Edgar Filing: GABELLI DIVIDEND & INCOME TRUST

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

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-21423

The Gabelli Dividend & Income Trust
-----------------------------------------------------------
(Exact name of registrant as specified in charter)

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

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

registrant's telephone number, including area code: 1-800-422-3554
---------------

Date of fiscal year end: December 31
------------

Date of reporting period: December 31, 2005
-------------------

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

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

ITEM 1. REPORTS TO STOCKHOLDERS.

The Report to Shareholders is attached herewith.

[LOGO]
THE GABELLI
DIVIDEND & INCOME TRUST

THE GABELLI DIVIDEND & INCOME TRUST

Annual Report
December 31, 2005

TO OUR SHAREHOLDERS,

The Sarbanes-Oxley Act requires a fund's principal executive and financial
officers to certify the entire contents of the semi-annual and annual
shareholder reports in a filing with the Securities and Exchange Commission on
Form N-CSR. This certification would cover the portfolio manager's commentary
and subjective opinions if they are attached to or a part of the financial
statements. Many of these comments and opinions would be difficult or impossible
to certify.

Because we do not want our portfolio managers to eliminate their opinions
and/or restrict their commentary to historical facts, we have separated their
commentary from the financial statements and investment portfolio and have sent
it to you separately. Both the commentary and the financial statements,
including the portfolio of investments, will be available on our website at
www.gabelli.com/funds.

Enclosed are the audited financial statements and the investment portfolio
as of December 31, 2005.

COMPARATIVE RESULTS
--------------------------------------------------------------------------------
AVERAGE ANNUAL RETURNS THROUGH DECEMBER 31, 2005 (A)
----------------------------------------------------

SINCE
INCEPTION
QUARTER 1 YEAR (11/28/03)
--------- ------- ----------

GABELLI DIVIDEND & INCOME TRUST NAV RETURN (B).............................. (1.15)% 8.71% 10.13%
GABELLI DIVIDEND & INCOME TRUST INVESTMENT RETURN (C)....................... (2.93) 4.85 0.24
S&P 500 Index............................................................... 2.08 4.91 10.19
Dow Jones Industrial Average................................................ 2.01 1.83 6.90
Nasdaq Composite Index...................................................... 2.49 1.37 5.82

(a) RETURNS REPRESENT PAST PERFORMANCE AND DO NOT GUARANTEE FUTURE RESULTS.
INVESTMENT RETURNS AND THE PRINCIPAL VALUE OF AN INVESTMENT WILL
FLUCTUATE. WHEN SHARES ARE SOLD, THEY MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE
PERFORMANCE DATA PRESENTED. VISIT WWW.GABELLI.COM FOR PERFORMANCE
INFORMATION AS OF THE MOST RECENT MONTH END. PERFORMANCE FIGURES FOR
PERIODS LESS THAN ONE YEAR ARE NOT ANNUALIZED. INVESTORS SHOULD CONSIDER
THE INVESTMENT OBJECTIVES, RISKS, CHARGES, AND EXPENSES OF THE FUND
CAREFULLY BEFORE INVESTING. THE DOW JONES INDUSTRIAL AVERAGE IS AN
UNMANAGED INDEX OF 30 LARGE CAPITALIZATION STOCKS. THE S&P 500 AND THE
NASDAQ COMPOSITE INDICES ARE UNMANAGED INDICATORS OF STOCK MARKET
PERFORMANCE. DIVIDENDS ARE CONSIDERED REINVESTED EXCEPT FOR THE NASDAQ
COMPOSITE INDEX.

(b) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN NAV,
REINVESTMENT OF DISTRIBUTIONS AT NAV ON THE EX-DIVIDEND DATE AND ARE NET
OF EXPENSES. SINCE INCEPTION RETURN BASED ON AN INITIAL NAV OF $19.06.

(c) TOTAL RETURNS AND AVERAGE ANNUAL RETURNS REFLECT CHANGES IN CLOSING MARKET
VALUES ON THE NEW YORK STOCK EXCHANGE AND REINVESTMENT OF DISTRIBUTIONS.
SINCE INCEPTION RETURN BASED ON AN INITIAL OFFERING PRICE OF $20.00.
--------------------------------------------------------------------------------

Sincerely yours,

/s/ Bruce N. Alpert

Bruce N. Alpert
February 13, 2006 President

THE GABELLI DIVIDEND & INCOME TRUST
SUMMARY OF PORTFOLIO HOLDINGS (UNAUDITED)

The following table presents portfolio holdings as a percent of total
investments as of December 31, 2005:

Repurchase Agreements ......................................... 14.4%
Financial Services ............................................ 13.7%
Energy and Utilities: Oil ..................................... 11.9%
Energy and Utilities: Integrated .............................. 11.3%
Telecommunications ............................................ 7.0%
Energy and Utilities: Electric ................................ 5.4%
Health Care ................................................... 5.0%
Food and Beverage ............................................. 4.7%
Energy and Utilities: Natural Gas ............................. 3.1%
Diversified Industrial ........................................ 3.0%
U.S. Government Obligations ................................... 2.9%
Computer Software and Services ................................ 1.5%
Retail ........................................................ 1.4%
Entertainment ................................................. 1.4%
Consumer Products ............................................. 1.3%
Hotels and Gaming ............................................. 1.3%
Cable and Satellite ........................................... 1.1%
Automotive: Parts and Accessories ............................. 1.1%
Communications Equipment ...................................... 1.0%
Specialty Chemicals ........................................... 1.0%
Wireless Communications ....................................... 0.8%
Equipment and Supplies ........................................ 0.7%
Transportation ................................................ 0.6%
Broadcasting .................................................. 0.6%
Energy and Utilities .......................................... 0.6%
Metals and Mining ............................................. 0.6%
Agriculture ................................................... 0.5%
Energy and Utilities: Water ................................... 0.5%
Machinery ..................................................... 0.5%
Publishing .................................................... 0.3%
Aerospace ..................................................... 0.3%
Business Services ............................................. 0.2%
Aviation: Parts and Services .................................. 0.2%
Environmental Services ........................................ 0.1%
Real Estate ................................................... 0.0%
Automotive: Parts and Accessories ............................. 0.0%
Real Estate Investment Trusts ................................. 0.0%
Building and Construction ..................................... 0.0%
------
100.0%
======

THE GABELLI DIVIDEND & INCOME TRUST (THE "FUND") FILES A COMPLETE SCHEDULE OF
PORTFOLIO HOLDINGS WITH THE SEC FOR THE FIRST AND THIRD QUARTERS OF EACH FISCAL
YEAR ON FORM N-Q, THE LAST OF WHICH WAS FILED FOR THE QUARTER ENDED SEPTEMBER
30, 2005. SHAREHOLDERS MAY OBTAIN THIS INFORMATION AT WWW.GABELLI.COM OR BY
CALLING THE FUND AT 800-GABELLI (800-422-3554). THE FUND'S FORM N-Q IS AVAILABLE
ON THE SEC'S WEBSITE AT WWW.SEC.GOV AND MAY ALSO BE REVIEWED AND COPIED AT THE
COMMISSION'S PUBLIC REFERENCE ROOM IN WASHINGTON, DC. INFORMATION ON THE
OPERATION OF THE PUBLIC REFERENCE ROOM MAY BE OBTAINED BY CALLING
1-800-SEC-0330.

PROXY VOTING

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

THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS
DECEMBER 31, 2005

MARKET
SHARES COST VALUE
------------ -------------- ----------------

COMMON STOCKS -- 78.3%
AEROSPACE -- 0.2%
10,000 Goodrich Corp......................... $ 281,823 $ 411,000
50,000 Kaman Corp............................ 770,713 984,500
300,000 Rolls-Royce Group plc+................ 2,085,104 2,206,527
3,340,000 Rolls-Royce Group plc,
Cl. B............................. 3,390 5,890
-------------- ----------------
3,141,030 3,607,917
-------------- ----------------
AGRICULTURE -- 0.5%
480,000 Archer-Daniels-Midland Co............. 7,891,851 11,836,800
-------------- ----------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 1.1%
543,100 Dana Corp............................. 9,208,337 3,899,458
455,000 Genuine Parts Co...................... 15,537,978 19,983,600
-------------- ----------------
24,746,315 23,883,058
-------------- ----------------
BROADCASTING -- 0.1%
27,000 Liberty Corp.......................... 1,252,414 1,263,870
-------------- ----------------
CABLE AND SATELLITE -- 1.1%
14,200 Cogeco Inc............................ 276,997 293,174
105,000 DIRECTV Group Inc.+................... 1,814,833 1,482,600
300,000 EchoStar Communications
Corp., Cl. A+..................... 9,097,026 8,151,000
90,000 Liberty Global Inc., Cl. A+........... 1,835,298 2,025,000
90,000 Liberty Global Inc., Cl. C+........... 1,763,325 1,908,000
147,800 PanAmSat Holding Corp................. 3,581,891 3,621,100
200,000 Rogers Communications Inc.,
Cl. B............................. 4,628,280 8,452,000
-------------- ----------------
22,997,650 25,932,874
-------------- ----------------
COMMUNICATIONS EQUIPMENT -- 0.6%
300,000 Scientific-Atlanta Inc................ 12,661,542 12,921,000
20,000 Thomas & Betts Corp.+................. 629,282 839,200
-------------- ----------------
13,290,824 13,760,200
-------------- ----------------
COMPUTER SOFTWARE AND SERVICES -- 1.5%
115,100 Anteon International Corp.+........... 6,233,265 6,255,685
300,000 Micromuse Inc.+....................... 2,962,480 2,967,000
2,406,700 Siebel Systems Inc.................... 24,937,598 25,462,886
-------------- ----------------
34,133,343 34,685,571
-------------- ----------------
CONSUMER PRODUCTS -- 1.3%
10,000 Altria Group Inc...................... 491,463 747,200
110,000 Avon Products Inc..................... 3,292,448 3,140,500
33,000 Eastman Kodak Co...................... 837,383 772,200
135,000 Gallaher Group plc, ADR............... 6,687,853 8,121,600
1,000 Kimberly-Clark Corp................... 53,184 59,650
120,000 Maytag Corp........................... 1,998,367 2,258,400
90,000 Procter & Gamble Co................... 4,748,057 5,209,200
700,000 Swedish Match AB...................... 7,085,845 8,238,404
-------------- ----------------
25,194,600 28,547,154
-------------- ----------------
DIVERSIFIED INDUSTRIAL -- 2.6%
250,000 Bouygues SA........................... 8,642,798 12,223,709
150,000 Cooper Industries Ltd., Cl. A......... 9,567,202 10,950,000
400,000 General Electric Co................... 12,858,817 14,020,000
210,000 Honeywell International Inc........... 6,925,030 7,822,500
30,000 ITT Industries Inc.................... 2,489,631 3,084,600
100,000 Sonoco Products Co.................... 2,400,642 2,940,000
1,000 Textron Inc........................... 51,500 76,980
1,051,000 Tomkins plc........................... 5,080,148 5,420,181
19,000 Tomkins plc, ADR...................... 372,688 391,590
108,000 WHX Corp.+............................ 1,061,571 1,096,200
-------------- ----------------
49,450,027 58,025,760
-------------- ----------------

MARKET
SHARES COST VALUE
------------ -------------- ----------------

ENERGY AND UTILITIES: ELECTRIC -- 5.4%
30,000 Allegheny Energy Inc.+................ $ 438,040 $ 949,500
120,000 ALLETE Inc............................ 3,983,448 5,280,000
315,000 American Electric
Power Co. Inc..................... 9,742,599 11,683,350
20,000 Cleco Corp............................ 349,431 417,000
400,000 DPL Inc............................... 7,865,335 10,404,000
17,500 DTE Energy Co......................... 667,957 755,825
270,000 Duquesne Light
Holdings Inc...................... 4,812,167 4,406,400
237,000 Electric Power Development
Co. Ltd........................... 6,918,340 8,138,805
230,000 FPL Group Inc......................... 7,915,075 9,558,800
610,000 Great Plains Energy Inc............... 18,714,180 17,055,600
600,000 Pepco Holdings Inc.................... 11,391,942 13,422,000
220,000 Pinnacle West Capital Corp............ 8,566,123 9,097,000
490,000 Southern Co........................... 14,616,327 16,919,700
398,100 Unisource Energy Corp................. 10,238,183 12,420,720
-------------- ----------------
106,219,147 120,508,700
-------------- ----------------
ENERGY AND UTILITIES: INTEGRATED -- 11.3%
12,000 Alliant Energy Corp................... 305,115 336,480
410,000 Ameren Corp........................... 18,639,891 21,008,400
35,000 Avista Corp........................... 610,184 619,850
11,000 Black Hills Corp...................... 335,198 380,710
22,800 Central Vermont Public
Service Corp...................... 446,712 410,628
33,000 CH Energy Group Inc................... 1,524,587 1,514,700
108,000 Chubu Electric
Power Co. Inc..................... 2,458,019 2,573,282
121,500 Chugoku Electric
Power Co. Inc..................... 2,194,052 2,354,072
345,000 Cinergy Corp.......................... 13,277,438 14,648,700
155,000 CONSOL Energy Inc..................... 3,596,342 10,102,900
200,000 Consolidated Edison Inc............... 8,201,972 9,266,000
20,000 Dominion Resources Inc................ 1,455,866 1,544,000
200,000 Duke Energy Corp...................... 4,391,221 5,490,000
430,000 Edison SpA+........................... 1,002,090 868,990
200,000 El Paso Corp.......................... 2,048,265 2,432,000
6,500 Empire District Electric Co. ......... 144,112 132,145
605,000 Endesa SA............................. 15,460,981 15,915,210
300,000 Enel SpA.............................. 2,324,318 2,356,542
47,000 Enel SpA, ADR......................... 1,839,336 1,848,040
139,500 Energy East Corp...................... 3,166,127 3,180,600
220,000 FirstEnergy Corp...................... 7,886,725 10,777,800
135,000 Hawaiian Electric
Industries Inc.................... 3,175,890 3,496,500
250,000 Hera SpA.............................. 552,073 668,160
121,500 Hokkaido Electric
Power Co. Inc..................... 2,282,208 2,472,548
121,500 Hokuriku Electric Power Co............ 2,131,359 2,400,433
121,500 Kansai Electric
Power Co. Inc..................... 2,333,021 2,611,629
80,500 Korea Electric
Power Corp., ADR.................. 1,181,180 1,568,945
121,500 Kyushu Electric
Power Co. Inc..................... 2,374,466 2,637,385
25,000 Maine & Maritimes Corp................ 746,488 387,000
10,000 MGE Energy Inc........................ 354,894 339,100
35,102 National Grid plc, ADR................ 1,588,562 1,709,116
255,000 NiSource Inc.......................... 5,329,541 5,319,300
600,000 NSTAR................................. 14,242,809 17,220,000
500,000 OGE Energy Corp....................... 12,037,779 13,395,000
50,000 Ormat Technologies Inc................ 750,000 1,307,000
330,000 Progress Energy Inc................... 14,816,426 14,493,600

See accompanying notes to financial statements.

THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2005

MARKET
SHARES COST VALUE
------------ -------------- ----------------

COMMON STOCKS (CONTINUED)
ENERGY AND UTILITIES: INTEGRATED (CONTINUED)
310,000 Public Service Enterprise
Group Inc......................... $ 19,276,360 $ 20,140,700
220,000 Scottish Power plc, ADR............... 6,417,661 8,223,600
121,500 Shikoku Electric
Power Co. Inc..................... 2,264,565 2,477,700
5,000 TECO Energy Inc....................... 85,338 85,900
121,500 Tohoku Electric
Power Co. Inc..................... 2,112,763 2,472,548
108,000 Tokyo Electric
Power Co. Inc..................... 2,545,172 2,623,649
2,000 TXU Corp.............................. 28,289 100,380
69,800 Vectren Corp.......................... 1,766,636 1,895,768
460,400 Westar Energy Inc..................... 9,104,988 9,898,600
90,000 Wisconsin Energy Corp................. 2,844,518 3,515,400
150,000 WPS Resources Corp.................... 6,859,066 8,296,500
800,000 Xcel Energy Inc....................... 13,785,616 14,768,000
-------------- ----------------
222,296,219 252,285,510
-------------- ----------------
ENERGY AND UTILITIES: NATURAL GAS -- 3.1%
8,500 AGL Resources Inc..................... 231,031 295,885
100,000 Atmos Energy Corp..................... 2,487,349 2,616,000
14,800 Delta Natural Gas Co. Inc............. 374,076 372,960
6,000 Energen Corp.......................... 124,550 217,920
380,000 KeySpan Corp.......................... 13,740,598 13,562,200
20,000 Kinder Morgan Energy
Partners LP....................... 824,553 956,400
50,000 Laclede Group Inc..................... 1,380,807 1,460,500
300,000 National Fuel Gas Co.................. 7,226,378 9,357,000
215,000 Nicor Inc............................. 7,320,919 8,451,650
220,000 ONEOK Inc............................. 5,480,182 5,858,600
260,000 Peoples Energy Corp................... 10,847,653 9,118,200
300,000 SEMCO Energy Inc.+.................... 1,686,087 1,686,000
200,000 Sempra Energy......................... 5,955,980 8,968,000
24,000 South Jersey Industries Inc. ......... 497,736 699,360
42,000 Southern Union Co.+................... 963,184 992,460
180,000 Southwest Gas Corp.................... 4,320,420 4,752,000
-------------- ----------------
63,461,503 69,365,135
-------------- ----------------
ENERGY AND UTILITIES: OIL -- 11.9%
10,000 Amerada Hess Corp..................... 830,468 1,268,200
7,000 Anadarko Petroleum Corp............... 391,850 663,250
40,000 Apache Corp........................... 1,905,219 2,740,800
20,000 Baker Hughes Inc...................... 759,763 1,215,600
46,900 BG Group plc, ADR..................... 1,893,244 2,329,523
160,000 BP plc, ADR........................... 7,479,063 10,275,200
150,000 Burlington Resources Inc.............. 10,274,084 12,930,000
5,000 Chesapeake Energy Corp................ 65,488 158,650
319,888 Chevron Corp.......................... 18,621,240 18,160,042
1,000 Cimarex Energy Co.+................... 28,300 43,010
320,000 ConocoPhillips........................ 14,875,206 18,617,600
40,000 Cooper Cameron Corp.+................. 1,103,787 1,656,000
65,000 Devon Energy Corp..................... 2,611,289 4,065,100
290,000 Diamond Offshore
Drilling Inc...................... 16,562,002 20,172,400
75,000 Eni SpA, ADR.......................... 6,854,713 10,459,500
225,000 Exxon Mobil Corp...................... 10,427,149 12,638,250
200,000 Halliburton Co........................ 9,744,120 12,392,000
89,994 Kerr-McGee Corp....................... 4,654,992 8,176,855
298,366 Marathon Oil Corp..................... 14,236,160 18,191,375
200,000 Murphy Oil Corp....................... 10,026,477 10,798,000
2,000 Nabors Industries Ltd.+............... 97,350 151,500
5,000 Noble Corp............................ 254,820 352,700
190,000 Occidental Petroleum Corp. ........... 13,311,017 15,177,200
25,000 PetroChina Co. Ltd., ADR.............. 1,840,007 2,049,000

