Edgar Filing: DTF TAX-FREE INCOME INC

Tax Basis of

Investment

Appreciation

Depreciation

Net Unrealized

Appreciation

$ 183,880,605

$18,291,275

$18,220,294

DTF Tax-Free Income Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-06416

DTF Tax-Free Income Inc.

(Exact name of registrant as specified in charter)

55 East Monroe Street, Suite 3600, Chicago, Illinois 60603

(Address of principal executive offices) (Zip code)


Alan M. Meder		John R. Sagan
DTF Tax-Free Income Inc.		Mayer, Brown, Rowe & Maw LLP
55 East Monroe Street, Suite 3600		71 South Wacker Drive
Chicago, Illinois 60603		Chicago, Illinois 60606

(Name and address of agents for service)

Registrant’s telephone number, including area code: (312) 541-5555

Date	of fiscal year end: October 31

Date	of reporting period: January 31, 2006


Item 1 –		Schedule of Investments

DTF TAX FREE INCOME INC.

Portfolio of Investments

January 31, 2006


Moody’s Rating	Principal Amount (000)			Description (a)		Value
				LONG-TERM INVESTMENTS	143.2%
				Alabama	6.5%
				Jefferson Cnty. Swr. Rev.
				Capital Impvt.
Aaa	$	3,000	(b)	5.125%, 2/1/29, Ser. A, F.G.I.C.
				Prerefunded 2/1/09 @ $101		$	3,168,870
Aaa		2,100	(b)	5.00%, 2/1/33, Ser. A, F.G.I.C.
				Prerefunded 2/1/09 @ $101			2,210,775
Aaa		1,900	(b)	5.00%, 2/1/33, Ser. A, F.G.I.C.
				Prerefunded 2/1/09 @ $101			2,003,569
Aaa		1,600		5.25%, 2/1/15, Ser. B, F.S.A.			1,694,784

							9,077,998

				Alaska	0.4%
				Alaska St. Hsg. Fin. Corp. Rev.,
Aaa		500		5.00%, 12/1/11, Ser. B-2			518,205

				Arizona	1.1%
				Chandler Ariz Indl. Dev. Auth. Rev.
A1		1,500		4.375%, 12/1/35			1,532,235

				California	25.8%
				Burbank Elec. Rev.,
Aaa		1,380		5.375%, 6/1/18, M.B.I.A.			1,504,490
				Foothill/Eastern Corr.
				Agency Toll Road Rev.,
Aaa		5,640	(b)	6.00%, 1/1/34, Ser. A
				Prerefunded 1/1/07 @ $100			5,784,440
				Fresno Swr. Rev.,
Aaa		3,030		6.00%, 9/1/09, Ser. A-1, A.M.B.A.C.			3,302,548
Aaa		2,000		6.25%, 9/1/14, Ser. A-1, A.M.B.A.C			2,358,040
				Los Angeles Wastewtr. Sys. Rev.,
Aaa		2,000		5.00%, 6/1/26, Ser. A, M.B.I.A.			2,084,580
				Los Angeles Wtr. & Pwr. Rev., Ser. A,
Aaa		1,000		5.25%, 7/1/21, F.S.A.			1,067,320
Aaa		1,000		5.375%, 7/1/21, M.B.I.A.			1,078,960
				Metro Wtr. Dist. Southern
				California Waterwork Rev.,
Aaa		1,500		5.00%, 10/1/29, Ser. B, M.B.I.A.			1,566,375
				Pomona Sngl. Fam. Mtge. Rev.,
Aaa		1,870	(b)	7.375%, 8/1/10, Ser. B, GNMA Collateral
				Escrowed to maturity			2,013,953
				Riverside Cnty. Sngl. Fam. Rev.,
				Mtge. Backed,
Aaa		2,500	(b)	7.80%, 5/1/21, Ser. A, GNMA Collateral
				Escrowed to maturity			3,421,200
				San Bernardino Cnty. Residential
				Mtge. Rev.,
Aaa		7,840	(b)	9.60%, 9/1/15,
				Escrowed to maturity			11,314,610
				Saratoga Unified Sch. Dist., Gen. Oblig.
Aaa		1,040		Zero Coupon, 9/1/20, Ser. A, F.G.I.C.			542,714

							36,039,230

				Connecticut	4.1%
				Connecticut St. Health & Edl. Rev.,
Aa3		1,000		5.00%, 7/1/25, Ser. C, Radian			1,033,340
				Connecticut St. Spl. Tax Oblig. Rev.,
Aaa		1,000		5.25%, 7/1/17, Ser. B, A.M.B.A.C.			1,121,440
				Mashantucket Western Pequot
				Tribe Spl. Rev., 144A,
Baa3		3,500	(c)	5.75%, 9/1/18, Ser. B			3,630,130

