didividendincome_nq.htm
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
 
FORM N-Q
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY
 
Investment Company Act file number:       811-07460
 
Exact name of registrant as specified in charter: Delaware Investments® Dividend and
  Income Fund, Inc.
 
Address of principal executive offices: 2005 Market Street
  Philadelphia, PA 19103
 
Name and address of agent for service: David F. Connor, Esq.
  2005 Market Street
  Philadelphia, PA 19103
 
Registrant’s telephone number, including area code: (800) 523-1918
 
Date of fiscal year end: November 30
 
Date of reporting period: February 28, 2010


Item 1. Schedule of Investments.
 
Schedule of Investments (Unaudited)
 
Delaware Investments® Dividend and Income Fund, Inc.
 
February 28, 2010
 
Number of
               Shares                Value
Common Stock – 68.38%
Consumer Discretionary – 3.49%
P†=Avado Brands 1,390 $ 0
Comcast Class A 66,200 1,088,328
†DIRECTV Class A 1,550 52,468
Lowe's 51,200 1,213,952
2,354,748
Consumer Staples – 10.24%
Archer-Daniels-Midland 37,100 1,089,256
CVS Caremark 35,900 1,211,625
Heinz (H.J.) 27,400 1,257,659
Kimberly-Clark 19,300 1,172,282
Kraft Foods Class A 37,000 1,051,910
Safeway 45,400 1,131,368
6,914,100
Diversified REITs – 1.04%
*Investors Real Estate Trust 10,300 92,082
Lexington Reality Trust 17,900 106,505
Vornado Realty Trust 7,665 503,744
702,331
Energy – 5.68%
Chevron 12,600 910,980
ConocoPhillips 19,500 936,000
Marathon Oil 32,500 940,875
National Oilwell Varco 24,200 1,051,974
3,839,829
Financials – 7.01%
Allstate 36,600 1,143,749
Bank of New York Mellon 36,700 1,046,684
*Fifth Street Finance 34,041 385,685
*Solar Capital 44,661 826,229
Travelers 25,400 1,335,785
4,738,132
Health Care – 10.46%
†Alliance HealthCare Services 7,323 36,542
Bristol-Myers Squibb 42,200 1,034,322
Cardinal Health 39,800 1,352,005
Johnson & Johnson 17,000 1,071,000
*Merck 34,600 1,276,048
Pfizer 76,789 1,347,647
Quest Diagnostics 16,700 947,725
7,065,289
Health Care REITs – 2.80%
Cogdell Spencer 16,800 113,400
*HCP 15,650 450,407
*Health Care REIT 9,060 383,782
LTC Properties 3,300 86,064
Nationwide Health Properties 8,800 292,072
*Omega Healthcare Investors 7,900 149,863
*Ventas 9,375 414,281
1,889,869
Hotel REITs – 0.45%
†Chesapeake Lodging Trust 3,100 61,938
*Host Hotels & Resorts 20,588 241,085
303,023
Industrial REITs – 0.17%
AMB Property 1,280 31,155
DCT Industrial Trust 17,200 84,624
115,779
Industrials – 3.53%
*†Delta Air Lines 9 116
†Flextronics International 4,400 30,624
†Foster Wheeler 2 49
*†Mobile Mini 1,651 22,437
*Northrop Grumman 19,900 1,219,074
†P=PT Holdings 350 4
*Waste Management 33,700 1,112,774
2,385,078


Information Technology – 6.99%        
Intel                63,100                1,295,443
International Business Machines 10,400 1,322,464
†Motorola 124,800 843,648
Xerox 134,200 1,257,454
4,719,009
Mall REITs – 1.76%
†General Growth Properties 6 79
*Macerich 8,410 299,732
*Simon Property Group 11,347 888,357
1,188,168
Materials – 1.60%
duPont (E.I.) deNemours 32,100 1,082,412
1,082,412
Mortgage REITs – 0.49%
Annaly Capital Management 2,300 42,274
Chimera Investment 23,800 95,200
Cypress Sharpridge Investments 14,800 195,804
333,278
Multifamily REITs – 1.52%
Apartment Investment & Management 7,968 132,986
*BRE Properties 4,600 155,066
Camden Property Trust 3,450 138,173
Equity Residential 16,600 598,927
1,025,152
Office REITs – 1.28%
*Alexandria Real Estate Equities 3,090 190,406
Boston Properties 3,000 203,790
Brandywine Realty Trust 11,500 128,915
Government Properties Income Trust 4,800 113,040
*Highwoods Properties 2,900 84,245
Mack-Cali Realty 4,250 142,545
862,941
Office/Industrial REITs – 0.55%
*Digital Realty Trust 5,550 286,269
Liberty Property Trust 2,700 83,511
369,780
Real Estate Operating REITs – 0.44%
Starwood Property Trust 16,000 299,360
299,360
Self-Storage REITs – 0.63%
Public Storage 5,150 423,279
423,279
Shopping Center REITs – 0.83%
†Cedar Shopping Centers 5,700 37,563
*Federal Realty Investment Trust 300 20,688
*Kimco Realty 20,430 283,773
Ramco-Gershenson Properties Trust 14,300 143,286
*Weingarten Realty Investors 3,600 74,124
559,434
Single Tenant REITs – 0.30%
National Retail Properties 9,600 203,712
203,712
Specialty REITs – 0.96%
*Entertainment Properties Trust 6,320 241,550
*Plum Creek Timber 6,885 246,001
*Potlatch 4,825 159,322
646,873
Telecommunications – 2.83%
AT&T 33,200 823,692
=†Century Communications 500,000 0
*Frontier Communications 24,400 190,076
†GeoEye 550 13,101
Verizon Communications 30,700 888,151
1,915,020
Utilities – 3.33%
American Water Works 4,300 95,718
Edison International 33,900 1,106,157
†Mirant 189 2,378
NorthWestern 3,300 82,665
Progress Energy 25,100 961,079
2,247,997
Total Common Stock (cost $48,991,575) 46,184,593
 