MARKET
SHARES COST VALUE
------------ -------------- ----------------

280,000 Repsol YPF SA, ADR.................... $ 5,930,532 $ 8,234,800
200,000 Royal Dutch Shell plc,
Cl. A, ADR........................ 9,567,840 12,298,000
60,000 Schlumberger Ltd...................... 3,977,835 5,829,000
1,000 Seitel Inc.+.......................... 1,285 2,090
940,000 Statoil ASA, ADR...................... 13,338,307 21,582,400
200,000 Sunoco Inc............................ 8,156,500 15,676,000
100,000 Total SA, ADR......................... 8,988,541 12,640,000
80,000 Transocean Inc.+...................... 4,506,519 5,575,200
5,000 Vintage Petroleum Inc................. 241,450 266,650
-------------- ----------------
203,556,617 266,785,895
-------------- ----------------
ENERGY AND UTILITIES: WATER -- 0.5%
11,000 American States Water Co.............. 273,608 338,800
53,333 Aqua America Inc...................... 873,085 1,455,991
4,000 Artesian Resources Corp.,
Cl. A............................. 113,635 118,400
3,000 California Water
Service Group..................... 94,710 114,690
6,000 Connecticut Water
Service Inc....................... 152,821 147,060
6,000 Middlesex Water Co.................... 111,082 104,040
21,466 Pennichuck Corp....................... 417,620 438,765
45,000 SJW Corp.............................. 1,507,781 2,047,500
16,800 Southwest Water Co.................... 192,169 240,408
160,000 Suez SA............................... 5,222,977 4,978,039
168,000 Suez SA, Strips+...................... 0 1,989
36,000 United Utilities plc, ADR............. 774,333 839,520
11,000 Veolia Environnement.................. 304,150 497,993
6,000 York Water Co......................... 115,031 155,100
-------------- ----------------
10,153,002 11,478,295
-------------- ----------------
ENTERTAINMENT -- 1.2%
2,000 Grupo Televisa SA, ADR................ 79,516 161,000
500,000 The Walt Disney Co.................... 11,529,759 11,985,000
400,000 Time Warner Inc....................... 6,817,035 6,976,000
250,000 Vivendi Universal SA, ADR............. 7,761,402 7,857,500
-------------- ----------------
26,187,712 26,979,500
-------------- ----------------
ENVIRONMENTAL SERVICES -- 0.1%
100,000 Waste Management Inc.................. 2,820,012 3,035,000
-------------- ----------------
EQUIPMENT AND SUPPLIES -- 0.6%
115,000 CIRCOR International Inc.............. 2,094,187 2,950,900
29,000 Lufkin Industries Inc................. 457,313 1,446,230
45,000 Mueller Industries Inc................ 1,991,136 1,233,900
285,000 RPC Inc............................... 1,897,386 7,506,900
22,000 Weatherford
International Ltd.+............... 520,533 796,400
-------------- ----------------
6,960,555 13,934,330
-------------- ----------------
FINANCIAL SERVICES -- 13.0%
350,100 Alliance Capital Management
Holding LP........................ 11,985,180 19,777,149
370,000 American Express Co................... 16,473,279 19,040,200
265,000 American International
Group Inc......................... 16,018,612 18,080,950
74,000 Ameriprise Financial Inc.............. 2,378,274 3,034,000
200,000 AmSouth Bancorporation................ 5,110,276 5,242,000
182,442 Banca Antonveneta SpA................. 5,650,843 5,678,431
340,000 Bank of America Corp.................. 14,404,068 15,691,000
361,400 Bank of New York Co. Inc. ............ 11,720,504 11,510,590
5,000 BlackRock Inc., Cl. A................. 387,461 542,400
480,000 Citigroup Inc......................... 23,169,493 23,294,400
80,000 Commerce Bancorp Inc.................. 2,721,136 2,752,800
30,000 Deutsche Bank AG...................... 2,456,595 2,906,100
70,000 Fannie Mae............................ 3,368,870 3,416,700

See accompanying notes to financial statements.

THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2005

MARKET
SHARES COST VALUE
------------ -------------- ----------------

COMMON STOCKS (CONTINUED)
FINANCIAL SERVICES (CONTINUED)
40,000 Fidelity National
Financial Inc..................... $ 1,562,229 $ 1,471,600
7,000 Fidelity National Title
Group Inc., Cl. A................. 168,700 170,450
145,000 Fifth Third Bancorp................... 6,516,066 5,469,400
100,000 First Horizon National Corp........... 4,259,774 3,844,000
35,000 Flushing Financial Corp............... 663,554 544,950
44,300 Gold Banc Corp. Inc................... 789,510 807,146
27,000 Hartford Financial
Services Group Inc................ 1,748,090 2,319,030
520,000 JPMorgan Chase & Co................... 18,950,295 20,638,800
840,000 MBNA Corp............................. 21,925,256 22,806,000
67,000 Merrill Lynch & Co. Inc............... 4,352,426 4,537,910
135,000 Morgan Stanley........................ 6,866,538 7,659,900
180,000 New York Community
Bancorp Inc....................... 3,510,993 2,973,600
21,000 NewAlliance Bancshares Inc............ 308,926 305,340
30,000 North Fork
Bancorporation Inc................ 729,176 820,800
210,000 PNC Financial Services
Group Inc......................... 11,239,980 12,984,300
253,848 Popular Inc........................... 5,951,293 5,368,885
1,000 Progressive Corp...................... 89,520 116,780
330,010 Sovereign Bancorp Inc................. 7,300,160 7,134,816
290,000 St. Paul Travelers
Companies Inc..................... 10,913,064 12,954,300
15,750 Sterling Bancorp...................... 341,301 310,748
50,000 T. Rowe Price Group Inc............... 3,368,235 3,601,500
5,000 Unitrin Inc........................... 187,486 225,250
14,490 Valley National Bancorp............... 378,581 349,209
240,000 Wachovia Corp......................... 11,265,303 12,686,400
350,000 Waddell & Reed Financial
Inc., Cl. A....................... 7,779,892 7,339,500
32,000 Washington Mutual Inc................. 1,266,593 1,392,000
3,500 Webster Financial Corp................ 155,536 164,150
150,000 Wells Fargo & Co...................... 8,619,101 9,424,500
86,000 Wilmington Trust Corp................. 3,071,992 3,346,260
127,300 Zions Bancorporation.................. 8,617,330 9,618,788
-------------- ----------------
268,741,491 292,353,032
-------------- ----------------
FOOD AND BEVERAGE -- 4.7%
150,000 Anheuser-Busch
Companies Inc..................... 6,955,724 6,444,000
30,000 Campbell Soup Co...................... 881,564 893,100
220,000 Coca-Cola Co.......................... 9,736,509 8,868,200
210,000 ConAgra Foods Inc..................... 5,486,478 4,258,800
470,000 Dreyer's Grand Ice Cream
Holdings Inc., Cl. A.............. 36,629,575 38,953,600
190,000 General Mills Inc..................... 8,737,541 9,370,800
200,000 Groupe Danone......................... 20,753,729 20,895,734
50,000 Groupe Danone, ADR.................... 1,002,000 1,052,000
170,000 Heinz (H.J.) Co....................... 6,165,366 5,732,400
1,000 Kellogg Co............................ 35,550 43,220
40,000 Kraft Foods Inc., Cl. A............... 1,268,376 1,125,600
339,450 Parmalat SpA, GDR+.................... 981,615 825,814
310,000 Sara Lee Corp......................... 6,840,969 5,859,000
1,000 Wrigley (Wm.) Jr. Co.................. 55,998 66,490
-------------- ----------------
105,530,994 104,388,758
-------------- ----------------
HEALTH CARE -- 5.0%
470,000 Beverly Enterprises Inc.+............. 5,942,721 5,484,900
145,000 Bristol-Myers Squibb Co............... 3,552,525 3,332,100
1,000,000 Chiron Corp.+......................... 44,250,862 44,460,000
195,000 Eli Lilly & Co........................ 11,422,148 11,035,050
130,000 Guidant Corp.......................... 8,636,046 8,417,500

MARKET
SHARES COST VALUE
------------ -------------- ----------------

141,100 IDX Systems Corp.+.................... $ 6,122,849 $ 6,197,112
135,000 IMS Health Inc........................ 3,492,099 3,364,200
220,000 Merck & Co. Inc....................... 8,376,601 6,998,200
60,000 Owens & Minor Inc..................... 1,517,872 1,651,800
650,000 Pfizer Inc............................ 19,400,016 15,158,000
115,000 Renal Care Group Inc.+................ 5,313,134 5,440,650
10,000 Wyeth................................. 398,480 460,700
-------------- ----------------
118,425,353 112,000,212
-------------- ----------------
HOTELS AND GAMING -- 1.3%
30,000 GTECH Holdings Corp................... 986,033 952,200
2,000,000 Hilton Group plc...................... 9,246,478 12,507,955
150,000 Hilton Hotels Corp.................... 2,554,449 3,616,500
1,005,500 La Quinta Corp.+...................... 11,022,490 11,201,270
-------------- ----------------
23,809,450 28,277,925
-------------- ----------------
MACHINERY -- 0.5%
333,500 CNH Global NV......................... 6,600,187 6,183,090
60,000 Deere & Co............................ 3,880,374 4,086,600
-------------- ----------------
10,480,561 10,269,690
-------------- ----------------
METALS AND MINING -- 0.5%
10,000 Arch Coal Inc......................... 314,774 795,000
8,000 BHP Billiton Ltd., ADR................ 217,549 267,360
3,000 Fording Canadian Coal Trust........... 32,950 103,710
120,000 Freeport-McMoRan Copper
& Gold Inc., Cl. B................ 4,389,476 6,456,000
24,000 Inco Ltd.............................. 911,698 1,045,680
10,000 Massey Energy Co...................... 235,475 378,700
12,000 Peabody Energy Corp................... 291,734 989,040
12,000 Phelps Dodge Corp..................... 967,521 1,726,440
1,000 Rio Tinto plc, ADR.................... 127,360 182,790
3,000 Westmoreland Coal Co.+................ 52,605 68,700
-------------- ----------------
7,541,142 12,013,420
-------------- ----------------
PUBLISHING -- 0.3%
135,000 Dow Jones & Co. Inc................... 5,111,401 4,791,150
200,000 Reader's Digest
Association Inc................... 2,978,081 3,044,000
-------------- ----------------
8,089,482 7,835,150
-------------- ----------------
REAL ESTATE -- 0.0%
8,000 Brookfield Asset
Management Inc., Cl. A............ 186,196 402,640
-------------- ----------------
RETAIL -- 1.4%
720,000 Albertson's Inc....................... 16,741,286 15,372,000
160,000 Ingles Markets Inc., Cl. A............ 1,811,074 2,504,000
50,000 Reebok International Ltd.............. 2,862,402 2,911,500
475,000 Safeway Inc........................... 10,104,499 11,238,500
-------------- ----------------
31,519,261 32,026,000
-------------- ----------------
SPECIALTY CHEMICALS -- 1.0%
65,000 Ashland Inc........................... 2,532,334 3,763,500
165,200 Dow Chemical Co....................... 6,665,970 7,239,064
110,000 E.I. du Pont de
Nemours and Co.................... 4,769,592 4,675,000
200,000 Ferro Corp............................ 3,966,201 3,752,000
130,000 Olin Corp............................. 2,356,996 2,558,400
-------------- ----------------
20,291,093 21,987,964
-------------- ----------------
TELECOMMUNICATIONS -- 6.3%
700,000 AT&T Inc.............................. 17,162,018 17,143,000
650,000 BCE Inc............................... 14,200,755 15,567,500
205,000 BellSouth Corp........................ 5,462,246 5,555,500
74,000 BT Group plc, ADR..................... 2,312,412 2,840,120
20,000 CenturyTel Inc........................ 589,377 663,200

See accompanying notes to financial statements.

THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2005

MARKET
SHARES COST VALUE
------------ -------------- ----------------

COMMON STOCKS (CONTINUED)
TELECOMMUNICATIONS (CONTINUED)
50,000 Compania de
Telecomunicaciones de
Chile SA, ADR..................... $ 607,686 $ 440,000
100,000 Deutsche Telekom AG, ADR.............. 1,796,995 1,663,000
55,000 France Telecom SA, ADR................ 1,338,443 1,366,200
210,000 Hellenic Telecommunications
Organization SA, ADR+............. 1,644,219 2,200,800
700,000 MCI Inc............................... 17,541,123 13,811,000
205,000 Qwest Communications
International Inc.+............... 700,980 1,158,250
840,000 Sprint Nextel Corp.................... 18,063,759 19,622,400
370,000 TDC A/S............................... 20,709,078 22,163,599
370,000 TDC A/S, ADR.......................... 6,712,809 11,055,600
12,000 Telecom Corp. of New
Zealand Ltd., ADR................. 322,396 392,160
42,000 Telecom Italia SpA, ADR............... 1,285,636 1,226,820
26,000 Telefonica SA, ADR.................... 1,107,367 1,170,520
275,000 Telefonos de Mexico SA de
CV, Cl. L, ADR.................... 4,574,948 6,787,000
150,000 Telstra Corp. Ltd., ADR............... 2,756,717 2,149,500
80,000 TELUS Corp., Non-Voting............... 1,407,264 3,196,165
410,000 Verizon Communications Inc............ 13,915,384 12,349,200
-------------- ----------------
134,211,612 142,521,534
-------------- ----------------
TRANSPORTATION -- 0.4%
8,000 Frontline Ltd......................... 238,294 303,360
210,000 GATX Corp............................. 5,512,154 7,576,800
24,000 Golden Ocean Group Ltd.+.............. 14,400 13,512
4,000 Ship Finance
International Ltd................. 91,524 67,600
42,000 Teekay Shipping Corp.................. 1,312,136 1,675,800
-------------- ----------------
7,168,508 9,637,072
-------------- ----------------
WIRELESS COMMUNICATIONS -- 0.8%
17,000 Crown Castle
International Corp.+.............. 272,797 457,470
100,000 Nextel Partners Inc., Cl. A+.......... 2,789,720 2,794,000
2,750,000 O2 plc................................ 10,079,832 9,356,234
110,000 United States Cellular Corp.+......... 5,022,195 5,434,000
3,000 Vimpel-Communications,
ADR+.............................. 91,155 132,690
-------------- ----------------
18,255,699 18,174,394
-------------- ----------------
TOTAL
COMMON STOCKS..................... 1,578,003,663 1,757,803,360
-------------- ----------------

CONVERTIBLE PREFERRED STOCKS -- 2.6%
AEROSPACE -- 0.0%
8,315 Northrop Grumman Corp.,
7.000% Cv. Pfd., Ser. B........... 997,555 1,057,419
-------------- ----------------
AUTOMOTIVE -- 0.0%
20,000 General Motors Corp.,
4.500% Cv. Pfd., Ser. A........... 518,910 417,200
-------------- ----------------
AVIATION: PARTS AND SERVICES -- 0.2%
33,700 Sequa Corp.,
$5.00 Cv. Pfd..................... 3,187,375 3,504,800
-------------- ----------------
BROADCASTING -- 0.0%
20,460 Emmis Communications Corp.,
6.250% Cv. Pfd., Ser. A........... 960,081 912,107
-------------- ----------------
BUILDING AND CONSTRUCTION -- 0.0%
200 Fleetwood Capital Trust,
6.000% Cv. Pfd.+.................. 6,210 10,375
-------------- ----------------

MARKET
SHARES COST VALUE
------------ -------------- ----------------

BUSINESS SERVICES -- 0.1%
35,000 Allied Waste Industries Inc.,
6.250% Cv. Pfd.................... $ 1,864,442 $ 1,692,600
-------------- ----------------
DIVERSIFIED INDUSTRIAL -- 0.4%
179,400 Owens-Illinois Inc.,
4.750% Cv. Pfd.................... 5,956,159 6,099,600
80,502 Smurfit-Stone Container Corp.,
7.000% Cv. Pfd., Ser. A........... 2,008,346 1,823,370
1,000 U.S. Steel Corp.,
7.000% Cv. Pfd., Ser. B........... 88,510 153,645
-------------- ----------------
8,053,015 8,076,615
-------------- ----------------
ENERGY AND UTILITIES -- 0.6%
Chesapeake Energy Corp.,
5,000 5.000% Cv. Pfd. (a)............... 512,500 708,125
20,000 5.000% Cv. Pfd.................... 2,193,750 3,920,000
2,700 6.000% Cv. Pfd.................... 194,400 423,900
20,000 CMS Energy Corp.,
4.500% Cv. Pfd., Ser. B........... 1,069,063 1,597,500
130,000 El Paso Corp. Capital Trust I,
4.750% Cv. Pfd., Ser. C........... 4,680,219 4,295,200
40,000 Hanover Compressor
Capital Trust,
7.250% Cv. Pfd.................... 1,999,452 1,975,000
-------------- ----------------
10,649,384 12,919,725
-------------- ----------------
ENTERTAINMENT -- 0.1%
145,000 Six Flags Inc.,
7.250% Cv. Pfd., Ser. B........... 3,355,843 3,352,400
-------------- ----------------
FINANCIAL SERVICES -- 0.7%
4,500 Doral Financial Corp.,
4.750% Cv. Pfd.................... 940,920 715,500
215,000 National Australia Bank Ltd.,
7.875% Cv. Pfd.................... 8,179,114 8,471,000
138,900 Newell Financial Trust I,
5.250% Cv. Pfd.................... 6,516,450 5,694,900
-------------- ----------------
15,636,484 14,881,400
-------------- ----------------
HEALTH CARE -- 0.0%
10,000 Omnicare Inc.,
4.000% Cv. Pfd., Ser. B........... 605,400 742,700
-------------- ----------------
METALS AND MINING -- 0.1%
9,750 Arch Coal Inc.,
5.000% Cv. Pfd.................... 733,750 1,892,475
-------------- ----------------
REAL ESTATE INVESTMENT TRUSTS -- 0.0%
2,100 Equity Office Properties Trust,
5.250% Cv. Pfd., Ser. B........... 104,120 105,735
-------------- ----------------
TELECOMMUNICATIONS -- 0.4%
50,000 Cincinnati Bell Inc.,
6.750% Cv. Pfd., Ser. B........... 2,118,418 1,902,500
121,000 Crown Castle International Corp.,
6.250% Cv. Pfd.................... 5,568,000 6,443,250
-------------- ----------------
7,686,418 8,345,750
-------------- ----------------
TRANSPORTATION -- 0.0%
1,500 GATX Corp.,
$2.50 Cv. Pfd..................... 199,475 274,500
982 Kansas City Southern,
4.250% Cv. Pfd.................... 551,884 830,715
-------------- ----------------
751,359 1,105,215
-------------- ----------------
TOTAL CONVERTIBLE
PREFERRED STOCKS .................. 55,110,346 59,016,516
-------------- ----------------

See accompanying notes to financial statements.