							5,784,910


Moody’s Rating	Principal Amount (000)			Description (a)		Value
				District of Columbia	1.1%
				District of Columbia Wtr. & Swr. Rev.,
Aaa	$	1,500		5.00%, 10/1/33, F.G.I.C.		$1,541,235

				Florida	10.8%
				Dade Cnty. Wtr. & Swr. Sys. Rev.,
Aaa		3,000		5.25%, 10/1/26, F.G.I.C.		3,099,090
				Escambia Cnty. Hlth Fac. Rev.,
A3		1,170		5.125%, 10/1/19		1,197,015
				Florida Mun. Ln. Council Rev. North Miami
				Beach Wtr. Proj.,
Aaa		2,210		5.375%, 8/1/20, Ser. B, M.B.I.A.		2,416,768
				Miami-Dade Cnty. FL Storm Wtr. Util Rev.,
Aaa		2,000		5.00%, 4/1/27, M.B.I.A.		2,098,840
				Sarasota Cnty. Util. Sys. Rev.,
Aaa		1,000		5.25%, 10/1/16, Ser C, F.G.I.C.		1,083,100
				St. Petersburg Public Util. Rev.,
Aaa		5,000		5.00%, 10/1/28, Ser. A, F.S.A.		5,120,800

						15,015,613

				Georgia	16.3%
				Atlanta Wtr. & Wastewtr. Rev.,
				Ser. A,
Aaa		2,385		5.00%, 11/1/29, F.G.I.C.		2,432,223
Aaa		2,615	(b)	5.00%, 11/1/29, F.G.I.C.
				Prerefunded 5/1/09 @ $101		2,765,179
Aaa		715		5.00%, 11/1/38, F.G.I.C.		725,489
Aaa		785	(b)	5.00%, 11/1/38, F.G.I.C.
				Prerefunded 5/1/09 @ $101		830,082
				De Kalb Cnty. Wtr. & Swr. Rev.,
Aa2		4,000		5.00%, 10/1/24		4,188,480
				Fulton Cnty. Sch. Dist., Gen. Oblig.
Aa2		2,000		5.375%, 1/1/16		2,240,620
				Georgia Mun. Elec. Auth. Pwr. Rev., Ser. Y,
Aaa		145	(b)	6.40%, 1/1/13, A.M.B.A.C.
				Escrowed to Maturity		164,475
Aaa		2,440		6.40%, 1/1/13, A.M.B.A.C.		2,769,083
Aaa		30	(b)	6.40%, 1/1/13, A.M.B.A.C.
				Prerefunded 1/1/11 @ $100		33,825
				Georgia Mun. Elec. Auth. Pwr. Rev.,
Aaa		5,500		6.50%, 1/1/20, Ser. X, A.M.B.A.C.		6,591,200

						22,740,656

				Hawaii	1.4%
				Hawaii Dept. Budget & Fin.,
Aaa		2,000		4.80%, 1/1/25, Ser. A, F.G.I.C.		1,998,440

				Idaho	1.0%
				Idaho Hsg. Agcy.,
				Sngl. Fam. Mtge. Sr., Ser. B,
Aa1		915		6.65%, 7/1/14		924,141
Aaa		483		6.60%, 7/1/27, F.H.A.		484,874

						1,409,015

				Illinois	3.9%
				Chicago Gen. Oblig.,
Aaa		4,000		6.25%, 1/1/11, A.M.B.A.C.		4,402,920
				Chicago Park Dist., Gen. Oblig.,
Aaa		1,000		5.00%, 1/1/27, Ser. A, A.M.B.A.C.		1,041,070

						5,443,990


Moody’s Rating	Principal Amount (000)			Description (a)		Value
				Indiana	5.7%
				Indiana Mun. Pwr. Agcy., Pwr.
				Supply Sys. Rev.,
Aaa	$	5,000		6.00%, 1/1/13, Ser. B, M.B.I.A.		$5,653,650
				Indianapolis Local Pub. Impvt.
				Bond Bank Waterworks Proj.,
		2,100	(b)	5.25%, 7/1/33, Ser. A, M.B.I.A.
Aaa				Prerefunded 7/1/12 @ $100		2,295,636

						7,949,286

				Kentucky	1.5%
				Louisville & Jefferson Cnty. Met.
				Swr. Dist., Swr. & Drain Sys. Rev.,
Aaa		2,000		5.00%, 5/15/30, Ser. A, F.G.I.C.		2,062,360

