5.1 (a) Custodian shall defend the Fund, and pay any damages finally awarded by a court of competent jurisdiction, in any action or proceeding commenced by a third party against the Fund based on a claim that the Software or Services infringe upon a United States patent, copyright, or trade secret, provided that the Fund (i) notifies Custodian promptly of any such action or claim, (ii) grants Custodian full and exclusive authority to defend, compromise or settle such claim or action, and (iii) provides Custodian all assistance reasonably necessary to so defend, compromise or settle. The foregoing obligations shall not apply, however, to any claim or action arising from (i) the Fund’s use of the Software or Services in a manner not authorized by this Agreement, (ii) the Fund’s use of the Software or Services in combination with other software or services not supplied by the Bank or (iii) the Fund’s use of a superseded version of the Software after a current version has been made available to the Fund.

(b) In the event that the Software or Services are found to infringe upon a patent, copyright, trade secret, or other proprietary right, or in Custodian’s opinion the Software or Services are likely to be found to so infringe, Custodian may, at its sole option, (i) procure for the Fund the right to continue using the Software or Services, (ii) replace the Software or Services with software or services that are non-infringing, or (iii) terminate this Agreement and refund to the Fund any pre-paid charges relating to the Software or Services.

(c) THIS SECTION 5.1 STATES THE CUSTODIAN’S SOLE OBLIGATION, AND THE FUND’S SOLE REMEDY, WITH RESPECT TO ANY CLAIM OF INFRINGEMENT BY THE SOFTWARE OR SERVICES.

6. Security; Reliance; Unauthorized Use . The Fund will cause all persons utilizing the Software and System to treat all applicable user and authorization codes, passwords and authentication keys with extreme care, and it will establish internal control and safekeeping procedures to restrict the availability of the same to persons duly authorized to give Instructions. Custodian agrees that the Fund’s investment advisor shall be entitled to use, install and/or access the Software for the benefit of the Fund, provided such investment advisor agrees in an executed writing delivered to Custodian to be bound by the terms of this Appendix. Custodian is hereby irrevocably authorized to act in accordance with and rely on Instructions received by it through the System. The Fund acknowledges that it is its sole responsibility to assure that only persons duly authorized use the System and that Custodian shall not be responsible nor liable for any unauthorized use thereof.

7. System Acknowledgments . Custodian shall acknowledge through the System its receipt of each transmission communicated through the System, and in the absence of such acknowledgment Custodian shall not be liable for any failure to act in accordance with such transmission and the Fund may not claim that such transmission was received by Custodian.

9. ENCRYPTION . The Fund acknowledges and agrees that encryption may not be available for every communication through the System, or for all data. The Fund agrees that Custodian may deactivate any encryption features at any time, without notice or liability to the Fund, for the purpose of maintaining, repairing or troubleshooting the System or the Software.

SCHEDULE A

Strategic Partners Style Specific Funds

Strategic Partners Large Capitalization Growth Fund

Strategic Partners Large Capitalization Value Fund

Strategic Partners Small Capitalization Value Fund

Strategic Partners Small Capitalization Growth Fund

Strategic Partners Total Return Fund

Strategic Partners International Equity Fund

Strategic Partners Opportunity Funds

Strategic Partners Mid Cap Value Fund

Strategic Partners Focused Growth Fund

Strategic Partners Focused Value Fund

Strategic Partners New Era Growth Fund

Strategic Partners Asset Allocation Funds

Strategic Partners Moderate Growth Fund

Strategic Partners High Growth Fund

Strategic Partners Conservative Growth Fund

The Target Portfolio Trust

Large Capitalization Growth Portfolio

Large Capitalization Value Portfolio

Small Capitalization Growth Portfolio

Small Capitalization Value Portfolio

International Equity Portfolio

International Bond Portfolio

Total Return Bond Portfolio

Intermediate-Term Bond Portfolio

Mortgage-Backed Securities Portfolio

U.S. Government Money Market Portfolio

The High Yield Plus Fund, Inc.

Exhibit 99.(g)(2)

AMENDMENT

AMENDMENT made as of , 2005 to that certain Global Custody Agreement dated as of November 7, 2002 between each Fund listed on the attached Schedule A thereto, including any series thereof (the “Fund”) and The Bank of New York (“Custodian”) (such Global Custody Agreement hereinafter referred to as the “Custody Agreement”). Capitalized terms not otherwise defined herein shall have the meaning assigned to them pursuant to the Custody Agreement.

WHEREAS, the parties wish to amend the Custody Agreement to add certain funds and or series thereof as parties to the Custody Agreement.

NOW, THEREFORE, for and in consideration of the mutual promises hereinafter set forth, the parties hereto agree as follows:

4. This Amendment shall become effective as of the date hereof upon execution by the parties hereto. From and after the execution hereof, any reference to the Custody Agreement shall be a reference to the Custody Agreement as amended hereby. Except as amended hereby, the Custody Agreement shall remain in full force and effect.

IN WITNESS WHEREOF , the Fund and Custodian have caused this Amendment to be executed by their duly authorized representatives, as of the day and year first above written.

	EACH FUND LISTED ON SCHEDULE A HERETO


	By:
	Title:

	THE BANK OF NEW YORK


	By:
	Title:

EXHIBIT I

SCHEDULE A

To The Global Custody Agreement

Effective , 2005

PART I		Date of First Service

Strategic Partners Asset Allocation Funds
Strategic Partners Moderate Allocation Fund		January 6, 2002
Strategic Partners Growth Allocation Fund		January 6, 2002
Strategic Partners Conservative Allocation Fund		January 6, 2002

Strategic Partners Opportunity Funds
Jennison Select Growth Fund		December 9, 2002
Dryden Strategic Value Fund		December 9, 2002
Strategic Partners New Era Growth Fund		December 9, 2002
SP Mid-Cap Value Fund		December 9, 2002

Strategic Partners Style Specific Funds
Jennison Conservative Growth Fund		November 18, 2002
Strategic Partners Large Capitalization Value Fund		November 18, 2002
Strategic Partners Small Capitalization Growth Fund		December 9, 2002
Strategic Partners Small Capitalization Value Fund		November 18, 2002
Strategic Partners Total Return Bond Fund		December 23, 2002

Target Portfolio Trust
Target U.S Government Money Market Portfolio		December 23, 2002
Target Intermediate Term Bond Portfolio		December 23, 2002
Target International Bond Portfolio		December 23, 2002
Target International Equity Portfolio		December 23, 2002
Target Large Capitalization Growth Portfolio		November 18, 2002
Target Large Capitalization Value Portfolio		November 18, 2002
Target Mortgage Backed Securities Portfolio		December 23, 2002
Target Small Capitalization Growth Portfolio		December 9, 2002
Target Small Capitalization Value Portfolio		November 18, 2002
Target Total Return Bond Portfolio		December 23, 2002

PART II		Date of First Service

Dryden Core Investment Fund - Short-Term Bond Series Investment Company		TBD

Dryden Core Investment Fund-Taxable Money Market Series		June 6, 2005
Dryden Global Total Return Fund, Inc.		June 6, 2005
Dryden Government Securities Trust - Money Market Series		June 6, 2005
Dryden Municipal Bond Fund - Insured Series		June 6, 2005
Dryden Municipal Bond Fund - High Income Series		June 6, 2005
Dryden Short-Term Bond Fund, Inc. - Dryden Short-Term Corporate Bond Fund		June 6, 2005
Dryden Short-Term Bond Fund, Inc. - Dryden Ultra Short Bond Fund		June 6, 2005

MoneyMart Assets, Inc.		June 6, 2005
Prudential Institutional Liquidity Portfolio, Inc. - Institutional Money Market Series		June 6, 2005
Prudential World Fund, Inc. - Dryden International Equity Fund		June 6, 2005
Prudential World Fund, Inc. - Jennison Global Growth Fund		June 6, 2005
The High Yield Income Fund, Inc.		June 6, 2005
The Prudential Investment Portfolios, Inc. - Dryden Active Allocation Fund		June 6, 2005

Dryden Small-Cap Core Equity Fund, Inc.		June 27, 2005
Dryden Tax-Managed Funds - Dryden Large Cap Core Equity Fund		June 27, 2005
Dryden Index Series Fund - Dryden Stock Index Fund		June 27, 2005
Jennison 20/20 Focus Fund		June 27, 2005
Jennison Natural Resources Fund, Inc.		June 27, 2005
Jennison Sector Funds, Inc. - Jennison Financial Services Fund		June 27, 2005
Jennison Sector Funds, Inc. - Jennison Health Sciences Fund		June 27, 2005
Jennison Sector Funds, Inc. - Jennison Technology Fund		June 27, 2005
Jennison Sector Funds, Inc. - Jennison Utility Fund		June 27, 2005
Jennison Small Company Fund, Inc.		June 27, 2005
Jennison U.S. Emerging Growth Fund, Inc.		June 27, 2005
Jennison Value Fund		June 27, 2005
The Prudential Investment Portfolios, Inc. - Jennison Equity Opportunity Fund		June 27, 2005
The Prudential Investment Portfolios, Inc. - Jennison Growth Fund		June 27, 2005

Dryden Total Return Bond Fund, Inc.		July 25, 2005
Dryden Government Income Fund, Inc.		July 25, 2005
The Prudential Series Fund, Inc. - Diversified Bond Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - Government Income Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - High Yield Bond Portfolio		July 25, 2005
Dryden High Yield Fund, Inc.		July 25, 2005
The Prudential Series Fund, Inc. - Conservative Balanced Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - Flexible Managed Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - Global Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - Jennison 20/20 Focus Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - Jennison Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - Natural Resources Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - Small Capitalization Stock Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - SP Prudential U.S. Emerging Growth Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - Stock Index Portfolio		July 25, 2005
The Prudential Series Fund, Inc. - Value Portfolio		July 25, 2005

Prudential’s Gibraltar Fund, Inc.		July 25, 2005
The Prudential Investment Portfolios, Inc. -		July 25, 2005
JennisonDryden Asset Allocation Funds - JennisonDryden Conservative Allocation Fund		July 25, 2005
JennisonDryden Asset Allocation Funds - Jennison Dryden Growth Allocation Fund		July 25, 2005
JennisonDryden Asset Allocation Funds - JennisonDryden Moderate Allocation Fund		July 25, 2005

Cash Accumulation Trust - Liquid Assets Fund		September 12, 2005
Cash Accumulation Trust - National Money Market Fund		September 12, 2005
Dryden California Municipal Fund - California Income Series		September 12, 2005
Dryden California Municipal Fund - California Series		September 12, 2005
Dryden Municipal Series Fund - Florida Series		September 12, 2005
Dryden Municipal Series Fund - New Jersey Series		September 12, 2005
Dryden Municipal Series Fund - New York Series		September 12, 2005
Dryden Municipal Series Fund - Pennsylvania Series		September 12, 2005
Dryden National Municipals Fund, Inc.		September 12, 2005
The Prudential Series Fund, Inc. - Money Market Portfolio		September 12, 2005
The Prudential Series Fund, Inc. - SP Aggressive Growth Asset Allocation Portfolio		September 12, 2005
The Prudential Series Fund, Inc. - SP Balanced Asset Allocation Portfolio		September 12, 2005
The Prudential Series Fund, Inc. - SP Conservative Asset Allocation Portfolio		September 12, 2005
The Prudential Series Fund, Inc. - SP Growth Asset Allocation Portfolio		September 12, 2005

Exhibit 99.(j)

Letterhead of KPMG LLP

Consent of Independent Registered Public Accounting Firm

The Board of Trustees and Shareholders of

Dryden Municipal Bond Fund:

We consent to the incorporation by reference, in this registration statement, of our report dated June 27, 2005 on the statement of assets and liabilities of the High Income Series and Insured Series (constituting the Dryden Municipal Bond Fund, formerly the Prudential Municipal Bond Fund, hereafter referred to as the “Fund”) including the portfolio of investments, as of April 30, 2005, and the related statement of operations for the year then ended, and the statements of changes in net assets and financial highlights for each of the years in the two-year period then ended. These financial statements and financial highlights and our report thereon are included in the Annual Report of the Fund as filed on Form N-CSR.

We also consent to the references to our firm under the headings “Financial Highlights” in the Prospectus and “Other Service Providers” and “Financial Statements” in the Statement of Additional Information.

/s/ KPMG LLP

KPMG LLP
New York, New York
June 29, 2005

Exhibit 99.(m)(2)

NOTICE OF RULE 12B-1 FEE WAIVER

CLASS A SHARES

THIS NOTICE OF RULE 12B-1 FEE WAIVER is signed as of May 1, 2005, by PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC (PIMS), the principal underwriter of Dryden Municipal Bond Fund, an open-end management investment company (the Fund).

WHEREAS, PIMS desires to waive a portion of its distribution and shareholder services fees payable on Class A shares of the Fund (Rule 12b-1 fees); and

WHEREAS, PIMS understands and intends that the Fund will rely on this Notice and agreement in preparing a registration statement on Form N-1A and in accruing the Fund’s expenses for purposes of calculating net asset value and for other purposes, and expressly permits the Fund to do so; and

WHEREAS, shareholders of the Fund will benefit from the ongoing contractual waiver by incurring lower Fund operating expenses than they would absent such waiver.

NOW, THEREFORE, PIMS hereby provides notice that it has agreed to limit the distribution and service (12b-1) fees incurred by Class A shares of the Fund to .25 of 1% of the average daily net assets of the Fund. This contractual waiver shall be effective from the date hereof until April 30, 2006.

IN WITNESS WHEREOF, PIMS has signed this Notice of Rule 12b-1 Fee Waiver as of the day and year first above written.

PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC


By:	/s/ Robert F. Gunia

Name:	Robert F. Gunia

Title:	President

NOTICE OF RULE 12B-1 FEE WAIVER

CLASS C SHARES

WHEREAS, PIMS desires to waive a portion of its distribution and shareholder services fees payable on Class C shares of the Fund (Rule 12b-1 fees); and

WHEREAS, shareholders of the Fund will benefit from the ongoing contractual waiver by incurring lower Fund operating expenses than they would absent such waiver.

NOW, THEREFORE, PIMS hereby provides notice that it has agreed to limit the distribution and service (12b-1) fees incurred by Class C shares of the Fund to .75 of 1% of the average daily net assets of the Fund. This contractual waiver shall be effective from the date hereof until April 30, 2006.

IN WITNESS WHEREOF, PIMS has signed this Notice of Rule 12b-1 Fee Waiver as of the day and year first above written.

PRUDENTIAL INVESTMENT MANAGEMENT SERVICES LLC


By:	/s/ Robert F. Gunia

Name:	Robert F. Gunia

Title:	President

Exhibit 99.(p)(1)

JENNISONDRYDEN AND

STRATEGIC PARTNERS MUTUAL FUND COMPLEX

(the Fund)

Code of Ethics Adopted Pursuant to Rule 17j-1

Under the Investment Company Act of 1940

(the Code)

1. Purposes

The Code has been adopted by the Board of Directors/Trustees of the Fund, in accordance with Rule 17j-1(c) under the Investment Company Act of 1940 (the Act) and in accordance with the following general principles:

(1) The duty at all times to place the interests of investment company shareholders first.

Investment company personnel should scrupulously avoid serving their own personal interests ahead of shareholders’ interests in any decision relating to their personal investments.

(2) The requirement that all personal securities transactions be conducted consistent with the Code and in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual’s position of trust and responsibility.

Investment company personnel must not only seek to achieve technical compliance with the Code but should strive to abide by its spirit and the principles articulated herein.

(3) The fundamental standard that investment company personnel should not take inappropriate advantage of their positions.

Investment company personnel must avoid any situation that might compromise, or call into question, their exercise of fully independent judgment in the interest of shareholders, including, but not limited to the receipt of unusual investment opportunities, perquisites, or gifts of more than a de minimis value from persons doing or seeking business with the Fund.

Rule 17j-1 under the Act generally proscribes fraudulent or manipulative practices with respect to a purchase or sale of a security held or to be acquired (as such term is defined in Section 2) by an investment company, if effected by an associated person of such company.