THE GABELLI DIVIDEND & INCOME TRUST
SCHEDULE OF INVESTMENTS (CONTINUED)
DECEMBER 31, 2005

PRINCIPAL MARKET
AMOUNT COST VALUE
------------ -------------- ----------------

CONVERTIBLE CORPORATE BONDS -- 1.8%
AEROSPACE -- 0.1%
$ 1,000,000 GenCorp Inc., Sub. Deb. Cv.,
5.750%, 04/15/07.................. $ 993,738 $ 1,090,000
-------------- ----------------
AUTOMOTIVE: PARTS AND ACCESSORIES -- 0.0%
500,000 Standard Motor Products Inc.,
Sub. Deb. Cv.,
6.750%, 07/15/09.................. 480,811 427,500
-------------- ----------------
BROADCASTING -- 0.5%
13,240,000 Sinclair Broadcast Group Inc.,
Sub. Deb. Cv.,
6.000%, 09/15/12.................. 10,854,439 11,601,550
-------------- ----------------
BUSINESS SERVICES -- 0.1%
Trans-Lux Corp., Sub. Deb. Cv.,
2,000,000 7.500%, 12/01/06.................. 2,000,000 1,995,000
950,000 8.250%, 03/01/12.................. 947,271 921,500
-------------- ----------------
2,947,271 2,916,500
-------------- ----------------
COMMUNICATIONS EQUIPMENT -- 0.4%
8,000,000 Agere Systems Inc.,
Sub. Deb. Cv.,
6.500%, 12/15/09.................. 8,095,536 7,910,000
2,000,000 TriQuint Semiconductor Inc.,
Sub. Deb. Cv.,
4.000%, 03/01/07.................. 1,965,134 1,962,500
-------------- ----------------
10,060,670 9,872,500
-------------- ----------------
ENTERTAINMENT -- 0.1%
1,500,000 The Walt Disney Co., Cv.,
2.125%, 04/15/23.................. 1,523,203 1,507,500
-------------- ----------------
EQUIPMENT AND SUPPLIES -- 0.1%
1,000,000 Robbins & Myers Inc.,
Sub. Deb. Cv.,
8.000%, 01/31/08.................. 1,008,636 1,023,750
-------------- ----------------
FINANCIAL SERVICES -- 0.0%
250,000 AON Corp., Deb. Cv.,
3.500%, 11/15/12.................. 275,313 424,062
-------------- ----------------
METALS AND MINING -- 0.0%
400,000 Inco Ltd., Cv.,
Zero Coupon, 03/29/21............. 405,980 460,500
-------------- ----------------
REAL ESTATE -- 0.0%
Palm Harbor Homes Inc., Cv.,
100,000 3.250%, 05/15/24.................. 84,011 86,625
1,000,000 3.250%, 05/15/24 (a).............. 972,593 866,250
-------------- ----------------
1,056,604 952,875
-------------- ----------------
TELECOMMUNICATIONS -- 0.3%
6,000,000 Nortel Networks Corp., Cv.,
4.250%, 09/01/08.................. 5,731,863 5,655,000
-------------- ----------------
TRANSPORTATION -- 0.2%
3,000,000 GATX Corp., Cv.,
7.500%, 02/01/07.................. 3,226,423 3,521,250
-------------- ----------------
TOTAL CONVERTIBLE
CORPORATE BONDS................... 38,564,951 39,452,987
-------------- ----------------
SHARES
------------
WARRANTS -- 0.0%
FOOD AND BEVERAGE -- 0.0%
650 Parmalat SpA, GDR,
expire 12/31/15+ (a)................ 0 0
-------------- ----------------

PRINCIPAL MARKET
AMOUNT COST VALUE
------------ -------------- ----------------

SHORT-TERM OBLIGATIONS -- 17.3%
REPURCHASE AGREEMENTS -- 14.4%
$200,000,000 ABN Amro, 3.300%, dated
12/30/05, due 01/03/06,
proceeds at maturity,
$200,073,333 (b).................. $ 200,000,000 $ 200,000,000
122,720,000 Barclays Capital Inc.,
3.300%, dated 12/30/05,
due 01/03/06, proceeds at
maturity, $122,764,997 (c)........ 122,720,000 122,720,000
-------------- ----------------
322,720,000 322,720,000
-------------- ----------------
U.S. GOVERNMENT OBLIGATIONS -- 2.9%
64,687,000 U.S. Treasury Bills,
3.720% to 3.965%++,
01/19/06 to 03/23/06 (d) ........ 64,328,542 64,323,875
-------------- ----------------
TOTAL SHORT-TERM
OBLIGATIONS....................... 387,048,542 387,043,875
-------------- ----------------

TOTAL INVESTMENTS -- 100.0%.......................... $2,058,727,502 2,243,316,738
==============
OTHER ASSETS AND LIABILITIES (NET)................... (5,161,563)
-----------------
PREFERRED STOCK
(5,814,200 preferred shares outstanding)......... (500,000,000)
----------------
NET ASSETS -- COMMON SHARES
(84,313,405 common shares outstanding)........... $ 1,738,155,175
================
NET ASSET VALUE PER COMMON SHARE
($1,738,155,175 / 84,313,405 shares outstanding). $ 20.62
================

SECURITIES SOLD SHORT -- (0.1)%

NUMBER OF MARKET
SHARES PROCEEDS VALUE
------------ -------------- ----------------
COMMON STOCKS -- (0.1)%
METALS AND MINING -- (0.1)%
23,385 Arch Coal Inc......................... $ 1,852,975 $ 1,859,108
-------------- ----------------

________________

(a) Security exempt from registration under Rule 144A of the Securities Act of
1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers. At December
31, 2005, the Rule 144A securities are considered liquid and the market
value amounted to $1,574,375 or 0.07% of total investments.

(b) Collateralized by U.S. Treasury Notes, 2.375%, due 08/15/06, market value
$204,000,000.

(d) At December 31, 2005, $500,000 of the principal amount was pledged as
collateral for securities sold short.

+ Non-income producing security.

++ Represents annualized yield at date of purchase.

ADR American Depository Receipt

GDR Global Depository Receipt

% OF
MARKET MARKET
VALUE VALUE
------- --------------
GEOGRAPHIC DIVERSIFICATION
North America ................... 85.2% $1,911,168,529
Europe .......................... 12.0 269,428,520
Latin America ................... 1.1 25,530,673
Japan ........................... 1.4 30,762,051
Asia/Pacific .................... 0.3 6,426,965
------- --------------
Total Investments ............... 100.0% $2,243,316,738
======= ==============

See accompanying notes to financial statements.

THE GABELLI DIVIDEND & INCOME TRUST

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 2005

ASSETS:
Investments, at value (cost $1,736,007,502) ............... $1,920,596,738
Repurchase agreements, at value (cost $322,720,000) ....... 322,720,000
Segregated cash............................................ 89,141
Cash....................................................... 1,088
Unrealized appreciation on swap contracts.................. 2,935,711
Dividends and interest receivable.......................... 2,906,325
Receivable for investments sold............................ 2,542,448
Other assets .............................................. 74,019
--------------
TOTAL ASSETS............................................... 2,251,865,470
--------------
LIABILITIES:
Securities sold short (proceeds $1,852,975)................ 1,859,108
Payable for investments purchased ......................... 5,922,963
Payable for investment advisory fees....................... 4,809,823
Payable for offering expenses.............................. 431,133
Dividends payable.......................................... 251,205
Other accrued expenses..................................... 436,063
--------------
TOTAL LIABILITIES ......................................... 13,710,295
--------------
PREFERRED STOCK:
Series A Cumulative Preferred Stock (5.875%, $25
liquidation value, $0.001 par value, 3,200,000 shares
authorized with 3,200,000 shares issued and
outstanding)............................................ 80,000,000
Series B Cumulative Preferred Stock (Auction Market,
$25,000 liquidation value, $0.001 par value,
4,000 shares authorized with 4,000 shares
issued and outstanding) ................................ 100,000,000
Series C Cumulative Preferred Stock (Auction Market,
$25,000 liquidation value, $0.001 par value,
4,800 shares authorized with 4,800 shares
issued and outstanding)................................. 120,000,000
Series D Cumulative Preferred Stock (6.00%,
$25 liquidation value, $0.001 par value,
2,600,000 shares authorized with 2,600,000
shares issued and outstanding).......................... 65,000,000
Series E Cumulative Preferred Stock (Auction Rate,
$25,000 liquidation value, $0.001 par value,
5,400 shares authorized with 5,400 shares
issued and outstanding)................................. 135,000,000
--------------
TOTAL PREFERRED STOCK ..................................... 500,000,000
--------------
NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS ............................................ $1,738,155,175
==============
NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS CONSIST OF:
Shares of beneficial interest, at $0.001 par value......... $ 84,313
Additional paid-in capital ................................ 1,550,561,641
Undistributed net investment income........................ 132,784
Accumulated distributions in excess of net realized
gain on investments, options, securities sold
short, and foreign currency transactions................ (140,896)
Net unrealized appreciation on investments
and swap contracts ..................................... 187,524,947
Net unrealized depreciation on securities sold short....... (6,133)
Net unrealized depreciation on foreign
currency translations .................................. (1,481)
--------------
NET ASSETS ................................................ $1,738,155,175
==============
NET ASSET VALUE PER COMMON SHARE
($1,738,155,175 / 84,313,405 shares outstanding;
unlimited number of shares authorized).................. $ 20.62
==============

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2005

INVESTMENT INCOME:
Dividends (net of foreign taxes of $1,167,089)............. $ 56,018,518
Interest .................................................. 14,497,102
--------------
TOTAL INVESTMENT INCOME.................................... 70,515,620
--------------
EXPENSES:
Investment advisory fees .................................. 20,599,143
Auction agent fees......................................... 610,826
Shareholder communications expenses ....................... 550,817
Payroll expenses........................................... 278,409
Custodian fees ............................................ 179,919
Trustees' fees ............................................ 179,466
Legal and audit fees ...................................... 116,948
Shareholder services fees.................................. 33,406
Dividends on securities sold short......................... 2,025
Miscellaneous expenses .................................... 428,882
--------------
TOTAL EXPENSES............................................. 22,979,841
Less: Custodian fee credits................................ (13,496)
--------------
TOTAL NET EXPENSES......................................... 22,966,345
--------------
NET INVESTMENT INCOME ..................................... 47,549,275
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, OPTIONS, SWAP CONTRACTS, SECURITIES
SOLD SHORT, AND FOREIGN CURRENCY:
Net realized gain on investments........................... 67,982,211
Net realized gain on option contracts written.............. 144,095
Net realized loss on swap contracts........................ (205,774)
Net realized gain on securities sold short................. 276,526
Net realized gain on foreign currency transactions......... 157,883
--------------
Net realized gain on investments, options, swap
contracts, and foreign currency transactions............ 68,354,941
Net change in unrealized appreciation/depreciation
on investments, options, swap contracts, and
foreign currency translations........................... 43,584,535
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS, OPTIONS, SWAP CONTRACTS,
AND FOREIGN CURRENCY.................................... 111,939,476
--------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS......................................... 159,488,751
Total Distributions to Preferred
Stock Shareholders ..................................... (13,480,202)
--------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON
SHAREHOLDERS RESULTING FROM OPERATIONS.................. $ 146,008,549
==============

See accompanying notes to financial statements.

THE GABELLI DIVIDEND & INCOME TRUST

STATEMENT OF CHANGES IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS

YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------- -----------------

OPERATIONS:
Net investment income ................................................................... $ 47,549,275 $ 35,159,011
Net realized gain on investments, options, swap contracts, securities sold short, and
foreign currency transactions ........................................................ 68,354,941 19,906,221
Net change in unrealized appreciation on investments, options, swap contracts,
and foreign currency translations .................................................... 43,584,535 128,766,916
----------------- -----------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS .................................... 159,488,751 183,832,148
----------------- -----------------
DISTRIBUTIONS TO PREFERRED STOCK SHAREHOLDERS:
Net investment income ................................................................... (5,432,355) (1,276,372)
Net realized short-term gains on investments, options and foreign currency transactions . (1,314,615) (342,333)
Net realized long-term gains on investments, options and foreign currency transactions .. (6,733,232) (439,984)
----------------- -----------------
TOTAL DISTRIBUTIONS TO PREFERRED STOCK SHAREHOLDERS ..................................... (13,480,202) (2,058,689)
----------------- -----------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS ............................................................ 146,008,549 181,773,459
----------------- -----------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ................................................................... (40,982,793) (33,326,081)
Net realized short-term gains on investments, options and foreign currency transactions . (9,917,725) (8,938,304)
Net realized long-term gains on investments, options and foreign currency transactions .. (50,796,878) (11,487,977)
Return of capital ....................................................................... -- (48,189,583)
----------------- -----------------
TOTAL DISTRIBUTIONS TO COMMON SHAREHOLDERS .............................................. (101,697,396) (101,941,945)
----------------- -----------------
TRUST SHARE TRANSACTIONS:
Net increase in net assets from common shares issued in offering ........................ -- 185,270,000
Net decrease from repurchase of common stock ............................................ (9,076,752) (4,246,068)
Offering costs for common shares charged to paid-in capital ............................. -- (482,528)
Offering costs for preferred shares charged to paid-in capital .......................... (3,782,570) (5,320,000)
----------------- -----------------
NET INCREASE (DECREASE) IN NET ASSETS FROM TRUST SHARE TRANSACTIONS ..................... (12,859,322) 175,221,404
----------------- -----------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS .......................... 31,451,831 255,052,918

NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS:
Beginning of period ..................................................................... 1,706,703,344 1,451,650,426
----------------- -----------------
End of period (including undistributed net investment income of $132,784 and $0,
respectively) ........................................................................ $ 1,738,155,175 $ 1,706,703,344
================= =================

See accompanying notes to financial statements.

THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION. The Gabelli Dividend & Income Trust (the "Trust" or the "Fund")
is a non-diversified closed-end management investment company organized under
the laws of the State of Delaware and registered under the Investment Company
Act of 1940, as amended (the "1940 Act"). The Trust sold 7,184 shares to Gabelli
Funds, LLC (the "Adviser") for $137,214 on November 18, 2003. Investment
operations commenced on November 28, 2003.

The Trust's investment objective is to provide a high level of total
return on its assets with an emphasis on dividends and income. The Trust will
attempt to achieve its investment objective by investing, under normal market
conditions, at least 80% of its assets in dividend paying securities (such as
common and preferred stock) or other income producing securities (such as fixed
income debt securities and securities that are convertible into equity
securities).

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

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

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

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

REPURCHASE AGREEMENTS. The Trust may enter into repurchase agreements with
primary government securities dealers recognized by the Federal Reserve Board,
with member banks of the Federal Reserve System, or with other brokers or
dealers that meet credit guidelines established by the Adviser and reviewed by
the Board. Under the terms of a typical repurchase agreement, the Trust takes
possession of an underlying debt obligation subject to an obligation of the
seller to repurchase, and the Trust to resell, the obligation at an agreed-upon
price and time, thereby determining the yield during the Trust's holding period.
The Trust will always receive and maintain securities as collateral whose market
value, including accrued interest, will be at least equal in value to the dollar
amount invested by the Trust in each agreement. The Trust will make payment for
such securities only upon physical delivery or upon evidence of book entry
transfer of the collateral to the account of the custodian. To the extent that
any repurchase transaction exceeds one business day, the value of the collateral
is marked-to-market on a daily basis to maintain the adequacy of the collateral.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Trust may be delayed or limited.

OPTIONS. The Trust may purchase or write call or put options on securities
or indices. As a writer of put options, the Trust receives a premium at the
outset and then bears the risk of unfavorable changes in the price of the
financial instrument underlying the option. The Trust would incur a loss if the
price of the underlying financial instrument decreases between the date the
option is written and the date on which the option is terminated. The Trust
would realize a gain, to the extent of the premium, if the price of the
financial instrument increases between those dates.

THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

As a purchaser of put options, the Trust pays a premium for the right to
sell to the seller of the put option the underlying security at a specified
price. The seller of the put has the obligation to purchase the underlying
security upon exercise at the exercise price. If the price of the underlying
security declines, the Trust would realize a gain upon sale or exercise. If the
price of the underlying security increases or stays the same, the Trust would
realize a loss upon sale or at expiration date, but only to the extent of the
premium paid.

In the case of call options, these exercise prices are referred to as
"in-the-money," "at-the-money," and "out-of-the-money," respectively. The Trust
may write (a) in-the-money call options when the Adviser expects that the price
of the underlying security will remain stable or decline moderately during the
option period, (b) covered at-the-money call options when the Adviser expects
that the price of the underlying security will remain stable or advance
moderately during the option period and (c) out-of-the-money call options when
the Adviser expects that the premiums received from writing the call option will
be greater than the appreciation in the price of the underlying security above
the exercise price. By writing a call option, the Trust limits its opportunity
to profit from any increase in the market value of the underlying security above
the exercise price of the option. Out-of-the-money, at-the-money, and
in-the-money put options (the reverse of call options as to the relation of
exercise price to market price) may be utilized in the same market environments
that such call options are used in equivalent transactions.