				Massachusetts	5.0%
				Boston Wtr. & Swr. Comm. Rev.,
Aaa		2,000		5.00%, 11/1/28, Ser. D, F.G.I.C.		2,065,020
				Massachusetts St. Tpk. Auth.,
				Metro. Highway Sys. Rev.,
Aaa		2,355		5.125%, 1/1/23, Ser. B, M.B.I.A.		2,433,045
Aaa		2,500		4.75%, 1/1/34, Ser. A, A.M.B.A.C.		2,505,225

						7,003,290

				Michigan	3.0%
				Detroit Wtr. Supply Sys. Rev.,
				Sr. Lien, Ser. A,
Aaa		2,000		5.00%, 7/1/30, F.G.I.C.		2,050,420
Aaa		2,000		5.50%, 7/1/24, F.G.I.C.		2,160,900

						4,211,320

				Nebraska	4.8%
				Lincoln San. Swr. Rev.,
Aaa		1,000		5.00%, 6/15/16, M.B.I.A.		1,072,960
				Omaha Pub. Pwr. Dist.,
				Elec. Rev., Ser. B,
Aa2		2,500	(b)	6.15%, 2/1/12
				Escrowed to maturity		2,759,150
Aa2		2,500	(b)	6.20%, 2/1/17
				Escrowed to maturity		2,911,450

						6,743,560


Moody’s Rating	Principal Amount (000)		Description (a)			Value
			Nevada	3.3	%
			Las Vegas Valley Wtr. Dist.,
			Gen. Oblig.,
Aaa	$	1,400	5.00%, 6/1/25, Ser. B, M.B.I.A.			$1,469,286
Aaa		3,000	5.00%, 6/1/32, Ser. A, F.G.I.C.			3,085,440

						4,554,726

			New Jersey	1.6	%
			New Jersey St. Gen. Oblig.,
Aa3		2,000	5.25%, 7/1/17, Ser. H			2,215,660

			New York	7.5	%
			Long Island Pwr. Auth. Elec.
			Sys. Rev.,
Aaa		4,000	5.25%, 12/1/26, Ser. A, M.B.I.A.			4,180,280
			Metro. Trans. Auth. Rev.,
Aaa		1,000	5.25%, 11/15/31, Ser. A, F.G.I.C.			1,066,090
			New York City Mun. Wtr. Fin. Auth.,
			Wtr & Swr. Sys. Rev.,
Aaa		5,000	5.00%, 6/15/29, Ser. B, F.S.A.			5,195,650

						10,442,020

			Ohio	4.3	%
			Hamilton Elec. Sys. Rev.
Aaa		1,000	4.60%, 10/15/20, Ser. A, F.S.A.			1,027,120
			Mason City Sch. Dist. Gen. Oblig.
Aaa		1,000	5.25%, 12/1/21, F.G.I.C.			1,129,170
			Ohio St. Wtr. Dev. Auth. Rev.,
Aaa		2,445	5.50%, 6/1/20, Ser. B, F.S.A.			2,819,990
			Springboro Swr. Sys. Rev.
Aaa		1,045	5.00%, 6/1/26, M.B.I.A.			1,094,972

						6,071,252

			Pennsylvania	2.2	%
			Delaware Cnty. Auth. Rev.,
			Elwyn Inc. Proj.,
Aa3		2,000	5.00%, 6/1/21, Ser. A, Radian			2,076,960
			Pennsylvania Economic Dev. Fin.
			Auth. Res. Recov. Rev.,
Aaa		1,000	4.625%, 12/1/18, Ser. F, A.M.B.A.C.			1,007,340

						3,084,300

			Puerto Rico	0.8	%
			Puerto Rico Elec. Auth. Rev.,
Aaa		1,000	5.00%, 7/1/25, Ser. PP, F.G.I.C.			1,054,740

			South Carolina	1.9	%
			Berkeley Cnty. Wtr. & Swr. Rev.,
Aaa		1,000	5.25%, 6/1/16, M.B.I.A.			1,089,920
			Spartanburg Waterworks Rev.,
			Jr. Lien.,
Aaa		1,500	5.25%, 6/1/28, F.G.I.C.			1,605,330