Convertible Preferred Stock – 2.40%
Banking, Finance & Insurance – 0.74%
Aspen Insurance Holdings 5.625% exercise price $29.28, expiration date 12/31/49 8,800 492,250


@Fannie Mae 8.75% exercise price $32.45, expiration date 5/13/11                3,500                5,355
497,605
Cable, Media & Publishing – 0.40%
#Interpublic Group 144A 5.25% exercise price $13.66, expiration date 12/31/49 360 269,640
269,640
Energy – 0.50%
El Paso Energy Capital Trust I 4.75% exercise price $41.59, expiration date 3/31/28 5,250 193,725
Whiting Petroleum 6.25% exercise price $43.42, expiration date 12/31/49 800 146,400
340,125
Health Care & Pharmaceuticals – 0.42%
Merck 6.00% exercise price $52.85, expiration date 8/13/10 15 3,780
Mylan 6.50% exercise price $17.08, expiration date 11/15/10 220 283,580
287,360
Telecommunications – 0.34%
Lucent Technologies Capital Trust I 7.75% exercise price $24.80, expiration date 3/15/17 305 229,589
229,589
Total Convertible Preferred Stock (cost $1,777,264) 1,624,319
 
Principal
Amount
Convertible Bonds – 13.54%
Aerospace & Defense – 0.79%
#AAR 144A 1.75% exercise price $29.43, expiration date 1/1/26 $ 260,000 258,050
*#L-3 Communications Holdings 144A 3.00% exercise price $100.14, expiration date 8/1/35 265,000 277,919
535,969
Auto Parts & Equipment – 0.27%
ArvinMeritor 4.00% exercise price $26.73, expiration date 2/15/27 235,000 184,475
184,475
Banking, Finance & Insurance – 0.17%
*Jefferies Group 3.875% exercise price $39.20, expiration date 11/1/29 115,000 114,713
114,713
Basic Materials – 1.03%
Century Aluminum 1.75% exercise price $30.54, expiration date 8/1/24 20,000 17,875
Rayonier TRS Holdings 3.75% exercise price $54.81, expiration date 10/15/12 345,000 365,269
#Sino-Forest 144A 5.00% exercise price $20.29, expiration date 8/1/13 255,000 312,056
695,200
Buildings & Materials – 0.08%
Beazer Homes USA 4.625% exercise price $49.64, expiration date 6/15/24 55,000 53,350
53,350
Cable, Media & Publishing – 0.31%
VeriSign 3.25% exercise price $34.37, expiration date 8/15/37 235,000 209,150
209,150
Computers & Technology – 2.03%
#Advanced Micro Devices 144A 6.00% exercise price $28.08, expiration date 5/1/15 450,000 417,937
Euronet Worldwide 3.50% exercise price $40.48, expiration date 10/15/25 435,000 400,744
*Hutchinson Technology 3.25% exercise price $36.43, expiration date 1/15/26 150,000 124,500
*#Intel 144A 3.25% exercise price $22.68, expiration date 8/1/39 70,000 79,013
Linear Technology 3.00% exercise price $46.12, expiration date 5/1/27 120,000 116,250
SanDisk 1.00% exercise price $82.35, expiration date 5/15/13 280,000 233,100
1,371,544
Electronics & Electrical Equipment – 0.12%
Flextronics International 1.00% exercise price $15.53, expiration date 8/1/10 85,000 84,469
84,469
Energy – 0.56%
Chesapeake Energy 2.25% exercise price $85.89, expiration date 12/15/38 220,000 164,450
Peabody Energy 4.75% exercise price 58.44, expiration date 12/15/41 205,000 211,150
375,600
Health Care & Pharmaceuticals – 2.95%
#Allergan 144A 1.50% exercise price $63.33, expiration date 4/1/26 415,000 457,018
Amgen
       0.375% exercise price $79.48, expiration date 2/1/13 270,000 271,350
       #144A 0.375% exercise price $79.48, expiration date 2/1/13 165,000 165,825
fHologic 2.00% exercise price $38.59, expiration date 12/15/37 335,000 288,099
Inverness Medical Innovations 3.00% exercise price $43.98, expiration date 5/15/16 215,000 238,919
LifePoint Hospitals 3.50% exercise price $51.79, expiration date 5/14/14 110,000 101,338
Medtronic 1.65% exercise price $55.41, expiration date 4/15/13 275,000 286,688
*Millipore 3.75% exercise $90.51, expiration date 6/1/26 155,000 181,350
1,990,587
Leisure, Lodging & Entertainment – 0.53%
#Gaylord Entertainment 144A 3.75% exercise price $27.25, expiration date 10/1/14 160,000 170,200
#International Game Technology 144A 3.25% exercise price $19.97, expiration date 5/1/14 160,000 188,000
358,200
Real Estate – 1.23%
#Corporate Office Properties 144A 3.50% exercise price $53.12, expiration date 9/15/26 195,000 190,613
#Digital Realty Trust 144A 5.50% exercise price $43.00, expiration date 4/15/29 95,000 124,628
#Lexington Realty Trust 144A 6.00% exercise price $7.09, expiration date 1/15/30 120,000 118,152


