UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM N-Q

 

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

 

Investment Company Act file number:		811-06416
Exact name of registrant as specified in charter:		DTF Tax-Free Income Inc.
Address of principal executive offices:		55 East Monroe Street, Suite 3600, Chicago, IL 60603
Name and address of agent for service:		Deborah A. Docs Gateway Center 3, 100 Mulberry Street, Newark, New Jersey 07102
Registrant’s telephone number, including area code:		973-367-7521
Date of fiscal year end:		10/31/2005
Date of reporting period:		1/31/2005

---

Item 1.

Schedule of Investments [INSERT REPORT]

 

---

DTF TAX-FREE INCOME INC.

STATEMENT OF NET ASSETS (UNAUDITED)

As of January 31, 2005

 

Moody’s Rating

Principal Amount (000)

Description (a)

Value

LONG-TERM INVESTMENTS

140.3

%

Alabama

5.3

%

Jefferson Cnty. Swr. Rev.

Capital Impvt.

Aaa

$

3,000

(b)

5.125%, 2/1/29, Ser. A, F.G.I.C.

$

3,285,480

Prerefunded 2/1/09 @ $101

5.00%, 2/1/33, Ser. A, F.G.I.C.

Aaa

2,100

(b)

Prerefunded 2/1/09 @ $101

2,289,966

5.00%, 2/1/33, Ser. A, F.G.I.C.

Aaa

1,900

(b)

Prerefunded 2/1/04 @ $104

2,076,415

7,651,861

Alaska

0.4

%

Alaska St. Hsg. Fin. Corp.,

Rev., Ser. B-2

Aaa

500

5.00%, 12/1/11

527,360

California

25.9

%

Burbank Elec. Rev.,

Aaa

1,380

5.375%, 6/1/18, M.B.I.A.

1,544,123

Foothill/Eastern Trans. Corr.

Agency Toll Road Rev.,

Aaa

5,640

(b)

6.00%, 1/1/34, Ser. A

Prerefunded 1/1/07 @$100

6,028,991

Fresno Swr. Rev.,

Aaa

3,030

6.00%, 9/1/09, A.M.B.A.C.

3,467,259

Aaa

2,000

6.25%, 9/1/14, A.M.B.A.C

2,447,560

Los Angeles Wastewtr. Sys. Rev.,

Aaa

2,000

5.00%, 6/1/26, Ser. A, M.B.I.A.

2,111,400

Los Angeles Wtr. & Pwr. Rev., Ser. A,

Aaa

1,000

5.25%, 7/1/21, F.S.A.

1,103,540

Aaa

1,000

5.375%, 7/1/21, F.S.A.

1,114,800

Metro Wtr. Dist. Southern

California Waterwork Rev.

Aaa

1,500

5.00%, 10/1/29, M.B.I.A.

1,577,400

Pomona Sngl. Fam. Mtge. Rev.,

Aaa

2,170

(b)

7.375%, 8/1/10

2,423,738

Escrowed to maturity

Riverside Cnty. Sngl. Fam. Rev.,

Aaa

2,500

(b)

7.80%, 5/1/21, Ser. A,

3,519,000

Escrowed to maturity

San Bernardino Cnty. Residential

Mtge. Rev.,

Aaa

7,840

(b)

9.60%, 9/1/15,

11,863,488

Escrowed to maturity

Saratoga Union Sch. Dist.,

Aaa

1,040

Zero Coupon, 9/1/20, Ser. A, F.G.I.C.

511,191

37,712,490

Connecticut

3.3

%

Connecticut St. Tax Oblig. Rev.,

Aaa

1,000

5.25%, 7/1/17, Ser. B, A.M.B.A.C.