The purpose of the Code is to establish procedures consistent with the Act and Rule 17j-1 to give effect to the following general prohibitions as set forth in Rule 17j-1(b) as follows:

(a) It shall be unlawful for any affiliated person of or Principal Underwriter for a registered investment company, or any affiliated person of an investment adviser of or principal underwriter for a registered investment company in connection with the purchase or sale, directly or indirectly, by such person of a security held or to be acquired, by such registered investment company:

(1) To employ any device, scheme or artifice to defraud such registered investment company;

(2) To make to such registered investment company any untrue statement of a material fact or omit to state to such registered investment company a material fact necessary in order to make the statements made, in light of the circumstances under which they are made, not misleading;

(3) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any such registered investment company; or

(4) To engage in any manipulative practice with respect to such registered investment company.

2. Definitions

(a) “Access Person” means any director/trustee, officer, general partner or Advisory Person (including any Investment Personnel, as that term is defined herein) of the Fund, the Manager, the Adviser/ Subadviser, or the Principal Underwriter.

(b) “Adviser/Subadviser” means the Adviser or a Subadviser, if any, of the Fund or both as the context may require.

(c) “Advisory Person” means (i) any employee of the Fund, Manager or Adviser/Subadviser (or of any company in a control relationship to the Fund, Manager or Adviser/Subadviser) who, in connection with his or her regular functions or duties, makes, participates in, or obtains current or pending information regarding the purchase or sale of a security by the Fund, or whose functions relate to the making of any recommendations with respect to such purchases or sales; and (ii) any natural person in a control relationship to the Fund who obtains information concerning recommendations made to the Fund with regard to the purchase or sale of a security.

(d) “Beneficial Ownership” will be interpreted in the same manner as it would be under Securities Exchange Act Rule 16a-1(a)(2) in determining which security holdings of a person are subject to the reporting and short-swing profit provisions of Section 16 of the Securities Exchange Act of 1934 and the rules and regulations thereunder, except that the determination of direct or indirect beneficial ownership will apply to all securities which an Access Person has or acquires ( Exhibit A ).

(e) “Complex” means the group of registered investment companies for which Prudential Investments LLC serves as Manager; provided, however, that with respect to Access Persons of the Manager or Subadviser (including any unit or subdivision thereof), “Complex” means the group of registered investment companies in the Complex advised by such Subadviser or unit or subdivision thereof or to which an Access Person is deemed to have access. A list of such registered investment companies will be maintained by the Compliance Officer.

(f) “Compliance Officer” means the person or persons (including his or her designees) designated by the Manager, the Adviser/Subadviser, or Principal Underwriter, respectively, as having responsibility for compliance with the requirements of the Code.

(g) “Control” will have the same meaning as that set forth in

Section 2(a)(9) of the Act.

(h) “Disinterested Director/Trustee” means a Director/Trustee of the Fund who is not an “interested person” of the Fund within the meaning of Section 2(a)(19) of the Act.

An interested Director/Trustee who would not otherwise be deemed to be an Access Person, shall be treated as a Disinterested Director/Trustee for purposes of compliance with the provisions of the Code.

(i) “Initial Public Offering” means an offering of securities registered under the Securities Act of 1933, the issuer of which, immediately before the registration, was not subject to the reporting requirements of sections 13 or 15(d) of the Securities Exchange Act of 1934.

(j) “Investment Personnel” means: (a) Portfolio Managers and other Advisory Persons who provide investment information and/or advice to the Portfolio Manager(s) and/or help execute the Portfolio Manager’s(s’) investment decisions, including securities analysts and traders; (b) any natural person in a control relationship to the Fund who obtains information concerning recommendations made to the Fund with regard to the purchase or sale of a security; and (c) certain other individuals as designated by the Compliance Officer.

(k) “Manager” means Prudential Investments LLC.

(l) “Mutual Fund Code of Ethics/Personal Securities Trading Committee” or “Committee” means a specified group of Business Unit, Compliance, and Human Resources executives responsible for interpreting and administering the Code, including but not limited to, reviewing violations of the Code and determining any sanctions or other disciplinary actions that may be deemed appropriate. In addition, the Committee may waive and or modify violations and sanctions or other disciplinary actions at its discretion when deemed appropriate by the Committee. The Committee will review such violations in consultation with legal counsel. A list of such Committee members shall be maintained by the Compliance Officer.

(m) “Non-proprietary Registered Open-end Investment Company” or “Non-proprietary Fund” means any registered open-end investment company whose registered investment adviser is an entity other than Prudential Investments LLC.

(n) “Portfolio Manager” means any Advisory Person who has the direct responsibility and authority to make investment decisions for the Fund.

(o) “Private placement” means a limited offering that is exempt from registration under the Securities Act of 1933 pursuant to section 4(2) or section 4(6) or pursuant to rule 504, rule 505 or rule 506 under such Securities Act.

(p) “Profits” means any total or partial gain realized from a securities transaction or group of transactions as defined by the Mutual Fund Code of Ethics/Personal Securities Trading Committee (“Committee”).

(q) “Proprietary Registered Open-End Investment Company” or “Proprietary Fund” means a registered open-end investment company for which Prudential Investments LLC acts as the registered investment adviser, with the exception of proprietary money market open-end registered investment companies or any other open-end registered investment companies identified by the Compliance Officer.(1)

(r) “Security” will have the meaning set forth in Section 2(a)(36) of the Act, except that it will not include shares of Non-proprietary Registered Open-end Investment Companies, money market registered open-end investment companies, direct obligations of the Government of the United States, short-term debt securities which are “government securities” within the meaning of Section 2(a)(16) of the Act, bankers’ acceptances, bank certificates of deposit, commercial paper and such other money market instruments as are designated by the Compliance Officer. For purposes of the Code, an “equivalent Security” is one that has a substantial economic relationship to another Security. This would include, among other things, (1) a Security that is exchangeable for or convertible into another Security, (2) with respect to an equity Security, a Security having the same issuer (including a private issue by the same issuer) and any derivative, option or warrant relating to that Security and (3) with respect to a fixed-income Security, a Security having the same issuer, maturity, coupon and rating.

(s) “Security held or to be acquired” means any Security or any equivalent Security which, within the most recent 15 days: (1) is or has been held by the Fund; or (2) is being considered by the Fund or its investment adviser for purchase by the Fund.

(1) The Compliance Officer will maintain a list of such exempt open-end registered investment companies.

3. Applicability

The Code applies to all Access Persons, except that Access Persons covered by more than one Code of Ethics meeting the requirements of Rule 17j-1 may be governed by the provisions of such other Code of Ethics and report all transactions pursuant to the terms of such other Code of Ethics provided that such Code was reviewed and approved by the Board of Directors/Trustees of the Fund. The Compliance Officer shall ensure that each Access Person subject to this Code receives a copy of the Code. The Compliance Officer will maintain a list of all Access Persons who are currently, and within the past five years, subject to the Code.

4. Prohibited Purchases and Sales

The prohibitions described below will only apply to a transaction in a security in which the designated Access Person has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership.

A. Mutual Funds

Except as provided in Section 5 below, Investment Personnel and certain other individuals identified by the Compliance Officer are required to hold Proprietary Funds purchased for a period of 90-days. Profits realized on such transactions that do not adhere to the requirements of this Section may be promptly required to be disgorged to the Fund or as otherwise deemed appropriate by the Committee.

B. Initial Public Offerings

No Investment Personnel may acquire any Securities in an initial public offering. For purposes of this restriction, “Initial Public Offerings” shall not include offerings of government and municipal securities.

C. Private Placements

No Investment Personnel may acquire any Securities in a private placement without prior approval.

(i) Prior approval must be obtained in accordance with the preclearance procedure described in Section 6 below. Such approval will take into account, among other factors, whether the investment opportunity should be reserved for the Fund and its shareholders and whether the opportunity is being offered to the Investment Personnel by virtue of his or her position with the Fund. The Adviser/Subadviser shall maintain a record of such prior approval and reason for same, for at least 5 years after the end of the fiscal year in which the approval is granted.

(ii) Investment Personnel who have been authorized to acquire Securities in a private placement must disclose that investment to the chief investment officer (including his or her designee) of the Adviser/Subadviser (or of any unit or subdivision thereof) or the Compliance Officer when they play a part in any subsequent consideration of an investment by the Fund in the issuer. In such circumstances, the Fund’s decision to purchase Securities of the issuer will be subject to an independent review by appropriate personnel with no personal interest in the issuer.

D. Blackout Periods

(i) Except as provided in Section 5 below, Access Persons are prohibited from executing a Securities transaction on a day during which any investment

company in the Complex has a pending “buy” or “sell” order in the same or an equivalent Security and until such time as that order is executed or withdrawn; provided, however, that this prohibition shall not apply to Disinterested Directors/Trustees except if they have actual knowledge of trading by any fund in the Complex.

This prohibition shall also not apply to Access Persons of the Manager, Principal Underwriter, and Adviser/Subadviser who do not, in the ordinary course of fulfilling his or her official duties, have access to current or pending information regarding the purchase and sale of Securities for the Fund and are not engaged in the day-to-day trading operations of the Fund; provided that Securities investments effected by such Access Persons during the proscribed period are not effected with knowledge of the purchase or sale of the same or equivalent Securities by any fund in the Complex.

A “pending ‘buy’ or ‘sell’ order” exists when a decision to purchase or sell a Security has been made and communicated. However, this prohibition shall not apply to a “pending ‘buy ‘or ‘sell’ order” in the same or an equivalent security in a broad based index fund.(2)

(ii) Portfolio Managers are prohibited from buying or selling a Security within seven calendar days before or after a Fund in the same Complex trades in the same or an equivalent Security. Nevertheless, a personal trade by any Investment Personnel shall not prevent a Fund in the same Complex from trading in the same or an equivalent security. However, such a transaction shall

be subject to independent review by the Compliance Officer. This prohibition shall not apply to purchases and sales executed in a broad based index fund.

(iii) If trades are effected during the periods proscribed in (i) or (ii) above, except as provided in (iv) below with respect to (i) above, Profits realized on such trades will be promptly required to be disgorged to the Fund or a charitable organization approved by the Committee.

(iv) A transaction by Access Persons (other than Investment Personnel) inadvertently effected during the period proscribed in (i) above will not be considered a violation of the Code and disgorgement will not be required so long as the transaction was effected in accordance with the preclearance procedures described in Section 6 below and without prior knowledge of trading by any Fund in the Complex in the same or an equivalent Security.

E. Short-Term Trading Profits

Except as provided in Section 5 below, Investment Personnel are prohibited from profiting from a purchase and sale, or sale and purchase, of the same or an equivalent Security within any 60 calendar day period. For purposes of this prohibition, Security shall exclude Proprietary Funds. If trades are effected during the proscribed period, Profits realized on such trades will be promptly required to be disgorged to the Fund or a charitable organization approved by the Committee.

F. Short Sales

No Access Person may sell any security short that is owned by any Fund in the Complex. Access Persons may, however make short sales when he/she owns an

(2) A list of such Funds shall be maintained by the Compliance Officer.

equivalent amount of the same security. This prohibition does not apply to Disinterested Directors/Trustees.

G. Options

No Access Person may write a naked call option or buy a naked put option on a security owned by any Fund in the Complex. Access Persons may purchase options on securities not held by any Fund in the Complex, or purchase call options or write put options on securities owned by any Fund in the Complex, subject to preclearance and the same restrictions applicable to other Securities. Access Persons may write covered call options or buy covered put options on a Security owned by any Fund in the Complex at the discretion of the Compliance Officer. This prohibition does not apply to Disinterested Directors/Trustees.

H. Investment Clubs

No Access Person may participate in an investment club. This prohibition does not apply to Disinterested Directors/Trustees.

5. Exempted Transactions

The requirements of Section 4.A. above will not apply to subparagraphs (a), (c), (d), (i), and (k) hereof. In addition, subject to preclearance in accordance with Section 6 below with respect to subparagraphs (b), (e), (f), (g) and (i) hereof, the prohibitions of Sections 4.D. and 4.E., will not apply to the following:

(a) Purchases or sales of Securities effected in any account over which the Access Person has no direct or indirect influence or control or in any account of the Access Person which is managed on a discretionary basis by a person other than such Access Person and with respect to which such Access Person does not in fact influence or control such transactions.

(b) Purchases or sales of Securities (or their equivalents) which are not eligible for purchase or sale by any fund in the Complex.

(c) Purchases or sales of Securities which are non-volitional on the part of either the Access Person or any fund in the Complex.

(d) Purchases of Securities, which are part of an automatic dividend reinvestment plan.

(e) Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its Securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired.

(f) Any equity Securities transaction, or series of related transactions effected over a 30 calendar day period, involving 500 shares or less in the aggregate, if (i) the Access Person has no prior knowledge of activity in such security by any fund in the Complex and (ii) the issuer is listed on The New York Stock Exchange or has a market capitalization (outstanding shares multiplied by the current price per share) greater than $1 billion (or a corresponding market capitalization in foreign markets).

(g) Any fixed-income Securities transaction, or series of related transactions effected over a 30 calendar day period, involving 100 units ($100,000 principal amount) or less in the aggregate, if the Access Person has no prior knowledge of transactions in such Securities by any fund in the Complex.

(h) Any transaction in index options effected on a broad-based index.(3)

(i) Purchases or sales of Securities which receive the prior approval of the Compliance Officer (such person having no personal interest in such purchases or sales), based on a determination that no abuse is involved and that such purchases and sales are not likely to have any economic impact on any fund in the Complex or on its ability to purchase or sell Securities of the same class or other Securities of the same issuer. With respect to the requirements of Section 4.A. above, the Compliance Officer may approve certain hardship or other exceptions.

(j) Purchases or sales of Unit Investment Trusts.

(k) Purchases or sales of Securities that are part of an

(3) A list of such indices will be maintained by the Compliance Officer.

automatic investment/withdrawal program or that result from automatic rebalancing.

6. Preclearance

Access Persons (other than Disinterested Directors/Trustees) must preclear all personal Securities investments with the exception of those identified in subparts (a), (c), (d), (h) and (j) of Section 5 and Section 4.A. above.

All requests for preclearance must be submitted to the Compliance Officer for approval. All approved orders must be executed by the close of business on the day in which preclearance is granted; provided, however that approved orders for Securities traded in foreign markets may be executed within two (2) business days from the date preclearance is granted. If any order is not timely executed, a request for preclearance must be resubmitted.

7. Reporting

(a) Disinterested Directors/Trustees shall report to the Secretary of the Fund the information described in Section 7(b) hereof with respect to transactions in any Security in which such Disinterested Director/Trustee has, or by reason of such transaction acquires, any direct or indirect Beneficial Ownership in the Security only if such Disinterested Director/Trustee, at the time of that transaction knew or, in the ordinary course of fulfilling his or her official duties as a Director/Trustee of the Fund, should have known that, during the 15-day period immediately preceding or subsequent to the date of the transaction in a Security by such Director/Trustee, such Security is or was purchased or sold by the Fund or was being considered for purchase or sale by the Fund, the Manager or Adviser/Subadviser; provided, however, that a Disinterested

Director/Trustee is not required to make a report with respect to transactions effected in any account over which such Director/Trustee does not have any direct or indirect influence or control or in any account of the Disinterested Director/Trustee which is managed on a discretionary basis by a person other than such Director/Trustee and with respect to which such Director/Trustee does not in fact influence or control such transactions. The Secretary of the Fund shall maintain such reports and such other records to the extent required by Rule 17j-1 under the Act.

(b) Every report required by Section 7(a) hereof shall be made not later than ten days after the end of the calendar quarter in which the transaction to which the report relates was effected, and shall contain the following information:

(i) The date of the transaction, the title and the number of shares, and the principal amount of each Security involved;

(ii) The nature of the transaction (i.e., purchase, sale or any other type of acquisition or disposition);

(iii) The price at which the transaction was effected;

(iv) The name of the broker, dealer or bank with or through whom the transaction was effected; and

(v) The date that the report is submitted.

(c) Any such report may contain a statement that the report shall not be construed as an admission by the person making such report that he or she has any direct or indirect Beneficial Ownership in the Security to which the report relates.