@MeriStar Hospitality 9.50% exercise price $10.18, expiration date 4/1/10                230,000                236,094
ProLogis 2.25% exercise price $75.98, expiration date 4/1/37 170,000 160,863
830,350
Retail – 0.24%
Pantry 3.00% exercise price $50.09, expiration date 11/15/12 180,000 161,550
161,550
Telecommunications – 2.36%
Alaska Communications System Group 5.75% exercise price $12.90, expiration date 3/1/13 260,000 238,225
Leap Wireless International 4.50% exercise price $93.21, expiration date 7/15/14 225,000 195,188
Level 3 Communications 5.25% exercise price $3.98, expiration date 12/15/11 140,000 134,050
NII Holdings 3.125% exercise price $118.32, expiration date 6/15/12 410,000 381,299
Qwest Communications International 3.50% exercise price $4.92, expiration date 11/15/25 400,000 424,999
#SBA Communications 144A 4.00% exercise price $30.38, expiration date 10/1/14 165,000 220,894
1,594,655
Transportation – 0.39%
Bristow Group 3.00% exercise price $77.34, expiration date 6/14/38 300,000 262,125
262,125
Utilities – 0.48%
Dominion Resources 2.125% exercise price $35.44, expiration date 12/15/23 290,000 322,988
322,988
Total Convertible Bonds (cost $8,789,170) 9,144,925
         
Corporate Bonds – 44.45%
Banking – 1.91%
•BAC Capital Trust XIV 5.63% 12/31/49 215,000 152,113
Capital One Capital V 10.25% 8/15/39 190,000 216,054
•Citigroup Capital XXI 8.30% 12/21/57 85,000 79,263
*GMAC 8.00% 12/31/18 160,000 149,600
•#HBOS Capital Funding 144A 6.071% 6/29/49 205,000 151,700
*@Popular North America Capital Trust I 6.564% 9/15/34 30,000 19,825
•#Rabobank 144A 11.00% 12/29/49 150,000 190,603
•USB Capital IX 6.189% 4/15/49 115,000 96,025
Zions Bancorporation
       5.50% 11/16/15 57,000 48,862
       6.00% 9/15/15 141,000 121,996
       7.75% 9/23/14 65,000 62,576
1,288,617
Basic Industry – 4.85%
#Algoma Acquisition 144A 9.875% 6/15/15 170,000 150,025
#Appleton Papers 144A 10.50% 6/15/15 130,000 120,900
California Steel Industries 6.125% 3/15/14 15,000 14,400
Century Aluminum 8.00% 5/15/14 131,150 129,839
#Drummond 144A 9.00% 10/15/14 145,000 145,725
#FMG Finance 144A 10.625% 9/1/16 195,000 218,399
Freeport-McMoRan Copper & Gold 8.375% 4/1/17 125,000 135,807
*Hexion US Finance 9.75% 11/15/14 226,000 214,700
#Innophos Holdings 144A 9.50% 4/15/12 115,000 115,288
*International Coal Group 10.25% 7/15/14 178,000 182,450
#MacDermid 144A 9.50% 4/15/17 393,000 394,964
*#Momentive Performance Material 144A 12.50% 6/15/14 70,000 77,350
#Murray Energy 144A 10.25% 10/15/15 115,000 115,719
NewPage
       11.375% 12/31/14 65,000 62,400
       #144A 11.375% 12/31/14 175,000 168,000
•Noranda Aluminum Acquisition PIK 5.274% 5/15/15 151,023 118,931
Novelis
       7.25% 2/15/15 75,000 69,938
       #144A 11.50% 2/15/15 72,000 76,860
#PE Paper Escrow 144A 12.00% 8/1/14 100,000 108,686
=@Port Townsend 7.32% 8/27/12 102,592 74,379
Ryerson
       •7.624% 11/1/14 99,000 88,853
       12.00% 11/1/15 125,000 129,063
#Steel Capital 144A 9.75% 7/29/13 100,000 107,880
Steel Dynamics 7.75% 4/15/16 127,000 127,000
Teck Resources
       10.25% 5/15/16 28,000 33,530
       #144A 10.75% 5/15/19 75,000 92,625
3,273,711
Brokerage – 0.67%
#Cemex Finance 144A 9.50% 12/14/16 150,000 153,750
E Trade Financial PIK 12.50% 11/30/17 258,000 299,925
453,675
Capital Goods – 3.34%
AMH Holdings 11.25% 3/1/14 115,000 114,425
#*Associated Materials 144A 9.875% 11/15/16 15,000 15,975
#BWAY 144A 10.00% 4/15/14 123,000 127,305