SWAP AGREEMENTS. The Trust may enter into interest rate swap or cap
transactions. The use of interest rate swaps and caps is a highly specialized
activity that involves investment techniques and risks different from those
associated with ordinary portfolio security transactions. In an interest rate
swap, the Trust would agree to pay to the other party to the interest rate swap
(which is known as the "counterparty") periodically a fixed rate payment in
exchange for the counterparty agreeing to pay to the Trust periodically a
variable rate payment that is intended to approximate the Trust's variable rate
payment obligation on the Series B, Series C, and Series E Preferred Stock. In
an interest rate cap, the Trust would pay a premium to the counterparty and, to
the extent that a specified variable rate index exceeds a predetermined fixed
rate, would receive from the counterparty payments of the difference based on
the notional amount of such cap. Interest rate swap and cap transactions
introduce additional risk because the Trust would remain obligated to pay
preferred stock dividends when due in accordance with the Articles Supplementary
even if the counterparty defaulted. If there is a default by the counterparty to
a swap contract, the Trust will be limited to contractual remedies pursuant to
the agreements related to the transaction. There is no assurance that the swap
contract counterparties will be able to meet their obligations pursuant to the
swap contracts or that, in the event of default, the Trust will succeed in
pursuing contractual remedies. The Trust thus assumes the risk that it may be
delayed in or prevented from obtaining payments owed to it pursuant to the swap
contracts. The creditworthiness of the swap contract counterparties is closely
monitored in order to minimize this risk. Depending on the general state of
short-term interest rates and the returns on the Trust's portfolio securities at
that point in time, such a default could negatively affect the Trust's ability
to make dividend payments for the Series B, Series C, and Series E Preferred
Stock. In addition, at the time an interest rate swap or cap transaction reaches
its scheduled termination date, there is a risk that the Trust will not be able
to obtain a replacement transaction or that the terms of the replacement will
not be as favorable as on the expiring transaction. If this occurs, it could
have a negative impact on the Trust's ability to make dividend payments on the
Series B, Series C, and Series E Preferred Stock.

The use of derivative instruments involves, to varying degrees, elements
of market risk in excess of the amount recognized in the Statement of Assets and
Liabilities.

Unrealized gains related to swaps are reported as an asset and unrealized
losses are reported as a liability in the Statement of Assets and Liabilities.
The change in value of swaps, including the accrual of periodic amounts of
interest to be paid or received on swaps is reported as unrealized gains or
losses in the Statement of Operations. A realized gain or loss is recorded upon
payment or receipt of a periodic payment or termination of swap agreements. Swap
agreements involve, to varying degrees, elements of market and counterparty
risk, and exposure to loss in excess of the related amounts reflected in the
Statement of Assets and Liabilities.

The Trust has entered into one interest rate swap agreement with Citibank
N.A. Under the agreement the Trust receives a floating rate of interest and pays
a respective fixed rate of interest on the nominal value of the swap. Details of
the swap at December 31, 2005 are as follows:

NOTIONAL VARIABLE RATE* TERMINATION UNREALIZED
AMOUNT FIXED RATE (RATE RESET MONTHLY) DATE APPRECIATION
------------ ---------- -------------------- ------------ -------------
$100,000,000 4.01% 4.29375% June 2, 2010 $2,935,711

____________________________
* Based on Libor (London Interbank Offered Rate).

THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

FUTURES CONTRACTS. The Trust may engage in futures contracts for the
purpose of hedging against changes in the value of its portfolio securities and
in the value of securities it intends to purchase. Such investments will only be
made if they are economically appropriate to the reduction of risks involved in
the management of the Trust's investments. Upon entering into a futures
contract, the Trust is required to deposit with the broker an amount of cash or
cash equivalents equal to a certain percentage of the contract amount. This is
known as the "initial margin." Subsequent payments ("variation margin") are made
or received by the Trust each day, depending on the daily fluctuation of the
value of the contract. The daily changes in the contract are included in
unrealized appreciation/depreciation on investments and futures contracts. The
Trust recognizes a realized gain or loss when the contract is closed.

There are several risks in connection with the use of futures contracts as
a hedging instrument. The change in value of futures contracts primarily
corresponds with the value of their underlying instruments, which may not
correlate with the change in value of the hedged investments. These contracts
may involve market risk in excess of the unrealized gain or loss reflected in
the Statement of Assets and Liabilities. In addition, there is the risk that the
Fund may not be able to enter into a closing transaction because of an illiquid
secondary market. At December 31, 2005, there were no open futures contracts.

SECURITIES SOLD SHORT. The Trust may enter into short sale transactions. A
short sale involves selling a security which the Fund does not own. The proceeds
received for short sales are recorded as liabilities and the Fund records an
unrealized gain or loss to the extent of the difference between the proceeds
received and the value of the open short position on the day of determination.
The Fund records a realized gain or loss when the short position is closed out.
By entering into a short sale, the Fund bears the market risk of an unfavorable
change in the price of the security sold short. Dividends on short sales are
recorded as an expense by the Fund on the ex-dividend date and interest expense
is recorded on the accrual basis. Securities sold short at December 31, 2005 are
reflected in the Schedule of Investments.

FORWARD FOREIGN EXCHANGE CONTRACTS. The Trust may engage in forward
foreign exchange contracts for hedging a specific transaction with respect to
either the currency in which the transaction is denominated or another currency
as deemed appropriate by the Adviser. Forward foreign exchange contracts are
valued at the forward rate and are marked-to-market daily. The change in market
value is included in unrealized appreciation/depreciation on investments and
foreign currency translations. When the contract is closed, the Trust records a
realized gain or loss equal to the difference between the value of the contract
at the time it was opened and the value at the time it was closed.

The use of forward foreign exchange contracts does not eliminate
fluctuations in the underlying prices of the Trust's portfolio securities, but
it does establish a rate of exchange that can be achieved in the future.
Although forward foreign exchange contracts limit the risk of loss due to a
decline in the value of the hedged currency, they also limit any potential gain
that might result should the value of the currency increase. These contracts may
involve market risk in excess of the unrealized gain or loss reflected in the
Statement of Assets and Liabilities. In addition, the Trust could be exposed to
risks if the counterparties to the contracts are unable to meet the terms of
their contracts. At December 31, 2005, there were no open forward foreign
exchange contracts.

FOREIGN CURRENCY TRANSLATIONS. The books and records of the Trust are
maintained in United States (U.S.) dollars. Foreign currencies, investments, and
other assets and liabilities are translated into U.S. dollars at the current
exchange rates. Purchases and sales of investment securities, income, and
expenses are translated at the exchange rate prevailing on the respective dates
of such transactions. Unrealized gains and losses that result from changes in
foreign exchange rates and/or changes in market prices of securities have been
included in unrealized appreciation/depreciation on investments and foreign
currency translations. Net realized foreign currency gains and losses resulting
from changes in exchange rates include foreign currency gains and losses between
trade date and settlement date on investment securities transactions, foreign
currency transactions, and the difference between the amounts of interest and
dividends recorded on the books of the Trust and the amounts actually received.
The portion of foreign currency gains and losses related to fluctuation in
exchange rates between the initial trade date and subsequent sale trade date is
included in realized gain/(loss) on investments.

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

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

THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

RESTRICTED AND ILLIQUID SECURITIES. The Trust is not subject to an
independent limitation on the amount it may invest in securities for which the
markets are illiquid. Illiquid securities include securities the disposition of
which is subject to substantial legal or contractual restrictions. The sale of
illiquid securities often requires more time and results in higher brokerage
charges or dealer discounts and other selling expenses than does the sale of
securities eligible for trading on national securities exchanges or in the
over-the-counter markets. Restricted securities may sell at a price lower than
similar securities that are not subject to restrictions on resale. Securities
freely salable among qualified institutional investors under special rules
adopted by the Securities and Exchange Commission ("SEC") may be treated as
liquid if they satisfy liquidity standards established by the Board. The
continued liquidity of such securities is not as well assured as that of
publicly traded securities, and accordingly the Board will monitor their
liquidity.

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

CUSTODIAN FEE CREDITS. When cash balances are maintained in the custody
account, the Fund receives credits which are used to offset custodian fees. The
gross expenses paid under the custody arrangement are included in custodian fees
in the Statement of Operations with the corresponding expense offset shown as
"custodian fee credits".

DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS. Distributions to common
shareholders are recorded on the ex-dividend date. Income distributions and
capital gain distributions are determined in accordance with Federal income tax
regulations, which may differ from that determined under U.S. generally accepted
accounting principles. These differences are primarily due to differing
treatments of income and gains on various investment securities held by the
Trust, foreign currency transactions, timing differences, and differing
characterizations of distributions made by the Trust. These book/tax differences
are either temporary or permanent in nature. To the extent these differences are
permanent, adjustments are made to the appropriate capital accounts in the
period when the differences arise. These reclassifications have no impact on the
NAV of the Trust and the calculation of net investment income per share in the
Financial Highlights includes these adjustments. For the year ended December 31,
2005, reclassifications were made to decrease accumulated net investment income
by $1,001,343 and to decrease accumulated distributions in excess of net
realized gain on investments, swap contracts, options, and foreign currency
transactions by $1,001,343.

Distributions to shareholders of the Trust's 5.875% Series A Cumulative
Preferred Stock, Series B Auction Market Cumulative Preferred Stock, Series C
Auction Market Cumulative Preferred Stock, 6.00% Series D Cumulative Preferred
Stock, and Series E Auction Rate Cumulative Preferred Stock ("Cumulative
Preferred Stock") are recorded on a daily basis and are determined as described
in Note 5.

The tax character of distributions paid during the years ended December
31, 2005 and December 31, 2004 was as follows:

YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
--------------------------- ---------------------------
Common Preferred Common Preferred
------------ ------------ ------------ ------------

Distributions paid from:
Ordinary income
(inclusive of short-term capital gains) .... $ 50,900,518 $ 6,746,970 $ 42,201,712 $ 1,616,305
Net long-term capital gains .................. 50,796,878 6,733,232 11,550,650 442,384
Non-taxable return of capital ................ -- -- 48,189,583 --
------------ ------------ ------------ ------------
Total distributions paid ..................... $101,697,396 $ 13,480,202 $101,941,945 $ 2,058,689
============ ============ ============ ============

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

As of December 31, 2005, the components of accumulated earnings/(losses)
on a tax basis were as follows:

Net unrealized appreciation on investments ................. $ 184,448,340
Net unrealized appreciation on foreign currency and swap
contracts ................................................ 2,911,373
Net unrealized depreciation on short sales ................. (6,133)
Undistributed ordinary income .............................. 406,846
Dividend payable ........................................... (251,205)
-------------
Total ...................................................... $ 187,509,221
=============

THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The following summarizes the tax cost of investments, swap contracts,
foreign currency, and the related unrealized appreciation/depreciation at
December 31, 2005:

GROSS GROSS NET UNREALIZED
UNREALIZED UNREALIZED APPRECIATION/
COST APPRECIATION DEPRECIATION (DEPRECIATION)
--------------- ------------- ------------- --------------

Investments ................... $ 2,058,868,398 $ 226,013,846 $ (41,565,506) $ 184,448,340
Swap contracts ................ -- 2,935,711 -- 2,935,711
Short sales ................... (1,852,975) -- (6,133) (6,133)
--------------- ------------- ------------- --------------
$ 2,057,015,423 $ 228,949,557 $ (41,571,639) $ 187,377,918
=============== ============= ============= ==============

3. AGREEMENTS AND TRANSACTIONS WITH AFFILIATES. The Trust has entered into an
investment advisory agreement (the "Advisory Agreement") with the Adviser which
provides that the Trust will pay the Adviser a fee, computed weekly and paid
monthly, equal on an annual basis to 1.00% of the value of the Trust's average
weekly net assets including liquidation value of the preferred stock. In
accordance with the Advisory Agreement, the Adviser provides a continuous
investment program for the Trust's portfolio and oversees the administration of
all aspects of the Trust's business and affairs. The Adviser has agreed to
reduce the management fee on the incremental assets attributable to the
Cumulative Preferred Stock if the total return of the net asset value ("NAV") of
the Common Shares of the Trust, including distributions and advisory fee subject
to reduction, does not exceed the stated dividend rate or corresponding swap
rate of the Cumulative Preferred Stock for the fiscal year.

The Trust's total return on the NAV of the Common Shares is monitored on a
monthly basis to assess whether the total return on the NAV of the Common Shares
exceeds the stated dividend rate of each particular series of Cumulative
Preferred Stock for the period. For the year ended December 31, 2005, the
Trust's total return on the NAV of the Common Shares exceeded the stated
dividend rate or corresponding swap rate of all outstanding Preferred Stock.
Thus, management fees were accrued on these assets.

During the year ended December 31, 2005, Gabelli & Company, Inc. ("Gabelli
& Company"), an affiliate of the Adviser, received $957,277 in brokerage
commissions as a result of executing agency transactions in portfolio securities
on behalf of the Trust.

The cost of calculating the Trust's NAV per share is a Trust expense
pursuant to the Advisory Agreement. During the year ended December 31, 2005, the
Trust reimbursed the Adviser $45,000 in connection with the cost of computing
the Trust's NAV, which is included in miscellaneous expenses in the Statement of
Operations.

The Trust is assuming its portion of the allocated cost of the Gabelli
Funds' Chief Compliance Officer in the amount of $33,345 for the year ended
December 31, 2005, which is included in payroll expenses in the Statement of
Operations.

4. PORTFOLIO SECURITIES. Purchases and proceeds from the sales of securities,
other than short-term securities, for the year ended December 31, 2005
aggregated $922,955,419 and $415,673,754, respectively.

Option contracts written by the Trust during the year ended December 31,
2005 were as follows:

NUMBER OF
CONTRACTS PREMIUMS
--------- ---------
Options outstanding at December 31, 2004 .... 400 $ 56,549
Options written ............................. 450 88,646
Options exercised ........................... -- --
Options closed .............................. (850) (145,195)
------ ---------
Options outstanding at December 31, 2005 .... -- --
====== =========

5. CAPITAL. The Trust is authorized to issue an unlimited number of Common
Shares of beneficial interest (par value $.001). The Board has authorized the
repurchase of its shares on the open market when the shares are trading at a
discount of 7.5% or more (or such other percentage as the Board may determine
from time to time) from the NAV of the shares. During the year ended December
31, 2005, the Trust repurchased 504,100 shares of beneficial interest in the
open market at a cost of $9,076,752 and an average discount of approximately
13.12% from its net asset value. All shares of beneficial interest repurchased
have been retired.

Transactions in shares of beneficial interest were as follows:

YEAR ENDED YEAR ENDED
DECEMBER 31, 2005 DECEMBER 31, 2004
----------------------- -------------------------
Shares Amount Shares Amount
-------- ------------ --------- -------------

Shares issued in offering ...... -- -- 9,700,000 $ 184,787,472
Shares repurchased ............. (504,100) $ (9,076,752) (245,700) (4,246,068)
-------- ------------ --------- -------------
Net increase ................... (504,100) $ (9,076,752) 9,454,300 $ 180,541,404
======== ============ ========= =============

THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The Trust's Declaration of Trust, as amended, authorizes the issuance of
an unlimited number of shares of $0.001 par value Cumulative Preferred Stock.
The Cumulative Preferred Stock is senior to the Common Shares and results in the
financial leveraging of the Common Shares. Such leveraging tends to magnify both
the risks and opportunities to common shareholders. Dividends on shares of the
Cumulative Preferred Stock are cumulative. The Trust is required by the 1940 Act
and by the Statements of Preferences to meet certain asset coverage tests with
respect to the Cumulative Preferred Stock. If the Trust fails to meet these
requirements and does not correct such failure, the Trust may be required to
redeem, in part or in full, the 5.875% Series A Cumulative Preferred Stock,
Series B Auction Market Cumulative Preferred Stock, Series C Auction Market
Cumulative Preferred Stock, 6.00% Series D Cumulative Preferred Stock, and
Series E Auction Rate Cumulative Preferred Stock at a redemption price of $25,
$25,000, $25,000, $25, and $25,000, respectively, per share plus an amount equal
to the accumulated and unpaid dividends whether or not declared on such shares
in order to meet these requirements. Additionally, failure to meet the foregoing
asset coverage requirements could restrict the Trust's ability to pay dividends
to common shareholders and could lead to sales of portfolio securities at
inopportune times. The income received on the Trust's assets may vary in a
manner unrelated to the fixed and variable rates, which could have either a
beneficial or detrimental impact on net investment income and gains available to
common shareholders.

On October 12, 2004, the Trust received net proceeds of $77,280,971 (after
underwriting discounts of $2,520,000 and offering expenses of $199,029) from the
public offering of 3,200,000 shares of 5.875% Series A Cumulative Preferred
Stock. Commencing October 12, 2009 and thereafter, the Trust, at its option, may
redeem the 5.875% Series A Cumulative Preferred Stock in whole or in part at the
redemption price at any time. During the year ended December 31, 2005, the Trust
did not repurchase any shares of 5.875% Series A Cumulative Preferred Stock. At
December 31, 2005, 3,200,000 shares of the 5.875% Series A Cumulative Preferred
Stock were outstanding and accrued dividends amounted to $65,278.

On October 12, 2004, the Trust received net proceeds of $217,488,958
(after underwriting discounts of $2,200,000 and offering expenses of $311,042)
from the public offering of 4,000 shares of Series B and 4,800 shares of Series
C Auction Market Cumulative Preferred Stock, respectively. The dividend rate, as
set by the auction process, which is generally held every 7 days, is expected to
vary with short-term interest rates. The dividend rates of Series B Auction
Market Cumulative Preferred Stock ranged from 2.00% to 4.48% from January 1,
2005 through December 31, 2005. The dividend rates of Series C Auction Market
Cumulative Preferred Stock ranged from 2.21% to 4.40% from January 1, 2005
through December 31, 2005. Existing shareholders may submit an order to hold,
bid, or sell such shares on each auction date. Series B and C Auction Market
Cumulative Preferred Stock shareholders may also trade shares in the secondary
market. The Trust, at its option, may redeem the Series B and C Auction Market
Cumulative Preferred Stock in whole or in part at the redemption price at any
time. During the year ended December 31, 2005, the Trust did not redeem any
shares of Series B and C Auction Market Cumulative Preferred Stock. At December
31, 2005, 4,000 and 4,800 shares of the Series B and C Auction Market Cumulative
Preferred Stock were outstanding with an annualized dividend rate of 4.48% and
4.40% and accrued dividends amounted to $49,778 and $29,333, respectively.