						2,695,250


Moody’s Rating	Principal Amount (000)			Description (a)			Value
				Texas	16.3	%
				Bexar Met. Wtr. Dist.
				Waterworks Sys. Rev.,
Aaa	$	2,500		5.00%, 5/1/25, M.B.I.A.			$2,564,225
				Coastal Wtr. Auth. Contract Rev.,
				City Of Houston Proj.,
Aaa		4,000		5.00%, 12/15/25, F.S.A.			4,094,400
				El Paso Wtr. & Swr. Rev.,
Aaa		1,555		5.50%, 3/1/12, Ser. A, F.S.A.			1,702,367
				Harris Cnty. Toll Road Sub. Lien, Gen. Oblig.,
Aa1		1,650		7.00%, 8/15/10, Ser. A			1,882,435
				Houston Wtr. & Swr. Sys. Rev.,
Aaa		1,500	(b)	5.25%, 12/1/23, Ser. B, F.G.I.C.
				Prerefunded 12/1/10 @ $100			1,607,445
Aaa		3,500	(b)	5.00%, 12/1/28, Ser. A, F.S.A.
				Prerefunded 12/1/09 @ $100			3,695,650
				Lower Colorado River Auth. Rev.,
				Refunding & Impvmnt.,
Aaa		2,000		5.00%, 5/15/31, F.S.A.			2,042,700
				San Antonio Elec. & Gas Rev.,
Aa1		4,000		5.00%, 2/1/18, Ser. A			4,175,840
				University North Texas Rev.,
Aaa		1,000		4.50%, 4/15/25, F.G.I.C.			993,580

							22,758,642

				Virginia	3.0	%
				Henrico Cnty. Wtr & Swr. Rev.,
Aa2		3,985		5.00%, 5/1/28			4,148,584

				Washington	5.6	%
				Energy Northwest Wind Proj. Rev.,
Aaa		500		4.75%, 7/1/21, M.B.I.A.			514,665
Aaa		1,170		5.00%, 7/1/19, A.M.B.A.C.			1,221,457
				King Cnty. Swr. Rev.,
Aaa		2,500		5.00%, 1/1/31, F.G.I.C.			2,561,600
				Seattle Wtr. Sys. Rev.,
Aaa		1,000		5.00%, 9/1/18, M.B.I.A.			1,061,440
				Washington St. Pub. Pwr. Supply,
				Nuclear Proj. No. 2 Rev.,
Aaa		2,400		6.00%, 7/1/07, Ser. A			2,487,888

							7,847,050

				West Virginia	1.1	%
				Monongalia Cnty. Building Commission
				Hospital Rev.
A-*		1,500		5.00%, 7/1/30, Ser. A			1,477,065

				Wyoming	3.2	%
				Wyoming St. Farm Loan Brd.
				Cap. Facs. Rev.,
AA*		4,000		5.75%, 10/1/20			4,429,840

				Total long-term investments
				(cost $182,067,728)			199,850,472


Moody’s Rating	Principal Amount (000)	Description (a)			Value
	Shares	SHORT-TERM INVESTMENT	1.6	%
		Goldman Sachs Tax Exempt
		Money Market Fund,
NR	2,250,427	(cost $2,250,427)			$	2,250,427


		Total Investments	144.8	%
		(cost $184,318,155)				202,100,899

	Other assets in excess of liabilities —		1.8	%		2,446,170

	Liquidation Value of Remarketed Preferred Stock —		(46.6	)%		(65,000,000	)


	Net Assets Applicable to Common Stock —		100.0	%		$139,547,069


	Net Asset Value per Common Share ($139,547,069 / 8,507,456)					$16.40

*	Standard & Poor rating.

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

(a)	The following abbreviations are used in portfolio descriptions to indicate providers of credit support, in whole or in part:

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

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

F.H.A. - Federal Housing Authority.

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

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

Radian - Radian Asset Assurance Inc.

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

(c)

Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers. At January 31, 2006, these securities amounted to a value of $3,630,130 or 2.6% of net assets applicable to common stock.

The United States federal income tax basis of the Fund’s investments and the net unrealized appreciation as of January 31, 2006 was as follows:


Item 2 –		Controls and Procedures

		(a)The registrant’s principal executive officer and principal financial officer have concluded that the registrant’s disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “1940 Act”)) are effective, based on an evaluation of those controls and procedures made as of a date within 90 days of the filing date of this report as required by Rule 30a-3(b) under the 1940 Act and Rule 13a-15(b) under the Exchange Act.

		(b)There has been no change in the registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that occurred during the second fiscal quarter of the fiscal half-year covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3 –		Exhibits

		Exhibit 99.CERT- Certifications pursuant to Section 302 of the Sarbanes-Oxley Act – Attached hereto

SIGNATURES

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


(Registrant)		DTF TAX-FREE INCOME INC.

By (Signature and Title)		Alan M. Meder
		Alan M. Meder Treasurer and Principal Financial Officer

Date		March 24, 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)		Nathan I. Partain
		Nathan I. Partain President and Chief Executive Officer

Date		March 24, 2006

By (Signature and Title)		Alan M. Meder
		Alan M. Meder Treasurer and Principal Financial Officer

Date		March 24, 2006