•#C8 Capital 144A 6.64% 12/31/49                100,000                70,174
#DAE Aviation Holdings 144A 11.25% 8/1/15 135,000 123,863
*Graham Packaging Capital I 9.875% 10/15/14 123,000 126,075
#Graphic Packaging International 144A 9.50% 6/15/17 116,000 122,380
Intertape Polymer 8.50% 8/1/14 100,000 84,500
Manitowoc 9.50% 2/15/18 155,000 155,388
#Plastipak Holdings 144A
       8.50% 12/15/15 66,000 66,330
       10.625% 8/15/19 71,000 78,633
#Ply Gem Industries 144A 13.125% 7/15/14 150,000 151,500
Pregis 12.375% 10/15/13 302,000 301,244
*RBS Global/Rexnord 11.75% 8/1/16 183,000 191,234
Sally Holdings Capital 10.50% 11/15/16 75,000 81,188
Solo Cup 8.50% 2/15/14 134,000 127,970
Thermadyne Holdings 11.50% 2/1/14 137,000 134,603
#Trimas 144A 9.75% 12/15/17 120,000 121,200
USG
       6.30% 11/15/16 26,000 23,010
       #144A 9.75% 8/1/14 35,000 36,925
2,253,922
Consumer Cyclical – 4.85%
#Allison Transmission 144A 11.00% 11/1/15 220,000 229,350
American Axle & Manufacturing 7.875% 3/1/17 165,000 144,375
#American Axle & Manufacturing Holdings 144A 9.25% 1/15/17 50,000 52,000
ArvinMeritor
       8.125% 9/15/15 160,000 146,400
       10.625% 3/15/18 85,000 83,320
Beazer Homes USA
       *8.125% 6/15/16 65,000 55,250
       8.375% 4/15/12 95,000 94,050
Burlington Coat Factory Investment Holdings 14.50% 10/15/14 225,000 231,749
*Burlington Coat Factory Warehouse 11.125% 4/15/14 70,000 71,575
Duane Reade 11.75% 8/1/15 65,000 82,225
*Ford Motor 7.45% 7/16/31 244,000 215,635
Ford Motor Credit 12.00% 5/15/15 160,000 182,952
‡General Motors 7.20% 1/15/11 265,000 81,488
Goodyear Tire & Rubber 10.50% 5/15/16 2,000 2,165
Interface
       9.50% 2/1/14 19,000 19,523
       #144A 11.375% 11/1/13 50,000 56,500
K Hovnanian Enterprises
       6.25% 1/15/15 40,000 30,200
       7.50% 5/15/16 70,000 50,400
       #144A 10.625% 10/15/16 70,000 73,500
#Landry's Restaurants 144A 11.625% 12/1/15 220,000 230,999
M/I Homes 6.875% 4/1/12 75,000 73,125
Meritage Homes
       6.25% 3/15/15 24,000 22,740
       7.00% 5/1/14 108,000 105,300
Navistar International 8.25% 11/1/21 145,000 147,900
#Norcraft Finance 144A 10.50% 12/15/15 110,000 114,400
Norcraft Holdings 9.75% 9/1/12 69,000 65,205
*OSI Restaurant Partners 10.00% 6/15/15 83,000 78,850
Quiksilver 6.875% 4/15/15 200,000 171,500
*Rite Aid 9.375% 12/15/15 170,000 142,800
#Standard Pacific Escrow 144A 10.75% 9/15/16 75,000 78,563
*Tenneco Automotive 8.625% 11/15/14 71,000 70,113
#Toys R Us Property 144A 10.75% 7/15/17 66,000 72,765
3,276,917
Consumer Non-Cyclical – 3.12%
Accellent 10.50% 12/1/13 105,000 105,263
#Alliance One International 144A 10.00% 7/15/16 133,000 138,985
Bausch & Lomb 9.875% 11/1/15 137,000 141,110
#Cott Beverages 144A 8.375% 11/15/17 90,000 91,800
DJO Finance
       10.875% 11/15/14 140,000 150,500
       #144A 10.875% 11/15/14 5,000 5,375
#Dole Food 144A 13.875% 3/15/14 62,000 74,245
Inverness Medical Innovations 9.00% 5/15/16 104,000 104,780
#JBS USA 144A 11.625% 5/1/14 68,000 77,180
#JohnsonDiversey Holdings 144A 10.50% 5/15/20 305,000 318,724
LVB Acquisition 11.625% 10/15/17 135,000 149,850
Smithfield Foods
       7.75% 5/15/13 155,000 151,900
       7.75% 7/1/17 35,000 32,200
       #144A 10.00% 7/15/14 38,000 41,325
#Tops Markets 144A 10.125% 10/15/15 140,000 145,250
Universal Hospital Services PIK 8.50% 6/1/15 80,000 78,000


#Viskase 144A 9.875% 1/15/18                145,000                147,538
*Yankee Acquisition 9.75% 2/15/17 150,000 150,375
  2,104,400
Energy – 4.60%
#Antero Resources Finance 144A 9.375% 12/1/17 115,000 117,875
#Aquilex Holdings 144A 11.125% 12/15/16 110,000 115,500
Chesapeake Energy 9.50% 2/15/15 24,000 26,220
Complete Production Service 8.00% 12/15/16 77,000 75,268
Copano Energy Finance 7.75% 6/1/18 94,000 92,355
*#Crosstex Energy/Finance 144A 8.875% 2/15/18 120,000 122,400
Denbury Resources 9.75% 3/1/16 66,000 71,445
Dynegy Holdings 7.75% 6/1/19 162,000 127,980
El Paso    
       6.875% 6/15/14 47,000 47,629
       7.00% 6/15/17 52,000 52,420
#El Paso Performance-Linked Trust 144A 7.75% 7/15/11 33,000 34,575
•Enterprise Products Operating 8.375% 8/1/66 75,000 75,937
#Gibson Energy/GEP Midstream Finance144A 10.00% 1/15/18 85,000 83,300
*#Headwaters 144A 11.375% 11/1/14 145,000 147,175
#Helix Energy Solutions Group 144A 9.50% 1/15/16 156,000 158,339
#Hercules Offshore 144A 10.50% 10/15/17 135,000 135,000
#Hilcorp Energy I 144A
       7.75% 11/1/15 47,000 45,943
       9.00% 6/1/16 94,000 95,645
#Holly 144A 9.875% 6/15/17 121,000 124,630
*Key Energy Services 8.375% 12/1/14 141,000 140,295
Mariner Energy 8.00% 5/15/17 118,000 113,280
MarkWest Energy Partners/Finance 8.75% 4/15/18 80,000 81,400
#NFR Energy/Finance 144A 9.75% 2/15/17 150,000 147,375
OPTI Canada
       7.875% 12/15/14 116,000 102,660
       8.25% 12/15/14 142,000 127,090
PetroHawk Energy 7.875% 6/1/15 80,000 80,400
Petroleum Development 12.00% 2/15/18 143,000 150,865
Quicksilver Resources 7.125% 4/1/16 215,000 201,024
#SandRidge Energy 144A
       8.75% 1/15/20 90,000 88,650
       9.875% 5/15/16 123,000 127,613
3,110,288
Finance & Investments – 2.10%
•American International Group 8.175% 5/15/58 125,000 85,313
•#C5 Capital 144A 6.196% 12/31/49 100,000 69,206
City National Capital Trust I 9.625% 2/1/40 145,000 158,458
•Genworth Financial 6.15% 11/15/66 100,000 70,000
International Lease Finance
       5.25% 1/10/13 85,000 73,812
       5.35% 3/1/12 15,000 13,869
       5.55% 9/5/12 50,000 44,828
       5.625% 9/20/13 120,000 102,440
       6.375% 3/25/13 25,000 22,034
       6.625% 11/15/13 225,000 198,409
•#Metlife Capital Trust X 144A 9.25% 4/8/38 100,000 112,000
Nuveen Investments 10.50% 11/15/15 434,000 394,967
•P@XL Capital 6.50% 12/31/49 95,000 75,411
1,420,747
Media – 3.42%
Affinion Group 11.50% 10/15/15 70,000 71,750
#Cablevision Systems 144A 8.625% 9/15/17 80,000 82,800
*CCH II Capital 13.50% 11/30/16 125,000 148,281
#Cengage Learning Acquisitions 144A 10.50% 1/15/15 85,000 77,881
#Charter Communications Operating 144A 10.875% 9/15/14 63,000 70,481
*Clear Channel Communications 10.75% 8/1/16 205,000 157,850
#Columbus International 144A 11.50% 11/20/14 135,000 143,775
#DISH DBS 144A 7.875% 9/1/19 150,000 155,250
#GXS Worldwide 144A 9.75% 6/15/15 150,000 143,250
#MDC Partners 144A 11.00% 11/1/16 70,000 75,250
#Mediacom Capital 144A 9.125% 8/15/19 70,000 70,700
Nielsen Finance
       10.00% 8/1/14 75,000 78,188
       11.50% 5/1/16 25,000 27,969
       11.625% 2/1/14 42,000 46,988
       Ω12.50% 8/1/16 66,000 60,060
#Sinclair Television Group 144A 9.25% 11/1/17 110,000 114,675
#Terremark Worldwide 44A 12.25% 6/15/17 131,000 144,428
*#Umbrella Acquisition PIK 144A 9.75% 3/15/15 90,000 80,100
#Univision Communications 144A 12.00% 7/1/14 103,000 112,013
#UPC Holding 144A 9.875% 4/15/18 100,000 104,500
#XM Satellite Radio 144A 13.00% 8/1/13 315,000 346,499
2,312,688