On November 3, 2005, the Trust received net proceeds of $62,727,500 (after
underwriting discounts of $2,047,500 and estimated offering expenses of
$225,000) from the public offering of 2,600,000 shares of 6.00% Series D
Cumulative Preferred Stock. Commencing November 3, 2010 and thereafter, the
Trust, at its option, may redeem the 6.00% Series D Cumulative Preferred Stock
in whole or in part at the redemption price at any time. During the year ended
December 31, 2005, the Trust did not repurchase any shares of 6.00% Series D
Cumulative Preferred Stock. At December 31, 2005, 2,600,000 shares of the 6.00%
Series D Cumulative Preferred Stock were outstanding and accrued dividends
amounted to $54,166.

On November 3, 2005, the Trust received net proceeds of $133,400,000
(after underwriting discounts of $1,350,000 and estimated offering expenses of
$250,000) from the public offering of 5,400 shares of Series E Auction Rate
Cumulative Preferred Stock. The dividend rate, as set by the auction process,
which is generally held every 7 days, is expected to vary with short-term
interest rates. The dividend rates of Series E Auction Rate Cumulative Preferred
Stock ranged from 3.73% to 4.68% from November 13, 2005 through December 31,
2005. Existing shareholders may submit an order to hold, bid, or sell such
shares on each auction date. Series E Auction Rate Preferred Stock shareholders
may also trade shares in the secondary market. The Trust, at its option, may
redeem the Series E Auction Rate Preferred Stock in whole or in part at the
redemption price at any time. During the year ended December 31, 2005, the Trust
did not redeem any shares of Series E Auction Rate Preferred Stock. At December
31, 2005, 5,400 shares of the Series E Auction Rate Preferred Stock were
outstanding with an annualized dividend rate of 4.68% and accrued dividends
amounted to $52,650.

THE GABELLI DIVIDEND & INCOME TRUST
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

The holders of Cumulative Preferred Stock generally are entitled to one
vote per share held on each matter submitted to a vote of shareholders of the
Trust and will vote together with holders of common shares as a single class.
The holders of Cumulative Preferred Stock voting together as a single class also
have the right currently to elect two Trustees and under certain circumstances
are entitled to elect a majority of the Board of Trustees. In addition, the
affirmative vote of a majority of the votes entitled to be cast by holders of
all outstanding shares of the preferred stock, voting as a single class, will be
required to approve any plan of reorganization adversely affecting the preferred
stock, and the approval of two-thirds of each class, voting separately, of the
Trust's outstanding voting stock must approve the conversion of the Trust from a
closed-end to an open-end investment company. The approval of a majority (as
defined in the 1940 Act) of the outstanding preferred stock and a majority (as
defined in the 1940 Act) of the Trust's outstanding voting securities are
required to approve certain other actions, including changes in the Trust's
investment objectives or fundamental investment policies.

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

7. OTHER MATTERS. The Adviser and/or affiliates have received subpoenas from the
Attorney General of the State of New York and the SEC requesting information on
mutual fund trading practices involving certain funds managed by the Adviser.
GAMCO Investors, Inc., the Adviser's parent company, is responding to these
requests for documents and testimony. On a separate matter, in September 2005,
the Adviser was informed by the staff of the SEC that the staff may recommend to
the Commission that an administrative remedy and a monetary penalty be sought
from the Adviser in connection with the actions of two of seven closed-end funds
managed by the Adviser relating to Section 19(a) and Rule 19a-1 of the 1940 Act.
These provisions require registered investment companies to provide written
statements to shareholders when a dividend is made from a source other than net
investment income. While the two closed-end funds sent annual statements and
provided other materials containing this information, the funds did not send
written statements to shareholders with each distribution in 2002 and 2003. The
Adviser believes that all of the funds are now in compliance. The Adviser
believes that these matters would have no effect on the Trust or any material
adverse effect on the Adviser or its ability to manage the Trust. The staff's
notice to the Adviser did not relate to the Trust.

THE GABELLI DIVIDEND & INCOME TRUST
FINANCIAL HIGHLIGHTS

SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING THROUGHOUT EACH
PERIOD:

YEAR ENDED DECEMBER 31, PERIOD ENDED
------------------------------ DECEMBER 31,
2005 2004 2003 (a)
------------ ------------- -------------

OPERATING PERFORMANCE:
Net asset value, beginning of period ............................. $ 20.12 $ 19.26 $ 19.06(b)
------------ ------------- -------------
Net investment income ............................................ 0.55 0.40 --
Net realized and unrealized gain on investments .................. 1.33 1.80 0.20
------------ ------------- -------------
Total from investment operations ................................. 1.88 2.20 0.20
------------ ------------- -------------
DISTRIBUTIONS TO PREFERRED STOCK SHAREHOLDERS: (g)
Net investment income ............................................ (0.06) (0.01) --
Net realized gain on investments ................................. (0.10) (0.01) --
------------ ------------- -------------
Total distributions to preferred stock shareholders .............. (0.16) (0.02) --
------------ ------------- -------------
NET INCREASE IN NET ASSETS ATTRIBUTABLE TO COMMON SHAREHOLDERS
RESULTING FROM OPERATIONS .................................... 1.72 2.18 --
------------ ------------- -------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS:
Net investment income ............................................ (0.48) (0.39) --
Net realized gain on investments ................................. (0.72) (0.24) --
Return of capital ................................................ -- (0.57) --
------------ ------------- -------------
Total distributions to common shareholders ....................... (1.20) (1.20) --
------------ ------------- -------------
CAPITAL SHARE TRANSACTIONS:
Decrease in net asset value from common share transactions ....... -- (0.05) --
Increase in net asset value from repurchase of common shares ..... 0.02 -- --
Offering costs for common shares charged to paid-in capital ...... -- (0.01) --
Offering costs for preferred shares charged to paid-in capital ... (0.04) (0.06) --
------------ ------------- -------------
Total from capital share transactions ............................ (0.02) (0.12) --
------------ ------------- -------------
NET ASSET VALUE ATTRIBUTABLE TO COMMON SHAREHOLDERS, END OF PERIOD $ 20.62 $ 20.12 $ 19.26
============ ============= =============
Net asset value total return + ................................... 9.47% 11.56% 1.0%*
============ ============= =============
Market value, end of period ...................................... $ 17.62 $ 17.95 $ 20.00
============ ============= =============
Total investment return ++ ....................................... 4.85% (4.15)% 0.0%**
============ ============= =============
RATIOS AND SUPPLEMENTAL DATA:
Net assets including liquidation value of preferred shares, end of
period (in 000's) ............................................ $ 2,238,155 $ 2,006,703 --
Net assets attributable to common shares, end of period (in 000's) $ 1,738,155 $ 1,706,703 $ 1,451,650
Ratio of net investment income to average net assets attributable
to common shares ............................................. 2.75% 2.17% (0.04)%(c)
Ratio of operating expenses to average net assets attributable to
common shares net of fee reduction ........................... 1.33%(f) 1.12% 1.38%(c)
Ratio of operating expenses to average net assets including
liquidation value of preferred shares net of fee reduction ... 1.12%(f) 1.07% --
Portfolio turnover rate .......................................... 25.6% 33.3% 0.4%

5.875% CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ...................... $ 80,000 $ 80,000 --
Total shares outstanding (in 000's) .............................. 3,200 3,200 --
Liquidation preference per share ................................. $ 25.00 $ 25.00 --
Average market value (d) ......................................... $ 24.82 $ 24.68 --
Asset coverage per share ......................................... $ 111.91 $ 167.23 --

AUCTION RATE SERIES B CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ...................... $ 100,000 $ 100,000 --
Total shares outstanding (in 000's) .............................. 4 4 --
Liquidation preference per share ................................. $ 25,000 $ 25,000 --
Average market value (d) ......................................... $ 25,000 $ 25,000 --
Asset coverage per share ......................................... $ 111,908 $ 167,225 --

AUCTION RATE SERIES C CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) ...................... $ 120,000 $ 120,000 --
Total shares outstanding (in 000's) .............................. 5 5 --
Liquidation preference per share ................................. $ 25,000 $ 25,000 --
Average market value (d) ......................................... $ 25,000 $ 25,000 --
Asset coverage per share ......................................... $ 111,908 $ 167,225 --

See accompanying notes to financial statements.

THE GABELLI DIVIDEND & INCOME TRUST
FINANCIAL HIGHLIGHTS (CONTINUED)

YEAR ENDED DECEMBER 31,
----------------------- PERIOD ENDED
2005 2004 DECEMBER 31, 2003 (a)
----------- ------ ---------------------

RATIOS AND SUPPLEMENTAL DATA (CONTINUED):
6.00% CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) .... $ 65,000 -- --
Total shares outstanding (in 000's) ............ 2,600 -- --
Liquidation preference per share ............... $ 25.00 -- --
Average market value (d) ....................... $ 24.72 -- --
Asset coverage per share ....................... $ 111.91 -- --
AUCTION RATE SERIES E CUMULATIVE PREFERRED STOCK
Liquidation value, end of period (in 000's) .... $ 135,000 -- --
Total shares outstanding (in 000's) ............ 5 -- --
Liquidation preference per share ............... $ 25,000 -- --
Average market value (d) ....................... $ 25,000 -- --
Asset coverage per share ....................... $ 111,908 -- --
ASSET COVERAGE (e) ............................. 448% 669% --

_________________________
(a) The Gabelli Dividend & Income Trust commenced investment operations on
November 28, 2003.

(b) The beginning NAV includes a $0.04 reduction for costs associated with the
initial public offering.

(d) Based on weekly prices.

(e) Asset coverage is calculated by combining all series of preferred stock.

(f) For the year ended December 31, 2005, the effect of the custodian fee
credits was minimal.

(g) Calculated based upon average common shares outstanding on the record
dates throughout the year.

* Based on net asset value per share at commencement of operations of $19.06
per share.

** Based on market value per share at initial public offering of $20.00 per
share.

+ Based on net asset value per share, adjusted for reinvestment of
distributions at prices dependent upon the relationship of the net asset
value per share and the market value per share on the ex-dividend dates.
Total return for periods of less than one year are not annualized.

++ Based on market value per share, adjusted for reinvestment of
distributions. Total return for periods of less than one year are not
annualized.

See accompanying notes to financial statements.

THE GABELLI DIVIDEND & INCOME TRUST
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Trustees and Shareholders of
The Gabelli Dividend & Income Trust:

In our opinion, the accompanying statement of assets and liabilities, including
the schedule of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of The Gabelli Dividend & Income Trust
(hereafter referred to as the "Trust") at December 31, 2005, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended and the financial highlights for each of
the periods presented, in conformity with accounting principles generally
accepted in the United States of America. These financial statements and
financial highlights (hereafter referred to as "financial statements") are the
responsibility of the Trust's management. Our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these financial statements in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those standards
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits, which included
confirmation of securities at December 31, 2005 by correspondence with the
custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
New York, New York
February 28, 2006

THE GABELLI DIVIDEND & INCOME TRUST
ADDITIONAL FUND INFORMATION (UNAUDITED)

The names and business addresses of the Trustees and principal
officers of this Fund are set forth in the following table, together with their
positions and their principal occupations during the past five years and, in the
case of the Trustees, their positions with certain other organizations and
companies.

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

INTERESTED TRUSTEES 3:
---------------------
MARIO J. GABELLI Since 2003*** 24 Chairman of the Board and Director of Morgan Group
Trustee Chief Executive Officer Holdings, Inc. (holding
Chief Investment Officer of GAMCO Investors, Inc. company)
Age: 63 and Chief Investment
Officer - Value
Portfolios of Gabelli
Funds, LLC and GAMCO
Asset Management Inc.;
Chairman and Chief
Executive Officer of
Lynch Interactive
Corporation (multimedia
and services)

SALVATORE M. SALIBELLO Since 2003** 3 Certified Public --
Trustee Accountant and Managing
Age: 60 Partner of the accounting
firm Salibello & Broder,
LLP

EDWARD T. TOKAR Since 2003** 1 Senior Managing Director Trustee, LEVCO Series
Trustee of Beacon Trust Company Trust; Director of DB
Age: 58 (trust services) since Hedge Strategies Fund
2004; Chief Executive LLC; Director of the
Officer of Allied Capital Topiary Benefit Plan
Management LLC Investor Fund LLC
(1977-2004); Vice (financial services)
President of Honeywell
International Inc.,
(1977-2004)

NON-INTERESTED TRUSTEES:
-----------------------
ANTHONY J. COLAVITA Since 2003* 34 Partner in the law firm --
Trustee of Anthony J. Colavita,
Age: 70 P.C.

JAMES P. CONN Since 2003** 14 Former Managing Director Director of LaQuinta
Trustee and Chief Investment Corp. (hotels) and First
Age: 67 Officer of Financial Republic Bank (banking)
Security Assurance
Holdings Ltd. (insurance
holding company)
(1992-1998)

MARIO D'URSO Since 2003*** 3 Chairman of Mittel --
Trustee Capital Markets S.p.A.,
Age: 65 since 2001; Senator in
the Italian Parliament,
(1996-2001)

FRANK J. FAHRENKOPF, JR. Since 2003* 5 President and Chief Director of First
Trustee Executive Officer of the Republic Bank
Age: 66 American Gaming (banking)
Association; Partner
in the law firm of
Hogan & Hartson LLP;
Co-Chairman of the
Commission on
Presidential
Debates; Former
Chairman of the
Republican National
Committee

MICHAEL J. MELARKEY Since 2003*** 3 Partner in the law firm Director of Southwest Gas
Trustee of Avansino, Melarkey, Corporation (natural gas
Age: 56 Knobel & Mulligan utility)

THE GABELLI DIVIDEND & INCOME TRUST
ADDITIONAL FUND INFORMATION (CONTINUED) (UNAUDITED)

NON-INTERESTED TRUSTEES (CONTINUED):
-----------------------------------
ANTHONIE C. VAN EKRIS Since 2003* 18 Chairman of BALMAC --
Trustee International, Inc.
Age: 71 (commodities and futures
trading)

SALVATORE J. ZIZZA Since 2003* 25 Chairman of Hallmark Director of Hollis-Eden
Trustee Electrical Supplies Corp. Pharmaceuticals
Age: 60 (biotechnology) and Earl
Scheib, Inc. (automotive
services)

OFFICERS:
--------
BRUCE N. ALPERT Since 2003 -- Executive Vice President --
President and Chief Operating
Age: 54 Officer of Gabelli Funds,
LLC since 1988 and an
officer of all of the
registered investment
companies in the Gabelli
Funds complex. Director
and President of Gabelli
Advisers, Inc. since
1998.

CARTER W. AUSTIN Since 2003 -- Vice President of The --
Vice President Gabelli Equity Trust
Age: 39 since 2000 and The
Gabelli Global Gold,
Natural Resources &
Income Trust since 2005.
Vice President of Gabelli
Funds, LLC since 1996.

JAMES E. MCKEE Since 2003 -- Vice President, General --
Secretary Counsel and Secretary of
Age: 42 GAMCO Investors, Inc.
(since 1999) and GAMCO
Asset Management Inc.
(since 1993); Secretary
of all of the registered
investment companies in
the Gabelli Funds
complex.

RICHARD C. SELL, JR. Since 2003 -- Vice President and --
Treasurer Controller of Gabelli &
Age: 56 Company, Inc. since 1998.

PETER D. GOLDSTEIN Since 2004 -- Director of Regulatory
Chief Compliance Officer Affairs for GAMCO --
Age: 52 Investors, Inc. since
2004; Chief Compliance
Officer of all of the
registered investment
companies in the Gabelli
Funds complex; Vice
President of Goldman
Sachs Asset Management
from 2000 through 2004.

_______________________
1 Address: One Corporate Center, Rye, NY 10580-1422, unless otherwise noted.

2 The Trust's Board of Trustees is divided into three classes, each class
having a term of three years. Each year the term of office of one class
expires and the successor or successors elected to such class serve for a
three year term. The three year term for each class expires as follows:

* - Term expires at the Trust's 2008 Annual Meeting of Shareholders and
until their successors are duly elected and qualified.

** - Term expires at the Trust's 2006 Annual Meeting of Shareholders and
until their successors are duly elected and qualified.

*** - Term expires at the Trust's 2007 Annual Meeting of Shareholders and
until their successors are duly elected and qualified.

Each officer will hold office for an indefinite term until the date he or
she resigns or retires or until his or her successor is elected and
qualified.

3 "Interested person" of the Trust, as defined in the 1940 Act. Mr. Gabelli
is an "interested person" of the Trust as a result of his employment as an
officer of the Investment Adviser. Mr. Gabelli is also a registered
representative of an affiliated broker-dealer. Mr. Tokar is an "interested
person" as a result of his son's employment by an affiliate of the
Investment Adviser. Mr. Salibello may be considered an "interested person"
of the Fund as a result of being a partner in an accounting firm that
provides professional services to affiliates of the investment adviser.
Effective November 16, 2005, Mr. Karl Otto Pohl resigned from the Board of
Trustees and now serves as Trustee Emeritus.

4 This column includes only directorships of companies required to report to
the SEC under the Securities Exchange Act of 1934 (i.e. public companies)
or other investment companies registered under the 1940 Act.

CERTIFICATIONS

The Trust's Chief Executive Officer has certified to the New York Stock
Exchange that, as of June 6, 2005, he was not aware of any violation by the
Trust of applicable NYSE corporate governance listing standards. The Trust
reports to the SEC on Form N-CSR and N-CSR's contain certifications by the
Trust's principal executive officer and principal financial officer that relate
to the Trust's disclosure in such reports and that are required by Rule 30a-2(a)
under the Investment Company Act.

THE GABELLI DIVIDEND & INCOME TRUST
INCOME TAX INFORMATION (UNAUDITED)
DECEMBER 31, 2005

CASH DIVIDENDS AND DISTRIBUTIONS

TOTAL AMOUNT ORDINARY LONG-TERM DIVIDEND
PAYABLE RECORD PAID INVESTMENT CAPITAL REINVESTMENT
DATE DATE PER SHARE (a) INCOME (a) GAINS (a) PRICE
-------- -------- ------------- ---------- ---------- ------------

COMMON STOCK
01/25/05 01/17/05 $0.10000 $ 0.04547 $0.05453 $17.87180
02/22/05 02/14/05 0.10000 0.04547 0.05453 18.04770
03/24/05 03/16/05 0.10000 0.04547 0.05453 17.75230
04/25/05 04/15/05 0.10000 0.04547 0.05453 18.14260
05/24/05 05/16/05 0.10000 0.04547 0.05453 18.37550
06/24/05 06/16/05 0.10000 0.04547 0.05453 18.51080
07/25/05 07/15/05 0.10000 0.04547 0.05453 18.69550
08/25/05 08/17/05 0.10000 0.04547 0.05453 18.71220
09/26/05 09/16/05 0.10000 0.04547 0.05453 18.40650
10/25/05 10/17/05 0.10000 0.04547 0.05453 17.72410
11/23/05 11/15/05 0.10000 0.04547 0.05453 17.74580
12/23/05 12/15/05 0.10000 0.04547 0.05453 17.90440
-------- --------- ---------
Total Common Stock $1.20000 $ 0.54564 $0.65436

5.875% PREFERRED SHARES
03/28/05 03/18/05 $0.36719 $ 0.16696 $0.20023
06/27/05 06/20/05 0.36719 0.16696 0.20023
09/26/05 09/19/05 0.36719 0.16696 0.20023
12/27/05 12/19/05 0.36718 0.16695 0.20023
-------- --------- ---------
$1.46875 $ 0.66783 $0.80092

6.000% PREFERRED SHARES
12/27/05 12/19/05 $0.22500 $ 0.10230 $0.12270

AUCTION MARKET AND AUCTION RATE PREFERRED SHARES

The Series B Auction Market Preferred Shares, Series C Auction Market
Preferred Shares, and Series E Auction Rate Preferred Shares pay dividends
weekly based on a rate set at auction, usually held every seven days. The
percentage of 2005 distributions derived from long-term capital gains for the
Series B Auction Market Preferred Shares, Series C Auction Market Preferred
Shares, and Series E Auction Rate Preferred Shares was 54.53%.

A Form 1099-DIV has been mailed to all shareholders of record for the
distributions mentioned above, setting forth specific amounts to be included in
your 2005 tax returns. Ordinary income distributions include net investment
income and realized net short-term capital gains.

CORPORATE DIVIDENDS RECEIVED DEDUCTION, QUALIFIED DIVIDEND INCOME AND U.S.
GOVERNMENT SECURITIES INCOME

The Trust paid to common, 5.875%, and 6% preferred shareholders ordinary
income dividends of $0.54564, $0.66783, and $0.10230 per share, respectively, in
2005. The Trust paid weekly distributions to Series B, C, and E Auction Rate
Preferred shareholders at varying rates throughout the year, including an
ordinary income dividend totaling $379.91860, $384.62460, and $80.13510 per
share, respectively, in 2005. For the year ended December 31, 2005, 80.06% of
the ordinary dividend qualified for the dividend received deduction available to
corporations, and 100% of the ordinary income distribution was qualified
dividend income. The percentage of ordinary income dividends paid by the Trust
during 2005 derived from U.S. Treasury Securities was 7.39%. Such income is
exempt from state and local taxes in all states. However, many states, including
New York and California, allow a tax exemption for a portion of the income
earned only if a mutual fund has invested at least 50% of its assets at the end
of each quarter of the Trust's fiscal year in U.S. Government Securities. The
Trust did not meet this strict requirement in 2005. The percentage of U.S.
Treasury Securities held as of December 31, 2005 was 2.87%.

HISTORICAL DISTRIBUTION SUMMARY

SHORT-TERM LONG-TERM ADJUSTMENT
INVESTMENT CAPITAL CAPITAL RETURN OF TOTAL TO
INCOME (b) GAINS (b) GAINS CAPITAL (c) DISTRIBUTIONS (a) COST BASIS (d)
----------- ---------- ---------- ----------- ----------------- ---------------

COMMON STOCK
2005 ............................... $ 0.45996 $ 0.08568 $ 0.65436 -- $ 1.20000 --
2004 ............................... 0.40005 0.10023 0.13893 $ 0.56079 1.20000 $ 0.56079

5.875% PREFERRED STOCK
2005 ............................... $ 0.56290 $ 0.10493 $ 0.80092 -- $ 1.46875 --
2004 ............................... 0.19150 0.04798 0.06651 -- 0.30599 --

AUCTION MARKET/RATE PREFERRED SHARES
2005 Class B Shares ................ $ 320.22640 $ 59.69220 $455.63150 -- $835.55000 --
2005 Class C Shares ................ 324.19300 60.43160 461.27540 -- 845.90000 --
2005 Class E Shares ................ 67.54440 12.59070 96.10490 -- 176.24000 --
2004 Class B Shares ................ 68.71140 17.21520 23.86340 -- 109.80000 --
2004 Class C Shares ................ 70.77030 17.73100 24.57840 -- 113.10000 --

_____________________

(a) Total amounts may differ due to rounding.

(b) Taxable as ordinary income for Federal tax purposes.

(d) Decrease in cost basis.

THE GABELLI DIVIDEND & INCOME TRUST
BOARD CONSIDERATION AND RE-APPROVAL OF INVESTMENT ADVISORY AGREEMENT (UNAUDITED)

During the six months ended December 31, 2005, the Board of Trustees of the
Trust approved the continuation of the investment advisory agreement with the
Adviser for the Trust on the basis of the recommendation by the trustees (the
"Independent Trustees") who are not "interested persons" of the Trust. The
following paragraphs summarize the material information and factors considered
by the Independent Trustees as well as their conclusions relative to such
factors.

NATURE, EXTENT AND QUALITY OF SERVICES. The Independent Trustees considered
information regarding the portfolio managers, the depth of the analyst pool
available to the Adviser and the portfolio managers, the scope of
administrative, shareholder, and other services supervised or provided by the
Adviser and the absence of significant service problems reported to the Board.
The Independent Trustees noted the experience, length of service, and reputation
of the portfolio managers.

INVESTMENT PERFORMANCE. The Independent Trustees reviewed the performance of the
Trust since inception against a peer group of all closed-end equity funds. The
Independent Trustees noted the Trust's excellent performance for the one year
period and since inception.

PROFITABILITY. The Independent Trustees reviewed summary data regarding the
profitability of the Trust to the Adviser.

ECONOMIES OF SCALE. The Independent Trustees discussed the major elements of the
Adviser's cost structure and the relationship of those elements to potential
economies of scale and reviewed rudimentary data suggesting that 20% growth in
the Trust would not produce meaningful economies of scale that the shareholders
would not participate in.

SHARING OF ECONOMIES OF SCALE. The Independent Trustees noted that the
investment advisory fee schedule for the Trust does not take into account any
potential economies of scale that may develop.

SERVICE AND COST COMPARISONS. The Independent Trustees compared the expense
ratios of the investment advisory fee, other expenses, and total expenses of the
Trust to similar expense ratios of the peer group of closed-end equity funds and
noted that the Adviser's advisory fee includes substantially all administrative
services of the Trust as well as investment advisory services. The Trust's
assets are higher than all but one closed-end fund. The Trust's advisory fee and
total expense ratio are below the group average. The Independent Trustees also
noted that the advisory fee structure was the same as that in effect for most of
the Gabelli funds. The Independent Trustees were presented with, but did not
compare, the advisory fee to the fee for other types of accounts managed by the
Adviser.

CONCLUSIONS. The Independent Trustees concluded that the Trust enjoyed highly
experienced portfolio management services, good ancillary services, and a
moderately above average performance record. The Independent Trustees also
concluded that the Trust's expense ratios and the profitability to the Adviser
of managing the Trust were reasonable, and that economies of scale were not a
significant factor in their thinking at this time. The Independent Trustees did
not view the potential profitability of ancillary services as material to their
decision. On the basis of the foregoing and without assigning particular weight
to any single conclusion, the Independent Trustees determined to recommend
continuation of the investment advisory agreement to the full Board of Trustees.

AUTOMATIC DIVIDEND REINVESTMENT
AND VOLUNTARY CASH PURCHASE PLANS

ENROLLMENT IN THE PLAN

It is the Policy of The Gabelli Dividend & Income Trust ("Trust") to
automatically reinvest dividends payable to common shareholders. As a
"registered" shareholder you automatically become a participant in the Trust's
Automatic Dividend Reinvestment Plan (the "Plan"). The Plan authorizes the Trust
to issue common shares to participants upon an income dividend or a capital
gains distribution regardless of whether the shares are trading at a discount or
a premium to net asset value. All distributions to shareholders whose shares are
registered in their own names will be automatically reinvested pursuant to the
Plan in additional shares of the Trust. Plan participants may send their share
certificates to Computershare Trust Company N.A. ("Computershare") to be held in
their dividend reinvestment account. Registered shareholders wishing to receive
their distribution in cash must submit this request in writing to:

The Gabelli Dividend & Income Trust
c/o Computershare
P.O. Box 43010
Providence, RI 02940-3010

Shareholders requesting this cash election must include the shareholder's
name and address as they appear on the share certificate. Shareholders with
additional questions regarding the Plan or requesting a copy of the terms of the
Plan may contact Computershare at (800) 336-6983.

If your shares are held in the name of a broker, bank, or nominee, you
should contact such institution. If such institution is not participating in the
Plan, your account will be credited with a cash dividend. In order to
participate in the Plan through such institution, it may be necessary for you to
have your shares taken out of "street name" and re-registered in your own name.
Once registered in your own name your distributions will be automatically
reinvested. Certain brokers participate in the Plan. Shareholders holding shares
in "street name" at participating institutions will have dividends automatically
reinvested. Shareholders wishing a cash dividend at such institution must
contact their broker to make this change.

The number of common shares distributed to participants in the Plan in
lieu of cash dividends is determined in the following manner. Under the Plan,
whenever the market price of the Trust's common shares is equal to or exceeds
net asset value at the time shares are valued for purposes of determining the
number of shares equivalent to the cash dividends or capital gains distribution,
participants are issued common shares valued at the greater of (i) the net asset
value as most recently determined or (ii) 95% of the then current market price
of the Trust's common shares. The valuation date is the dividend or distribution
payment date or, if that date is not a New York Stock Exchange ("NYSE") trading
day, the next trading day. If the net asset value of the common shares at the
time of valuation exceeds the market price of the common shares, participants
will receive common shares from the Trust valued at market price. If the Trust
should declare a dividend or capital gains distribution payable only in cash,
Computershare will buy common shares in the open market, or on the NYSE or
elsewhere for the participants' accounts, except that Computershare will
endeavor to terminate purchases in the open market and cause the Trust to issue
shares at net asset value if, following the commencement of such purchases, the
market value of the common shares exceeds the then current net asset value.

The automatic reinvestment of dividends and capital gains distributions
will not relieve participants of any income tax which may be payable on such
distributions. A participant in the Plan will be treated for Federal income tax
purposes as having received, on a dividend payment date, a dividend or
distribution in an amount equal to the cash the participant could have received
instead of shares.

VOLUNTARY CASH PURCHASE PLAN

The Voluntary Cash Purchase Plan is yet another vehicle for our
shareholders to increase their investment in the Trust. In order to participate
in the Voluntary Cash Purchase Plan, shareholders must have their shares
registered in their own name.

Participants in the Voluntary Cash Purchase Plan have the option of making
additional cash payments to Computershare for investments in the Trust's common
shares at the then current market price. Shareholders may send an amount from
$250 to $10,000. Computershare will use these funds to purchase shares in the
open market on or about the 1st and 15th of each month. Computershare will
charge each shareholder who participates $0.75, plus a pro rata share of the
brokerage commissions. Brokerage charges for such purchases are expected to be
less than the usual brokerage charge for such transactions. It is suggested that
any voluntary cash payments be sent to Computershare, P.O. Box 43010,
Providence, RI 02940-3010 such that Computershare receives such payments
approximately 10 days before the 1st and 15th of the month. Funds not received
at least five days before the investment date shall be held for investment until
the next purchase date. A payment may be withdrawn without charge if notice is
received by Computershare at least 48 hours before such payment is to be
invested.

SHAREHOLDERS WISHING TO LIQUIDATE SHARES HELD AT COMPUTERSHARE must do so
in writing or by telephone. Please submit your request to the above mentioned
address or telephone number. Include in your request your name, address, and
account number. The cost to liquidate shares is $2.50 per transaction as well as
the brokerage commission incurred. Brokerage charges are expected to be less
than the usual brokerage charge for such transactions.

For more information regarding the Automatic Dividend Reinvestment Plan
and Voluntary Cash Purchase Plan, brochures are available by calling (914)
921-5070 or by writing directly to the Trust.

The Trust reserves the right to amend or terminate the Plan as applied to
any voluntary cash payments made and any dividend or distribution paid
subsequent to written notice of the change sent to the members of the Plan at
least 90 days before the record date for such dividend or distribution. The Plan
also may be amended or terminated by Computershare on at least 90 days' written
notice to participants in the Plan.

------------------------------------------------------------------------
The Annual Meeting of The Gabelli Dividend & Income Trust's stockholders
will be held at 12:00 P.M. on Monday, May 15, 2006 at the Greenwich
Library in Greenwich, Connecticut.
------------------------------------------------------------------------

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

THE GABELLI DIVIDEND & INCOME TRUST
AND YOUR PERSONAL PRIVACY

WHO ARE WE?

The Gabelli Dividend & Income Trust (the "Trust") is a closed-end investment
company registered with the Securities and Exchange Commission under the
Investment Company Act of 1940. We are managed by Gabelli Funds, LLC, which is
affiliated with GAMCO Investors, Inc. GAMCO Investors, Inc. is a publicly held
company that has subsidiaries that provide investment advisory or brokerage
services for a variety of clients.

WHAT KIND OF NON-PUBLIC INFORMATION DO WE COLLECT ABOUT YOU IF YOU BECOME A
GABELLI CUSTOMER?

When you purchase shares of the Trust on the New York Stock Exchange, you have
the option of registering directly with our transfer agent in order, for
example, to participate in our dividend reinvestment plan.

o INFORMATION YOU GIVE US ON YOUR APPLICATION FORM. This could include your
name, address, telephone number, social security number, bank account
number, and other information.

o INFORMATION ABOUT YOUR TRANSACTIONS WITH US. This would include
information about the shares that you buy or sell, it may also include
information about whether you sell or exercise rights that we have issued
from time to time. If we hire someone else to provide services--like a
transfer agent--we will also have information about the transactions that
you conduct through them.

WHAT INFORMATION DO WE DISCLOSE AND TO WHOM DO WE DISCLOSE IT?

We do not disclose any non-public personal information about our customers or
former customers to anyone, other than our affiliates, our service providers who
need to know such information, and as otherwise permitted by law. If you want to
find out what the law permits, you can read the privacy rules adopted by the
Securities and Exchange Commission. They are in volume 17 of the Code of Federal
Regulations, Part 248. The Commission often posts information about its
regulations on its web site, WWW.SEC.GOV.

WHAT DO WE DO TO PROTECT YOUR PERSONAL INFORMATION?

We restrict access to non-public personal information about you to the people
who need to know that information in order to provide services to you or the
Fund and to ensure that we are complying with the laws governing the securities
business. We maintain physical, electronic, and procedural safeguards to keep
your personal information confidential.

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

TRUSTEES AND OFFICERS
THE GABELLI DIVIDEND & INCOME TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422

TRUSTEES

Mario J. Gabelli, CFA
CHAIRMAN & CHIEF EXECUTIVE OFFICER,
GAMCO INVESTORS, INC.

Anthony J. Colavita
ATTORNEY-AT-LAW,
ANTHONY J. COLAVITA, P.C.

James P. Conn
FORMER CHIEF INVESTMENT OFFICER,
FINANCIAL SECURITY ASSURANCE HOLDINGS LTD.

Mario d'Urso
CHAIRMAN, MITTEL CAPITAL MARKETS SPA

Frank J. Fahrenkopf, Jr.
PRESIDENT & CHIEF EXECUTIVE OFFICER,
AMERICAN GAMING ASSOCIATION

Michael J. Melarkey
ATTORNEY-AT-LAW,
AVANSINO, MELARKEY, KNOBEL & MULLIGAN

Salvatore M. Salibello
CERTIFIED PUBLIC ACCOUNTANT,
SALIBELLO & BRODER, LLP

Edward T. Tokar
SENIOR MANAGING DIRECTOR, BEACON TRUST COMPANY

Anthonie C. van Ekris
CHAIRMAN, BALMAC INTERNATIONAL, INC.

Salvatore J. Zizza
CHAIRMAN, HALLMARK ELECTRICAL SUPPLIES CORP.

OFFICERS

Bruce N. Alpert
PRESIDENT

Carter W. Austin
VICE PRESIDENT

Peter D. Goldstein
CHIEF COMPLIANCE OFFICER

James E. McKee
SECRETARY

Richard C. Sell, Jr.
TREASURER

INVESTMENT ADVISER
Gabelli Funds, LLC
One Corporate Center
Rye, New York 10580-1422

CUSTODIAN
State Street Bank and Trust Company

COUNSEL
Skadden, Arps, Slate, Meagher & Flom, LLP

TRANSFER AGENT AND REGISTRAR
Computershare Trust Company, N.A.

STOCK EXCHANGE LISTING
5.875% 6.000%
COMMON PREFERRED PREFERRED
---------- --------- ---------
NYSE-Symbol: GDV GDV PrA GDV PrD
Shares
Outstanding: 84,313,405 3,200,000 2,600,000

The Net Asset Value appears in the Publicly Traded Funds column, under the
heading "General Equity Funds," in Sunday's The New York Times and in Monday's
The Wall Street Journal. It is also listed in Barron's Mutual Funds/Closed End
Funds section under the heading "General Equity Funds."

The Net Asset Value may be obtained each day by calling (914) 921-5070.

------------------------------------------------------------------------
For general information about the Gabelli Funds, call 800-GABELLI
(800-422-3554), fax us at 914-921-5118, visit Gabelli Funds' Internet
homepage at: WWW.GABELLI.COM or e-mail us at: closedend@gabelli.com
------------------------------------------------------------------------

------------------------------------------------------------------------
Notice is hereby given in accordance with Section 23(c) of the
Investment Company Act of 1940, as amended, that the Dividend & Income
Trust may, from time to time, purchase its common shares in the open
market when the Dividend & Income Trust shares are trading at a discount
of 7.5% or more from the net asset value of the shares. The Dividend &
Income Trust may also, from time to time, purchase its Cumulative
Preferred Shares in the open market when the shares are trading at a
discount to the Liquidation Value of $25.00.
------------------------------------------------------------------------

THE GABELLI DIVIDEND & INCOME TRUST
ONE CORPORATE CENTER, RYE, NY 10580-1422

PHONE: 800-GABELLI (800-422-3554)
FAX: 914-921-5118 INTERNET: WWW.GABELLI.COM
E-MAIL: CLOSEDEND@GABELLI.COM GDC AR 2005

ITEM 2. CODE OF ETHICS.