1,157,490

Mashantucket Western Pequot

Tribe Spl. Rev.,

Baa3

3,500

5.75%, 9/1/18, Ser. B

3,679,235

4,836,725

 

---

Moody’s Rating		Principal Amount (000)			Description (a)					Value
					District of Columbia		1.1	%
					District of Columbia Wtr. & Swr. Rev.,
Aaa		1,500			5.00%, 10/1/33, F.G.I.C.					1,555,425
					Florida		9.7	%
					Dade Cnty. FL Wtr. & Swr. Sys. Rev.,
Aaa		3,000			5.25%, 10/1/26, F.G.I.C.					3,177,090
					Florida Mun. Ln. Council Rev. North Miami
					Beach Wtr. Proj.,
Aaa		2,000			5.375%, 8/1/20, Ser. B, M.B.I.A.					2,482,117
					Miami-Dade Cnty. FL Storm Wtr. Util Rev.,
Aaa		2,000			5.00%, 4/1/27, M.B.I.A.					2,127,780
					Sarasota Cnty. Util. Sys. Rev.,
Aaa		1,000			5.25%, 10/1/16, Ser C, F.G.I.C.					1,113,890
					St. Petersburg Public Util. Rev.,
Aaa		5,000			5.00%, 10/1/28, Ser. A, F.S.A.					5,166,450
										14,067,327
					Georgia		16.1	%
					Atlanta Wtr. & Wastewtr. Rev.,
					Ser. A,
Aaa		2,385			5.00%, 11/1/29, F.G.I.C.					2,466,138
Aaa		715			5.00%, 11/1/38, F.G.I.C.					735,399
Aaa		2,615	(b)		5.00%, 11/1/29, F.G.I.C.					2,870,433
					Prerefunded 5/1/09 @ $101
Aaa		785	(b)		5.00%, 11/1/38, F.G.I.C.					861,679
					Prerefunded 5/1/09 @ $101
					De Kalb Cnty. Wtr. & Swr. Rev.,
Aa2		4,000			5.00%, 10/1/24					4,258,960
					Fulton Cnty. Sch. Dist. Gen. Oblig.
Aa2		2,000			5.375%, 1/1/16					2,304,400
					Georgia Mun. Elec. Auth. Pwr. Rev., Ser. Y,
Aaa		145	(b)		6.40%, 1/1/13, A.M.B.A.C.					172,025
					Escrowed to Maturity
Aaa		2,470			6.40%, 1/1/13, A.M.B.A.C.					2,900,817
					Georgia Mun. Elec. Auth. Rev.,
Aaa		5,500			6.50%, 1/1/20, Ser. X, A.M.B.A.C.					6,802,015
										23,371,866
					Hawaii		1.4	%
					Hawaii St. Dept. Budget & Fin. Rev.,
Aaa		2,000			4.80%, 1/1/25, Ser. A, F.G.I.C.					2,020,380
					Idaho		1.4	%
					Idaho Hsg. Agcy.,
					Sngl. Fam. Mtge. Sr., Ser. B,
Aa1		1,260			6.65%, 7/1/14					1,275,233
Aaa		718			6.60%, 7/1/27, F.H.A.					733,006
										2,008,239
					Illinois		4.6	%
					Chicago Gen. Oblig.,
Aaa		4,000			6.25%, 1/1/11, A.M.B.A.C.					4,570,560
					Chicago Park Dist., Gen. Oblig.,
Aaa		1,000			5.00%, 1/1/27, Ser. A, A.M.B.A.C.					1,052,910
					Lake Cnty. Wtr. & Swr. Sys. Rev.,
Aaa		1,000			5.50%, 12/1/10, Ser. A, A.M.B.A.C.					1,127,580
										6,751,050

 

---

Moody’s Rating			Principal Amount (000)			Description (a)					Value
						Indiana		5.6	%
						Indiana Mun. Pwr. Agcy., Pwr.
						Supply Sys. Rev.,
Aaa			5,000			6.00%, 1/1/13, Ser. B, M.B.I.A.					5,872,750
						Indianapolis Local Pub. Impvt.
						Bond Bank Waterworks Proj.,
Aaa			2,100			5.25%, 7/1/33, Ser. A, M.B.I.A.					2,245,635
											8,118,385
						Kentucky		1.4	%
						Louisville & Jefferson Cnty. Met.
						Swr. Dist. Swr. & Drain Sys. Rev.,
Aaa			2,000			5.00%, 5/15/30, Ser. A, F.G.I.C.					2,079,020
						Louisiana		0.9	%
						St. Charles Parish, Solid Waste & Disp. Rev.,
						(Louisiana Pwr. & Lt., Co.)
Aaa			1,250			7.00%, 12/1/22, Ser. A, F.S.A.					1,254,200
						Massachusetts		4.9	%
						Boston Wtr. & Swr. Comm. Rev.,
Aaa			2,000			5.00%, 11/1/28, Ser. D, F.G.I.C.					2,091,020
						Massachusetts St. Tpk. Auth.,
						Metro. Highway Sys. Rev.,
Aaa			2,500			4.75%, 1/1/34, Ser. A, A.M.B.A.C.					2,517,325
Aaa			2,355			5.125%, 1/1/23, Ser. B, M.B.I.A.					2,491,967
											7,100,312
						Michigan		3.0	%
						Detroit Wtr. Supply Sys. Rev.,
						Sr. Lien, Ser. A,
Aaa			2,000			5.50%, 7/1/24, F.G.I.C.					2,246,360
Aaa			2,000			5.00%, 7/1/30, F.G.I.C.					2,064,120
											4,310,480
						Mississipi		1.2	%
						Mississipi Gulf Coast Reg. Wastewtr. Auth.
						Rev., Wastewtr. Treatment Facs.,
AAA	*		1,500	(b)		7.00%, 7/1/12					1,793,955
						Escrowed to maturity
						Nebraska		4.8	%
						Lincoln San. Swr. Rev.,
Aaa			1,000			5.00%, 6/15/16, M.B.I.A.					1,093,570
						Omaha Pub. Pwr. Dist.,
						Elec. Rev., Ser. B,
Aa2			2,500	(b)		6.15%, 2/1/12					2,877,175
						Escrowed to maturity
Aa2			2,500	(b)		6.20%, 2/1/17					3,019,850
						Escrowed to maturity					6,990,595

 

---

Moody’s Rating		Principal Amount (000)		Description (a)					Value
				Nevada		3.2	%
				Las Vegas Valley Wtr. Dist.,
				Gen. Oblig.,
Aaa		1,400		5.00%, 6/1/25, Ser. B, M.B.I.A.					1,486,744
Aaa		3,000		5.00%, 6/1/32, Ser. A, F.G.I.C.					3,099,930
									4,586,674
				New Jersey		1.6	%
				New Jersey St. Gen. Oblig.,
Aa3		2,000		5.25%, 7/1/17, Ser. H					2,276,360
				New York		8.8	%
				Long Island Pwr. Auth. Elec.
				Sys. Rev.,
Aaa		4,000		5.25%, 12/1/26, Ser. A, M.B.I.A.					4,280,000
				Metro. Trans. Auth. Rev., Ser. A,
Aaa		1,000		5.25%, 11/15/31, F.G.I.C.					1,073,670
				New York City Mun. Wtr. Fin. Auth.,
				Wtr & Swr. Sys. Rev.,
Aaa		5,000		5.00%, 6/15/29, Ser. B, F.S.A.					5,208,600
				New York St. Dorm. Auth. Rev.,
				Comsewogue Pub. Lib. Insd.,
Aaa		2,020		6.00%, 7/1/15, M.B.I.A.					2,090,619
				New York St. Envir. Fac. Corp.,
				Poll. Ctrl. Rev.,
Aaa		200		7.125%, 12/1/29, Ser. D					204,660
									12,857,549
				Ohio		2.8	%
				Ohio St. Wtr. Dev. Auth. Rev.,
Aaa		2,445		5.50%, 6/1/20, Ser. B, F.S.A.					2,890,039
				Springboro Swr. Sys. Rev.
Aaa		1,045		5.00%, 6/1/26, M.B.I.A.					1,110,605
									4,000,644
				Puerto Rico		0.7	%
				Puerto Rico Elec. Auth. Rev.
Aaa		1,000		5.00%, 7/1/25, F.G.I.C.					1,075,350
				South Carolina		1.9	%
				Berkeley Cnty. Wtr. & Swr. Rev.,
Aaa		1,000		5.25%, 6/1/16, M.B.I.A.					1,117,070
				Spartanburg Waterworks Rev.,
				Jr. Lien.,
Aaa		1,500		5.25%, 6/1/28, F.G.I.C.					1,625,310
									2,742,380

 

---

Moody’s Rating		Principal Amount (000)			Description (a)					Value
					Texas		17.3	%
					Bexar Met. Wtr. Dist.
					Waterworks Sys. Rev.,
Aaa		2,500			5.00%, 5/1/25, M.B.I.A.					2,595,575
					Coastal Wtr. Auth. Contract Rev.,
					City Of Houston Proj.,
Aaa		4,000			5.00%, 12/15/25, F.S.A.					4,143,040
					El Paso Wtr. & Swr. Rev.,
Aaa		1,555			5.50%, 3/1/12, Ser. A, F.S.A.					1,769,466
					Harris Cnty. Toll Road Sub. Lien,
					Gen. Oblig.,
Aa1		1,650			7.00%, 8/15/10, Ser. A					1,974,060
					Houston Ind. Sch. Dist., Gen. Oblig.,
Aaa		1,000			4.50%, 2/15/26, F.S.A.					1,003,670
					Houston Wtr. & Swr. Sys. Rev.,
Aaa		3,500	(b)		5.00%, 12/1/28, Ser. A, F.S.A.					3,834,076
					Prerefunded 12/1/09 @$100
Aaa		1,500	(b)		5.25%, 12/1/23, Ser. B, F.G.I.C.					1,674,810
					Prerefunded 12/1/10 @$100
					Lower Colorado River Auth. Rev.,
					Jr. Lien-Fifth Suppl.,
Aaa		1,600	(b)		5.25%, 1/1/15, M.B.I.A.					1,818,480
					Escrowed to maturity
					Lower Colorado River Auth. Rev.,
					Ref. & Impvmnt., M.B.I.A.
Aaa		2,000			5.00%, 5/15/31, F.S.A.					2,057,420
					San Antonio Elec. & Gas Rev.,
Aa1		4,000			5.00%, 2/1/18, Ser. A					4,282,520
										25,153,117
					Virginia		2.8	%
					Henrico Cnty. Wtr & Swr. Rev.,
Aa2		3,985			5.00%, 5/1/28					4,125,152
					Washington		5.5	%
					Energy Northwest Wind Proj. Rev.,
Aaa		1,170			5.00%, 7/1/19, A.M.B.A.C.					1,246,729
Aaa		500			4.75%, 7/1/21, M.B.I.A.					520,795
					King Cnty. Swr. Rev.,
Aaa		2,500			5.00%, 1/1/31, F.G.I.C.					2,575,000
					Seattle Wtr. Sys. Dev. Rev.,
Aaa		1,000			5.00%, 9/1/18, M.B.I.A.					1,087,550
					Washington St. Pub. Pwr. Supply,
					Nuclear Proj. No. 2, Rev.,
Aaa		2,400			6.00%, 7/1/07, Ser. A					2,588,712
										8,018,786
					Wisconsin		1.5	%
					Milwaukee Met. Swr. Dist.,
					Gen. Oblig.,
Aa1		2,000			5.25%, 10/1/18, Ser. D					2,223,180

 

---

Moody’s Rating			Principal Amount (000)		Description (a)					Value
					Wyoming		3.2	%
					Wyoming St. Farm Loan Brd.
					Cap. Facs. Rev.,
AA	*		4,000		5.75%, 10/1/20						4,727,360
					Total long-term investments
					(cost $181,723,769)						203,936,222
			Shares
					SHORT-TERM INVESTMENT		3.5	%
					Goldman Sachs Tax Exempt
					Money Market Fund
NR			5,118,528		(cost $5,118,528)						5,118,528
					Total Investments		143.8	%
					(cost $186,842,297) (c)						209,054,750
			Other assets in excess of liabilities -				0.9	%			1,290,534
			Liquidation Value of Remarketed Preferred Stock				(44.7	)%			(65,000,000	)
			Net Assets Applicable to Common Stock –				100.0	%		$	145,345,284
			Net Asset Value per Common Share ($145,345,284 / 8,507,456)							$	17.08

---

(a)	The following abbreviations are used in portfolio descriptions:

 

A.M.B.A.C. - American Municipal Bond Assurance Corporation.

 

F.G.I.C. - Financial Guarantee Insurance Company.

 

F.H.A. - Federal Housing Authority.

 

F.S.A. - Financial Security Assurance Inc.

 

M.B.I.A. - Municipal Bond Insurance Association.

 

(b)	Prerefunded and escrowed to maturity issues are secured by escrowed cash, government obligations, or other securities.

 

(c)	At January 31, 2005, the Fund's most recent recent fiscal quarter end, based on a tax cost of investments of $186,388,399, the Fund had gross unrealized appreciation of $22,765,771 and gross unrealized depreciation of $99,420.

 

*	Standard & Poor’s rating.

 

NR	Not rated by Moody’s or Standard & Poor’s.

 

---

 

DTF TAX-FREE INCOME, INC. (THE “FUND”)

 

NOTES TO STATEMENT OF NET ASSETS (UNAUDITED)

 

Securities Valuation: The Fund values its fixed income securities by using market quotations, prices provided by market makers or estimates of market values obtained from yield data relating to instruments or securities with similar characteristics in accordance with procedures established by the Board of Directors of the Fund. The relative liquidity of some securities in the Fund’s portfolio may adversely affect the ability of the Fund to accurately value such securities. Any securities or other assets for which such current market quotations are not readily available are valued at fair value as determined in good faith under procedures established by and under the general supervision and responsibility of the Fund’s Board of Directors.

 

Debt securities having a remaining maturity of 60 days or less when purchased and debt securities originally purchased with maturities in excess of 60 days but which currently have maturities of 60 days or less are valued at cost adjusted for amortization of premiums and accretion of discounts, which approximates market value.

 

Other information regarding the Fund is available in the Fund’s most recent Report to Shareholders. This information is available on the Securities and Exchange Commission’s website (www.sec.gov).

 

---

Item 2.

Controls and Procedures

 

(a)

It is the conclusion of the registrant’s principal executive officer and principal financial officer that the effectiveness of the registrant’s current disclosure controls and procedures (such disclosure controls and procedures having been evaluated within 90 days of the date of this filing) provide reasonable assurance that the information required to be disclosed by the registrant has been recorded, processed, summarized and reported within the time period specified in the Commission’s rules and forms and that the information required to be disclosed by the registrant has been accumulated and communicated to the registrant’s principal executive officer and principal financial officer in order to allow timely decisions regarding required disclosure.

 

(b)

There have been no significant changes in the registrant’s internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

 

Item 3.

Exhibits

 

Certifications pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 – Attached hereto.

 

---

SIGNATURES

 

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

 

(Registrant) DTF Tax-Free Income Inc..
By (Signature and Title)*		/s/    NATHAN I. PARTAIN
		Nathan I. Partain
		President and Principal Executive Officer

 

Date March 28, 2005

 

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

 

By (Signature and Title)*		/s/    NATHAN I. PARTAIN
		Nathan I. Partain
		President and Principal Executive Officer

 

Date March 28, 2005

 

By (Signature and Title)*		/s/    ALAN M. MEDER
		Alan M. Meder
		Treasurer and Principal Financial Officer

 

Date March 28, 2005

 

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