Real Estate – 0.22%                              
*#Felcor Lodging 144A 10.00% 10/1/14 155,000 151,513
151,513
Services Cyclical – 4.66%
#Ashtead Capital 144A 9.00% 8/15/16 100,000 101,000
Avis Budget Car Rental
       7.625% 5/15/14 190,000 178,125
       7.75% 5/15/16 80,000 72,600
Delta Air Lines 7.92% 11/18/10 61,000 61,610
*#Equinox Holdings 144A 9.50% 2/1/16 155,000 153,450
#Galaxy Entertainment Finance 144A 9.875% 12/15/12 240,000 250,199
#General Maritime 144A 12.00% 11/15/17 155,000 161,200
Global Cash Access 8.75% 3/15/12 41,000 40,795
#Harrah's Operating 144A 10.00% 12/15/18 289,000 219,640
#Kansas City Southern de Mexico 144A
       8.00% 2/1/18 35,000 34,738
       12.50% 4/1/16 100,000 114,750
MGM MIRAGE
       *7.50% 6/1/16 42,000 33,495
       13.00% 11/15/13 101,000 115,645
       *#144A 11.375% 3/1/18 345,000 320,849
Mohegan Tribal Gaming Authority
       6.875% 2/15/15 40,000 28,000
       7.125% 8/15/14 100,000 74,500
#National Money Mart 144A 10.375% 12/15/16 145,000 151,888
*#NCL 144A 11.75% 11/15/16 75,000 78,188
‡@Northwest Airlines 10.00% 2/1/11 55,000 418
PHH 7.125% 3/1/13 140,000 132,475
Pinnacle Entertainment 7.50% 6/15/15 161,000 134,033
#Quintiles Transnational PIK 144A 9.50% 12/30/14 70,000 70,875
Royal Caribbean Cruises 6.875% 12/1/13 80,000 80,000
*RSC Equipment Rental
       9.50% 12/1/14 132,000 128,370
       #144A 10.25% 11/15/19 15,000 14,925
#ServiceMaster PIK 144A 10.75% 7/15/15 145,000 149,350
#Shingle Springs Tribal Gaming Authority 144A 9.375% 6/15/15 116,000 92,800
*#United Air Lines 144A 12.00% 11/1/13 155,000 151,125
3,145,043
Services Non-Cyclical – 1.32%
Casella Waste Systems 9.75% 2/1/13 137,000 137,856
Cornell 10.75% 7/1/12 52,000 53,170
HCA 9.25% 11/15/16 140,000 148,925
#Novasep Holding 144A 9.75% 12/15/16 145,000 134,850
Psychiatric Solutions
       7.75% 7/15/15 94,000 90,710
       #144A 7.75% 7/15/15 42,000 39,480
Select Medical 7.625% 2/1/15 149,000 140,805
•US Oncology Holdings PIK 6.43% 3/15/12 155,000 146,475
892,271
Technology & Electronics – 1.05%
*First Data 9.875% 9/24/15 295,000 256,650
Freescale Semiconductor 8.875% 12/15/14 173,000 154,403
Sanmina-SCI 8.125% 3/1/16 154,000 152,460
SunGard Data Systems 10.25% 8/15/15 138,000 143,865
707,378
Telecommunications – 6.63%
Cincinnati Bell 8.25% 10/15/17 105,000 105,525
#Clearwire Communications 144A 12.00% 12/1/15 295,000 289,838
*Cricket Communications 9.375% 11/1/14 150,000 150,000
#Digicel Group 144A
       8.25% 9/1/17 110,000 105,050
       *8.875% 1/15/15 100,000 96,000
       PIK 9.125% 1/15/15 100,000 97,000
*#GCI 144A 8.625% 11/15/19 145,000 148,081
#GeoEye 144A 9.625% 10/1/15 85,000 86,700
#Global Crossing 144A 12.00% 9/15/15 135,000 147,488
Intelsat 6.50% 11/1/13 145,000 135,938
Intelsat Bermuda
       11.25% 2/4/17 283,000 288,305
       PIK 11.50% 2/4/17 164,688 161,805
Intelsat Jackson Holdings 11.25% 6/15/16 136,000 145,860
Level 3 Financing
       9.25% 11/1/14 66,000 62,865
       #144A 10.00% 2/1/18 90,000 83,025
*MetroPCS Wireless 9.25% 11/1/14 214,000 214,535
#NII Capital 144A 10.00% 8/15/16 138,000 150,420
#Nordic Telephone Holdings 144A 8.875% 5/1/16 75,000 80,625