8. Records of Securities Transactions and Post-Trade Review

Access Persons (other than Disinterested Directors/Trustees) are required to direct their brokers to supply, on a timely basis, duplicate copies of confirmations of all

personal Securities transactions and copies of periodic statements for all Securities accounts in which such Access Persons have a Beneficial Ownership interest to the Compliance Officer. Such instructions must be made upon becoming an Access Person and promptly as new accounts are established, but no later than ten days after the end of a calendar quarter, with respect to any account established by the Access Person in which any securities were held during the quarter for the direct or indirect beneficial interest of the Access Person. Notification must be made in writing and a copy of the notification must be submitted to Compliance. This notification will include the broker, dealer or bank with which the account was established and the date the account was established.

Compliance with this Code requirement will be deemed to satisfy the reporting requirements imposed on Access Persons under Rule 17j-1(d), provided, however, that such confirmations and statements contain all the information required by Section 7. b. hereof and are furnished within the time period required by such section.

The Compliance Officer will periodically review the personal investment activity of all Access Persons (including Disinterested Directors/Trustees with respect to Securities transactions reported pursuant to Section 7 above) and holdings reports of all Access Persons.

9. Disclosure of Personal Holdings

Within ten days after an individual first becomes an Access Person and thereafter on an annual basis, each Access Person (other than Disinterested Directors/Trustees) must disclose all personal Securities holdings. Such disclosure must be made in writing and be current as of a date no more than 45 days prior to the

date the individual first became an Access Person with respect to the initial report and include information that is current within the previous 45 days, with respect to the annual report. All such reports shall include the following: title, number of shares and principal amount of each security held, name of broker, dealer or bank with whom these securities are held and the date of submission by the Access Person.

10. Gifts

Access Persons are prohibited from receiving any gift or other thing, which would be considered excessive in value from any person or entity that does business with or on behalf of the Fund. Occasional business meals or entertainment (theatrical or sporting events, etc.) are permitted so long as they are not excessive in number or cost.

11. Service As a Director

Investment Personnel are prohibited from serving on the boards of directors of publicly traded companies, absent prior authorization based upon a determination that the board service would be consistent with the interests of the Fund and its shareholders. In the limited instances that such board service is authorized, Investment Personnel will be isolated from those making investment decisions affecting transactions in Securities issued by any publicly traded company on whose board such Investment Personnel serves as a director through the use of “Chinese Wall” or other procedures designed to address the potential conflicts of interest.

12. Certification of Compliance with the Code

Access Persons are required to certify annually as follows:

(i) that they have read and understood the Code;

(ii) that they recognize that they are subject to the Code;

(iii) that they have complied with the requirements of the Code; and

(iv) that they have disclosed or reported all personal Securities transactions required to be disclosed or reported pursuant to the requirements of the Code.

13. Code Violations and Sanctions

All violations of the Code will be reviewed by the Committee. The Committee will determine any sanctions or other disciplinary actions that may be deemed appropriate. All material violations and corresponding sanctions and/or disciplinary action will be reported to the Board of Directors/Trustees of the Fund on a quarterly basis. The Board of Directors/Trustees may take action as it deems appropriate, in addition to any action previously taken by the Committee.

14. Review by the Board of Directors/Trustees

The Board of Directors/Trustees will be provided with an annual report which at a minimum:

(i) certifies to the Board that the Fund, Manager, Investment Adviser/Subadviser, and Principal Underwriter have adopted procedures reasonably necessary to prevent its Access persons from violating its Code.

(ii) summarizes existing procedures concerning personal investing and any changes in the procedures made during the preceding year;

(iii) identifies material Code or procedural violations and sanctions imposed in response to those material violations; and

(iv) identifies any recommended changes in existing restrictions or procedures based upon the Fund’s experience under the Code, evolving industry practices, or

developments in applicable laws and regulations.

The Board will review such report and determine if any further action is required.

Explanatory Notes to Code

1. No comparable Code requirements have been imposed upon Prudential Mutual Fund Services LLC, the Fund’s transfer agent, or those of its directors or officers who are not Directors/Trustees or Officers of the Fund since they are deemed not to constitute Access Persons or Advisory Persons as defined in paragraphs (e)(1) and (2) of Rule 17j-1.

Exhibit A

Definition of Beneficial Ownership

The term “beneficial ownership” of securities would include not only ownership of securities held by an access person for his or her own benefit, whether in bearer form or registered in his or her own name or otherwise, but also ownership of securities held for his or her benefit by other (regardless of whether or how they are registered) such as custodians, brokers, executors, administrators, or trustees (including trusts in which he or she has only a remainder interest), and securities held for his or her account by pledges, securities owned by a partnership in which he or she should regard as a personal holding corporation. Correspondingly, this term would exclude securities held by an access person for the benefit of someone else.

Ordinarily, this term would not include securities held by executors or administrators in estates in which an access person is a legatee or beneficiary unless there is a specific legacy to such person of such securities or such person is the sole legatee or beneficiary and there are other assets in the estate sufficient to pay debts ranking ahead of such legacy, or the securities are held in the estate more than a year after the decedent’s death.

Securities held in the name of another should be considered as “beneficially” owned by an access person where such person enjoys “benefits substantially equivalent to ownership”. The SEC has said that although the final determination of beneficial ownership is a question to be determined in the light of the facts of the particular case, generally a person is regarded as the beneficial owner of securities held in the name of his or her spouse and their minor children. Absent special circumstances such relationship ordinarily results in such person obtaining benefits substantially equivalent to ownership, e.g., application of the income derived from such securities to maintain a common home, to meet expenses which such person otherwise would meet from other sources, or the ability to exercise a controlling influence over the purchase, sale or voting of such securities.

An access person also may be regarded as the beneficial owner of securities held in the name of another person, if by reason of any contact, understanding, relationship, agreement or other arrangement, he obtains therefrom benefits substantially equivalent to those of ownership. Moreover, the fact that the holder is a relative or relative of a spouse and sharing the same home as an access person may in itself indicate that the access person would obtain benefits substantially equivalent to those of ownership from securities held in the name of such relative. Thus, absent countervailing facts, it is expected that securities held by relatives who share the same home as an access person will be treated as being beneficially owned by the access person.

An access person also is regarded as the beneficial owner of securities held in the name of a spouse, minor children or other person, even though he does not obtain therefrom the aforementioned benefits of ownership, if he can vest or revest title in himself at once or at some future time.

Exhibit 99.(p)(2)

Personal Securities

As a leader in the financial services industry, Prudential Financial, Inc. (“Prudential” or “Company”) aspires to the highest standards of business conduct. Consistent with this standard, Prudential has developed a Personal Securities Trading Policy (“Policy”) incorporating policies and procedures followed by leading financial service firms. This Policy is designed to ensure Prudential and its associates comply with various securities laws and regulations including the Insider Trading and Securities Fraud Enforcement Act of 1988 (“ITSFEA”) and the National Association of Securities Dealers (“NASD”) Conduct Rules, and to ensure that its associates conduct their personal trading in a manner consistent with Prudential’s policy of placing its shareholders’ and customers’ interests first.

This Policy sets forth insider trading standards and requirements, trade monitoring procedures, and personal trading restrictions for Prudential associates.

Section I sets forth Prudential’s Policy Statement On Insider Trading that applies to all Prudential associates. It is important that all Prudential associates read and understand this policy, which sets forth their responsibilities in connection with the use and disclosure of material nonpublic information.

Section II sets forth Prudential’s trade monitoring procedures and trade reporting obligations for Covered and Access Persons, including the authorized broker-dealer requirements.

Section III sets forth Prudential’s policy and restrictions relating to personal trading in securities issued by Prudential for Designated Persons and all other Prudential associates. Responsibilities for Section 16 Insiders are covered under a separate policy.

Section IV sets forth the additional trading policies and procedures applicable to associates of a Prudential broker-dealer.

Section V sets forth the additional trading policies and procedures applicable to associates of a Prudential portfolio management unit, trading unit or registered investment adviser.

Section VI sets forth the additional trading policies and procedures applicable to associates of the private asset management units of Prudential Investment Management (“PIM”).

Section VII sets forth the additional trading policies and procedures applicable to associates of Prudential Equity Group, Inc. (“PEG”).

If you are unclear as to your personal trading and reporting responsibilities, or have any questions concerning any aspect of this Policy, please contact the Securities Monitoring Unit, Compliance Department.

The personal trading policy and trade monitoring procedures described in this Policy reflect the practices followed by leading financial service firms. No business unit or

group may adopt policies or procedures that are inconsistent with this Policy. However, business units may, with the prior approval of the Securities Monitoring Unit, adopt policies and procedures that are more stringent than those contained in this Policy.

INTRODUCTION

TABLE OF CONTENTS

I.	PRUDENTIAL’S POLICY STATEMENT ON INSIDER TRADING
	A. Use of Material Nonpublic Information
	B. Prudential Insider Trading Rules
	C. What is Nonpublic Information?
	D. What is Material Information?
	E. “Front-running” and “Scalping”
	F. Private Securities Transactions
	G. Charitable Gifts
	H. Penalties for Insider Trading
		1. Penalties for Individuals
		2. Penalties for Supervisors
		3. Penalties for Prudential

II.	SECURITIES TRADE MONITORING FOR COVERED AND ACCESS PERSONS
	A. The “SMARTS” System
	B. Covered, Access and Supervised Persons
	C. Trade Reporting Requirements
		1. Authorized Broker-Dealer Requirements
		2. Authorized Broker-Dealer Exceptions
		3. Trade Reporting Requirements for Exception Accounts
		4. Personal and Family Member Accounts
		5. Reportable Securities Transactions
		6. Confidentiality of Trading Information
		7. Prohibited Transactions
		8. Additional Requirements

III. POLICY AND RESTRICTIONS FOR PERSONAL TRADING IN SECURITIES ISSUED BY PRUDENTIAL BY DESIGNATED PERSONS
	A. Designated Persons
	B. Specific Trading Requirements
		1. Brokerage Account Requirements for Designated Persons
		2. Trade Reporting Requirements for Accounts with Non-Authorized Broker-Dealers
		3. Trading Windows/Blackout Periods
		4. Preclearance of Trading in Securities Issued by Prudential
		5. Prohibited Transactions
		6. PESP
	C. Supervisory Responsibilities
	D. Violations to the Policy

IV. TRADING RESTRICTIONS FOR ASSOCIATES OF BROKER-DEALERS
	A. Trade Monitoring for Associates of a Broker/Dealer
		1. Notification Requirements for Personal Securities Accounts
		2. Annual Compliance Training and Sign-off
		3. Requirement for Supervised Persons
	B. Restrictions on the Purchase and Sale of Initial Equity Public Offerings

iii

	C. Private Securities Transactions
	D. Additional Restrictions for PEG Associates

V. TRADING RESTRICTIONS FOR PORTFOLIO MANAGEMENT AND TRADING UNITS AND REGISTERED INVESTMENT ADVISERS
	A. Background
		1. Advisers Act Requirements
		2. Investment Company Act Requirements
	B. Definitions
	C. Conflicts of Interest
	D. Mutual Fund Reporting and Trading Restrictions
		1. Mutual Fund Holding Period
		2. Policies Relating to Reporting and Trading Mutual Funds
	E. Additional Trading Restrictions for Access and Investment Personnel of PIM and Quantitative Management Associates LLC (“QMA”)
		1. Initial Public Offerings
		2. Private Placements
		3. Blackout Periods — “7 Day Rule”
		4. Short-Term Trading Profits
		5. Short Sales
		6. Options
	F. Investment Clubs
	G. Prohibited Transactions Involving Securities Issued by Prudential
	H. Preclearance
	I. Exemptions
		1. Ineligible securities.
		2. Exercise of rights issued by issuer.
		3. De minimis trades.
		4. Discretionary accounts.
		5. Index options.
		6. Unit investment trusts and open-end mutual funds.
		7. Non-volitional transactions and dividend reinvestment plans.
		8. Exceptions by prior written approval.
		9. Automatic Investment/Withdrawal Programs and Automatic Rebalancing.
	J. Personal Trade Reporting
	K. Personal Securities Holdings
	L. Service as a Director
	M. Gifts
	N. Code Violations and Sanctions
	O. Reports to Clients
	P. Additional Trading Requirements for Access Persons of Global Portfolio Strategies Inc. (“GPSI”)
		1. Initial Public Offerings
		2. Private Placements
		3. Restricted Lists

VI. TRADING RESTRICTIONS OF PRIVATE ASSET MANAGEMENT UNITS
	A. Background
	B. Conflicts of Interest

	C. Requirement of Private-Side Associates
	D. Private Side Monitored List & Global Real Estate Monitored List
	E. Investment Clubs
	F. Mutual Fund Reporting and Trading Restrictions
		1. Mutual Fund Holding Period
		2. Policies Relating to Reporting and Trading Mutual Funds
	D. Personal Securities Holdings
	E. Private Placements
	F. Initial Public Offerings
	G. Additional Restrictions for Certain Units
		1. Real Estate Units
		2. Prudential Capital Group

VII. POLICY FOR PRUDENTIAL EQUITY GROUP, INC.
	A. Associated Persons’ Securities Accounts
		1. Trade Monitoring at PEG
	B. Definition of “Employee Account” and “Employee Related Account”
	C. Investment Clubs
	D. Personal Trading Restrictions
		1. Purchases of Public Equity Offerings
		2. Private Securities Transactions
		3. Annual Compliance Training
		4. 24 - Hour Research Report Restriction
	E. Restricted List
	F. Additional Trading Restrictions for Certain PEG Departments
		1. Trading Restrictions
		2. Preclearance Procedures

EXHIBITS
	Exhibit 1 – Sample Letter to Brokerage Firm
	Exhibit 2 – Acknowledgment of the Personal Securities Trading Policy
	Exhibit 3 – Compliance and Reporting of Personal Transactions
	Exhibit 4 – Index Options On a Broad-Based Index
	Exhibit 5 – Personal Securities Holdings Report
	Exhibit 6 — Section 16 Insiders and Designated Persons Preclearance Request Form
	Exhibit 7 — Non Proprietary Subadvised Mutual Funds
	Exhibit 8 – Initial Public Offering and Private Placement Preclearance Form for Access Persons and Private-Side Associates

Prudential aspires to the highest standard of business ethics. Accordingly, Prudential has developed the following standards and requirements to ensure the proper protection of material nonpublic information and to comply with laws and regulations governing insider trading.

In the course of your work at Prudential, you may receive or have access to material nonpublic information about Prudential or other public companies. Company policy, industry practice and federal and state laws establish strict guidelines regarding the use of material nonpublic information.

• You may not use material nonpublic information, obtained in the course of your employment, for your personal gain or share such information with others for their personal benefit;

• You must treat as confidential all information that is not publicly disclosed concerning Prudential’s financial information and key performance drivers, investment activity or plans, or the financial condition and business activity of Prudential or any company with which Prudential is doing business; and

• If you possess material nonpublic information, you must preserve its confidentiality and disclose it only to other associates who have a legitimate business need for the information.

Under federal securities law, it is illegal to buy or sell a security while in possession of material nonpublic information relating to the security.(1) It is also illegal to “tip” others about inside information. In other words, you may not pass material nonpublic information about an issuer on to others or recommend that they trade the issuer’s securities.

Insider trading is an extremely complex area of the law principally regulated by the Securities and Exchange Commission (“SEC”). If you have any questions concerning the law or a particular situation, you should consult with the Securities Monitoring Unit, Compliance Department or the Law Department. If you believe that you may have material nonpublic information about a public company obtained in the course of your position, or if you are in a portfolio or asset management unit and you believe you may have material nonpublic information regardless of the source, you should notify your Chief Compliance Officer or the Securities Monitoring Unit so that the securities can be monitored and/or placed on a restricted list as appropriate.

(1) In some circumstances, additional elements may be required for there to be a violation of law, including scienter and breach of a duty.

Below are three rules concerning insider trading. Failure to comply with these rules could result in violations of the federal securities laws and subject you to severe penalties described in Section H . Violations of these rules also may result in discipline by Prudential up to and including termination of employment.

(1) You may not buy or sell securities issued by Prudential or any other public company if you are in possession of material nonpublic information relating to those companies. This restriction applies to transactions for you, members of your family, Prudential or any other person for whom you may buy or sell securities. In addition, you may not recommend to others that they buy or sell that security.

(2) If you are aware that Prudential is considering or actually trading any security for any account it manages, you must regard that as material nonpublic information. Accordingly, you may not make any trade or recommendation involving that security, until seven calendar days after you know that such trading is no longer being considered or until seven calendar days after Prudential ceases trading in that security.(2) In addition, you must treat any nonpublic information about portfolio holdings of any registered investment company managed by Prudential as material nonpublic information.

(3) You may not communicate material nonpublic information to anyone except individuals who are entitled to receive it in connection with the performance of their responsibilities for Prudential (i.e., individuals with a “need to know”).

Nonpublic information is information that is not generally available to the investing public. Information is public if it is generally available through the media or disclosed in public documents such as corporate filings with the SEC. If it is disclosed in a national business or financial wire service (such as Dow Jones or Bloomberg), in a national news service (such as AP or Reuters), in a newspaper, on the television, on the radio, or in a publicly disseminated disclosure document (such as a proxy statement or prospectus), you may consider the information to be public. If the information is not available in the general media or in a public filing, you should consider it to be nonpublic. Neither partial disclosure (disclosure of part of the information), nor the existence of rumors, is sufficient to consider the information to be public. If you are uncertain as to whether information is nonpublic, you should consult your Chief Compliance Officer, the Securities Monitoring Unit or the Law Department.

While you must be especially alert to sensitive information, you may consider information received directly from a designated company spokesperson to be public information unless you know or have reason to believe that such information is not generally available to the investing public. An associate working on a private securities transaction who receives information from a company representative regarding the transaction should presume that the information is nonpublic.

(2) For restrictions applicable to PEG trading department associates, see Section VII.

Example :

When telling a Prudential analyst certain information about the company, a company representative gives indication that the information may be nonpublic by saying “This is not generally known but . . .” In such a situation, the analyst should assume that the information is nonpublic.

There is no statutory definition of material information. You should assume that information is material if an investor, considering all the surrounding facts and circumstances, would find such information important in deciding whether or when to buy or sell a security. In general, any nonpublic information that, if announced, could affect the price of the security should be considered to be material information. If you are not sure whether nonpublic information is material, you should consult the Law Department, the Securities Monitoring Unit or your Chief Compliance Officer.

Material information may be about Prudential or another public company.

Examples :

• Information about a company’s earnings or dividends (e.g., whether earnings will increase or decrease);

• Information about a company’s physical assets (e.g., an oil discovery, a fire that destroyed a factory, or an environmental problem);

• Information about a company’s personnel (e.g., a valuable employee leaving or becoming seriously ill);

• Information about a company’s pension plans (e.g., the removal of assets from an over-funded plan or an increase or decrease in future contributions);

• Information about a company’s financial status (e.g., financial restructuring plans or changes to planned payments of debt securities); or

• Information about a merger, acquisition, tender offer, joint venture or similar transaction involving the Company generally should be considered material.

Information may be material even though it may not be directly about a company (e.g., if the information is relevant to that company or its products, business, or assets).

Examples :

• Information that a company’s primary supplier is going to increase dramatically the prices it charges; or

• Information that a competitor has just developed a product that will cause sales of a company’s products to plummet.

Material information may also include information about Prudential’s activities or plans relating to a company unaffiliated with Prudential.

Example :

Information that Prudential is going to enter into a transaction with a company, such as, for example, awarding a large service contract to a particular company.

Trading while in possession of information concerning Prudential’s trades is prohibited by Prudential’s insider trading rules and may also violate federal law. This type of trading activity is referred to as “front running” and “scalping”.

Front running occurs when an individual, with knowledge of Prudential’s trading intentions, knowingly makes a trade in the same direction as Prudential just before Prudential makes its trade. Examples include buying a security just before Prudential buys that security (in the expectation that the price may rise based on such purchase) or selling a security just before Prudential sells such security (in the expectation that such sale will lead to a drop in price).

Scalping is making a trade in the opposite direction just after Prudential’s trade, in other words, buying a security just after Prudential stops selling such security or selling just after Prudential stops buying such security.

Example:

Prudential is planning to sell a large position in ABC Co. If you sell ABC Co. securities ahead of Prudential in expectation that the large sale will depress its price, you are engaging in front running. If you purchase ABC Co. securities after Prudential has completed its sale to take advantage of the temporary price decrease, you are engaging in scalping.

The antifraud provisions of the federal securities laws apply to transactions in both publicly traded securities and private securities. However, the insider trading laws do not prohibit private securities transactions where both parties to the transaction have possession of the same material nonpublic information.

If you are in possession of material nonpublic information concerning a security you hold, you may not gift the security to a charitable institution and receive a tax deduction on the gift.

(3) In addition to the penalties listed in this section, Prudential and/or Prudential associates could be subject to penalties under the Employee Retirement Income Security Act of 1974 (ERISA) if the insider trading occurs in connection with an ERISA plan’s investment.

Individuals who illegally trade while in possession of material nonpublic information or who illegally tip such information to others may be subject to severe civil and criminal penalties including disgorgement of profits, substantial fines and imprisonment. Employment consequences of such behavior may include the loss or suspension of licenses to work in the securities industry, and disciplinary action by Prudential up to and including termination of employment.

The law provides for penalties for “controlling persons” of individuals who commit insider trading. Accordingly, under certain circumstances, supervisors of an associate who is found liable for insider trading may be subject to criminal fines up to $1 million per violation, civil penalties and fines, and discipline by Prudential up to and including termination of employment.

Prudential could also be subject to penalties in the event an associate is found liable for insider trading. Such penalties include, among others, harsh criminal fines and civil penalties, as well as, restrictions placed on Prudential’s ability to conduct certain business activities including broker-dealer, investment adviser, and investment company activities.

Federal Law requires all broker-dealers and investment advisers to establish procedures to prevent insider trading by their associates. In addition, the Federal Sentencing Guidelines require companies to establish reasonable procedures to prevent and detect violations of the law. To comply with these and other similar laws and rules, Prudential has developed the Personal Securities Trading Policy to prevent the misuse of material nonpublic information about Prudential or other public companies. All employees are held to the general principles of the Policy to ensure the proper use of material nonpublic information.

However, certain employees are required to have their personal trading activities monitored and may be subject to additional restrictions. Prudential has established a program to monitor the personal securities trading of associates with routine access to nonpublic corporate information about Prudential or any external public company, portfolio management activities, nonpublic mutual fund holdings information or other sensitive information. These individuals are required to have their personal securities transactions monitored in the securities trade monitoring system known as “SMARTS” (Securities Monitoring Automated Reporting and Tracking System).

Certain employees are classified as “Covered” or “Access” Persons (as defined below). These individuals are categorized based on the information to which they have access. Covered and Access Persons are required to report their personal securities transactions and conform to the authorized broker-dealer requirements (discussed below).

“Access Persons” - Associates who work in or support portfolio management activities, have access to nonpublic investment advisory client trading information or recommendations or have access to nonpublic portfolio holdings of mutual funds. See Section V for specific requirements. Certain Access Persons are subject to preclearance of all personal securities trading activity, while other Access Persons may only be subject to specific trading restrictions.

“Covered Persons” – Associates, other than Access Persons, who may have access to material nonpublic information about external public companies or those individuals who have a regulatory obligation to be monitored.(4)

(4) Private-Side Associates, as defined under Section VI of this policy (excluding employees of PMCC), are considered Access Persons under the Investment Advisers Act of 1940 due to their access to investment advisory client trading information. These individuals will continue to be called Covered Persons or Private-Side Associates under this Policy.

In addition, certain individuals may be classified as Supervised Persons of a registered investment adviser. Supervised Persons are subject to the following requirements:

• Acknowledge receipt of their Investment Adviser Code of Ethics (“Code”), including this Policy and any amendments to the Code and/or Policy;

• Comply with all applicable federal securities laws; and

• Report any violations of the Code including this Policy to his/her Chief Compliance Officer or the Securities Monitoring Unit.

If an individual is only classified as a Supervised Person, and is not also classified as an Access, Covered or Designated Person, as defined in Section III.A. , he/she is not required to report his/her personal securities trading activity and is not subject to the authorized broker/dealer requirements.

“Supervised Persons” are individuals who are officers, directors and employees of a registered investment adviser, as well as certain other individuals who provide advice on behalf of the adviser and are subject to the adviser’s supervision and control. If you are unsure as to whether you are an Access, Covered, or Supervised Person, contact your Chief Compliance Officer or the Securities Monitoring Unit.(5)

Covered and Access Persons are required to maintain personal brokerage accounts at an authorized broker-dealer. The authorized firms are Wachovia Securities, Pruco Securities, Charles Schwab, E*TRADE, Fidelity Investments, and Merrill Lynch. Covered and Access Persons can find information about each firm through the authorized broker-dealer website at http://njplazx51/authorizedbrokerdealers. The account types that are subject to the authorized broker-dealer requirements are listed below in Section C. 4 .

Prudential Financial, Inc. securities held at EquiServe Trust Company, N.A. are not required to be transferred.

New Associates who are subject to this requirement will be required to transfer accounts to an authorized broker-dealer within 60 days of becoming a Covered and/or Access Person. Associates must instruct their brokers to send trading activity (written confirmations and statements) to the Securities Monitoring Unit while they are in the process of transferring their accounts. A sample letter to a brokerage firm is provided as Exhibit 1 to this Policy.

Exceptions to the authorized broker-dealer requirement are limited and should be submitted to the Chief Compliance Officer responsible for your business unit who will submit the request to the appropriate Business Unit or Corporate Department Executive

(5) PEG monitors the personal trading of its associates in conformity with applicable NYSE and NASD rules, through its own process utilizing SMARTS technology. See Section VII.

at the Senior Vice President level or above for review. Documentation for all exceptions must be forwarded to your business unit compliance officer for review. Exceptions will be evaluated on a case-by-case basis based on the following criteria:

• Accounts held jointly with or accounts for spouses who are subject to the same type of personal trading requirements that pre-date this policy (June 27, 2002) or that were established prior to being subject to this policy.

• Accounts in which the employee has a formal investment management agreement that provides full discretionary authority to a third party money manager. A copy of the management agreement must be submitted to the business unit compliance officer.

• Blind trusts and family trusts. A copy of the trust agreement must be submitted to the business unit compliance officer.

• Accounts for international employees in locations where there is no local presence or access to one of these firms.

• Accounts holding non-transferable securities that may not, due to their nature, be liquidated without undue hardship to the employee (new purchases generally will not be permitted.)

• Direct stock purchase or dividend reinvestment plans that are established directly with a public company.

If you are granted an exception to the authorized broker-dealer requirement, you must direct the brokerage firm(s) that maintains your securities account(s) to send duplicate copies of your trade confirmations and account statements (“trading activity”) to the Securities Monitoring Unit. A sample letter to a brokerage firm is provided as Exhibit 1 to this Policy. Remember, accounts maintained at Wachovia Securities, Pruco Securities, Charles Schwab, E*TRADE, Merrill Lynch, and Fidelity Investments are exempt from this requirement.(6)

You are required to maintain in the manner described above, all securities accounts in which you have a beneficial interest, including the following:

(1) Personal accounts;

(2) Accounts in which your spouse has beneficial interest;

(3) Accounts in which your minor children or any dependent family member has a beneficial interest;

(4) Joint or tenant-in-common accounts in which you are a participant;

(5) Accounts for which you act as trustee, executor or custodian;

(6) Information concerning securities transactions at the authorized broker-dealers is fed by computer link directly to Prudential’s trade monitoring system, SMARTS.

(6) Accounts over which you exercise control or have any investment discretion; and

(7) Accounts of any individual to whose financial support you materially contribute.(7)

Mutual fund accounts held directly at mutual fund companies, where the account is systematically blocked from trading any securities other than mutual funds, and/or 529 College Savings Plans are not subject to the Policy and do not require disclosure.(8),(9) However, all brokerage accounts, even those that only hold mutual funds, are subject to the Policy and must comply with the authorized broker-dealer requirements.

All monitored associates are required to complete and sign an annual Acknowledgment Form, attached as Exhibit 2 , identifying and listing the location of all reportable brokerage accounts, including those held at authorized broker-dealers and those held at non-authorized firms. For the latter, your signature on the Acknowledgement Form will confirm that you have instructed all brokers for such accounts to send duplicate copies of account statements and trade confirmations to the Securities Monitoring Unit. If you are classified an Access or Covered Person, by signing the annual Acknowledgment Form you are also confirming your obligations of notifying the Securities Monitoring Unit of any changes to your accounts that have been granted exceptions under the authorized broker-dealer requirements.(10) Acknowledgment forms, which are supplied to you electronically by the Securities Monitoring Unit, must be completed annually.(11)

In general, all securities transactions are reportable by Access and Covered Persons except where noted below:

• Covered Persons, with the exception of Private-Side Associates as defined in Section VI , are not required to report purchases and sales of open-end mutual funds, affiliated variable insurance products and variable annuities, certificates of deposit and certain United States government securities.

• Investment Personnel, as defined in Section V.B. , Access Persons and Private-Side Associates are not required to report certificates of deposit and certain United States government securities. Individuals under these classifications are however required to report purchases and sales of affiliated variable insurance products and variable annuities and any underlying sub-account transactions associated with these products, as well as any transactions and holdings of certain open-end mutual funds as described in Section V .

(7) For example, this would include individuals with whom you share living expenses, bank accounts, rent or mortgage payments, ownership of a home, or any other material financial support.

(8) Investment Personnel, Access Persons and Private-Side Associates are subject to certain trading restrictions and reporting requirements with respect to mutual fund transactions and holdings. See Section V.B .

(9) A list of approved mutual fund companies is maintained by the Securities Monitoring Unit.

(10) Any changes to accounts that have been previously been granted exceptions must be reevaluated to determine if the exception is still permitted.

(11) The Securities Monitoring Unit administers the processing of annual acknowledgment forms. If you are a reporting associate, and have not completed an acknowledgment form, please contact the Securities Monitoring Unit.

The chart attached as Exhibit 3 identifies the personal securities transactions that are reportable.

The Securities Monitoring Unit is responsible for maintaining SMARTS, and recognizes that your investment records are highly confidential. Accordingly, the Securities Monitoring Unit follows careful procedures for the collection and review of associate trading information to ensure that such records are kept in the strictest confidence. Other than exception reports which are reviewed by business unit heads and business unit compliance personnel or as required by federal securities laws, the only persons who have access to this information are a small group within the Compliance Department.

All employees, including Covered and Access Persons, are prohibited from selling short including “short sales against the box” and from participating in any options transactions on any securities issued by Prudential. Employees classified as Designated Persons are subject to additional restrictions relating to securities issued by Prudential. These requirements are outlined in Section III of this Policy.

Additional information and guidance can be found in the following Sections:

Requirements for Designated Person – Section III .

Requirements for Associates of Broker Dealers – Section IV .

Requirements for Portfolio Management and Trading Units and Registered Investment Advisers. – Section V .

Requirements for Private Asset Management Units – Section VI .

Requirements for associates of PEG – Section VII .

This Section specifically addresses the requirements for those associates who have routine access to material nonpublic information about Prudential. These requirements are consistent with policies of leading financial service firms. Specific policies and procedures relating to Section 16 Insiders are addressed in a separate policy statement, which is available through the Securities Monitoring Unit.

A “Designated Person” is an employee who, during the normal course of his or her job, has routine access to material nonpublic information about Prudential, including information about one or more business units or corporate level information. Employees at the corporate rank of Executive Vice President (“EVP”) and above are deemed to be Designated Persons. Direct reports to each Vice Chairman and EVP and their direct reports are also deemed to be Designated Persons.

The Vice Presidents (“VP’s”) of Finance for each business unit must identify additional employees in each unit who, regardless of level, have routine access to material nonpublic information about Prudential. It is the responsibility of the VPs of Finance to notify the Securities Monitoring Unit of any changes to this list.

Finally, management of all other business groups and corporate departments are required to identify and inform the Securities Monitoring Unit of any additional employees, who through the performance of their jobs, have regular access to material nonpublic information.

Employees who have been classified as a Designated Person, but believe that they do not have access to material nonpublic information, may request an exception to this requirement. Requests should be forwarded to the Securities Monitoring Unit, who in consultation with the Law Department, will review and facilitate the request. Certain exceptions must be approved by Prudential’s General Counsel.

All employees are prohibited from trading securities issued by Prudential while in possession of material nonpublic information regarding the Company. All employees are also prohibited from selling short including “short sales against the box” and from participating in any options transactions on any securities issued by Prudential. Employees are also discouraged from engaging in speculative transactions in securities issued by Prudential and are encouraged to hold Prudential securities for long-term investment.

Designated Persons are required to preclear all transactions in Company securities prior to execution through the Securities Monitoring Unit. This requirement excludes

transactions in Prudential mutual funds and annuities. Trades will be approved only during open “trading windows.” Designated Persons are also subject to the general prohibition relating to short sales and options transactions. These restrictions apply to all accounts in which a Designated Person has a direct or indirect beneficial interest including, but not limited to, accounts for spouses, family members living in your household, and accounts for which the Designated Person or his/her family member exercises investment discretion.

Designated Persons are required to hold and trade Prudential Financial, Inc. common stock and related equity derivative securities (“PRU”) only at an authorized broker-dealer. The authorized firms are Wachovia Securities, Pruco Securities, Charles Schwab, E*TRADE, Fidelity Investments, and Merrill Lynch.

Designated Persons can access information about each firm through the authorized broker-dealer website at http://njplazx51/authorizedbrokerdealers.

This requirement applies to accounts for you, your family members, or accounts in which you have a beneficial interest or over which you have trading authority. See Section II.C.4. for a complete list of applicable accounts. You may still maintain your accounts at non-authorized broker-dealers for your non-PRU positions, however those accounts are still subject to Prudential’s monitoring procedures outlined below in Section B.2.

While PRU stock held by you at EquiServe Trust Company, N.A., (“EquiServe”) is subject to the provisions of this Policy (e.g., transactions are subject to preclearance and trading window requirements), Designated Persons are not required to transfer PRU positions held at EquiServe to an authorized broker-dealer.

Designated Persons who maintain brokerage accounts with brokerage firms (for their non-PRU positions) other than the authorized broker-dealers listed in Section B.1. above, must direct the brokerage firm(s) to send duplicate copies of trade confirmations and account statements to the Securities Monitoring Unit.(12) A sample letter to a brokerage firm is provided as Exhibit 1 to this Policy.

Designated Persons are permitted to trade in securities issued by Prudential only during open trading windows. Approximately 24 hours after the Company releases its quarterly earnings to the public, the trading window generally opens and generally will remain open until approximately two weeks before the end of each quarter. In addition, the Company may notify Designated Persons regarding unscheduled blackout periods. For example, in the event the Company decides to make an unscheduled announcement (e.g., a pre quarter-end earnings estimate), Prudential may restrict trading activity during a normally permissible trading window. The Securities Monitoring Unit will notify

(12) Information concerning securities transactions at the authorized broker-dealers is fed by computer link directly to SMARTS. For accounts held at unauthorized firms, the Securities Monitoring Unit must receive paper copies of all confirms and monthly statements.

Designated Persons of the opening of trading windows and the commencement of blackout periods.

Designated Persons are required to preclear all transactions in securities issued by Prudential through the Securities Monitoring Unit. Designated Persons should submit requests electronically through the SMARTS Preclearance Intranet site. Designated Persons will be sent a link to the Preclearance site from the Securities Monitoring Unit, and a link is also available from the Compliance Department’s Intranet site. All approved transactions are valid until the close of the market on the day in which preclearance is granted. Therefore, Designated Persons may not enter into “good until cancelled” or “limit” orders involving Prudential securities that carry over until the next trading day. (See Exhibit 6 for sample SMARTS Preclearance Request Form.)

Transactions that require preclearance include, but are not limited to, the following:

• Open market transactions through a broker/dealer;

• Prudential securities transactions executed in EquiServe accounts;

• Gifts received or given;

• Stock option, restricted stock and performance share plan exercises; and

• Prudential Employee Savings Plan (“PESP”) and Deferred Compensation Plan Company Stock Fund transactions. Purchases through automatic payroll deductions need only be precleared at the time the election is made. Preclearance requests for automatic payroll elections will only be accepted during open trading windows.

All employees are prohibited from selling short including “short sales against the box” and from participating in any options transactions on any securities issued by Prudential.

In addition, Designated Persons are prohibited from exercising their employee stock options during a blackout period, regardless of whether the transaction involves the sale of Prudential securities. As a result, controls have been established to prevent option exercises during closed trading windows. If a blocking system fails, the employee will be responsible for the exception to the Policy.

Certain controls have been established to prevent trading activity in PESP during closed trading periods. PESP transactions that are blocked include exchanges, deferral rate and allocation changes, loans and distributions. Remember, it is the Designated Person’s obligation to comply with this Policy including the preclearance and trading window requirements. If a blocking system fails, the employee will be responsible for the exception to the Policy.

The VP’s of Finance, in conjunction with the Business Unit and Department Heads or

their designees, are responsible for identifying changes to the Designated Persons list in their areas and informing the Securities Monitoring Unit, and, with the Securities Monitoring Unit, facilitating employee understanding of and conformity with this Policy. The trade monitoring process is conducted by the Securities Monitoring Unit with matters brought to the attention of Business Unit/Department Head management as needed.

Violations or other exceptions to this policy including the preclearance and trading window requirements are reviewed by the Designated Persons Personal Trading Policy Committee. Policy violations or exceptions that may result in disciplinary action, other than an educational reminder, will be resolved with the employee’s supervisor. Individuals who do not comply with the Policy are subject to disciplinary action that may include fines or other monetary penalties up to and including termination of employment.

Prudential has a number of different broker/dealers including Pruco Securities Corporation (“Pruco”), Prudential Investment Management Services, LLC. (“PIMS”), American Skandia Marketing, Incorporated (“ASM”), Prudential Retirement Brokerage Services, Inc. (“PRBS”) that are specifically referred to as “Broker-Dealers” under this Section.(13)

Pruco is a full service broker-dealer whose business is limited to the facilitation of non-solicited customer orders of general securities and the distribution of investment company and variable contract products. PIMS and ASM”) are a full service broker-dealers whose primary business is restricted to the facilitation of customer orders in and distribution of Prudential mutual funds, annuities, and 529 plan interests. PRBS is a discount broker-dealer that primarily offers Individual Retirement Accounts (“IRA’s”) to retirement plan participants serviced by Prudential Retirement. Investments offered include mutual funds, stocks, bonds and municipal securities.

Unlike Prudential units that participate in the personal trade monitoring system, the nature and scope of the Broker-Dealers’ businesses are such that their associates do not have access to material nonpublic information concerning publicly traded securities through their employment.(14) Accordingly, Broker-Dealer associates are generally not required to participate in SMARTS. However, pursuant to SEC and NASD regulations, Broker-Dealer Registered Representatives must comply with the reporting requirements listed below.(15) In addition, certain officers and registered representatives of Pruco and PRBS, who are also federally registered investment advisers, have been identified as Supervised Persons, as defined in Section II.B. The requirements for Supervised Persons are also outlined below.

In accordance with NASD Rule 3050, Broker-Dealer Registered Representatives (“Registered Representatives”) must notify the Broker-Dealer to which they are associated, in writing, prior to opening an account at another broker-dealer, and must notify the Broker-Dealer of any accounts opened prior to becoming a Registered Representative. Registered Representatives must also notify broker-dealers, prior to opening such accounts, that they are Registered Representatives of a broker-dealer. However, if the account was established prior to the association of the person with the Broker-Dealer, the Registered Representative must notify the broker-dealer in writing promptly after becoming so associated.

(13) Requirements for associates of Prudential Equity Group, LLC are covered under Section VII of this Policy.

(14) Certain PIMS personnel employed by portfolio management units may be subject to the personal securities trading restrictions set forth in Section V. due to their association with portfolio management activities in addition to the restrictions set forth in this Section.

(15) ASM associated persons follow policies and procedures outlined in AMS’s compliance manual that are generally consistent with the requirements of this Section.

These notification requirements apply to all personal securities accounts of Registered Representatives and any securities accounts over which they have discretionary authority.

Registered Representatives are not required to report accounts that are limited to the following types of investments: (1) mutual funds; (2) variable life and variable annuity contracts; (3) unit investment trusts; (4) certificates of deposit; (5) 529 Plans; and (6) money market fund accounts.(16)

The NASD/NYSE Joint Memorandum on Chinese Wall Policies and Procedures (NASD Notice to Members 91-45) provides that firms that do not conduct investment banking research or arbitrage activities still must have “reasonable procedures for the education and training of its associates about insider trading” in order to be in compliance with ITSFEA. Consistent with this Notice, the Broker-Dealers include a statement concerning insider trading in their annual Compliance Overview. Annually, all Registered Representatives are required to sign a statement affirming that they have read and understand the policy concerning insider trading as described in the Broker-Dealer’s compliance manual and as set forth in Prudential’s Policy Statement On Insider Trading contained in Section I of this Policy.

Certain Pruco and PRBS officers and registered representatives involved in investment advisory activity have been classified as Supervised Persons.(17) Supervised Persons are subject to the following requirements:

• Acknowledge receipt of their Investment Adviser Code of Ethics (“Code”), including this Policy and any amendments to the Code and/or Policy;

• Comply with all applicable federal securities laws; and

• Report any violations of the Code including this Policy to his/her Chief Compliance Officer or the Securities Monitoring Unit.

If an individual is only classified as a Supervised Person, and is not also classified as an Access, Covered or Designated Person, he/she is not required to report his/her personal securities trading activity and is not subject to the authorized broker-dealer requirements outlined in Section II .

NASD Rule 2790 prohibits broker-dealers from purchasing or retaining “new issues” in their own accounts and from selling new issues to a restricted person. Restricted persons are defined as directors, officers, general partners, employees, associated

(16) Associated persons who are also Access Persons and/or Private-Side Associates are required to report certain mutual fund transactions and holdings and purchases of certain variable-life and variable-annuity contracts and sub-account transactions, as described in Section V.D .

(17) The Securities Monitoring Unit will notify all individuals who are classified as Supervised Persons.

persons and agents engaged in the investment banking or securities business of any broker-dealer. “New Issues” are any initial public offerings of an equity security.

These basic prohibitions also cover sales of new issues to accounts in which any restricted person may have a beneficial interest and, with limited exceptions, to members of the immediate family of such persons. A Restricted Person is permitted to have an interest in an account that purchases new issues (i.e., collective investment accounts including hedge funds, investment partnerships, investment corporations, etc.) provided that the beneficial interests of all restricted persons do not in aggregate exceed 10% of the total account.

The overall purpose of this prohibition is to protect the integrity of the public offering process by requiring that NASD members make a bona-fide public distribution of securities by not withholding such securities for their own benefit or using the securities to reward other persons who are in a position to direct future business to the firm.

To ensure compliance with this Rule, associated persons of Prudential’s broker-dealers are prohibited from purchasing securities in any public offerings of equity securities. This prohibition includes all associates of Prudential’s broker-dealers including PIMS, PRBS, PRUCO, ASM and PEG (See Section VII for a full discussion of requirements and restrictions applicable to PEG associates.)

The policy applies to all public offerings of equity securities, whether or not the above broker-dealers are participating in the offering. There are no prohibitions on purchases of public offerings of, investment grade asset-backed securities, open-end mutual funds, preferred securities, convertible securities or any debt securities, including but not limited to municipal or government securities.

Accounts of all persons associated with the above broker-dealers and their immediate families are restricted from purchasing equity public offerings of securities. The term “immediate family” includes parents, mother-in-law, father-in-law, spouse, siblings, brother-in-law, sisters-in-law, children and their spouses, or any other person who is supported (directly or indirectly) to a material extent by the associated person.

The prohibition does not apply to sales to a member of the associate’s immediate family who is not supported directly or indirectly to a material extent by the associate, if the sale is by a broker-dealer other than that employing the restricted person and the restricted person has no ability to control the allocation of the new issue. For information on this exception, please contact your broker-dealer compliance officer.

In accordance with NASD Rule 3040, all associates of the Broker-Dealers, including PEG, must notify their broker-dealer, in writing, and obtain written approval from the broker-dealer, prior to engaging in any private securities transaction. Private securities transactions include, but are not limited to, transactions in unregistered offerings of

securities, and purchases or sales of limited partnership interests.

Such notification should be made to the compliance officer for the broker-dealer or the compliance officer’s designee who will be responsible for approving private securities transactions. This notification requirement does not apply to those trades for which duplicate confirmations are provided by the executing broker. For associates who are subject to preclearance, the preclearance form will satisfy the notification requirement.

PEG associates are subject to certain additional personal trading restrictions, which are set forth in Section VII .

The Investment Advisers Act of 1940 (“Advisers Act”) and the Investment Company Act of 1940 (“Investment Company Act”) govern activities of officers, directors and employees of registered investment advisers and advisers who manage registered investment companies, respectively. These rules set forth specific requirements relating to conflicts of interest and personal securities trading activity.

Rule 204A-1 under the Advisers Act requires each federally registered investment adviser to adopt a written code of ethics designed to prevent fraud by reinforcing fiduciary principles that govern the conduct of investment advisory firms and their personnel. In addition, the code must set forth specific requirements relating to personal trading activity including reporting transactions and holdings.

Generally, the code of ethics applies to all Supervised Persons of the adviser, including all Access Persons of the adviser. The Investment Adviser Code of Ethics (“Code”), as adopted by Prudential’s registered investment advisers, includes the Personal Securities Trading Policy and the Statement of Policy Restricting Communication and the Use of Issuer-Related Information by Prudential Investment Associates (“Chinese Wall Policy”). Employees identified as Supervised Persons must comply with the Code, including this Policy.(18) Compliance is responsible for notifying each individual who is subject to the Code.

Rule 17(j) under the Investment Company Act requires that every investment company adopt procedures designed to prevent improper personal trading by investment company personnel. Rule 17(j) was created to prevent conflicts of interest between investment company personnel and shareholders, to promote shareholder value, and to prevent investment company personnel from profiting from their access to proprietary information.

In light of the adoption of Rule 17(j) and the growing concern that the mutual fund industry needed to police itself, the Investment Company Institute (“ICI”), an industry group, assembled a blue ribbon panel and, in 1994, issued a report setting forth a series of recommendations concerning personal trading by investment personnel. These recommendations, known as the “ICI rules”, have been praised by the SEC, and have been adopted by the majority of the asset management industry associated with U.S. registered investment companies.

(18) Generally, Private-Side Associates are also considered Access Persons under the Investment Advisers Act of 1940. See Section VI for information on the requirements for Private-Side Associates.

In keeping with our ethical standards and the practices of the industry leaders, Prudential has adopted the ICI rules for all of its portfolio management units. The ICI rules concerning personal trading are set forth below and are applicable to these portfolio management units and certain associates outside the specific business unit who provide direct support to these units.(19) In addition, the ICI rules, with certain exceptions, have also been adopted for other investment management units within Prudential including.(20)

The following terms are defined for purposes of this policy:

• “Access Persons”, as defined in Section II.B. , include employees or officers of a mutual fund or investment adviser, who, in connection with their normal responsibilities, make, participate in, or have access to current or pending information regarding the purchase or sale of a security by the Complex (Complex defined below).(21)

• “Investment personnel” are Access Persons who are public-side portfolio managers, analysts, traders, or certain other individuals as designated by the compliance officer. (For restrictions applicable to PEG Trading Desk personnel, see Section VII ).

• A “pending buy or sell order” exists when a decision to purchase or sell a security has been made and communicated.

• The “Complex” includes all portfolios managed by the business unit or group of units to which an individual is deemed to have access.

Prudential holds its employees to the highest ethical standards. Maintaining high standards requires a total commitment to sound ethical principles and Prudential’s value. It also requires nurturing a business culture that supports decisions and actions based on what is right, not simply what is expedient. Management must make the Company’s ethical standards clear. At every level, associates must set the right example in their daily conduct. Moreover, associates are encouraged to understand the expectations of the Company and apply these guidelines to analogous situations or seek guidance if they have questions about conduct in given circumstances.

All Access Persons must act in accordance with the following general principles:

(19) Certain PIMS personnel employed by portfolio management units may be subject to the personal securities trading restrictions set forth in this section due to their association with portfolio management activities in addition to the restrictions set forth in Section IV.

(20) Certain international units may also be subject to the requirements of this Section. Individuals should consult the applicable business unit compliance officer for additional information.

(21) Officers listed on PI’s Form ADV and mutual fund officers are also classified as Access Persons.

• It is the duty at all times to place the interests of investment company shareholders and other investment advisory clients first.

• Access Persons should scrupulously avoid serving their own personal interests ahead of clients’ interests in any decision relating to their personal investments.

• All personal securities transactions must be conducted in such a manner as to avoid any actual or potential conflict of interest or any abuse of an individual’s position of trust and responsibility.

• Access Persons must not only seek to achieve technical compliance with this Policy, but should strive to abide by its spirit and the principles articulated herein.

An appearance of a conflict of interest may occur if, following a meeting with a representative of an issuer, an analyst buys the issuer’s securities for his or her personal account, but does not recommend his or her client purchase such securities.

• Access Persons may not take inappropriate advantage of their positions.

• Access Persons must avoid any situation that might compromise, or call into question, their exercise of fully independent judgment in the interest of shareholders or clients, including, but nor limited to the receipt of unusual investment opportunities, perquisites, or gifts of more than de minimis value from persons doing or seeking business with their portfolios.

• Access Persons may not bunch a personal order with a client order.

• Access Persons may not conduct personal business with brokers who execute trades for their portfolios.

Investment Personnel and Access Persons are prohibited from market timing any proprietary mutual funds, as well as non-proprietary funds subadvised by Prudential, and must comply with any trading restrictions established by Prudential and its clients to prevent market timing of these funds.

To deter the market timing in proprietary and non-proprietary funds subadvised by Prudential, Investment Personnel and certain officers of Prudential Investment Management (“PIM”) and Prudential Investments LLC (“PI”) are required to hold any proprietary or non-proprietary subadvised mutual funds for a period of 90 days. Investment Persons and Access Persons are also required to report mutual fund transactions covered under this policy as described below.

Investment Personnel and certain PIM and PI employees are required to hold proprietary and non-proprietary subadvised mutual funds, excluding money market funds and the

Dryden Ultra Short Bond Fund, purchased for a period of 90 days.(22) Proprietary funds include JennisonDryden, Strategic Partners, Target, and American Skandia Advisor Funds (“American Skandia Funds”). Non-proprietary subadvised funds are defined in Exhibit 7 . Specifically, Investment Personnel and certain PIM and PI employees are prohibited from executing a purchase and a sale of the same proprietary or non-proprietary subadvised mutual fund during any 90-day period.(23) This restriction applies to accounts for which Investment Personnel and certain PIM and PI employees have a direct or indirect beneficial interest, including household members. See Section II.C.4. Profits realized on such transactions must be disgorged to the applicable mutual fund or client, or as otherwise deemed appropriate by the Committee.(24)

Access Persons are required to report all transactions of proprietary and non-proprietary subadvised mutual funds. This requirement applies to accounts for which Access Persons have a direct or indirect beneficial interest, including household members. See Section II.C.4.

Access Persons may hold and trade proprietary and non-proprietary subadvised mutual funds only through one of the authorized broker/dealers, directly with Prudential Mutual Fund Services (“PMFS”), the Prudential Employee Savings Plan (“PESP”), or the Jennison Associates (“Jennison”) Savings and Pension Plans.(25) However, non-proprietary subadvised funds may be traded directly with the fund provided that duplicate account statements and trade confirmations are sent directly to the Securities Monitoring Unit, Compliance Department. For non-proprietary subadvised funds, Access Persons must notify fund complexes within 10 business days of receipt of this policy requesting that duplicate statements and confirmations be forwarded to the Securities Monitoring Unit. Investment elections or transactions executed in the executive deferred compensation plans are not subject to this requirement.(26)

Investment Personnel and Access Persons must notify the Securities Monitoring Unit of any mutual fund accounts, including accounts of all household members, held directly with the fund for all non-proprietary subadvised mutual funds. In addition, Investment

(22) PIM and PI employees will be identified by the President of PIM in consultation with the PIM Chief Compliance Officer. The PIM Chief Compliance Officer will be responsible for maintaining the list and submitting any changes to the Securities Monitoring Unit.

(23) For the Prudential Employee Savings Plan and the Jennison Associates Savings and Pension Plans, only exchanges of proprietary and non-proprietary subadvised funds are subject to the 90-day holding period. Purchases due to automatic payroll deductions and company match and automatic rebalancing transactions are exempt from this requirement.

(24) Discipline and sanctions relating to violations occurring in the Prudential Employee Savings Plan or the Jennison Savings or Pension Plans will be determined separately by the Personal Securities Trading/Mutual Fund Code of Ethics Committee.

(25) Mutual fund transactions executed through PMFS, PESP and the Jennison Savings and Pension Plans will be sent to Compliance through a daily electronic trading feed.

(26) Prudential’s deferred compensation plans (including The Prudential Insurance Company of America Deferred Compensation Plan, the Amended and Restated American Skandia Lifestyle Security Plan, and the Trust Agreement Between Jennison Associates LLC and Wachovia Bank, N.A.) are not susceptible to market timing due to the fact that the plans only permit one transaction per month. Therefore, transactions in these plans are exempt from both the 90-day holding period and reporting requirements.

Personnel and Access Persons must contact these funds to request that duplicate statements and confirmations of mutual fund trading activity be sent to the Securities Monitoring Unit. A sample letter to a brokerage firm is provided as Exhibit 1 to this Policy.

The following restrictions and requirements apply to all accounts in which Access Persons and Investment Personnel have a direct or indirect beneficial interest, including accounts of household members as described in Section II.C.4.

Investment personnel are prohibited from purchasing initial public offerings of securities. For purposes of this policy, “initial public offerings of securities” do not include offerings of government or municipal securities.

Investment personnel are prohibited from acquiring any securities in a private placement without express prior approval. Such approval must be obtained from the local business unit head in consultation with the business unit compliance officer (such person having no personal interest in such purchases or sales), based on a determination that no conflict of interest is involved.

Investment personnel must disclose their private placement holdings to the business unit compliance officer and the business unit’s chief investment officer when the investment personnel play a part in the consideration of any investment by the portfolio in the issuer. In such circumstances, the portfolio’s decision to purchase securities of the issuer will be subject to independent review by appropriate personnel with no personal interest in the issuer.

Access Persons are prohibited from executing a securities transaction on a day during which any portfolio in their Complex has a pending buy or sell order in the same or an equivalent security and until such time as that order is executed or withdrawn.(27) This prohibition will not apply to purchases and sales executed in a fund or portfolio that replicates a broad based securities market index.

Investment personnel are prohibited from buying or selling a security within seven calendar days before or after a portfolio in their Complex trades in the same or an equivalent security. Nevertheless, a personal trade by any investment personnel shall not prevent a portfolio in the same business unit from trading in the same or an equivalent security. However, such a transaction shall be subject to independent review

(27) There is no presumption that Access Persons have knowledge of actual trading activity.

by their business unit compliance officer.(28) This prohibition will not apply to purchases and sales executed in a fund or portfolio that replicates a broad based securities market index.

Profits realized on transactions that are executed during blackout periods may be required to be disgorged to the business unit. Transactions inadvertently executed by an Access Person during a blackout period will not be considered a violation and disgorgement will not be required provided that the transaction was effected in accordance with the preclearance procedures and without prior knowledge of any pending purchase or sale orders in the Complex in the same or equivalent security. All disgorged profits will be donated to a charitable organization in the name of the Company or to an account or client for which the security is held or traded.

Investment personnel are prohibited from profiting from a purchase and sale, or sale and purchase, of the same or an equivalent security within any sixty calendar day period. Profits realized on such proscribed trades must be disgorged to the business unit. All disgorged profits will be donated to a charitable organization in the name of the Company or to an account or client for which the security is held or traded.

Access Persons may not sell any security short which is owned by any portfolio managed by the business unit. Access Persons may, however, make short sales “against the box.” A short sale “against the box” refers to a short sale when the seller owns an equivalent amount of the same securities.

Access Persons may not write naked call options or buy naked put options on a security owned by any portfolio managed by the business unit. Access Persons may purchase options on securities not held by any portfolio managed by the business unit, or purchase call options or write put options on securities owned by any portfolio managed by the business unit, subject to preclearance and the same restrictions applicable to other securities. Access Persons may write covered call options or buy covered put options on a security owned by any portfolio managed by the business unit at the discretion of the business unit compliance officer. However, investment personnel should keep in mind that the short-term trading profit rule might affect their ability to close out an option position at a profit.

Access Persons may not participate in investment clubs.

(28) Properly precleared personal trades executed within seven days prior to a portfolio trading will be presumed not violative of the 7 day rule provided there was no additional evidence to the contrary.

All employees, including Access Persons, are prohibited from selling short including “short sales against the box” and from participating in any options transactions on any securities issued by Prudential. Employees classified as Designated Persons are subject to additional restrictions relating to securities issued by Prudential. These requirements are outlined in Section III of this Policy.

Access Persons of PIM, QMA, American Skandia Investment Services, Inc. (“ASISI”) and Prudential Investments LLC (“PI”) must preclear all personal securities transactions with the exception of those identified in Section V.P. below. Preclearance is also not required for both proprietary and non-proprietary subadvised mutual funds. All requests for preclearance must be submitted to the business unit compliance officer for approval using the automated preclearance website which may be accessed via http://smartspreclearance.prudential.com/smarts_preclearance/.(29), (30)

All approved orders must be executed by the close of business on the day in which preclearance is granted; provided however that approved orders for securities traded in foreign markets may be executed within two business days from the date preclearance is granted. If any order is not timely executed, a request for preclearance must be resubmitted.(31)

The black out periods and the short-term trading profit rule do not apply to any of the following activities. In addition, the mutual fund 90-day holding period does not apply to items 4,7,8, and 9. Preclearance is not required for items 4, 5, 6, and 7.

Purchases or sales of securities (or their equivalents) that are not eligible for purchase or sale by any portfolio in the business unit.

Purchases effected upon the exercise of rights issued by an issuer pro rata to all holders of a class of its securities, to the extent such rights were acquired from such issuer, and sales of such rights so acquired.

(29) Paper preclearance forms may be used for international units and in certain hardship cases. Paper Forms are available from the business unit compliance officer.

(30) Access Persons should submit their preclearance forms to the business unit compliance officer of the Complex to which they are deemed to have access.

(31) Exceptions to the requirement to resubmit preclearance requests may be granted in advance by the business unit compliance officer for unusual circumstances.

Any trades, or series of trades effected over a 30 day calendar period, involving 500 shares or less in the aggregate of an equity security, provided that the securities are listed on the New York Stock Exchange or have a market capitalization greater than $1 billion, and the Access Person has no prior knowledge of activity in such security by any portfolio in the business unit.

Any fixed-income securities transaction, or series of related transactions effected over a 30 day calendar period, involving 100 units ($100,000 principal amount) or less in the aggregate, if the Access Person has no prior knowledge of transactions in such security by any portfolio in the business unit.

Purchases or sales of securities effected in any account over which the Access Person has no direct or indirect influence or control or in any account of the Access Person which is managed exclusively on a discretionary basis by a person other than such Access Person and with respect to which such Access Person does not in fact influence or control such transactions.(32) Access Persons must provide written documentation that evidences he/she does not have authority to participate in the management of the account and must receive written permission from the business unit compliance officer.

Any transactions in index options effected on a broad-based index. (See Exhibit 4 .)

Purchases or sales of securities which receive prior written approval of the business unit compliance officer (such person having no personal interest in such purchases or sales), based on a determination that no conflict of interest is involved and that such purchases or sales are not likely to have any economic impact on any portfolio in the business unit or on its ability to purchase or sell securities of the same class or other securities of the same issuer.

With respect to the mutual fund 90-day holding period requirement, only certain limited exceptions will be approved including, but not limited to, hardships and extended

(32) Such accounts must receive written approval in advance from the Securities Monitoring Unit. In such cases, the employee must give exclusive discretion to his/her broker or investment adviser. A copy of such notification should be sent to the Securities Monitoring Unit. Such accounts are required to be reported and monitored as provide under Section II.A .

disability. Mutual fund 90-day holding period exceptions must be approved by the Business Unit Head and the PIM Chief Compliance Officer prior to execution.(33)

Purchases or sales of securities that are part of an automatic investment/withdrawal program or resulting from an automatic rebalancing. Transactions that override any pre-set schedule or allocation must be precleared and reported to the Securities Monitoring Units.

All Access Persons must participate in Prudential’s Personal Trade Monitoring System as described in Section II of this Policy. In addition, all Access Persons must preclear all private securities transactions immediately and report completion of the transaction promptly, in any event not later than ten days following the close of each quarter in which the trade was executed. Forms to report such private securities transactions are available from your business unit compliance officer or the Securities Monitoring Unit.

Within ten days of becoming an Access Person, and thereafter on an annual basis, Access Persons (other than disinterested directors/trustees) must disclose personal securities holdings, including all holdings of private securities (e.g., limited partnership interests, private placements, etc.) and all holdings of proprietary and non-proprietary subadvised mutual funds, excluding money market funds and the Dryden Ultra Short Bond Fund. Holdings Reports must include information that is current within the previous 45 days of becoming an Access Person or submitting the annual Holdings Report. (See Exhibit 5 for the Holdings Report Form.)

Consistent with Prudential policy, Investment Personnel are prohibited from serving on the board of directors of publicly traded companies, absent prior authorization from the business unit compliance officer based upon a determination that the board service would not be inconsistent with the interests of the investment company or other clients. In the limited instances that such board service may be authorized, Investment Personnel will be isolated from those making investment decisions affecting transactions in securities issued by any publicly traded company on whose board such Investment Personnel serves as a director through the use of a “Chinese Wall” or other procedures designed to address the potential conflicts of interest.

(33) For purposes of this policy, Business Unit Head is defined as the executive in charge of Fixed Income Trading, QMA, Jennison, PI or his/her delegate. Delegation of this responsibility must be done in writing and submitted to the PIM Chief Compliance Officer.

Consistent with Prudential’s Gift and Entertainment Policy, Access Persons are prohibited from receiving any gift or other thing that would be considered excessive in value from any person or entity that does business with or on behalf of Prudential. Access Persons must comply with Company limits and reporting guidelines for all gifts and entertainment given and/or received.

Access Persons and Supervised Persons are required to promptly report any known violations of the Code or this Policy to the business unit chief compliance officer. Reported violations and other exceptions to this Policy detected through internal monitoring will be provided to the business unit Chief Compliance Officer or his/her designee and the Personal Securities Trading/Mutual Fund Code of Ethics Committee (“Committee”). The Committee, comprised of business unit executives, compliance and human resource personnel, will review all violations of this Policy. The Committee will determine any sanctions or other disciplinary actions that may be deemed appropriate.

The Board of Directors/Trustees of any investment company client will be provided, as requested by client or otherwise required by regulation, with an annual report which at a minimum:

• Certifies that the investment adviser/portfolio management unit has adopted procedures reasonably necessary to prevent its Access Persons from violating this policy;

• Summarizes existing procedures concerning personal investing and any changes in the procedures made during the preceding year;

• Identifies material violations of this policy and sanctions imposed in response to those violations; and

• Identifies any recommended changes in existing restrictions or procedures based upon experience under the policy, evolving industry practices, or developments in applicable laws and regulations.

The following restrictions and requirements apply to all accounts in which GPSI Access Persons have a direct or indirect beneficial interest, including accounts of household members as described in Section II.C.4.

GPSI Access Persons must preclear purchases of initial public offerings of securities. For purposes of this policy, “initial public offerings of securities” do not include offerings of government or municipal securities. See Exhibit 8 for a copy of the preclearance request form.

GPSI Access Persons are prohibited from personally acquiring any securities in a private placement without express prior approval. Such approval must be obtained from the business unit compliance officer, based on a determination that no conflict of interest is involved. See Exhibit 8 for a copy of the preclearance request form.

GPSI Access Persons are restricted from purchasing or selling securities of the issuers on the GPSI Restricted List. This restriction applies to all accounts in which the associate is deemed to have a beneficial interest as listed above. GPSI Access Persons who hold GSPI Restricted List securities prior to the institution of this policy, becoming a GPSI Access Person or being placed on the GPSI Restricted List must obtain written approval from their business unit compliance officer prior to the sale of such securities.

The Advisers Act governs activities of officers, directors and employees of registered investment advisers. These rules set forth specific requirements relating to conflicts of interest and personal securities trading activity.

The code of ethics applies to all Supervised Persons of the adviser, including all “Access Persons” of the adviser. Under the rules, “Access Persons” are considered employees of the adviser who have access to client recommendations and trading activity. Based on this definition, Private-Side Associates (excluding employees of PMCC) would be considered “Access Persons” and be subject to the requirements of the rules due to their access to investment advisory client recommendations and trading activity. In addition, employees of Prudential Real Estate Fixed Income Investors (“PREFII”) are considered Supervised Persons under the rules.

The Investment Adviser Code of Ethics (“Code”), as adopted by Prudential’s registered investment advisers, includes the Personal Securities Trading Policy and the Statement of Policy Restricting Communication and the Use of Issuer-Related Information by Prudential Investment Associates (“Chinese Wall Policy”). Employees identified as Supervised Persons must comply with the Code, including this Policy. Compliance is responsible for notifying each individual who is subject to the Code. Sections II and VI of this Policy set forth the requirements that are intended to enable Private-Side Associates to comply with Rule 204A-1.

All Private-Side Associates must act in accordance with the following general principles:

• It is the duty at all times to place the interests of investment advisory clients and investment company shareholders first.

• Private Side Associates should scrupulously avoid serving their own personal interests ahead of clients’ interests in any decision relating to their personal investments.

• Private-Side Associates must not only seek to achieve technical compliance with this Policy, but should strive to abide by its spirit and the principles articulated herein.

• Private-Side Associates may not take inappropriate advantage of their positions.

• Private-Side Associates must avoid any situation that might compromise, or call into question, their exercise of fully independent judgment in the interest of clients or shareholder, including, but nor limited to the receipt of unusual investment opportunities, perquisites, or gifts of more than de minimis value from persons doing or seeking business with their portfolios.

• Private-Side Associates may not bunch a personal order with a client order.

• Private-Side Associate may not conduct personal business with brokers who execute trades for their portfolios.

In addition to the personal securities trade reporting requirements set forth in Section II of this Policy, all associates of Private Asset Management units of Prudential Investment Management (“PIM”) are subject to certain trading restrictions as set forth below. The Private Asset Management units of PIM are as follows: Prudential Capital Group (“PCG”), Prudential Real Estate Investors (“PREI”), Global Real Estate Private Equity (“GREPE”) and Prudential Mortgage Capital Company (“PMCC”). These individuals are referred to as Private-Side Associates throughout this Policy.

Such restrictions apply to transactions in any securities accounts for which the associate maintains a beneficial interest, including the following:

• Personal accounts;

• Joint or tenant-in-common accounts in which the associate is a participant;

• Accounts for which the associate acts as trustee, executor or custodian;

• Accounts in which the associate’s spouse has a beneficial interest;

• Accounts in which the associate’s minor children or any dependent family member has a beneficial interest;

• Accounts over which the associate exercises control or has any investment discretion; and

• Accounts of any individual to whose financial support the associate materially contributes.

Under Prudential’s Chinese Wall Policy, the Private Asset Management units are required to maintain a Private-Side Monitored List (“PSML”) containing the names of publicly-traded issuers about which they possess material nonpublic information. In addition, due to a recently approved Chinese Wall Policy exception, GREPE is required to maintain its own Global Private-Side Monitored List (“Global PSML”). All Private-Side Associates, with the exception of GREPE employees, are restricted from purchasing or selling securities of the issuers on the PSML. Similarly, GREPE employees are restricted from purchasing or selling securities of the issuers on the Global PSML. These restrictions apply to all accounts in which the associate is deemed to have a beneficial interest as listed above.

Associates should not, however, provide the PSML or the Global PSML to individuals outside of their business unit. The associate should instruct individuals who exercise control or have investment discretion over an account in which the associate has a beneficial interest to check with the associate prior to purchasing or selling any security for such account to ensure that no trade is placed in a security on the PSML or the Global PSML.

If the security is on the PSML or the Global PSML, respectively, the associate should instruct the individual exercising control over the account that he or she is prohibited from trading the security because of his or her employment with Prudential. In the case of a discretionary account with a brokerage firm, the preceding rule does not apply and the associate must not disclose any security or issuer with the broker in advance of any trade. In addition, a copy of the signed discretionary account agreement should be sent to the Securities Monitoring Unit.

Associates of Private Asset Management units may not advise a person not employed by Prudential, or a Prudential employee on the Public-Side of the Chinese Wall that a security is restricted because Prudential is in possession of material nonpublic information.

All associates of Private Asset Management units are prohibited from participating in investment clubs.

Private-Side Associates are prohibited from market timing any proprietary mutual funds, as well as non-proprietary funds subadvised by Prudential, and must comply with any trading restrictions established by Prudential and its clients to prevent market timing of these funds.

To deter the market timing in proprietary and non-proprietary funds subadvised by Prudential, certain officers of PIM are required to hold any proprietary or non-proprietary subadvised mutual funds for a period of 90 days.(34) Private-Side Associates are also required to report mutual fund transactions covered under this policy as described below.

Certain officers of PIM are required to hold proprietary and non-proprietary subadvised mutual funds, excluding money market funds or the Dryden Ultra Short Bond Fund, purchased for a period of 90 days.(35) Proprietary funds include JennisonDryden, Strategic Partners, Target, and American Skandia Advisor Funds (“American Skandia Funds”). Non-proprietary subadvised funds are defined in Exhibit 7 . Specifically, affected officers are prohibited from executing a purchase and a sale of the same proprietary or non-proprietary subadvised mutual fund during any 90-day period.(36) This restriction applies to accounts for these officers have a direct or indirect beneficial interest, including household members. See Section II.C.4. Profits realized on such transactions must be disgorged to the applicable mutual fund or client, or as otherwise deemed appropriate by the Personal Securities Trading/Mutual Fund Code of Ethics Committee (“Committee”).(37),(38)

Private-Side Associates are required to report all transactions of proprietary and non-proprietary subadvised mutual funds. This requirement applies to accounts for which Private-Side Associates have a direct or indirect beneficial interest, including household members. See Section II.C.4.

Private-Side Associates may hold and trade proprietary and non-proprietary subadvised mutual funds only through one of the authorized broker/dealers, directly with Prudential Mutual Fund Services (“PMFS”), or the Prudential Employee Savings Plan (“PESP”).(39) However, non-proprietary subadvised funds may be traded directly with the fund provided that duplicate account statements and trade confirmations are sent directly to the Securities Monitoring Unit. For non-proprietary subadvised funds, Private-Side Associates must notify fund complexes within 10 business days of receipt of this policy requesting that duplicate statements and confirmations be forwarded to the Securities

(34) Public-Side Investment Personnel and other individuals who are specifically notified are also subject to the 90-day mutual fund holding period.

(35) These officers will be identified by the President of PIM in consultation with the PIM Chief Compliance Officer. The PIM Chief Compliance Officer will be responsible for maintaining the list and submitting any changes to the Securities Monitoring Unit of the Compliance Department.

(36) For the Prudential Employee Savings Plan, only exchanges of proprietary and non-proprietary subadvised funds are subject to the 90-day holding period. Purchases due to automatic payroll deductions and company match and automatic rebalancing transactions are exempt from this requirement.

(37) The Committee evaluates violations of the Policy and determines appropriate disciplinary action.

(38) Discipline and sanctions relating to violations occurring in the Prudential Employee Savings Plan or the Jennison Savings or Pension Plans will be determined separately by the Personal Securities Trading/Mutual Fund Code of Ethics Committee.

(39) Mutual fund transactions executed through PMFS and PESP will be sent to the Securities Monitoring Unit through a daily electronic trading feed.

Monitoring Unit. Investment elections or transactions executed in the executive deferred compensation plans are not subject to this requirement.(40)

Private-Side Associates must notify the Securities Monitoring Unit of any mutual fund accounts, including accounts of all household members, held directly with the fund for all non-proprietary subadvised mutual funds. In addition, Private-Side Associates must contact these funds to request that duplicate statements and confirmations of mutual fund trading activity be sent to the Securities Monitoring Unit. A sample letter to a brokerage firm is provided as Exhibit 1 to this Policy.

Within ten days of becoming a Private-Side Associate, and thereafter on an annual basis, Private-Side Associates (other than disinterested directors/trustees) must disclose personal securities holdings, including all holdings of private securities (e.g., limited partnership interests, private placements, etc.) and all holdings of proprietary and non-proprietary subadvised mutual funds, excluding money market funds and the Dryden Ultra Short Bond Fund. Holdings Reports must include information that is current within the previous 45 days of becoming an Access Person or submitting the annual Holdings Report. (See Exhibit 5 for the Holdings Report Form.)

Private-Side Associates are prohibited from personally acquiring any securities in a private placement without express prior approval. Such approval must be obtained from the local business unit head in consultation with the business unit compliance officer (such person having no personal interest in such purchases or sales), based on a determination that no conflict of interest is involved.

Private-Side Associates must disclose their private placement holdings to the business unit compliance officer and the business unit’s chief investment officer when the Private-Side Associate plays a part in the consideration of any investment by the portfolio in the issuer. In such circumstances, the portfolio’s decision to purchase securities of the issuer will be subject to independent review by appropriate personnel with no personal interest in the issuer. See Exhibit 8 for a copy of the preclearance request form.

Private-Side Associates must preclear all purchases of initial public offerings of securities. For purposes of this policy, “initial public offerings of securities” do not include offerings of government or municipal securities. See Exhibit 8 for a copy of the preclearance request form.

(40) Prudential’s deferred compensation plans (including The Prudential Insurance Company of America Deferred Compensation Plan) are not susceptible to market timing due to the fact that the plans only permit one transaction per month. Therefore, transactions in these plans are exempt from both the 90-day holding period and reporting requirements.

To ensure compliance with ITSFEA and to prevent actual and apparent conflicts of interest in the Private Asset Management Real Estate units, all associates of PREI, PMCC and GREPE who are located in the U.S. (and functional associates who are co-located with PREI) are prohibited from purchasing interests in publicly-traded real estate investment trusts (“REITs”) and real estate-related securities.

PIM Compliance maintains a list of real estate security issuers in the PIM Compliance Library, accessible via Lotus Notes. Please note however, that this prohibition applies to all REITs and real estate-related securities, whether they are on the list or not.

Associates who hold REIT securities or real estate securities prior to the institution of this policy or joining PREI, PMCC or GREPE must obtain written approval from PIM Compliance prior to the sale of such securities. Associates of the Private Asset Management Real Estate units will be permitted to purchase shares of open-end mutual funds that invest in REITs or real estate securities.

To insure compliance with ITSFEA and to prevent actual or apparent conflicts of interest in PCG, all associates of PCG (and functional associates who support PCG) are prohibited from purchasing securities of companies listed on PCG’s 90 Day Pricing Summary Update for Public Companies (90 Day Pricing List). In addition, PCG employees who have access to information about investment advisory client transactions and holdings involving public securities are prohibited from trading the securities of those publicly traded issuers.

PIM Compliance maintains the PCG 90-day Pricing list in the PIM Compliance Library, accessible via Lotus Notes.

In addition to the requirements of ITSFEA and the NASD Conduct Rules, PEG is required by New York Stock Exchange rules to review transactions in all accounts of its associated persons and their family members. To ensure compliance with these requirements, PEG associates are prohibited from opening or maintaining any “employee account or employee-related account,” as defined below, at a firm other than the following authorized broker-dealers: Wachovia Securities, Charles Schwab, E*Trade and Fidelity Investments. (Note: Monitored employees of other Prudential business groups may also open accounts with Pruco Securities and Merrill Lynch. These options are not available to PEG associates.) Prudential has arranged to obtain electronic feeds of all trading data in accounts with the authorized firms. In addition, paper monthly statements must also be submitted to PEG Compliance.

Exceptions to this policy will be granted only in unusual circumstances. Any exception to this policy requires the prior written approval of the associate’s supervisor and the PEG Compliance Department. In those cases where accounts are approved to be held at an unauthorized firm, the Compliance Department will make arrangements to have duplicate copies of all confirmations and monthly statements sent to the associate’s supervisor and the Compliance Department. Exceptions may be granted for “employee-related accounts” in rare circumstances where the employee can demonstrate that he or she has no financial interest in such account.

“Employee accounts” include the following securities and/or commodities accounts:

• Any personal account of an employee;

• Any joint or tenant-in-common in which the employee is a participant;

• Any account for which the employee acts as the trustee, executor or custodian;

• Any account over which the employee has investment discretion or otherwise can exercise control (other than non-related client’s accounts over which associates have investment discretion – Note: PEG trading personnel are not permitted to exercise discretion over client accounts); and

• Any other account in which an employee is directly or indirectly financially interested.

“Employee-related accounts” include the following securities and/or commodities accounts:

• Accounts of the employee’s spouse;

• Accounts of the employee’s minor and/or any dependent family members; and

• Accounts of any individual to whose financial support the employee materially contributes.

PEG sales, trading, research and/or investment associates are not permitted to participate in Investment Clubs. Other associates must contact the PEG Compliance Department if they wish to participate in an Investment Club. An Investment Club account will be considered an Employee Account for purposes of this Policy and must be maintained at one of the authorized broker-dealers.

All PEG associates must comply with NASD Rule 2790 as set forth in Section IV.B of this Policy. This includes a prohibition on purchasing new equity offerings directly from a syndicate member.

In accordance with NASD Rule 3040, all associates of PEG must notify the PEG Compliance Department, in writing, and obtain written approval from the broker-dealer, prior to engaging in any private securities transaction. Private securities transactions include, but are not limited to, transactions in unregistered offerings of securities, and purchases or sales of limited partnership interests.

The NASD/NYSE Joint Memorandum on Chinese Wall Policies and Procedures (NASD Notice to Members 91-45) provides that firms which do not conduct investment banking research or arbitrage activities still must have “reasonable procedures for the education and training of its associates about insider trading” in order to be in compliance with ITSFEA. Consistent with this Notice, PEG covers insider trading issues with applicable associates as part of its annual training program.

PEG associates are prohibited from effecting transactions in a company’s securities when PEG initiates coverage of the company, or upgrades or downgrades a research opinion or recommendation. This prohibition generally applies for a 24-hour period after the release of the research. If the investing public has had time to receive and react to the release of the research report, the 24-hour restriction may be shortened by the Compliance Department. The 24-hour rule becomes effective when the research is issued.

PEG associates are also prohibited from engaging in transactions in a security when the associate knows that a research report relating to the security is in preparation.

Securities subject to the 24-hour rule appear on PEG’s Restricted List. Although only the symbol for the common stock may be indicated on the Restricted List, all related

securities (including common and preferred stock, convertibles, options, warrants and rights) of the companies listed (and debt securities, if indicated) are subject to restriction.

PEG’s Restricted List is a confidential list of securities that are subject to certain research, sales and trading restrictions. Securities may be placed on the Restricted List for a variety of reasons designed to ensure compliance with regulatory requirements and Company policy. For example, as stated above, securities that are subject to the 24-hour rule are placed on the Restricted List. Employees may not purchase or sell securities for their personal accounts if such transactions are prohibited by the Restricted List. Although only the symbol for the common stock may be indicated on the Restricted List, all securities from the same issuer (including common and preferred stock, convertibles, options, warrants and rights of the companies listed (and debt securities, if indicated)) are subject to restriction.

Personal trading by Research Analysts is subject to the requirements and restrictions set forth in the Equity Research Manual available on the Compliance page of the Capital Markets Intranet site. http://psibranch.cs.prusec.com/complian/capital.htm. All questions should be referred to the PEG Compliance Department.

Trading Department associates must preclear trades of all equity securities.

For securities over which the Trading Department has trading or market-making responsibility, an employee of the Trading Department may not sell any such security that (s)he has purchased within the prior 30 calendar days or purchase any such security that (s)he had sold within the prior 30 calendar days. Under very limited circumstances, exceptions to this 30-day holding period may be granted by obtaining prior written approval from the Compliance Department.

All requests for preclearance must be submitted to the Business Unit head and PEG Compliance for approval. All approved orders must be executed by the close of business on the day preclearance is granted.

TO: Broker-Dealer

RE: Account #:

Date of Establishment:

Dear Sir/Madam:

Please furnish to Prudential Financial, Inc. (“Prudential”), copies of all trade confirmations and account statements with respect to all transactions for the above listed account(s). Please include all transactions in shares of unit investment trusts and all closed-end mutual funds.

Copies of these confirmations and statements should be sent to Prudential, as trades are effected, addressed as follows:

Prudential Financial, Inc.

Compliance Department

P.O. Box 919

Newark, NJ 07101-9998

This request is being made pursuant to Rule 3050 of the Conduct Rules of the NASD and/or Rule 204-2(a) of the Investment Advisers Act, as applicable.

Very truly yours,

cc: Ellen McGlynn Koke,

Vice President, Securities Compliance

Compliance Department

For employees required to report their transactions in SMARTS as described in Section II of this policy, please complete the following acknowledgment and send it to:

Prudential Financial, Inc.

Compliance Department

P.O. Box 919

Newark, NJ 07101-9998

I have read and understand the Personal Securities Trading Policy and have and will continue to comply in all respects with the rules contained therein.

I confirm that I have instructed in writing all brokers for all securities accounts in which I maintain a beneficial interest, as described immediately below, to send duplicate copies of all confirmations covering any transactions as trades are effected and all account statements to the address listed above. I understand that for accounts maintained at Charles Schwab, E*Trade, Merrill Lynch, Fidelity Investments, Pruco Securities, or Wachovia Securities, I do not need to contact these brokers in writing. Beneficial interest includes the following:

• personal accounts;

• accounts in which my spouse has a beneficial interest;**

• accounts in which my minor children or any dependent family member has a beneficial interest;**

• joint or tenant-in-common accounts in which I am a participant;

• accounts for which I act as trustee, executor or custodian;

• accounts over which I exercise control or have investment discretion; and

• accounts of any individual to whose financial support I materially contribute.

** Due to certain international laws, employees located in Japan are not required to disclose or report information regarding accounts for which a spouse, dependent family member and/or minor child has a beneficial interest.

Set forth below (and on accompanying pages if necessary) is a list of all such accounts (including Charles Schwab, E*Trade, Merrill Lynch, Fidelity Investments, Pruco Securities, and Wachovia Securities) including the individual holding the account, the social security number of that individual, the name of the institution, and the account number. I understand that I must promptly advise the Compliance Department of any change in this information. I understand that if I have been classified as a Covered or Access Person that in the event circumstances change for an account for which I have been granted an exception to maintain at a non-authorized brokerage firm, I must notify the Compliance Department immediately and request that the account be reviewed in light of the changed circumstances.


Full Name of Employee		Business Unit/Location


Signature		Date


Social Security Number of Employee

List of all Accounts

Name of Individual	Social Security Number	Name of Institution	Account Number

Investment Category/ Method	Sub-Category	Reportable (Yes/No)	Comments
Bonds	ABS Agency CMO’s Convertibles Corporates MBS Municipals Public Offerings Treasury Bills, Notes, Bonds	Yes Yes Yes Yes Yes Yes Yes Yes No
Stocks (Purchases and sales of Individual Stocks)	Common Optional Dividend Reinvestments Preferred Public Offerings (Initial & Secondary) Rights Warrants Automatic Dividend Reinvestments	Yes Yes Yes Yes Yes Yes No
Private Placements		Yes
Limited Partnerships		Yes
Open End Mutual Funds	Proprietary Non Proprietary Prudential Financial, Inc. Common Stock Fund	No No Yes	Transactions of the Prudential Financial, Inc. Common Stock Fund executed in the PESP plan are fed electronically to SMARTS.
Open End Mutual Funds – For Investment Personnel, Access Persons and Private-Side Associates	Proprietary Non-Money Market Non-proprietary subadvised Non-Money Market Proprietary and Non-Proprietary Off-Shore Funds Money Market Funds Non Affiliated	Yes Yes Yes No No	Proprietary Funds include JennisonDryden, Strategic Partners, Target, and American Skandia Advisor funds. A list of non -proprietary subadvised funds can be found in Exhibit 7.
Closed End Mutual Funds & Unit Investments Trusts	Affiliated Mutual Funds Affiliated Unit Investment Trusts Non-Affiliated Mutual Funds Non-Affiliated Unit Inv. Trusts	Yes Yes Yes Yes
Derivatives	Any Exchange Traded, NASDAQ, or OTC Option or Future Including But not Limited To: Security Futures All other Futures (Including Financial Futures) Options on Foreign Currency Options on Futures Options on Indexes Options on Securities	Yes No Yes Yes Yes Yes
Foreign Currency		No	Exchanges made for personal travel are not reportable.
Commodities	Other Commodities	No

Annuities & Life Insurance Contracts w/Investment Components (e.g. Variable Life)	Affiliated Non Affiliated	Yes Yes	** Investment Personnel, Access Persons and Private-Side Associates must report transactions of both affiliated and non-affiliated variable life and annuities contracts where the underlying investment components invest in proprietary and/or subadvised non-proprietary mutual funds. In addition, any underlying sub-account transactions are also reportable.
Bonuses Prudential Employees	Shares or Options received as part of Compensation	Yes	Prudential employee stock or option bonus awards are electronically reported to the Securities Monitoring Unit.

(Non-Pru Employee/ Household Member)	Shares or Options received as part of Compensation	No	For Non-employee stock or option bonus awards, the receipt is not reportable. However, the sale of stock or the exercise of an option is a reportable event.
Gifts Prudential securities All other gifts	Gifts given and received Given by Employee - Bonds and/or Stock Received by Employee - Bonds and/or Stock	Yes Yes No	For non-Prudential securities, a gift given to a charity is reportable, however, the receipt of a gift is not a reportable transaction under the Personal Securities Transaction Policy. Please see the Gift and Entertainment Policy for additional reporting requirements for gifts.

TICKER SYMBOL		DESCRIPTION
DJX		Dow Jones Industrial (30) Average
GTC		GSTI (Goldman Sachs 178 Technology Companies)
MID		S&P Midcap 400 Open/Euro Index
MNX		CBOE Mini-NDX (1 tenth value of NDX Index)
NFT		MSCI Multinational Company Index (50 US Stocks)
NIK		Nikkei 300 Index CI/Euro
OEX		S&P 100 Close/Amer Index
RAG		Russell 3000 Growth
RAV		Russell 3000 Value
RDG		Russell MidCap Growth
RLG		Russell 1000 Growth
RLV		Russell 1000 Value
RMC		Russell MidCap
RMV		Russell Midcap Value
RUA		Russell 3000
RUI		Russell 1000 Index
RUJ		Russell 2000 Value
RUO		Russell 2000 Growth
RUT		Russell 2000 Open/Euro Index
SML		S&P Small Cap 600
SPL		S&P 500 Long-Term Close
SPX		S&P 500 Open/Euro Index
TXX		CBOE Technology Index (30 Stocks)
VRU		Russell 2000 Long-Term Index
XEO		S&P 100 Euro Style
ZRU		Russell 2000 L-T Open./Euro

Reviewed by:

Initials:

Date:

Personal Securities Holdings Report

To: Jennifer Brown,

Securities Monitoring Unit

Compliance Department

From:		SS#:

Department:	Division:

Signed:	Date:

Listed below are all securities that I held, including those in which I had a direct or indirect beneficial interest, as of a date within the previous 45 days, as required by the Personal Securities Trading Policy and the Mutual Fund Code of Ethics.

DO WE NEED TO ADD TICKER/CUSIP AND TYPE OF SECURITY?

Public Securities

	Number	Principle
Title of Security	Of Shares	Amount	Broker/Dealer/Bank

This form is for preclearing transactions in Prudential securities. Please include all requested information. An associate from the Securities Monitoring Unit of the Compliance Department will review and respond to this request. The response will indicate that your request has either been approved or denied. A request is not considered approved until you receive a confirmation of approval from the Securities Monitoring Unit. Preclearance is only valid until the close of the market on the day approval is granted. Preclearance Forms should be faxed to the Securities Monitoring Unit at (973) 802-7454.

Part I – Information on Individual Requesting Preclearance:

Name:

Phone#:

Fax#:

Department:

Division:

In making this transaction, I understand it is my personal obligation under federal securities law not to trade securities of Prudential Financial, Inc. while in possession of material nonpublic information about the Company. This obligation continues during open trading windows and even where I have had a trade precleared.

		[Employee’s
	Signature]

If you have any questions, please contact Richard Baker from the Securities Monitoring Unit at (973) 802-6691.

Part II - Transaction Information:

Date:

Number of Shares/Options:

Transaction Type:

	Open Market Transactions
			Buy
			Sell*
	Stock Option Exercises
			Cashless Exercise (Exercise and Sell all Options)
			Exercise & Sell to Cover (Exercise and Sell only enough shares to cover option cost and taxes)
			Exercise & Hold (Exercise options and hold shares – no sale involved)
	PESP Transactions
			Exchange (into or out of Company Stock Fund)
			Allocation Change (Company Stock Fund)
			Catch-up Contribution (Company Stock Fund)
			Deferral Rate Change (Company Stock Fund)
			Disbursement (from Company Stock Fund)
			Loans (impacting Company Stock Fund)
	Other Benefit Plan Elections
			Deferred Compensation Elections (impacting Company Stock Fund)
			MasterShare Elections (impacting Company Stock Fund)

Asset Type:

Common Stock

Employee Stock Option

Company Stock Fund

* Do you currently hold securities to cover this transaction? (Note that this question applies to all sales due to the fact that short sales are prohibited.)

Account in which transaction will take place:		Brokerage
Firm
		Account No.

Part III – Information To Be Completed by Section 16 Insiders Only:

Have you traded the same or equivalent security for your personal account, accounts in which you have a beneficial interest, such as accounts of your spouse or family members, or accounts over which you maintain investment discretion within the past six months? If yes, the Securities Monitoring Unit may contact you for additional information.

Comments:

Part IV – Compliance/Law Response

Compliance Response:

APPROVED :

DENIED:

REVIEWER:

DATE/TIME:

Law Response (for Section 16 Insiders Only): APPROVED :

DENIED:

REVIEWER :

DATE/TIME:

PIM Subadvised Funds

SEI Institutional Investors Trust Fund

Jennison Subadvised Funds

AEGON/Transamerica Series Fund, Inc. – Jennison Growth

Allmerica Investment Trust – Select Growth Fund

Dreyfus Variable – Special Value

Harbor Fund - Harbor Capital Appreciation Fund

The Hirtle Callaghan Trust - The Growth Equity Portfolio

ING Investors Trust – ING Jennison Equity Opportunities Portfolio

The MainStay Funds - MainStay MAP Fund

Manufacturers Investment Trust – Capital Appreciation Trust

Metropolitan Series Fund, Inc. – Jennison Growth Portfolio

Ohio National Fund, Inc. – Capital Appreciation Portfolio

The Preferred Group of Mutual Funds - Preferred Large Cap Growth Fund

Scudder Focus Value Plus Growth Fund - Scudder Focus Value+Growth Fund

Scudder Variable Series II – SVS Focus Value+Growth Portfolio

Transamerica IDEX Mutual Funds – TA IDEX Jennison Growth

This form is for preclearing transactions in Initial Public Offering (IPO’s) and Private Placements for Access Persons and Private-Side Associates. Please include all requested information and submit the form to your business unit compliance officer. Your business unit compliance officer will review and respond to this request. The response will indicate that your request has either been approved or denied. A request is not considered approved until you receive a confirmation of approval from your business unit compliance officer. Preclearance is only valid until the close of the market on the day approval is granted.

Part I – Information on Individual Requesting Preclearance:

Name:

Phone#:

Fax#:

Department:

Division:

Employee’s signature:

Part II - Transaction Information:

Date:

Number of Shares/Options:

Transaction Type:

		Initial Public Offering

		Private Placement/Limited Partnership (A copy of the subscription agreement must be
		submitted to the Securities Monitoring Group of the Compliance Department).

Name of Issuer:

Account in which transaction will take place:

Part IV – Compliance/Law Response

Compliance Response:

APPROVED:

DENIED:

REVIEWER:

DATE/TIME:

Business Unit Head Response (only required for Private-Side Associates) :

APPROVED:

DENIED:

REVIEWER:

DATE/TIME:

Exhibit 99.(q)

Power of Attorney

The undersigned Directors and Trustees of the JennisonDryden Mutual Funds, the Strategic Partners Funds, The Prudential Variable Contract Accounts 2, 10 and 11, The High Yield Income Fund, Inc. and The Target Portfolio Trust, hereby constitute, appoint and authorize Deborah A. Docs, Jonathan D. Shain, William V. Healey, Kathryn C. Quirk, Grace C. Torres, Robert F. Gunia as true and lawful agents and attorneys-in-fact, to sign on his or her behalf in the capacities indicated, any Registration Statement or amendment thereto (including post-effective amendments), and to file the same, with all exhibits thereto, with the Securities and Exchange Commission. The undersigned do hereby give to said agents and attorneys-in-fact full power and authority to act in these premises, including, but not limited to, the power to appoint a substitute or substitutes to act hereunder with the same power and authority as said agents and attorneys-in-fact would have if personally acting. The undersigned do hereby approve, ratify and confirm all that said agents and attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.

/s/Linda W. Bynoe						/s/David E.A. Carson
Linda W. Bynoe						David E. A. Carson

/s/Robert F. Gunia						/s/Robert E. A. La Blanc
Robert F. Gunia						Robert E. A. La Blanc

/s/Douglas H. McCorkindale						/s/Richard A. Redeker
Douglas H. McCorkindale						Richard A. Redeker

/s/Judy A. Rice						/s/Robin B. Smith
Judy A. Rice						Robin B. Smith

/s/Stephen G. Stoneburn						/s/Clay T. Whitehead
Stephen G. Stoneburn						Clay T. Whitehead


Dated: March 2, 2005

Power of Attorney

The undersigned Treasurer and Principal Financial and Accounting Officer of the JennisonDryden Mutual Funds, the Strategic Partners Funds, The Prudential Variable Contract Accounts 2, 10 and 11, The High Yield Income Fund, Inc. and The Target Portfolio Trust, hereby constitutes, appoints and authorizes Deborah A. Docs, Jonathan D. Shain, William V. Healey, Kathryn C. Quirk, Robert F. Gunia as true and lawful agents and attorneys-in-fact, to sign on her behalf in the capacities indicated, any Registration Statement or amendment thereto (including post-effective amendments), and to file the same, with all exhibits thereto, with the Securities and Exchange Commission. The undersigned does hereby give to said agents and attorneys-in-fact full power and authority to act in these premises, including, but not limited to, the power to appoint a substitute or substitutes to act hereunder with the same power and authority as said agents and attorneys-in-fact would have if personally acting. The undersigned does hereby approve, ratify and confirm all that said agents and attorneys-in-fact, or any substitute or substitutes, may do by virtue hereof.

/s/ Grace C. Torres
Grace C. Torres


Dated: March 2, 2005

Private Securities (e.g., limited partnerships, private placements).