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

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

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

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

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

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

AUDIT FEES

(a) The aggregate fees billed for each of the last two fiscal years for
professional services rendered by the principal accountant for the
audit of the registrant's annual financial statements or services that
are normally provided by the accountant in connection with statutory
and regulatory filings or engagements for those fiscal years are
$103,372 in 2005 and $101,664 in 2004.

AUDIT-RELATED FEES

(b) The aggregate fees billed in each of the last two fiscal years for
assurance and related services by the principal accountant that are
reasonably related to the performance of the audit of the registrant's
financial statements and are not reported under paragraph (a) of this
Item are $13,800 in 2005 and $13,800 in 2004.

Audit-related fees represent services provided in the preparation of
Preferred Shares Reports.

TAX FEES

(c) The aggregate fees billed in each of the last two fiscal years for
professional services rendered by the principal accountant for tax
compliance, tax advice, and tax planning are $2,880 in 2005 and $2,550
in 2004.

Tax fees represent tax compliance services provided in connection with
the review of the Registrant's tax returns.

ALL OTHER FEES

(d) The aggregate fees billed in each of the last two fiscal years for
products and services provided by the principal accountant, other than
the services reported in paragraphs (a) through (c) of this Item are
$0 in 2005 and $0 in 2004.

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

Pre-Approval Policies and Procedures. The Audit Committee
("Committee") of the registrant is responsible for pre-approving (i)
all audit and permissible non-audit services to be provided by the
independent auditors to the registrant and (ii) all permissible
non-audit services to be provided by the independent auditors to the
Adviser, Gabelli Funds, LLC, and any affiliate of Gabelli Funds, LLC
("Gabelli") that provides services to the registrant (a "Covered
Services Provider") if the independent auditors' engagement related
directly to the operations and financial reporting of the registrant.
The Committee may delegate its responsibility to pre-approve any such
audit and permissible non-audit services to the Chairperson of the
Committee, and the Chairperson must report to the Committee, at its
next regularly scheduled meeting after the Chairperson's pre-approval
of such services, his or her decision(s). The Committee may also
establish detailed pre-approval policies and procedures for
pre-approval of such services in accordance with applicable laws,
including the delegation of some or all of the Committee's
pre-approval responsibilities to the other persons (other than Gabelli
or the registrant's officers). Pre-approval by the Committee of any
permissible non-audit services is not required so long as: (i) the
aggregate amount of all such permissible non-audit services provided
to the registrant, Gabelli and any Covered Services Provider
constitutes not more than 5% of the total amount of revenues paid by
the registrant to its independent auditors during the fiscal year in
which the permissible non-audit services are provided; (ii) the
permissible non-audit services were not recognized by the registrant
at the time of the engagement to be non-audit services; and (iii) such
services are promptly brought to the attention of the Committee and
approved by the Committee or Chairperson prior to the completion of
the audit.

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

(b) 100%

(d) N/A

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

(g) The aggregate non-audit fees billed by the registrant's accountant for
services rendered to the registrant, and rendered to the registrant's
investment adviser (not including any sub-adviser whose role is
primarily portfolio management and is subcontracted with or overseen
by another investment adviser), and any entity controlling, controlled
by, or under common control with the adviser that provides ongoing
services to the registrant for each of the last two fiscal years of
the registrant was $0 in 2005 and $0 in 2004.

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

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

The registrant has a separately designated audit committee consisting of the
following members: Frank J. Fahrenkopf, Jr., Anthonie C. van Ekris and Savadore
J. Zizza.

ITEM 6. SCHEDULE OF INVESTMENTS.

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

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

The Proxy Voting Policies are attached herewith.

THE VOTING OF PROXIES ON BEHALF OF CLIENTS

Rules 204(4)-2 and 204-2 under the Investment Advisers Act of 1940 and Rule
30b1-4 under the Investment Company Act of 1940 require investment advisers to
adopt written policies and procedures governing the voting of proxies on behalf
of their clients.

These procedures will be used by GAMCO Asset Management Inc., Gabelli
Funds, LLC, Gabelli Securities, Inc., and Gabelli Advisers, Inc. (collectively,
the "Advisers") to determine how to vote proxies relating to portfolio
securities held by their clients, including the procedures that the Advisers use
when a vote presents a conflict between the interests of the shareholders of an
investment company managed by one of the Advisers, on the one hand, and those of
the Advisers; the principal underwriter; or any affiliated person of the
investment company, the Advisers, or the principal underwriter. These procedures
will not apply where the Advisers do not have voting discretion or where the
Advisers have agreed to with a client to vote the client's proxies in accordance
with specific guidelines or procedures supplied by the client (to the extent
permitted by ERISA).

I. PROXY VOTING COMMITTEE

The Proxy Voting Committee was originally formed in April 1989 for the purpose
of formulating guidelines and reviewing proxy statements within the parameters
set by the substantive proxy voting guidelines originally published by GAMCO
Investors, Inc. in 1988 and updated periodically, a copy of which are appended
as Exhibit A. The Committee will include representatives of Research,
Administration, Legal, and the Advisers. Additional or replacement members of
the Committee will be nominated by the Chairman and voted upon by the entire
Committee.

Meetings are held as needed basis to form views on the manner in which the
Advisers should vote proxies on behalf of their clients.

In general, the Director of Proxy Voting Services, using the Proxy
Guidelines, recommendations of Institutional Shareholder Corporate Governance
Service ("ISS"), other third-party services and the analysts of Gabelli &
Company, Inc., will determine how to vote on each issue. For non-controversial
matters, the Director of Proxy Voting Services may vote the proxy if the vote is
(1) consistent with the recommendations of the issuer's Board of Directors and
not contrary to the Proxy Guidelines; (2) consistent with the recommendations of
the issuer's Board of Directors and is a non-controversial issue not covered by
the Proxy Guidelines; or (3) the vote is contrary to the recommendations of the
Board of Directors but is consistent with the Proxy Guidelines. In those
instances, the Director of Proxy Voting Services or the Chairman of the
Committee may sign and date the proxy statement indicating how each issue will
be voted.

All matters identified by the Chairman of the Committee, the Director of
Proxy Voting Services or the Legal Department as controversial, taking into
account the recommendations of ISS or other third party services and the
analysts of Gabelli & Company, Inc., will be presented to the Proxy Voting
Committee. If the Chairman of the Committee, the Director of Proxy Voting
Services or the Legal Department has identified the matter as one that (1) is
controversial; (2) would benefit from deliberation by the Proxy Voting
Committee; or (3) may give rise to a conflict of interest between the Advisers
and their clients, the Chairman of the Committee will initially determine what
vote to recommend that the Advisers should cast and the matter will go before
the Committee.

A. CONFLICTS OF INTEREST.

The Advisers have implemented these proxy voting procedures
in order to prevent conflicts of interest from influencing their proxy
voting decisions. By following the Proxy Guidelines, as well as the
recommendations of ISS, other third-party services and the analysts of
Gabelli & Company, the Advisers are able to avoid, wherever possible,
the influence of potential conflicts of interest. Nevertheless,
circumstances may arise in which one or more of the Advisers are faced
with a conflict of interest or the appearance of a conflict of
interest in connection with its vote. In general, a conflict of
interest may arise when an Adviser knowingly does business with an
issuer, and may appear to have a material conflict between its own
interests and the interests of the shareholders of an investment
company managed by one of the Advisers regarding how the proxy is to
be voted. A conflict also may exist when an Adviser has actual
knowledge of a material business arrangement between an issuer and an
affiliate of the Adviser.

In practical terms, a conflict of interest may arise, for example,
when a proxy is voted for a company that is a client of one of the
Advisers, such as GAMCO Asset Management Inc. A conflict also may
arise when a client of one of the Advisers has made a shareholder
proposal in a proxy to be voted upon by one or more of the Advisers.
The Director of Proxy Voting Services, together with the Legal
Department, will scrutinize all proxies for these or other situations
that may give rise to a conflict of interest with respect to the
voting of proxies.

A. OPERATION OF PROXY VOTING COMMITTEE.

For matters submitted to the Committee, each member of the Committee
will receive, prior to the meeting, a copy of the proxy statement, any
relevant third party research, a summary of any views provided by the
Chief Investment Officer and any recommendations by Gabelli & Company,
Inc. analysts. The Chief Investment Officer or the Gabelli & Company,
Inc. analysts may be invited to present their viewpoints. IF THE
DIRECTOR OF PROXY VOTING SERVICES or the Legal Department believe that
the matter before the committee is one with respect to which a
conflict of interest may exist between the Advisers and their clients,
counsel will provide an opinion to the Committee concerning the
conflict. If the matter is one in which the interests of the clients
of one or more of Advisers may diverge, counsel will so advise and the
Committee may make different recommendations as to different clients.
For any matters where the recommendation may trigger appraisal rights,
counsel will provide an opinion concerning the likely risks and merits
of such an appraisal action.

Each matter submitted to the Committee will be determined by the vote of a
majority of the members present at the meeting. Should the vote concerning one
or more recommendations be tied in a vote of the Committee, the Chairman of the
Committee will cast the deciding vote. The Committee will notify the proxy
department of its decisions and the proxies will be voted accordingly.

Although the Proxy Guidelines express the normal preferences for the voting
of any shares not covered by a contrary investment guideline provided by the
client, the Committee is not bound by the preferences set forth in the Proxy
Guidelines and will review each matter on its own merits. Written minutes of all
Proxy Voting Committee meetings will be maintained. The Advisers subscribe to
ISS, which supplies current information on companies, matters being voted on,
regulations, trends in proxy voting and information on corporate governance
issues.

If the vote cast either by the analyst or as a result of the deliberations
of the Proxy Voting Committee runs contrary to the recommendation of the Board
of Directors of the issuer, the matter will be referred to legal counsel to
determine whether an amendment to the most recently filed Schedule 13D is
appropriate.

II. SOCIAL ISSUES AND OTHER CLIENT GUIDELINES

If a client has provided special instructions relating to the voting of
proxies, they should be noted in the client's account file and forwarded to the
proxy department. This is the responsibility of the investment professional or
sales assistant for the client. In accordance with Department of Labor
guidelines, the Advisers' policy is to vote on behalf of ERISA accounts in the
best interest of the plan participants with regard to social issues that carry
an economic impact. Where an account is not governed by ERISA, the Advisers will
vote shares held on behalf of the client in a manner consistent with any
individual investment/voting guidelines provided by the client. Otherwise the
Advisers will abstain with respect to those shares.

III. CLIENT RETENTION OF VOTING RIGHTS

If a client chooses to retain the right to vote proxies or if there is any
change in voting authority, the following should be notified by the investment
professional or sales assistant for the client.

- Operations
- Legal Department
- Proxy Department
- Investment professional assigned to the account

In the event that the Board of Directors (or a Committee thereof) of one or
more of the investment companies managed by one of the Advisers has retained
direct voting control over any security, the Proxy Voting Department will
provide each Board Member (or Committee member) with a copy of the proxy
statement together with any other relevant information including recommendations
of ISS or other third-party services.

IV. VOTING RECORDS

The Proxy Voting Department will retain a record of matters voted upon by
the Advisers for their clients. The Advisers' staff may request proxy-voting
records for use in presentations to current or prospective clients. Requests for
proxy voting records should be made at least ten days prior to client meetings.

If a client wishes to receive a proxy voting record on a quarterly,
semi-annual or annual basis, please notify the Proxy Voting Department. The
reports will be available for mailing approximately ten days after the quarter
end of the period. First quarter reports may be delayed since the end of the
quarter falls during the height of the proxy season.

A letter is sent to the custodians for all clients for which the Advisers
have voting responsibility instructing them to forward all proxy materials to:

[Adviser name]
Attn: Proxy Voting Department
One Corporate Center
Rye, New York 10580-1433

The sales assistant sends the letters to the custodians along with the
trading/DTC instructions. Proxy voting records will be retained in compliance
with Rule 204-2 under the Investment Advisers Act.

V. VOTING PROCEDURES

1. Custodian banks, outside brokerage firms and Wexford Clearing Services
Corporation are responsible for forwarding proxies directly to GAMCO.

Proxies are received in one of two forms:

o Shareholder Vote Authorization Forms (VAFs) - Issued by ADP. VAFs must be
voted through the issuing institution causing a time lag. ADP is an outside
service contracted by the various institutions to issue proxy materials.

o Proxy cards which may be voted directly.

2. Upon receipt of the proxy, the number of shares each form represents is
logged into the proxy system according to security.

3. In the case of a discrepancy such as an incorrect number of shares, an
improperly signed or dated card, wrong class of security, etc., the issuing
custodian is notified by phone. A corrected proxy is requested. Any arrangements
are made to insure that a proper proxy is received in time to be voted
(overnight delivery, fax, etc.). When securities are out on loan on record date,
the custodian is requested to supply written verification.

4. Upon receipt of instructions from the proxy committee (see Administrative),
the votes are cast and recorded for each account on an individual basis.

Since January 1, 1992, records have been maintained on the Proxy Edge system.
The system is backed up regularly. From 1990 through 1991, records were
maintained on the PROXY VOTER system and in hardcopy format. Prior to 1990,
records were maintained on diskette and in hardcopy format.

PROXY EDGE records include:
Security Name and Cusip Number
Date and Type of Meeting (Annual, Special, Contest)
Client Name Adviser or Fund Account Number
Directors' Recommendation
How GAMCO voted for the client on each issue
The rationale for the vote when it appropriate

Records prior to the institution of the PROXY EDGE system include:
Security name
Type of Meeting (Annual, Special, Contest)
Date of Meeting
Name of Custodian
Name of Client
Custodian Account Number
Adviser or Fund Account Number
Directors' recommendation
How the Adviser voted for the client on each issue
Date the proxy statement was received and by whom
Name of person posting the vote
Date and method by which the vote was cast

o From these records individual client proxy voting records are compiled. It
is our policy to provide institutional clients with a proxy voting record
during client reviews. In addition, we will supply a proxy voting record at
the request of the client on a quarterly, semi-annual or annual basis.

5. VAFs are kept alphabetically by security. Records for the current proxy
season are located in the Proxy Voting Department office. In preparation for the
upcoming season, files are transferred to an offsite storage facility during
January/February.

6. Shareholder Vote Authorization Forms issued by ADP are always sent directly
to a specific individual at ADP.

7. If a proxy card or VAF is received too late to be voted in the conventional
matter, every attempt is made to vote on one of the following manners:

o VAFs can be faxed to ADP up until the time of the meeting. This is followed
up by mailing the original form.

o When a solicitor has been retained, the solicitor is called. At the
solicitor's direction, the proxy is faxed.

8. In the case of a proxy contest, records are maintained for each opposing
entity.

9. Voting in Person

a) At times it may be necessary to vote the shares in person. In this case, a
"legal proxy" is obtained in the following manner:

o Banks and brokerage firms using the services at ADP:

The back of the VAF is stamped indicating that we wish to vote in person.
The forms are then sent overnight to ADP. ADP issues individual legal proxies
and sends them back via overnight (or the Adviser can pay messenger charges). A
lead-time of at least two weeks prior to the meeting is needed to do this.
Alternatively, the procedures detailed below for banks not using ADP may be
implemented.

o Banks and brokerage firms issuing proxies directly:

The bank is called and/or faxed and a legal proxy is requested.

All legal proxies should appoint:

"REPRESENTATIVE OF [ADVISER NAME] WITH FULL POWER OF SUBSTITUTION."

b) The legal proxies are given to the person attending the meeting along with
the following supplemental material:

o A limited Power of Attorney appointing the attendee an Adviser
representative.
o A list of all shares being voted by custodian only. Client names and
account numbers are not included. This list must be presented, along with
the proxies, to the Inspectors of Elections and/or tabulator at least
one-half hour prior to the scheduled start of the meeting. The tabulator
must "qualify" the votes (i.e. determine if the vote have previously been
cast, if the votes have been rescinded, etc. vote have previously been
cast, etc.).
o A sample ERISA and Individual contract.
o A sample of the annual authorization to vote proxies form.
o A copy of our most recent Schedule 13D filing (if applicable).

APPENDIX A

PROXY GUIDELINES

==============================

PROXY VOTING GUIDELINES

==============================

GENERAL POLICY STATEMENT

It is the policy of GAMCO INVESTORS, INC. to vote in the best economic interests
of our clients. As we state in our Magna Carta of Shareholders Rights,
established in May 1988, we are neither for nor against management. We are for
shareholders.

At our first proxy committee meeting in 1989, it was decided that each proxy
statement should be evaluated on its own merits within the framework first
established by our Magna Carta of Shareholders Rights. The attached guidelines
serve to enhance that broad framework.

We do not consider any issue routine. We take into consideration all of our
research on the company, its directors, and their short and long-term goals for
the company. In cases where issues that we generally do not approve of are
combined with other issues, the negative aspects of the issues will be factored
into the evaluation of the overall proposals but will not necessitate a vote in
opposition to the overall proposals.

BOARD OF DIRECTORS

The advisers do not consider the election of the Board of Directors a routine
issue. Each slate of directors is evaluated on a case-by-case basis.

Factors taken into consideration include:

o Historical responsiveness to shareholders
This may include such areas as:
-Paying greenmail
-Failure to adopt shareholder resolutions receiving a
majority of shareholder votes
o Qualifications
o Nominating committee in place
o Number of outside directors on the board
o Attendance at meetings
o Overall performance

SELECTION OF AUDITORS

In general, we support the Board of Directors' recommendation for audit

BLANK CHECK PREFERRED STOCK

We oppose the issuance of blank check preferred stock.

Blank check preferred stock allows the company to issue stock and establish
dividends, voting rights, etc. without further shareholder approval.

CLASSIFIED BOARD

A classified board is one where the directors are divided into classes with
overlapping terms. A different class is elected at each annual meeting.

While a classified board promotes continuity of directors facilitating long
range planning, we feel directors should be accountable to shareholders on an
annual basis. We will look at this proposal on a case-by-case basis taking into
consideration the board's historical responsiveness to the rights of
shareholders.

Where a classified board is in place we will generally not support attempts to
change to an annually elected board.

When an annually elected board is in place, we generally will not support
attempts to classify the board.

INCREASE AUTHORIZED COMMON STOCK

The request to increase the amount of outstanding shares is considered on a
case-by-case basis.

Factors taken into consideration include:

o Future use of additional shares
-Stock split
-Stock option or other executive compensation plan
-Finance growth of company/strengthen balance sheet
-Aid in restructuring
-Improve credit rating
-Implement a poison pill or other takeover defense
o Amount of stock currently authorized but not yet issued or reserved for
stock option plans
o Amount of additional stock to be authorized and its dilutive effect

We will support this proposal if a detailed and verifiable plan for the use of
the additional shares is contained in the proxy statement.

CONFIDENTIAL BALLOT

We support the idea that a shareholder's identity and vote should be treated
with confidentiality.

However, we look at this issue on a case-by-case basis.

In order to promote confidentiality in the voting process, we endorse the use of
independent Inspectors of Election.

CUMULATIVE VOTING

In general, we support cumulative voting.

Cumulative voting is a process by which a shareholder may multiply the number of
directors being elected by the number of shares held on record date and cast the
total number for one candidate or allocate the voting among two or more
candidates.

Where cumulative voting is in place, we will vote against any proposal to
rescind this shareholder right.

Cumulative voting may result in a minority block of stock gaining representation
on the board. When a proposal is made to institute cumulative voting, the
proposal will be reviewed on a case-by-case basis. While we feel that each board
member should represent all shareholders, cumulative voting provides minority
shareholders an opportunity to have their views represented.

DIRECTOR LIABILITY AND INDEMNIFICATION

We support efforts to attract the best possible directors by limiting the
liability and increasing the indemnification of directors, except in the case of
insider dealing.

EQUAL ACCESS TO THE PROXY

The SEC's rules provide for shareholder resolutions. However, the resolutions
are limited in scope and there is a 500 word limit on proponents' written
arguments. Management has no such limitations. While we support equal access to
the proxy, we would look at such variables as length of time required to
respond, percentage of ownership, etc.

FAIR PRICE PROVISIONS

Charter provisions requiring a bidder to pay all shareholders a fair price are
intended to prevent two-tier tender offers that may be abusive. Typically, these
provisions do not apply to board-approved transactions.

We support fair price provisions because we feel all shareholders should be
entitled to receive the same benefits.

Reviewed on a case-by-case basis.

GOLDEN PARACHUTES

Golden parachutes are severance payments to top executives who are terminated or
demoted after a takeover.

We support any proposal that would assure management of its own welfare so that
they may continue to make decisions in the best interest of the company and
shareholders even if the decision results in them losing their job. We do not,
however, support excessive golden parachutes. Therefore, each proposal will be
decided on a case-by- case basis.

Note: Congress has imposed a tax on any parachute that is more than three times
the executive's average annual compensation.

ANTI-GREENMAIL PROPOSALS

We do not support greenmail. An offer extended to one shareholder should be
extended to all shareholders equally across the board.

LIMIT SHAREHOLDERS' RIGHTS TO CALL SPECIAL MEETINGS

We support the right of shareholders to call a special meeting.

CONSIDERATION OF NONFINANCIAL EFFECTS OF A MERGER

This proposal releases the directors from only looking at the financial effects
of a merger and allows them the opportunity to consider the merger's effects on
employees, the community, and consumers.

As a fiduciary, we are obligated to vote in the best economic interests of our
clients. In general, this proposal does not allow us to do that. Therefore, we
generally cannot support this proposal.

Reviewed on a case-by-case basis.

MERGERS, BUYOUTS, SPIN-OFFS, RESTRUCTURINGS

Each of the above is considered on a case-by-case basis. According to the
Department of Labor, we are not required to vote for a proposal simply because
the offering price is at a premium to the current market price. We may take into
consideration the long term interests of the shareholders.

MILITARY ISSUES

Shareholder proposals regarding military production must be evaluated on a
purely economic set of criteria for our ERISA clients. As such, decisions will
be made on a case-by-case basis.

In voting on this proposal for our non-ERISA clients, we will vote according to
the client's direction when applicable. Where no direction has been given, we
will vote in the best economic interests of our clients. It is not our duty to
impose our social judgment on others.

NORTHERN IRELAND

Shareholder proposals requesting the signing of the MacBride principles for the
purpose of countering the discrimination of Catholics in hiring practices must
be evaluated on a purely economic set of criteria for our ERISA clients. As
such, decisions will be made on a case-by-case basis.

In voting on this proposal for our non-ERISA clients, we will vote according to
client direction when applicable. Where no direction has been given, we will
vote in the best economic interests of our clients. It is not our duty to impose
our social judgment on others.

OPT OUT OF STATE ANTI-TAKEOVER LAW

This shareholder proposal requests that a company opt out of the coverage of the
state's takeover statutes. Example: Delaware law requires that a buyer must
acquire at least 85% of the company's stock before the buyer can exercise
control unless the board approves.

We consider this on a case-by-case basis. Our decision will be based on the
following:

o State of Incorporation
o Management history of responsiveness to shareholders
o Other mitigating factors

POISON PILL

In general, we do not endorse poison pills.

In certain cases where management has a history of being responsive to the needs
of shareholders and the stock is very liquid, we will reconsider this position.

REINCORPORATION

Generally, we support reincorporation for well-defined business reasons. We
oppose reincorporation if proposed solely for the purpose of reincorporating in
a state with more stringent anti-takeover statutes that may negatively impact
the value of the stock.

STOCK OPTION PLANS

Stock option plans are an excellent way to attract, hold and motivate directors
and employees. However, each stock option plan must be evaluated on its own
merits, taking into consideration the following:

o Dilution of voting power or earnings per share by more than 10%
o Kind of stock to be awarded, to whom, when and how much
o Method of payment
o Amount of stock already authorized but not yet issued under existing stock
option plans

SUPERMAJORITY VOTE REQUIREMENTS

Supermajority vote requirements in a company's charter or bylaws require a level
of voting approval in excess of a simple majority of the outstanding shares. In
general, we oppose supermajority-voting requirements. Supermajority requirements
often exceed the average level of shareholder participation. We support
proposals' approvals by a simple majority of the shares voting.

LIMIT SHAREHOLDERS RIGHT TO ACT BY WRITTEN CONSENT

Written consent allows shareholders to initiate and carry on a shareholder
action without having to wait until the next annual meeting or to call a special
meeting. It permits action to be taken by the written consent of the same
percentage of the shares that would be required to effect proposed action at a
shareholder meeting.

Reviewed on a case-by-case basis.

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

PORTFOLIO MANAGERS
------------------

Mr. Mario J. Gabelli, CFA, is primarily responsible for the day-to-day
management of The Gabelli Dividend & Income Trust, (the Trust). Mr. Gabelli has
served as Chairman, Chief Executive Officer, and Chief Investment Officer -Value
Portfolios of GAMCO Investors, Inc. and its affiliates since their organization.

Additionally, Barbara G. Marcin serves as Senior Portfolio Manager for the
Trust. Ms. Marcin joined GAMCO Investors, Inc. in 1999 to manage larger
capitalization value style portfolios.

MANAGEMENT OF OTHER ACCOUNTS
----------------------------

The table below shows the number of other accounts managed by the Portfolio
Managers and the total assets in each of the following categories: registered
investment companies, other paid investment vehicles and other accounts. For
each category, the table also shows the number of accounts and the total assets
in the accounts with respect to which the advisory fee is based on account
performance.

# of Accounts
Managed with Total Assets with
Total Advisory Fee Advisory Fee
Name of Portfolio # of Accounts Total Based on Based on
Manager Type of Accounts Managed Assets Performance Performance
-------- ---------------- ------- ----------- -----------

1. Mario J. Gabelli Registered Investment 24 $10.8B* 5 $2.5B
Companies:
Other Pooled Investment 20 $946.4M* 19 $704.6M
Vehicles:
Other Accounts: 1,882 $10.0B 5 $1.3B

2. Barbara G. Marcin Registered Investment 2 $500.0 0 $0
Companies:
Other Pooled Investment 0 $0 0 $0
Vehicles:
Other Accounts: 6 $43.4M 0 $0

* Represents the portion of assets for which the portfolio manager has primary
responsibility in the accounts indicated. The accounts indicated may contain
additional assets under the primary responsibility of other portfolio managers.

POTENTIAL CONFLICTS OF INTEREST
-------------------------------

As reflected above, the Portfolio Managers manage accounts in addition to the
Trust. Actual or apparent conflicts of interest may arise when a Portfolio
Manager also has day-to-day management responsibilities with respect to one or
more other accounts. These potential conflicts include:

ALLOCATION OF LIMITED TIME AND ATTENTION. As indicated above, the Portfolio
Managers manage multiple accounts. As a result, he/she will not be able to
devote all of their time to the management of the Trust. The Portfolio Managers,
therefore, may not be able to formulate as complete a strategy or identify
equally attractive investment opportunities for each of those accounts as might
be the case if he/she were to devote all of their attention to the management of
only the Trust.

ALLOCATION OF LIMITED INVESTMENT OPPORTUNITIES. As indicated above, the
Portfolio Managers manage managed accounts with investment strategies and/or
policies that are similar to the Trust. In these cases, if the Portfolio Manager
identifies an investment opportunity that may be suitable for multiple accounts,
a Fund may not be able to take full advantage of that opportunity because the
opportunity may be allocated among all or many of these accounts or other
accounts managed primarily by other Portfolio Managers of the Adviser, and their
affiliates. In addition, in the event a Portfolio Manager determines to purchase
a security for more than one account in an aggregate amount that may influence
the market price of the security, accounts that purchased or sold the security
first may receive a more favorable price than accounts that made subsequent
transactions.

SELECTION OF BROKER/DEALERS. Because of Mr. Gabelli's position with the
Distributor and his indirect majority ownership interest in the Distributor, he
may have an incentive to use the Distributor to execute portfolio transactions
for a Fund.

PURSUIT OF DIFFERING STRATEGIES. At times, the Portfolio Managers may determine
that an investment opportunity may be appropriate for only some of the accounts
for which he/she exercises investment responsibility, or may decide that certain
of the funds or accounts should take differing positions with respect to a
particular security. In these cases, the Portfolio Manager may execute differing
or opposite transactions for one or more accounts which may affect the market
price of the security or the execution of the transaction, or both, to the
detriment of one or more other accounts.

VARIATION IN COMPENSATION. A conflict of interest may arise where the financial
or other benefits available to the Portfolio Manager differs among the accounts
that he/she manages. If the structure of the Adviser's management fee or the
Portfolio Manager's compensation differs among accounts (such as where certain
accounts pay higher management fees or performance-based management fees), the
Portfolio Manager may be motivated to favor certain accounts over others. The
Portfolio Manager also may be motivated to favor accounts in which they have an
investment interest, or in which the Adviser, or their affiliates have
investment interests. Similarly, the desire to maintain assets under management
or to enhance a Portfolio Manager's performance record or to derive other
rewards, financial or otherwise, could influence the Portfolio Manager in
affording preferential treatment to those accounts that could most significantly
benefit the Portfolio Manager. For example, as reflected above, if the Portfolio
Manager manages accounts which have performance fee arrangements, certain
portions of his/her compensation will depend on the achievement of performance
milestones on those accounts. The Portfolio Manager could be incented to afford
preferential treatment to those accounts and thereby be subject to a potential
conflict of interest.

The Adviser, and the Funds have adopted compliance policies and procedures that
are designed to address the various conflicts of interest that may arise for the
Adviser and their staff members. However, there is no guarantee that such
policies and procedures will be able to detect and prevent every situation in
which an actual or potential conflict may arise.

COMPENSATION STRUCTURE FOR MARIO J. GABELLI
-------------------------------------------

Mr. Gabelli receives incentive-based variable compensation based on a percentage
of net revenues received by the Adviser for managing the Trust. Net revenues are
determined by deducting from gross investment management fees the firm's
expenses (other than Mr. Gabelli's compensation) allocable to this Trust. Five
closed-end registered investment companies (including this Trust) managed by Mr.
Gabelli have arrangements whereby the Adviser will only receive its investment
advisory fee attributable to the liquidation value of outstanding preferred
stock (and Mr. Gabelli would only receive his percentage of such advisory fee)
if certain performance levels are met. Additionally, he receives similar
incentive based variable compensation for managing other accounts within the
firm and its affiliates. This method of compensation is based on the premise
that superior long-term performance in managing a portfolio should be rewarded
with higher compensation as a result of growth of assets through appreciation
and net investment activity. The level of compensation is not determined with
specific reference to the performance of any account against any specific
benchmark. One of the other registered investment companies managed by Mr.
Gabelli has a performance (fulcrum) fee arrangement for which his compensation
is adjusted up or down based on the performance of the investment company
relative to an index. Mr. Gabelli manages other accounts with performance fees.
Compensation for managing these accounts has two components. One component is
based on a percentage of net revenues to the investment adviser for managing the
account. The second component is based on absolute performance of the account,
with respect to which a percentage of such performance fee is paid to Mr.
Gabelli. As an executive officer of the Adviser's parent company, GBL, Mr.
Gabelli also receives ten percent of the net operating profits of the parent
company. He receives no base salary, no annual bonus, and no stock options.

COMPENSATION STRUCTURE FOR BARBARA G. MARCIN
--------------------------------------------

The compensation of Ms. Marcin for the Trust is structured to enable the Adviser
to attract and retain highly qualified professionals in a competitive
environment. The Portfolio Manager receives a compensation package that includes
a minimum draw or base salary, equity-based incentive compensation via awards of
stock options, and incentive based variable compensation based on a percentage
of net revenue received by the Adviser for managing the Trust to the extent that
the amount exceeds a minimum level of compensation. Net revenues are determined
by deducting from gross investment management fees certain of the firm's
expenses (other than the Portfolio Managers' compensation) allocable to the
Trust (the incentive-based variable compensation for managing other accounts is
also based on a percentage of net revenues to the investment adviser for
managing the account). This method of compensation is based on the premise that
superior long-term performance in managing a portfolio should be rewarded with
higher compensation as a result of growth of assets through appreciation and net
investment activity. The level of equity-based incentive and incentive-based
variable compensation is based on an evaluation by the Adviser's parent, GBL, of
quantitative and qualitative performance evaluation criteria. This evaluation
takes into account, in a broad sense, the performance of the accounts managed by
the Portfolio Manager, but the level of compensation is not determined with
specific reference to the performance of any account against any specific
benchmark. Generally, greater consideration is given to the performance of
larger accounts and to longer term performance over smaller accounts and
short-term performance.

OWNERSHIP OF SHARES IN THE FUND
-------------------------------

Mario Gabelli and Barbara Marcin owned 2,784,705.00 and 0 shares respectively of
the Trust as of December 31, 2005.

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

REGISTRANT PURCHASES OF EQUITY SECURITIES

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

REGISTRANT PURCHASES OF EQUITY SECURITIES
=============================================================================================================================
(C) TOTAL NUMBER OF (D) MAXIMUM NUMBER (OR
SHARES (OR UNITS) APPROXIMATE DOLLAR VALUE) OF
(A) TOTAL NUMBER OF PURCHASED AS PART OF SHARES (OR UNITS) THAT MAY YET
SHARES (OR UNITS) (B) AVERAGE PRICE PAID PUBLICLY ANNOUNCED PLANS BE PURCHASED UNDER THE PLANS
PERIOD PURCHASED PER SHARE (OR UNIT) OR PROGRAMS OR PROGRAMS
=============================================================================================================================
=============================================================================================================================

=============================================================================================================================
Month #1 Common - 20,000 Common - $18.7764 Common - 20,000 Common - 84,777,505 -
07/01/05 20,000 = 84,757,505
through Preferred Series A - N/A Preferred Series A- N/A Preferred Series A - N/A
07/31/05 Preferred Series A - 3,200,000
=============================================================================================================================
=============================================================================================================================
Month #2 Common - 20,000 Common - $18.8534 Common - 20,000 Common - 84,757,505 -
08/01/05 20,000 = 84,737,505
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
08/31/05 Preferred Series A - 3,200,000
=============================================================================================================================
=============================================================================================================================
Month #3 Common - 20,000 Common - $19.0092 Common - 20,000 Common - 84,737,505 -
09/01/05 20,000 = 84,717,505
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
09/30/05 Preferred Series A - 3,200,000
=============================================================================================================================
=============================================================================================================================
Month #4 Common - 20,700 Common - $18.2913 Common - 20,700 Common - 84,717,505 -
10/01/05 20,700 = 84,696,805
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
10/31/05 Preferred Series A - 3,200,000
=============================================================================================================================
=============================================================================================================================
Month #5 Common - 84,000 Common - $17.5383 Common - 84,000 Common - 84,696,505 -
11/01/05 84,000 = 84,612,805
through Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
11/30/05 Preferred Series A - 3,200,000
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A
Preferred Series D - 2,600,000
=============================================================================================================================
=============================================================================================================================
Month #6 Common - 299,400 Common - $17.9006 Common - 299,400 Common - 84,612,805 -
12/01/05 299,400 = 84,313,405
through
12/31/05 Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - 3,200,000
Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - N/A Preferred Series D - 2,600,000
=============================================================================================================================
=============================================================================================================================
Total Common - 464,100 Common - $17.9790 Common - 464,100 N/A

Preferred Series A - N/A Preferred Series A - N/A Preferred Series A - N/A
=============================================================================================================================

Footnote columns (c) and (d) of the table, by disclosing the following
information in the aggregate for all plans or programs publicly announced:

a. The date each plan or program was announced - The notice of the potential
repurchase of common and preferred shares occurs quarterly in the Fund's
quarterly report in accordance with Section 23(c) of the Investment Company
Act of 1940, as amended.

b. The dollar amount (or share or unit amount) approved - Any or all common
shares outstanding may be repurchased when the Fund's common shares are
trading at a discount of 7.5% or more from the net asset value of the
shares.

Any or all preferred shares outstanding may be repurchased when the Fund's
preferred shares are trading at a discount to the liquidation value of
$25.00.

c. The expiration date (if any) of each plan or program - The Fund's
repurchase plans are ongoing.

d. Each plan or program that has expired during the period covered by the
table - The Fund's repurchase plans are ongoing.

e. Each plan or program the registrant has determined to terminate prior to
expiration, or under which the registrant does not intend to make further
purchases. - The Fund's repurchase plans are ongoing.

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

There have been no material changes to the procedures by which the shareholders
may recommend nominees to the registrant's Board of Trustees, where those
changes were implemented after the registrant last provided disclosure in
response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A (17 CFR
240.14a-101), or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

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

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

ITEM 12. EXHIBITS.

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

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

(a)(3) Not applicable.

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

SIGNATURES

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

(registrant) The Gabelli Dividend & Income Trust
--------------------------------------------------------------------

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

Date March 10, 2006
----------------------------------------------------------------------------

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

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

Date March 10, 2006
----------------------------------------------------------------------------

By (Signature and Title)* /s/ Richard C. Sell, Jr.
-------------------------------------------------------
Richard C. Sell, Jr., Principal Financial Officer
and Treasurer

Date March 10, 2006
----------------------------------------------------------------------------

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