PAETEC Holding
       8.875% 6/30/17 71,000 71,888
       *9.50% 7/15/15 80,000 78,200
#Qwest 144A 8.375% 5/1/16 5,000 5,500
Qwest Communications International 7.50% 2/15/14 61,000 61,915
Sprint Capital
       6.875% 11/15/28 65,000 49,563
       8.75% 3/15/32 400,000 354,999
*#Telcordia Technologies 144A 10.00% 3/15/13 175,000 165,813
Telesat Canada
       11.00% 11/1/15 80,000 87,600
       12.50% 11/1/17 169,000 190,125
US West Capital Funding 7.75% 2/15/31 80,000 70,800
US West Communications 7.25% 9/15/25 90,000 86,400
#ViaSat 144A 8.875% 9/15/16 75,000 76,688
Virgin Media 6.50% 11/15/16 198,000 233,144
Virgin Media Finance 8.375% 10/15/19 100,000 101,125
West 11.00% 10/15/16 110,000 110,825
#Wind Acquisition Finance 144A
       10.75% 12/1/15 75,000 80,625
       11.75% 7/15/17 100,000 107,500
4,481,770
Utilities – 1.71%
AES
       7.75% 3/1/14 83,000 83,519
       8.00% 6/1/20 35,000 34,519
Edison Mission Energy 7.00% 5/15/17 100,000 73,750
Elwood Energy 8.159% 7/5/26 157,828 151,871
*Energy Future Holdings 10.875% 11/1/17 66,000 50,325
*Mirant Americas Generation 8.50% 10/1/21 200,000 188,000
NRG Energy
       7.375% 2/1/16 189,000 186,761
       7.375% 1/15/17
Orion Power Holdings 12.00% 5/1/10 116,000 117,305
•Puget Sound Energy 6.974% 6/1/67 110,000 98,026
*Texas Competitive Electric Holdings 10.50% 11/1/15 121,000 91,040
TXU 5.55% 11/15/14 105,000 77,152
1,152,268
Total Corporate Bonds (cost $28,157,292) 30,025,208
 
«Senior Secured Loans – 0.58%
Alion Science & Technology Term Tranche Loan B 9.50% 2/6/13 70,000 69,935
Chester Downs & Marina Term Tranche Loan 12.375% 12/31/16 70,650 71,533
PQ Term Tranche Loan 6.74% 7/30/15 170,000 155,337
Texas Competitive Electric Holdings Term Tranche Loan B2 3.729% 10/10/14 115,119 93,154
Total Senior Secured Loans (cost $366,608) 389,959
 
Number of
               Shares               
Exchange Traded Fund – 0.03%
*ProShares UltraShort Real Estate 2,400 17,568
Total Exchange Traded Fund (cost $59,893) 17,568
 
Limited Partnerships – 0.25%
Blackstone Group 3,000 41,940
Brookfield Infrastructure Partners 7,600 125,020
Total Limited Partnerships (cost $184,721) 166,960
 
Preferred Stock – 0.35%
Banking, Finance & Insurance – 0.33%
•Bank of America
       8.00% 150,000 143,173
       8.125% 85,000 81,121
224,294
Industrials – 0.00%
=†Port Townsend 70 0
0
Real Estate – 0.02%
†W2007 Grace Acquisitions I 8.75% 34,400 13,760
13,760
Total Preferred Stock (cost $1,148,359) 238,054
 
Warrant – 0.00%
=†Port Townsend 70 1
Total Warrant (cost $1,680) 1
          
Total Value of Securities Before Securities Lending Collateral – 129.98%
       (cost $89,476,562) 87,791,587


Securities Lending Collateral** – 11.49%                              
Investment Companies
       Mellon GSL DBT II Collateral Fund 6,313,061 6,313,061
       BNY Mellon SL DBT II Liquidating Fund 1,455,058 1,441,235
       @†Mellon GSL Reinvestment Trust II 163,237 6,938
Total Securities Lending Collateral (cost $7,931,356) 7,761,234
 
Total Value of Securities – 141.47%
       (cost $97,407,918) 95,552,821 ©
Obligation to Return Securities Lending Collateral** – (11.74%) (7,931,356 )
Borrowing Under Line of Credit – (29.94%) (20,225,000 )
Receivables and Other Assets Net of Liabilities (See Notes) – 0.21% 144,091
Net Assets Applicable to 9,439,043 Shares Outstanding – 100.00% $ 67,540,556

PRestricted Security. These investments are in securities not registered under the Securities Act of 1933, as amended, and have certain restrictions on resale which may limit their liquidity. At February 28, 2010, the aggregate amount of the restricted securities was $75,415 or 0.11% of the Fund's net assets. See Note 5 in "Notes."
†Non income producing security.
=Security is being fair valued in accordance with the Fund’s fair valuation policy. At February 28, 2010, the aggregate amount of fair valued securities was $74,384, which represented 0.11% of the Fund’s net assets. See Note 1 in "Notes."
*Fully or partially on loan.
@Illiquid security. At February 28, 2010, the aggregate amount of illiquid securities was $418,420, which represented 0.62% of the Fund’s net assets. See Note 5 in “Notes."
#Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At February 28, 2010, the aggregate amount of Rule 144A securities was $16,059,204, which represented 23.78% of the Fund’s net assets. See Note 5 in "Notes."
•Variable rate security. The rate shown is the rate as of February 28, 2010.
fStep coupon bond. Coupon increases/decreases periodically based on a predetermined schedule. Stated rate in effect at February 28, 2010.
‡Non income producing security. Security is currently in default.
ΩStep coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.
«Senior Secured Loans generally pay interest at rates which are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally: (i) the prime rate offered by one or more United States banks, (ii) the lending rate offered by one or more European banks such as the London Inter-Bank Offered Rate (LIBOR), and (iii) the certificate of deposit rate. Senior Secured Loans may be subject to restrictions on resale. Stated rate in effect at February 28, 2010.
**See Note 4 in "Notes."
©Includes $7,842,231 of securities loaned.
 
Summary of Abbreviations:
PIK – Pay-in-kind
REIT – Real Estate Investment Trust
 
 
Notes
 
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and are consistently followed by Delaware Investments® Dividend and Income Fund, Inc. (Fund). This report covers the period of time since the Fund’s last fiscal year end.
 
Security Valuation – Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and the ask prices will be used. Securities listed on a foreign exchange are valued at the last quoted sales price on the valuation date. Short-term debt securities are valued at market value. U.S. government and agency securities are valued at the mean between the bid and ask prices. Other debt securities are valued by an independent pricing service or broker. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Investment companies are valued at net asset value per share. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Fund’s Board of Directors (Board). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. The Fund may use fair value pricing more frequently for securities traded primarily in non-U.S. markets because, among other things, most foreign markets close well before the Fund values its securities at 4:00 p.m. Eastern time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, government actions or pronouncements, aftermarket trading, or news events may have occurred in the interim. To account for this, the Fund may frequently value foreign securities using fair value prices based on third-party vendor modeling tools (international fair value pricing).
 
Federal Income Taxes – No provision for federal income taxes has been made as the Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years (November 30, 2006 – November 30, 2009), and has concluded that no provision for federal income tax is required in the Fund’s financial statements.
 

Distributions – The Fund has a managed distribution policy. Under the policy, the Fund declares and pays monthly distributions and is managed with a goal of generating as much of the distribution as possible from ordinary income (net investment income and short-term capital gains). The balance of the distribution then comes from long-term capital gains to the extent permitted and, if necessary, a return of capital.
 
Repurchase Agreements – The Fund may invest in a pooled cash account along with other members of the Delaware Investments® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Fund’s custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings. At February 28, 2010, the Fund held no investments in repurchase agreements.
 
Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
 
Other – Expenses directly attributable to the Fund are charged directly to the Fund. Other expenses common to various funds within the Delaware Investments® Family of Funds are generally allocated amongst such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Discounts and premiums on non-convertible bonds are amortized to interest income over the lives of the respective securities. Distributions received from investments in Real Estate Investment Trusts (REITs) are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distributions by the issuer.
 
2. Investments
At February 28, 2010, the cost of investments for federal income tax purposes has been estimated since final tax characteristics cannot be determined until fiscal year end. At February 28, 2010, the cost of investments and unrealized appreciation (depreciation) for the Fund was as follows:
 
Cost of investments         $ 97,872,026
Aggregate unrealized appreciation $ 6,343,500
Aggregate unrealized depreciation (8,662,705 )
Net unrealized depreciation $ (2,319,205 )
 
For federal income tax purposes, at November 30, 2009, capital loss carryforwards of $27,438,402 may be carried forward and applied against future capital gains. Such capital loss carryforwards will expire as follows: $16,115,503 expires in 2016 and $11,322,899 expires in 2017.
 
U.S. GAAP defines fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. A framework for measuring fair value and a three level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. The Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.
 
Level 1 – inputs are quoted prices in active markets
Level 2 – inputs are observable, directly or indirectly
Level 3 – inputs are unobservable and reflect assumptions on the part of the reporting entity
 
The following table summarizes the valuation of the Fund's investments by fair value hierarchy levels as of February 28, 2010:
 
        Level 1         Level 2         Level 3         Total
Common Stock $ 46,184,589 $ - $ 4 $ 46,184,593
Corporate Debt 146,400 40,845,480 192,531 41,184,411
Investment Companies 17,568 - - 17,568
Other 166,960 224,294 13,761 405,015
Securities Lending Collateral 6,313,061 1,441,235 6,938 7,761,234
Total $ 52,828,578 $ 42,511,009 $ 213,234 $ 95,552,821
 
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
 
Corporate Securities
        Common Stock         Debt         Other         Lending Collateral         Total
Balance as of 11/30/09 $ 43 $ 74,379 $ 20,641 $ 6,938 $ 102,001
Purchases - 120,000 - - 120,000
Net change in unrealized
       appreciation/depreciation (39 ) (1,848 ) (6,880 ) - (8,767 )
Balance as of 2/28/10 $ 4 $ 192,531 $ 13,761 $ 6,938 $ 213,234
                                                            
Net change in unrealized
       appreciation/depreciation from
       investments still held as of 2/28/10 $ (39 ) $ (1,848 ) $ (6,880 ) $ - $ (8,767 )
 
In January 2010, the Financial Accounting Standard Board issued an Accounting Standards Update, Improving Disclosures about Fair Value Measurements, which introduces new disclosure requirements and clarifies certain existing disclosure requirements around fair value measurements currently presented above. The new disclosures and clarifications of existing disclosures are generally effective for the Fund’s year ending November 30, 2011 and interim periods therein. Management is evaluating the impact of this update on its current disclosures.
 

3. Line of Credit
For the period ended February 28, 2010, the Fund borrowed money pursuant to a $30,000,000 Credit Agreement with The Bank of New York Mellon (BNY Mellon) that expires on November 15, 2010. Depending on market conditions, the amount borrowed by the Fund pursuant to the Credit Agreement may be reduced or possibly increased in the future.
 
At February 28, 2010, the par value of loans outstanding was $20,225,000 at a variable interest rate of 1.38%. During the period ended February 28, 2010, the average daily balance of loans outstanding was $20,225,000 at a weighted average interest rate of approximately 1.45%. Interest on borrowings is based on a variable short-term rate plus an applicable margin. The commitment fee is computed at a rate of 0.25% per annum on the unused balance. The loan is collateralized by the Fund’s portfolio.
 
4. Securities Lending
The Fund, along with other funds in the Delaware Investments® Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with BNY Mellon. With respect to each loan, if the aggregate market value of securities collateral held plus cash collateral received on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is generally invested in the BNY Mellon Securities Lending Overnight Fund (Collective Trust) established by BNY Mellon for the purpose of investment on behalf of clients participating in its securities lending programs. The Collective Trust may only hold cash and high quality assets with a maturity of one business day or less (Cash/Overnight Assets). The Fund also has cash collateral invested in the BNY Mellon SL DBT II Liquidating Fund (Liquidating Fund), which generally holds the portfolio securities of the Fund’s previous cash collateral pool other than its Cash/Overnight Assets. The Liquidating Fund invests in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top three tiers by Standard & Poor’s Ratings (S&P) Group or Moody’s Investors Service, Inc.(Moody’s) or repurchase agreements collateralized by such securities. The Fund will not make additional investments of cash collateral in the Liquidating Fund; the Fund’s exposure to the Liquidating Fund is expected to decrease as the Liquidating Fund’s assets mature or are sold. Both the Collective Trust and the Liquidating Fund seek to maintain a net asset value per unit of $1.00, but there can be no assurance that they will always be able to do so. The Fund may incur investment losses as a result of investing securities lending collateral in the Collective Trust and the Liquidating Fund. This could occur if an investment in the Collective Trust or the Liquidating Fund defaulted or if it were necessary to liquidate assets in the Collective Trust or the Liquidating Fund to meet returns on outstanding security loans at a time when their net asset value per unit was less than $1.00. Under those circumstances, the Fund may not receive an amount from the Collective Trust or the Liquidating Fund that is equal in amount to the collateral the Fund would be required to return to the borrower of the securities and the Fund would be required to make up for this shortfall. In October 2008, BNY Mellon transferred certain distressed securities from the Collective Trust into the Mellon GSL Reinvestment Trust II. The Fund can also accept U.S. government securities and letters of credit (non-cash collateral) in connection with securities loans. In the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Fund, or at the discretion of the lending agent, replace the loaned securities. The Fund continues to record dividends or interest, as applicable, on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Fund has the right under the Lending Agreement to recover the securities from the borrower on demand. With respect to security loans collateralized by non-cash collateral, the Fund receives loan premiums paid by the borrower. With respect to security loans collateralized by cash collateral, the earnings from the collateral investments are shared among the Fund, the security lending agent and the borrower. The Fund records security lending income net of allocations to the security lending agent and the borrower.
 
At February 28, 2010, the value of securities on loan was $7,842,231, for which the Fund received collateral, comprised of securities collateral valued at $115,560, and cash collateral of $7,931,356. At February 28, 2010, the value of invested collateral was $7,761,234. Investments purchased with cash collateral are presented on the schedule of investments under the caption “Securities Lending Collateral.”
 
5. Credit and Market Risk
The Fund borrows through its line of credit for purposes of leveraging. Leveraging may result in higher degrees of volatility because the Fund’s net asset value could be subject to fluctuations in short-term interest rates and changes in market value of portfolio securities attributable of the leverage.
 
The Fund invests a portion of its assets in high yield fixed income securities, which carry ratings of BB or lower by S&P and/or Ba or lower by Moody’s. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.
 
The Fund invests in REITs and is subject to some of the risks associated with that industry. If the Fund holds real estate directly as a result of defaults or receives rental income directly from real estate holdings, its tax status as a regulated investment company may be jeopardized. There were no direct real estate holdings during the period ended February 28, 2010. The Fund's REIT holdings are also affected by interest rate changes, particularly if the REITs it holds use floating rate debt to finance their ongoing operations.
 
The Fund may invest up to 10% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Fund’s Board has delegated to Delaware Management Company (DMC), a series of Delaware Management Business Trust, the day-to-day functions of determining whether individual securities are liquid for purposes of the Fund’s limitation on investments in illiquid assets. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 10% limit on investments in illiquid securities. Rule 144A and illiquid securities have been identified on the schedule of investments.
 
6. Sale of Delaware Investments to Macquarie Group
On August 18, 2009, Lincoln National Corporation (parent company of Delaware Investments) and Macquarie Group (Macquarie) entered into an agreement pursuant to which Delaware Investments, including DMC and Delaware Service Company, Inc. (DSC), would be acquired by Macquarie, an Australia-based global provider of banking, financial, advisory, investment and funds management services (Transaction). The Transaction was completed on January 4, 2010. DMC and DSC are now wholly owned subsidiaries of Macquarie.
 
The Transaction resulted in a change of control of DMC which, in turn, caused the termination of the investment advisory agreement between DMC and the Fund. On January 4, 2010, the new investment advisory agreement between DMC and the Fund that was approved by the shareholders became effective.
 
7. Subsequent Event
Management has evaluated whether any events or transactions occurred subsequent to February 28, 2010 through April 26, 2010, the date of issuance of the Fund’s schedule of investments, and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s schedule of investments.
 

Item 2. Controls and Procedures.
 
     The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
 
     There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
 
Item 3. Exhibits.
 
     File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)), exactly as set forth below: