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<SEC-DOCUMENT>0000930413-04-003499.txt : 20040805
<SEC-HEADER>0000930413-04-003499.hdr.sgml : 20040805
<ACCEPTANCE-DATETIME>20040805160019
ACCESSION NUMBER:		0000930413-04-003499
CONFORMED SUBMISSION TYPE:	N-CSR
PUBLIC DOCUMENT COUNT:		5
CONFORMED PERIOD OF REPORT:	20040531
FILED AS OF DATE:		20040805
EFFECTIVENESS DATE:		20040805

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			PIMCO MUNICIPAL INCOME FUND II
		CENTRAL INDEX KEY:			0001170299
		STATE OF INCORPORATION:			MA
		FISCAL YEAR END:			0430

	FILING VALUES:
		FORM TYPE:		N-CSR
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-21076
		FILM NUMBER:		04954829

	BUSINESS ADDRESS:	
		STREET 1:		1345 AVENUE OF THE AMERICAS, 47TH FL
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10105
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-CSR
<SEQUENCE>1
<FILENAME>c32583_ncsr.txt
<TEXT>

                                  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 811-21076

                         PIMCO Municipal Income Fund II
               (Exact name of registrant as specified in charter)

              1345 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10105
               (Address of principal executive offices) (Zip code)

  LAWRENCE G. ALTADONNA - 1345 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10105
                     (Name and address of agent for service)

Registrant's telephone number, including area code: 212-739-3371

Date of fiscal year end:  MAY 31

Date of reporting period: MAY 31

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, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.

<PAGE>

ITEM 1. REPORT TO SHAREHOLDERS

                                                                   Annual Report
                                                                         5.31.04

PIMCO MUNICIPAL INCOME FUND II
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
PIMCO NEW YORK MUNICIPAL INCOME FUND II

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



      PML                CONTENTS
     LISTED
      NYSE               Letter to Shareholders .............................1
  THE NEW YORK
 STOCK EXCHANGE          Performance and Statistics .......................2-4

      PCK                Schedules of Investments ........................5-23
     LISTED
      NYSE               Statements of Assets and Liabilities ..............24
  THE NEW YORK
 STOCK EXCHANGE          Statements of Operations ..........................25

      PNI                Statements of Changes in Net Assets ............26-27
     LISTED
      NYSE               Notes to Financial Statements ..................28-34
  THE NEW YORK
 STOCK EXCHANGE          Financial Highlights ...........................35-37

                         Report of Independent Registered Public
                         Accounting Firm ...................................38

                         Privacy Policy, Proxy Voting Policies and
                         Procedures, Other Information .....................39

                         Tax Information ...................................40

                         Dividend Reinvestment Plan ........................41

                         Board of Trustees .................................42




                                                           [PIMCO ADVISORS LOGO]

<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II  LETTER TO SHAREHOLDERS
- --------------------------------------------------------------------------------



                                                                    July 7, 2004
Dear Shareholder:

We are pleased to provide you with the annual report of PIMCO  Municipal  Income
Fund II, PIMCO California Municipal Income Fund II, and PIMCO New York Municipal
Income Fund II ("PIMCO Municipal Income Funds II" or the "Funds") for the fiscal
year ended May 31, 2004.

Please refer to the  following  pages for specific  information  for each of the
PIMCO  Municipal  Income  Funds  II.  If you have any  questions  regarding  the
information  provided,  please  contact  your  financial  advisor  or  call  our
shareholder  services area at  1-800-331-1710.  Please note that a wide range of
information   and   resources   can  be   accessed   through   our   Web   site,
www.pimcoadvisors.com.

We at the Funds, together with PA Fund Management LLC (formerly,  PIMCO Advisors
Fund  Management  LLC),  the Funds'  investment  manager and Pacific  Investment
Management Co. LLC, the Funds' sub-adviser,  thank you for investing with us. We
remain dedicated to serving your investment needs.

Sincerely,

/s/ Stephen Treadway                         /s/ Brian S. Shlissel
- --------------------                         ---------------------
Stephen Treadway                             Brian S. Shlissel
CHAIRMAN                                     PRESIDENT, CHIEF EXECUTIVE OFFICER


                       5.31.04 | PIMCO Municipal Income Funds II Annual Report 1
<PAGE>



PIMCO MUNICIPAL INCOME FUND II PERFORMANCE SUMMARY AND STATISTICS
May 31, 2004 (unaudited)
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
SYMBOL:
PML

OBJECTIVE:
To provide income exempt from federal income tax.

PRIMARY INVESTMENTS:
Municipal fixed-income securities, the interest from which is exempt
from federal income tax.

INCEPTION DATE:
June 28, 2002

TOTAL NET ASSETS(1):
$1,317.7 million

PORTFOLIO MANAGER:
Mark McCray
- --------------------------------------------------------------------------------


TOTAL RETURN(2):                                     MARKET PRICE          NAV
- --------------------------------------------------------------------------------
1 Year                                               (3.69)%               2.24%
- --------------------------------------------------------------------------------
Commencement of Operations (6/28/02) to 5/31/04        0.68%               5.84%
- --------------------------------------------------------------------------------

COMMON SHARE PRICE PERFORMANCE:
Commencement of Operations (6/28/02) to 5/31/04
[ ] at Market Price
[ ] at NAV

            [Data below represents line chart in the printed piece]

                  at NAV      at Market Price

6/28/02           14.33             15.00
                  14.32             15.08
                  14.35             15.17
                  14.37             15.19
                  14.46             15.03
                  14.46             15.03
                  14.52             15.06
                  14.57             15.00
                  14.50             15.02
                  14.63             15.04
                  14.77             15.02
                  14.89             15.11
                  15.10             15.04
                  15.13             15.00
                  15.17             15.06
                  15.09             15.06
                  14.28             14.80
                  14.15             14.42
                  14.41             14.74
                  14.66             14.68
                  14.53             14.59
                  14.33             14.40
                  14.22             14.34
                  14.51             14.29
                  14.58             14.10
                  14.66             14.12
                  14.50             14.20
                  14.64             14.54
                  14.52             14.41
                  14.49             14.45
                  14.41             14.43
                  14.38             14.23
                  14.39             14.41
                  14.55             14.50
                  14.57             14.41
                  14.39             14.31
                  14.60             14.31
                  14.68             14.37
                  14.48             14.29
                  14.55             14.25
                  14.27             14.35
                  14.35             14.34
                  14.54             14.49
                  14.53             14.36
                  14.57             14.48
                  14.64             14.64
                  14.70             14.80
                  14.68             14.72
                  14.66             14.80
                  14.69             14.90
                  14.77             14.89
                  14.64             14.75
                  14.54             14.84
                  14.56             14.86
                  14.55             14.67
                  14.36             14.33
                  14.06             14.15
                  13.42             13.64
                  13.73             14.00
                  13.51             13.81
                  13.54             13.66
                  13.62             13.63
                  13.77             14.00
                  13.79             13.81
                  14.03             13.82
                  14.08             13.79
                  14.05             13.95
                  13.93             13.8
                  13.91             13.68
                  14.13             13.73
                  14.19             13.77
                  14.25             13.95
                  14.38             13.84
                  14.52             13.92
                  14.64             13.82
                  14.50             13.98
                  14.57             13.80
                  14.65             13.93
                  14.65             13.90
                  14.81             13.99
                  14.97             14.48
                  14.87             14.61
                  14.90             14.53
                  14.79             14.80
                  14.90             14.84
                  14.96             14.73
                  15.01             14.52
                  14.90             14.75
                  14.94             14.97
                  14.89             14.90
                  14.80             14.80
                  14.62             14.79
                  14.46             14.74
                  14.60             14.25
                  14.48             13.98
                  14.43             13.71
                  14.28             13.69
                  14.08             13.28
                  13.81             13.20
                  13.84             13.02
5/31/04           14.01             13.31



MARKET PRICE/NET ASSET VALUE:
- ----------------------------------------
Market Price                     $13.31
- ----------------------------------------
Net Asset Value                  $14.01
- ----------------------------------------
Discount to Net Asset Value       5.00%
- ----------------------------------------
Market Price Yield(3)             7.61%
- ----------------------------------------




(1) Inclusive of net assets attributable to Preferred Shares outstanding.

(2) PAST  PERFORMANCE  IS NO  GUARANTEE  OF  FUTURE  RESULTS.  Total  return  is
determined by subtracting  the initial  investment  from the value at the end of
the period and dividing the remainder by the initial  investment  and expressing
the result as a percentage.  The calculation  assumes that all income  dividends
and capital gain distributions have been reinvested at prices obtained under the
Fund's  dividend  reinvestment  plan.  Total  return  does  not  reflect  broker
commissions or sales charges. Total return for a period of greater than one year
represents the average annual total return.

An investment in the Fund involves risk, including the loss of principal.  Total
return,  price,  yield and net asset value will fluctuate with changes in market
conditions.  This data is provided for information  only and is not intended for
trading  purposes.  A portion of the income generated by the Fund may be subject
to  federal,  state  and  local  taxes,  and  may at  times  be  subject  to the
alternative  minimum tax.  Closed-end  funds,  unlike  open-end  funds,  are not
continuously  offered.  There is a one-time  public  offering  and once  issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets  applicable  to common  shareholders  less total
liabilities  divided by the number of common  shares  outstanding.  Holdings are
subject to change daily.

(3) Market Price Yield is determined by dividing the annualized  current monthly
per share dividend payable to common shareholders by the market price per common
share at May 31, 2004.



2  PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>

PIMCO CALIFORNIA MUNICIPAL INCOME FUND II PERFORMANCE SUMMARY AND STATISTICS
May 31, 2004 (unaudited)
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
SYMBOL:
PCK

OBJECTIVE:
To provide income exempt from federal and California State income tax.

Primary Investments:
Municipal  fixed-income  securities,  the  interest  from  which is exempt  from
federal and California State income tax.

INCEPTION DATE:
June 28, 2002

TOTAL NET ASSETS(1):
$667.7 million

PORTFOLIO MANAGER:
Mark McCray
- --------------------------------------------------------------------------------


TOTAL RETURN(2):                                        MARKET PRICE      NAV
- --------------------------------------------------------------------------------
1 Year                                                  (3.92)%          (1.31)%
- --------------------------------------------------------------------------------
Commencement of Operations (6/28/02) to May 31, 2004     0.07%            3.49%
- --------------------------------------------------------------------------------

COMMON SHARE PRICE PERFORMANCE:
Commencement of Operations  (6/28/02) to May 31, 2004
[ ] at Market Price
[ ] at NAV

            [Data below represents line chart in the printed piece]

                  at NAV      at Market Price

6/28/02           14.33             15.00
                  14.33             15.10
                  14.42             15.28
                  14.42             15.26
                  14.47             15.04
                  14.44             15.29
                  14.49             15.28
                  14.56             15.28
                  14.48             15.22
                  14.60             15.05
                  14.70             15.18
                  14.86             15.25
                  15.02             15.25
                  15.02             15.10
                  14.98             15.07
                  14.80             15.07
                  14.07             14.26
                  13.93             14.42
                  14.25             14.72
                  14.54             14.80
                  14.34             14.67
                  14.16             14.27
                  14.03             14.35
                  14.26             14.10
                  14.36             14.18
                  14.48             14.18
                  14.45             14.25
                  14.48             14.25
                  14.32             14.11
                  14.23             14.05
                  14.17             14.08
                  14.12             14.05
                  14.13             14.12
                  14.25             14.06
                  14.26             14.10
                  14.20             14.19
                  14.47             14.50
                  14.54             14.36
                  14.32             14.36
                  14.38             14.40
                  14.06             14.31
                  14.12             14.24
                  14.34             14.25
                  14.33             14.28
                  14.42             14.54
                  14.47             14.64
                  14.59             14.78
                  14.69             14.82
                  14.66             14.78
                  14.70             14.96
                  14.83             15.00
                  14.57             14.85
                  14.35             14.59
                  14.36             14.75
                  14.29             14.35
                  13.97             14.10
                  13.62             13.88
                  13.06             13.21
                  13.31             13.66
                  13.03             13.37
                  13.09             13.43
                  13.14             13.62
                  13.32             13.77
                  13.33             13.92
                  13.57             13.98
                  13.64             13.90
                  13.59             13.92
                  13.45             13.88
                  13.52             13.65
                  13.68             13.81
                  13.76             13.88
                  13.81             13.96
                  13.94             13.82
                  14.08             13.74
                  14.20             13.79
                  14.04             13.81
                  14.12             13.51
                  14.22             13.59
                  14.23             13.60
                  14.35             13.65
                  14.54             13.78
                  14.44             13.98
                  14.41             13.96
                  14.28             14.03
                  14.41             14.14
                  14.49             14.09
                  14.56             14.09
                  14.48             14.17
                  14.56             14.37
                  14.51             14.44
                  14.41             14.30
                  14.16             14.31
                  14.03             13.97
                  14.13             13.70
                  13.93             13.53
                  13.94             13.20
                  13.79             13.10
                  13.57             12.91
                  13.28             12.76
                  13.33             13.03
5/31/04           13.53             13.27


MARKET PRICE/NET ASSET VALUE:
- ----------------------------------------
Market Price                     $13.27
- ----------------------------------------
Net Asset Value                  $13.53
- ----------------------------------------
Discount to Net Asset Value       1.92%
- ----------------------------------------
Market Price Yield(3)             7.35%
- ----------------------------------------



(1) Inclusive of net assets attributable to Preferred Shares outstanding.

(2) PAST  PERFORMANCE  IS NO  GUARANTEE  OF  FUTURE  RESULTS.  Total  return  is
determined by subtracting  the initial  investment  from the value at the end of
the period and dividing the remainder by the initial  investment  and expressing
the result as a percentage.  The calculation  assumes that all income  dividends
have been reinvested at prices  obtained under the Fund's dividend  reinvestment
plan. Total return does not reflect broker  commissions or sales charges.  Total
return for a period of greater than one year represents the average annual total
return.

An investment in the Fund involves risk, including the loss of principal.  Total
return,  price,  yield and net asset value will fluctuate with changes in market
conditions.  This data is provided for information  only and is not intended for
trading  purposes.  A portion of the income generated by the Fund may be subject
to  federal,  state  and  local  taxes,  and  may at  times  be  subject  to the
alternative  minimum tax.  Closed-end  funds,  unlike  open-end  funds,  are not
continuously  offered.  There is a one-time  public  offering  and once  issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets  applicable  to common  shareholders  less total
liabilities  divided by the number of common  shares  outstanding.  Holdings are
subject to change daily.

(3) Market Price Yield is determined by dividing the annualized  current monthly
per share dividend payable to common shareholders by the market price per common
share at May 31, 2004.

                       5.31.04 | PIMCO Municipal Income Funds II Annual Report 3

<PAGE>

PIMCO NEW YORK MUNICIPAL INCOME FUND II PERFORMANCE SUMMARY AND STATISTICS
May 31, 2004 (unaudited)
- --------------------------------------------------------------------------------

- --------------------------------------------------------------------------------
SYMBOL:
PNI

OBJECTIVE:
Seeks to provide current income exempt from federal, New York State and New York
City income tax.

PRIMARY INVESTMENTS:
Municipal  fixed-income  securities,  the  interest  from  which is exempt  from
federal, New York State and New York City income tax.

INCEPTION DATE:
June 28, 2002

TOTAL NET ASSETS(1):
$231.0 million

PORTFOLIO MANAGER:
Mark McCray
- --------------------------------------------------------------------------------


TOTAL RETURN(2):                                      MARKET PRICE         NAV
- --------------------------------------------------------------------------------
1 Year                                                (5.15)%              0.13%
- --------------------------------------------------------------------------------
Commencement of Operations (6/28/02) to May 31, 2004  (0.82)%              3.49%
- --------------------------------------------------------------------------------

COMMON SHARE PRICE PERFORMANCE:
Commencement of Operations  (6/28/02) to May 31, 2004
[ ] at Market Price
[ ] at NAV

            [Data below represents line chart in the printed piece]

                  at NAV      at Market Price

6/28/02           14.33             15.00
                  14.31             15.20
                  14.36             15.11
                  14.38             15.35
                  14.42             15.02
                  14.46             15.35
                  14.52             15.08
                  14.56             15.00
                  14.48             15.16
                  14.59             15.06
                  14.69             15.14
                  14.76             15.12
                  14.91             15.14
                  14.91             15.03
                  15.02             15.06
                  14.95             14.97
                  14.29             14.65
                  14.16             14.25
                  14.35             14.06
                  14.62             14.32
                  14.51             14.30
                  14.33             14.13
                  14.19             14.22
                  14.44             14.06
                  14.55             14.10
                  14.63             14.05
                  14.62             14.02
                  14.71             14.15
                  14.544            14.17
                  14.541            14.09
                  14.416            13.95
                  14.403            14.03
                  14.44             14.00
                  14.53             14.03
                  14.48             14.20
                  14.38             14.23
                  14.51             14.34
                  14.62             14.26
                  14.36             14.22
                  14.43             14.23
                  13.78             14.29
                  13.86             14.15
                  14.11             14.10
                  14.02             14.18
                  14.08             14.16
                  14.20             14.40
                  14.25             14.75
                  14.39             14.65
                  14.44             14.71
                  14.47             14.67
                  14.59             14.70
                  14.38             14.55
                  14.31             14.81
                  14.30             14.92
                  14.26             14.71
                  14.01             14.64
                  13.75             14.08
                  13.05             14.00
                  13.39             13.84
                  13.12             13.85
                  13.10             13.71
                  13.18             13.80
                  13.30             13.98
                  13.28             13.90
                  13.72             13.57
                  13.87             13.69
                  13.78             13.84
                  13.65             13.64
                  13.62             13.79
                  13.85             13.72
                  13.88             13.80
                  13.94             13.85
                  14.10             13.75
                  14.23             13.71
                  14.35             13.89
                  14.26             13.90
                  14.37             14.02
                  14.45             13.80
                  14.45             13.84
                  14.54             13.82
                  14.72             14.19
                  14.64             14.33
                  14.65             14.38
                  14.55             14.45
                  14.64             14.58
                  14.71             14.42
                  14.76             14.60
                  14.68             14.76
                  14.76             14.81
                  14.71             14.66
                  14.68             14.80
                  14.54             14.76
                  14.38             14.59
                  14.46             14.09
                  14.31             13.95
                  14.19             13.48
                  14.05             13.45
                  13.75             13.12
                  13.43             12.71
                  13.44             12.74
5/31/04           13.54             13.05


MARKET PRICE/NET ASSET VALUE:
- -------------------------------------
Market Price                  $13.05
- -------------------------------------
Net Asset Value               $13.54
- -------------------------------------
Discount to Net Asset Value    3.62%
- -------------------------------------
Market Price Yield(3)          7.47%
- -------------------------------------



(1) Inclusive of net assets attributable to Preferred Shares outstanding.

(2) PAST  PERFORMANCE  IS NO  GUARANTEE  OF  FUTURE  RESULTS.  Total  return  is
determined by subtracting  the initial  investment  from the value at the end of
the period and dividing the remainder by the initial  investment  and expressing
the result as a percentage.  The calculation  assumes that all income  dividends
have been reinvested at prices  obtained under the Fund's dividend  reinvestment
plan. Total return does not reflect broker  commissions or sales charges.  Total
return for a period of greater than one year represents the average annual total
return.

An  investment  in the Fund  involves  risk,  including  the loss of  principal.
Investment return,  price, yield and net asset value will fluctuate with changes
in market  conditions.  This data is provided  for  information  only and is not
intended for trading purposes. A portion of the income generated by the Fund may
be subject to federal, state and local taxes, and may at times be subject to the
alternative  minimum tax.  Closed-end  funds,  unlike  open-end  funds,  are not
continuously  offered.  There is a one-time  public  offering  and once  issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets  applicable  to common  shareholders  less total
liabilities  divided by the number of common  shares  outstanding.  Holdings are
subject to change daily.

(3) Market Price Yield is determined by dividing the annualized  current monthly
per share dividend payable to common shareholders by the market price per common
share at May 31, 2004.

4  PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                            Credit Rating
    (000)                                                                                             Moody's/S&P*          Value
====================================================================================================================================
 MUNICIPAL BONDS & NOTES-88.0%
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>                                                                                 <C>             <C>
                     ALABAMA--3.8%
$    29,145          Birmingham Waterworks & Sewer Board. Rev., Ser. B,
                       5.00%-5.25%, 1/1/27-1/1/37 (MBIA)                                                Aaa/AAA          $29,160,868
      1,750          Huntsville Health Care Auth.,
                       5.75%, 6/1/32, Ser. B                                                              A2/NR            1,790,670
     16,580          Jefferson Cnty. Sewer Rev.,
                       4.75%, 2/1/38, Ser. B (FGIC)                                                     Aaa/AAA           17,783,874
                                                                                                                         -----------
                                                                                                                          48,735,412
                                                                                                                         ===========
                     ALASKA--1.3%
                     State Housing Fin. Corp.,
     13,885            5.00%, 12/1/39, Ser. A                                                           Aaa/AAA           13,454,704
      3,550            5.25%, 6/1/32, Ser. C (MBIA)                                                     Aaa/AAA            3,485,639
                                                                                                                         -----------
                                                                                                                          16,940,343
                                                                                                                         ===========
                     ARIZONA--0.1%
      1,300          State Health Fac. Auth. Hosp. Rev., 5.75%, 12/1/32                                  NR/BBB            1,222,208
                                                                                                                         ===========

                     CALIFORNIA--5.2%
      9,610          Alameda Corridor Transportation Auth. Rev.,
                       zero coupon, 10/1/16, Ser. A                                                     Aaa/AAA            5,234,087
     43,775          Economic Recovery GO, 5.00%, 7/1/08-7/1/23, Ser. A                                 Aa3/AA-           47,510,216
     12,300          Golden State Tobacco Securitization Corp.,
                       Tobacco Settlement Rev.,
                       6.25%-6.75%, 6/1/33-6/1/39, Ser. 2003-A-1                                       Baa3/BBB           10,945,476
      1,000          Rancho Cucamonga Community Facs. Dist.,
                       6.30%, 9/1/23, Ser. A                                                              NR/NR            1,008,180
      4,000          Southern California Public Power Auth. Project Rev.,
                       zero coupon, 7/1/13                                                               Aa3/A+            2,633,000
                                                                                                                         -----------
                                                                                                                          67,330,959
                                                                                                                         ===========
                     COLORADO--4.9%
     30,000          Dawson Ridge Dist. No. 1, GO,
                       zero coupon, 10/1/22, Ser. A                                                      Aaa/NR           11,419,500
      5,000          Denver Co. City & Cnty. Cert. of Participation,
                       5.50%, 12/1/25, Ser. B (AMBAC)                                                   Aaa/AAA            5,613,250
     25,000          Health Fac. Auth. Rev., Catholic Health Initiatives-A,
                       5.50%, 3/1/32                                                                     Aa2/AA           25,423,250
     18,305          Health Fac. Auth. Rev., Exempla Inc.,
                       5.625%, 1/1/33, Ser. A                                                             A1/A-           18,334,837
      6,500          Health Fac. Auth. Rev., Liberty Height Retirement Fac.,
                       zero coupon, 7/15/22                                                             Aaa/AAA            2,501,915
                                                                                                                         -----------
                                                                                                                          63,292,752
                                                                                                                         ===========
                     DISTRICT OF COLUMBIA--1.3%
     17,500          Washington DC Convention Ctr. Auth. Tax Rev.,
                       4.75%, 10/1/28 (AMBAC)                                                           Aaa/AAA           16,487,800
                                                                                                                         ===========
</TABLE>


                       5.31.04 | PIMCO Municipal Income Funds II Annual Report 5
<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>                  <C>                                                                                 <C>             <C>
                     FLORIDA--3.8%
$     8,000          Highlands Cnty. Health Fac. Auth. Rev.,
                       6.00%, 11/15/31, Ser. A                                                          A3/A             $ 8,369,760
        635          Hillsborough Cnty. Health Fac. Indl. Dev. Rev.,
                       5.625%, 8/15/23                                                                 Baa2/BBB              594,512
      2,335          Hillsborough Cnty. Pollution Control Rev.,
                       Tampa Electric Co. Proj. 5.50%, 10/1/23                                         Baa2/BBB-           2,254,022
      7,135          Jacksonville Health Facs. Auth. Rev.,
                       5.25%, 11/15/32, Ser. A                                                          Aa2/AA             7,051,663
      7,500          JEA St. Johns River Power Park Syst. Rev., 5.00%, 10/1/09                          Aa2/AA-            8,091,300
     11,500          Lakeland Hosp. Syst. Rev., Regional Health Sys.,
                       5.50%, 11/15/32                                                                   A1/NR            11,320,830
      3,000          Leesburg Hosp. Rev., Leesburg Regional Medical Center,
                       5.50%, 7/1/32                                                                     A3/A              2,936,880
      7,550          Orange Cnty. Health Fac., Adventist Health Sys.,
                       5.625%-6.25%, 11/15/24-11/15/32                                                   A3/A              7,944,498
      1,500          Winter Springs Water & Sewer Rev.,
                       zero coupon, 10/1/29 (FGIC)                                                      Aaa/AAA              375,840
                                                                                                                         -----------
                                                                                                                          48,939,305
                                                                                                                         ===========

                     GEORGIA--0.7%
      4,000          Atlanta Water & Wastewater,
                       5.00%, 11/1/39, Ser. A (MBIA)                                                    Aaa/AAA            3,908,920
      1,500          Grantor Trust Gov't CP, 4.75%, 6/1/28, Ser. A (MBIA)                               Aaa/AAA            1,417,890
      9,600          Richmond Cnty. Dev Auth. Rev., zero coupon, 12/1/21                                 Aaa/NR            3,875,328
                                                                                                                         -----------
                                                                                                                           9,202,138
                                                                                                                         ===========
                     HAWAII--1.4%
     19,170          Honolulu City & Cnty. Wastewater Syst. Rev.,
                       First Board Resolution, 4.75%, 7/1/28 (FGIC)                                      Aaa/NR           18,373,103
                                                                                                                         ===========

                     ILLINOIS--16.6%
     11,760          Central Lake Cnty. Water Agy. Rev.,
                       5.125%, 5/1/28-5/1/32, Ser. A (AMBAC)                                             Aaa/NR           11,730,648
      5,000          Cicero Corp. GO,
                       5.25%, 12/1/31 (MBIA)                                                            Aaa/AAA            5,059,650
     94,485          Chicago City Colleges GO,
                       zero coupon, 1/1/37-1/1/39 (FGIC)                                                Aaa/AAA           13,751,530
                     Chicago Board of Education School Reform GO,
     15,535            Ser. A, zero coupon, 12/1/16                                                     Aaa/AAA            8,422,766
      5,000            Ser. A, zero coupon, 12/1/28 (FGIC)                                              Aaa/AAA            1,247,150
      4,500            zero coupon, 12/1/31 (FGIC)                                                      Aaa/AAA              941,850
                     Chicago GO,
     10,160            5.00%-5.125%, 1/1/29-1/1/33, (AMBAC)                                             Aaa/AAA            9,965,156
</TABLE>


6 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>                  <C>                                                                                 <C>             <C>
                     ILLINOIS--(CONCLUDED)
$      7,000         Chicago Midway Arpt. Rev.,
                       5.00%, 1/1/31, Ser. B (MBIA)                                                     Aaa/AAA         $  6,868,470
       9,862         Chicago Special Assessment, Lake Shore East
                       6.625%-6.75%, 12/1/22-12/1/32                                                      NR/NR           10,028,179
     144,650         Dev. Fin. Auth. Retirement Housing Rev.,
                       zero coupon, 7/15/23-7/15/25                                                      NR/AAA           44,340,538
      20,100         Health Facs. Auth. Rev., Elmurst Memorial Healthcare,
                       5.625%, 1/1/28                                                                     A2/NR           20,269,041
       1,000         McHenry & Kane Cnty. Community Consolidated
                       School Dist. 158, zero coupon, 1/1/12                                            Aaa/AAA              718,530
     110,000         Metropolitan Pier & Exposition Auth.,
                       zero coupon, 12/15/30-12/15/33(MBIA)                                             Aaa/AAA           22,556,100
                     State GO,
      10,000           5.00%, 3/1/34                                                                     Aa3/AA            9,698,100
      68,470         State Sports Facs. Auth,
                       zero coupon, 6/15/10 (AMBAC)                                                     Aaa/AAA           50,006,380
                                                                                                                        ------------
                                                                                                                         215,604,088
                                                                                                                        ============
                     INDIANA--0.6%
                     Brownsburg 1999 School Building Corp.,
       3,000           5.00%-5.25%, 3/15/25-9/15/25 (FSA)                                               Aaa/AAA            3,036,540
       4,125         Fort Wayne Pollution Control Rev., 6.20%, 10/15/25                                 Baa1/BBB           4,259,351
         500         State Bank Rev., 5.25%, 4/1/30, Ser. D (AMBAC)                                     Aaa/AAA              504,755
                                                                                                                        ------------
                                                                                                                           7,800,646
                                                                                                                        ============
                     IOWA--0.5%
       8,850         Tobacco Settlement Auth., 5.60%, 6/1/35, Ser. B                                    Baa2/BBB           6,546,522
                                                                                                                        ------------
                     KANSAS--0.2%
       2,800         Univ. of Kansas, Hosp. Auth. Health Facs. Rev.,
                       5.625%, 9/1/32                                                                     NR/A-            2,818,984
                                                                                                                        ------------

                     KENTUCKY--0.9%
                     Economic Dev. Finance Auth. Hospital Facs. Rev.,
       8,545           5.25%, 10/1/19                                                                    A3/A              9,311,059
       2,500           5.25%, 10/1/30                                                                    A1/AA-            2,485,675
                                                                                                                        ------------
                                                                                                                          11,796,734
                                                                                                                        ============

                     LOUISIANA--4.2%
      20,400         Ochsner Clinic Foundation Pub. Facs. Auth. Rev.,
                       5.50%, 5/15/32, Ser. B                                                            A3/NR            20,341,452
      44,395         Tobacco Settlement Financing Corp.,
                       5.875%, 5/15/39, Ser. 2001B                                                     Baa3/BBB           34,708,011
                                                                                                                        ------------
                                                                                                                          55,049,463
                                                                                                                        ============
                     MARYLAND--0.1%
       1,000         State Health & Higher Educational. Fac. Auth. Rev.,
                       Adventist Healthcare, 5.75%, 1/1/ 25, Ser. A,                                    Baa1/NR              972,920
                                                                                                                        ============
</TABLE>


                       5.31.04 | PIMCO Municipal Income Funds II Annual Report 7


<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>                  <C>                                                                                 <C>             <C>
               MASSACHUSETTS--2.2%
$     1,300         Massachusetts Bay Trans. Auth.,
                      4.75%, 3/1/21, Ser. A (MBIA)                                                       Aaa/AAA         $ 1,292,486
      9,000         State GO, 5.00%, 8/1/11, Ser. A                                                      Aaa/AAA           9,806,490
      4,295         State Turnpike Auth.,
                      4.75%, 1/1/34 Ser. A (AMBAC)                                                       Aaa/AAA           4,022,998
                    State Water Reserve Auth.,
     12,050           4.75%, 8/1/37, Ser. A                                                              Aaa/AAA          11,250,482
      2,300           4.75%, 12/1/21, Ser. B                                                             Aaa/AAA           2,301,449
                                                                                                                         -----------
                                                                                                                          28,673,905
                                                                                                                         ===========
                    MICHIGAN--2.7%
     10,250         Detroit City School Dist.,
                      5.00%-5.125%, 5/1/31-5/1/32, Ser. A                                                Aaa/AAA          10,154,890
      2,500         Detroit Water Supply Sys.,                                                                             2,478,300
                      5.00%, 7/1/30, Ser. A (FGIC)                                                       Aaa/AAA
      2,000         State GO, 5.25%, 12/1/09                                                             Aa1/AA+           2,193,460
      5,000         State Hosp. Fin. Auth. Rev., Ascension Health,
                      5.25%, 11/15/26, Ser. B                                                             Aa2/AA           4,960,750
     15,425         State Hosp. Fin. Auth. Rev., Oakwood Obligation Group,
                      5.75%-6.00%, 4/1/32, Ser. A                                                           A2/A          15,629,545
                                                                                                                         -----------
                                                                                                                          35,416,945
                                                                                                                         ===========
                    MISSISSIPPI--0.3%
      3,605         Business Finance Corp., Pollution Control Rev.,
                      5.875%, 4/1/22                                                                    Ba1/BBB-           3,618,086
      1,000         State Dev. Bank Oblig., Projects & Equipment Acquisitions,
                      5.00%, 7/1/24 (AMBAC)                                                              Aaa/AAA           1,015,210
                                                                                                                         -----------
                                                                                                                           4,633,296
                                                                                                                         ===========
                    MISSOURI--0.1%
      1,500         St. Louis Parking Facs. Rev., Downtown Parking Facility,
                      6.00%, 2/1/28                                                                        NR/NR           1,506,240
                                                                                                                         ===========

                    NEVADA--1.8%
      3,400         Clark Cnty. GO, 5.00%, 6/1/31 (FGIC)                                                 Aaa/AAA           3,365,184
     17,030         Reno Lien Trans.,
                      5.125%-5.25%, 6/1/27-6/1/41 (AMBAC)                                                Aaa/AAA          17,088,184
      3,290         Truckee Meadows Water Auth Rev.,
                      5.125%, 7/1/30, Ser. A (FSA)                                                       Aaa/AAA           3,331,717
                                                                                                                         -----------
                                                                                                                          23,785,085
                                                                                                                         ===========
                    NEW HAMPSHIRE--0.2%
      3,000         Health & Educational Facs. Auth. Rev., 6.125%, 7/1/32                              Baa1/BBB+           2,973,990
                                                                                                                         ===========
</TABLE>



8 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>                  <C>                                                                                 <C>             <C>
                    NEW JERSEY--2.2%
$        60         Camden Cnty. Impt. Auth. Rev., Cooper Health,
                      5.875%-6.00%, 2/15/15-2/15/27                                                      Ba2/NR          $    54,542
        750         Economic Dev. Auth., Arbor Glen,
                      6.00%, 5/15/28, Ser. A                                                              NR/NR              670,605
     15,405         Economic Dev. Auth., Kapkowski Landfill Proj.,
                      5.75%, 10/1/21-4/1/31                                                              Baa3/NR          15,687,123
      3,500         State Educational Fac. Auth. Rev.,
                      6.00%, 7/1/25, Ser. D                                                               NR/NR            3,507,070
     10,030         Tobacco Settlement Financing Corp., Rev.,
                      6.00%-6.75%, 6/1/37-6/1/43                                                        Baa3/BBB           8,259,811
                                                                                                                         -----------
                                                                                                                          28,179,151
                                                                                                                         ===========
                    NEW MEXICO--0.4%
      5,000         Farmington Pollution Control Rev., 5.80%, 4/1/22                                    Baa2/BBB           5,008,000
                                                                                                                         ===========
                    NEW YORK--2.2%
                    Metropolitan Trans. Auth.,
     10,600           5.00%, 11/15/30, Ser. A (FSA)                                                      Aaa/AAA          10,461,882
     10,000           5.25%, 11/15/32                                                                     A2/A            10,014,500
      6,700         State Dormitory Auth. Rev., 5.00%, 7/1/34, Ser. 1                                    Aa2/AA            6,556,888
      2,000         State Environmental Facilities Corp.,
                      5.00%, 6/15/28                                                                     Aaa/AAA           2,005,720
                                                                                                                         -----------
                                                                                                                          29,038,990
                                                                                                                         ===========
                    OHIO--0.6%
      7,500         Lorain Cnty. Hospital Rev.,
                      5.375%, 10/1/30                                                                     A1/AA-           7,479,450
                                                                                                                         ===========
                    PENNSYLVANIA--3.2%
      7,250         Allegheny Cnty. Hosp. Dev. Auth. Rev.,
                      9.25%, 11/15/15-11/15/30, Ser. B                                                     B2/B            8,153,568
      4,500         Cumberland Cnty. Auth. Rev., 7.25%, 1/1/35, Ser. A                                     NR/NR           4,477,680
      8,750         Montgomery Cnty. Higher Education & Health Auth. Hosp. Rev.,
                      5.125%, 6/1/27-6/1/32, Ser. A                                                        NR/A            8,442,525
      5,000         Philadelphia Auth. Dev. Lease Rev.,
                      5.25%, 10/1/30, Ser. B (FSA)                                                        Aaa/AAA          5,046,600
      3,050         Philadelphia Auth. Indl. Dev. Rev., Doubletree,
                      6.50%, 10/1/27                                                                       NR/NR           3,075,193
      3,000         Philadelphia GO, 5.25%, 9/15/25 (FSA)                                                 Aaa/AAA          3,054,540
      8,520         Philadelphia Hosp. & Higher Ed. Facs. Auth. Rev.,
                      6.85%, 7/1/22                                                                       Baa2/BBB         8,642,603
        500         Pittsburgh & Allegheny Cnty. Pub. Auditorium,
                      5.00%, 2/1/29 (AMBAC)                                                               Aaa/AAA            488,875
                                                                                                                         -----------
                                                                                                                          41,381,584
                                                                                                                         ===========
</TABLE>


                       5.31.04 | PIMCO Municipal Income Funds II Annual Report 9

<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>                  <C>                                                                                 <C>             <C>
                     PUERTO RICO--0.3%
$      4,200         Electric Power Auth. Power Rev., 5.125%, 7/1/29, Ser. NN                            A3/A-          $  4,150,146
                                                                                                                        ============
                     RHODE ISLAND--4.1%
      65,000         Tobacco Settlement Financing. Corp.,
                       6.25%, 6/1/42, Ser. A                                                           Baa3/BBB           52,788,450
                                                                                                                        ============
                     SOUTH CAROLINA--5.6%
      27,745         Greenville Cnty. School District, 5.50%, 12/1/28                                    A1/AA-           28,075,720
      18,120         Jobs Economic Dev. Auth. Economic Dev. Rev.,
                       5.625%, 11/15/30                                                                   A3/A-           17,565,528
      23,500         Lexington Cnty. Health Services Dist. Inc. Hosp. Rev.,
                       5.50%-5.75%, 11/1/28-5/1/37                                                        A2/A            23,617,790
       3,250         Tobacco Settlement Rev., 6.375%, 5/15/28, Ser. B                                   Baa3/BBB           2,804,198
       1,180         Trans. Infrastructure Rev.,
                       5.00%, 10/1/29, Ser. A (AMBAC)                                                    Aaa/NR            1,291,085
                                                                                                                        ------------
                                                                                                                          73,354,321
                                                                                                                        ============
                     TENNESSEE--5.2%
       3,750         Knox Cnty. Health Educational & Housing Facs. Board,
                       Hospital Facs. Rev., 5.25%, 10/1/30                                               A1/AA-            3,759,750
      58,785         Memphis Electric Sys. Rev.,
                       5.00%, 12/1/11, Ser. A (MBIA)                                                    Aaa/AAA           63,787,016
                                                                                                                        ------------
                                                                                                                          67,546,766
                                                                                                                        ============
                     TEXAS--9.2%
       1,000         Arlington Indpt. School Dist. GO, 5.00%, 2/15/24                                   Aaa/NR             1,001,170
       4,480         Aubrey Indpt. School Dist. GO, 5.50%, 2/15/33                                      Aaa/NR             4,558,042
       6,500         Brazos Cnty. Health Facs. Dev. Corp.,
                       Franciscan Services Corp., 5.375%, 1/1/32                                         NR/A-             6,277,765
       2,700         Comal Cnty. Health Facs., Mckenna Memorial Hosp.,
                       6.25%, 2/1/32                                                                   Baa2/BBB            2,682,126
       5,000         Dallas Area Rapid Transit., 5.00%, 12/1/31 (AMBAC)                                 Aaa/AAA            4,912,000
      20,000         Frisco Indpt. School Dist. GO, zero coupon, 8/15/34                                 Aaa/NR            3,536,600
      19,750         Harris Cnty. GO, 5.125%, 8/15/31                                                   Aa1/AA+           19,676,530
       5,250         Harris Cnty. Health Facs. Dev. Corp. Rev.,
                       5.375%, 2/15/26, Ser. A                                                           NR/AA-            5,263,545
      25,000         Harris Cnty. Senior Lien Toll Road,
                       5.00%, 8/15/30 (FSA)                                                             Aaa/AAA           24,603,500
       7,500         Keller Indpt. School Dist. GO, 4.875%, 8/15/31                                     Aaa/AAA            7,167,750
       3,170         Little Elm Indpt. School Dist. GO, 5.30%, 8/15/29, Ser. A                           NR/AAA            3,222,844
       6,250         North Dallas Thruway Auth., 4.75%, 1/1/29 (FGIC)                                   Aaa/AAA            5,936,812
       5,000         Quinlin Indpt. School Dist. GO, 5.10%, 2/15/32                                      Aaa/NR            4,977,550
                     State Turnpike Auth. Highway Imps. Rev.,
      10,000           zero coupon, 8/15/19 (AMBAC)                                                     Aaa/AAA            4,548,900
       8,880           5.00%, 8/15/42 (AMBAC)                                                           Aaa/AAA            8,543,093
       4,900         State Water Financial Assistance GO,
                       5.00%-5.25%, 8/1/35-8/1/36                                                        Aa1/AA            4,806,008
       8,000         Wichita Falls Water & Sewer Rev.,
                       5.00%, 8/1/27 (AMBAC)                                                            Aaa/AAA            7,902,160
                                                                                                                        ------------
                                                                                                                         119,616,395
                                                                                                                        ============
</TABLE>


10 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>                  <C>                                                                                 <C>             <C>
                     VIRGINIA--0.5%
$        6,500      Fredericksburg Industrial Dev., Medicorp Health Syst.,
                      5.125%-5.25%, 6/15/27-6/15/33, Ser. B                                               A3/NR       $    6,405,725
                                                                                                                      ==============
                    WASHINGTON--0.6%
         2,250      Energy Northwest Electric Revenue, 5.25%, 7/1/09 Ser. A                              Aaa/AAA           2,453,513
         5,000      Tacoma Sewer Rev., 5.00%, 12/1/31, Ser. A (FGIC)                                     Aaa/AAA           4,912,000
                                                                                                                      --------------
                                                                                                                           7,365,513
                                                                                                                      ==============
                    WISCONSIN--1.0%
                    Badger Tobacco Asset Securitization Corp.,
         9,135        6.125%, 6/1/27                                                                    Baa3/BBB           8,132,708
         1,125        6.00%, 6/1/17                                                                     Baa3/BBB           1,021,095
         2,500      State GO, 5.00%, 5/1/09                                                              Aaa/AAA           2,701,750
         1,000      State Health & Educational Facs. Auth. Rev.,
                      5.375%, 10/1/30                                                                      NR/A+             977,200
                                                                                                                      --------------
                                                                                                                          12,832,753
                                                                                                                      ==============

                    Total Municipal Bonds & Notes (cost-$1,156,025,263)                                                1,143,250,082
                                                                                                                      ==============

- ------------------------------------------------------------------------------------------------------------------------------------
VARIABLE RATE NOTES--7.4% (a) (b) (g)
- ------------------------------------------------------------------------------------------------------------------------------------
                    ALABAMA--0.8%
         6,675      Jefferson Cnty. Sewer Rev., Residual Ctfs.,
                      14.35%, 2/1/36, Ser. 352 (FGIC)                                                     Aaa/NR           8,816,674
         2,100      Montgomery Care Fac. Residual Ctfs.,
                      13.56%, 11/15/29, Ser. 435 (MBIA)                                                   Aaa/NR           1,893,843
                                                                                                                      --------------
                                                                                                                          10,710,517
                                                                                                                      ==============
                    COLORADO--0.2%
         2,813      Denver City & Cnty. Airpt Rev., Residual Ctfs.,
                      15.87%, 11/15/25, Ser. 425 (FSA)                                                    Aaa/NR           2,695,388
                                                                                                                      ==============
                    FLORIDA--0.5%
         2,228      Orange Cnty. School Board Cert. of Participation,
                      15.98%, 8/1/24, Ser. 328 (MBIA)                                                     Aaa/NR           2,259,665
         4,052      State Governmental Utilities Rev., Residual Ctfs.,
                      15.98%, 10/1/29, Ser. 327 (AMBAC)                                                   Aaa/NR           3,935,303
                                                                                                                      --------------
                                                                                                                           6,194,968
                                                                                                                      ==============
                    ILLINOIS--0.8%
                    Chicago GO,
         2,225        16.48%, 1/1/28 Ser. 332, (MBIA)                                                      NR/NR           2,110,724
         3,300        15.23%, 1/1/40 Ser. 426, (FGIC)                                                     Aaa/NR           3,479,850
         1,932      Cook Cnty., Residual Ctfs., 13.56%, 11/15/28, Ser. 403 (FGIC)                         Aaa/NR           1,824,716
         2,200      State GO, Residual Ctfs, 19.15%, 4/1/27, Ser. 783                                     Aaa/NR           2,346,696
                                                                                                                      --------------
                                                                                                                           9,761,986
                                                                                                                      ==============
</TABLE>


                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 11

<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>                  <C>                                                                                 <C>             <C>
                    MASSACHUSETTS--2.3%
$     2,100         Boston Water & Sewer Community Rev., Residual Ctfs.,
                      13.68%, 11/1/28, Ser. 434 (FGIC)                                                    Aaa/NR         $ 2,012,220
      2,420         State GO,
                      19.33%, 11/1/30, Ser. 785 (FGIC)                                                    Aaa/NR           3,425,074
      1,750         State College Bldg. Auth. Proj. Rev.,
                      43.843%-45.454%, 11/1/22-11/1/31, (XLCA)                                            NR/NR            2,636,551
                    State Turnpike Auth. Rev., Residual Ctfs.,
     11,049           13.68%, 1/1/37, Ser. 334 (AMBAC)                                                    Aaa/NR          10,065,970
      4,500           13.68%, 1/1/37, Ser. 489 (AMBAC)                                                    NR/AAA           4,099,635
      8,498           13.68%, 1/1/39, Ser. 335 (AMBAC)                                                    Aaa/NR           7,547,480
                                                                                                                         -----------
                                                                                                                          29,786,930
                                                                                                                         ===========
                    NEVADA--0.3%
      3,300         State GO, Residual Ctfs., 13.54%, 5/15/28, Ser. 344 (FGIC)                            Aaa/NR           3,269,211
                                                                                                                         ===========
                    OHIO--0.1%
      1,975         Hamilton Cnty. Sales Tax Residual Ctfs.,
                      16.01%, 12/1/27, Ser. 356 (MBIA)                                                    Aaa/NR           1,931,708
                                                                                                                         ===========
                    PENNSYLVANIA--0.4%
                    Philadelphia School Dist. Residual Ctfs., GO,
      2,505           12.70%, 4/1/27, Ser. 345, (MBIA)                                                    Aaa/NR           2,123,739
      4,016           12.73%, 4/1/27, Ser. 496, (MBIA)                                                    Aaa/NR           3,404,341
                                                                                                                         -----------
                                                                                                                           5,528,080
                                                                                                                         ===========
                    TENNESSEE--0.5%
      6,000         Memphis Electric Sys. Rev., Residual Ctfs.
                      8.66%, 12/1/11, Ser 880 (MBIA) (d)                                                  Aaa/NR           7,021,080
                                                                                                                         ===========
                    TEXAS--1.3%
      3,075         Denton Util. Sys. Rev., Residual Ctfs.,
                      16.51%, 12/1/29, Ser. 428 (MBIA)                                                    Aaa/NR           3,014,238
      1,650         Houston Arpt. Sys. Rev., Residual Ctfs.
                      13.44%, 7/1/25, Ser. 404 (FGIC)                                                     Aaa/NR           1,651,271
                    Houston Water & Sewer Syst. Rev., Residual Ctfs.,
      3,838           17.01%, 12/1/30, Ser. 495                                                           NR/AAA           5,376,645
      2,750           16.01%, 12/1/28, Ser. 427                                                           Aaa/NR           3,648,260
      3,080         State Affordable Housing, American Housing Foundation,
                      19.87%, 9/1/22, Ser. 780 (MBIA)                                                     Aaa/NR           3,522,996
                                                                                                                         -----------
                                                                                                                          17,213,410
                                                                                                                         ===========
                    WASHINGTON--0.2%
      2,730         Central Puget Sound Regl. Tran. Auth. Sales Tax &
                      Motor, Residual Ctfs., 12.70%, 2/1/28, Ser. 360                                     Aaa/NR           2,294,565
                                                                                                                         -----------

                    Total Variable Rate Notes (cost-$92,711,059)                                                          96,407,843
                                                                                                                         ===========
</TABLE>


12 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
 VARIABLE RATE DEMAND NOTES (c) (d)--3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                  <C>                                                                                 <C>             <C>
                     MASSACHUSETTS--0.1%
  $ 1,450            State Health & Educational Facilities Auth.,
                        1.09%, 6/1/04, Ser. C                                                            VMIG1/A-1+   $    1,450,000
                                                                                                                      ==============
                     MICHIGAN--0.3%
    4,000            State University Rev., 1.03%, 6/2/04, Ser. A                                         VMIG1/A-1+       4,000,000
                                                                                                                      ==============
                     MISSOURI--0.5%
                     State Health & Educational Facilities Auth Rev.,
    4,400               1.06%, 6/3/04                                                                                      4,400,000
    1,650               1.10%, 6/1/04, Ser. B                                                             VMIG1/A-1+       1,650,000
                                                                                                                      --------------
                                                                                                                           6,050,000
                                                                                                                      ==============
                     NEW YORK--0.5%
    7,000            New York City Municipal Water Finance & Auth.
                        Water & Sewer Syst. Rev.,
                        1.09%, 6/1/04, Ser. C (FGIC)                                                      VMIG1/A-1+       7,000,000
                                                                                                                      ==============
                     NORTH CAROLINA--1.1%
    3,150            Charlotte Water & Sewer Sys. Rev., 1.08%, 6/3/04, Ser. B                              Aa1/AAA         3,150,000
    3,980            Mecklenburg Cnty., CP., 1.07, 6/3/04                                                 VMIG1/A-1+       3,980,000
    7,000            State GO, 1.03%, 6/2/04, Ser. E                                                      VMIG1/A-1+       7,000,000
                                                                                                                      --------------
                                                                                                                          14,130,000
                                                                                                                      ==============
                     OREGON--0.1%
    1,600            State GO, 1.03%, 6/2/04                                                              VMIG1/A-1+       1,600,000
                                                                                                                      ==============
                     PENNSYLVANIA--0.1%
    1,400            State Hospitals & Higher Education Facilities Auth.,
                        1.08%, 12/1/03 (MBIA)                                                             VMIG1/A-1+       1,400,000
                                                                                                                      ==============
                     TEXAS--0.2%
    2,200            Harris Cnty Industrial Development Corp., 0.98%, 3/1/24                                Aaa/AAA        2,200,000
                                                                                                                      ==============
                     VIRGINIA--0.1%
    2,000            Loudoun Cnty. Indl. Dev. Auth. Rev., Howard Hughes
                        Med. Ctr., 1.06%, 6/1/04, Ser. C                                                  VMIG1/A-1+       2,000,000
                                                                                                                      ==============

                     TOTAL VARIABLE RATE DEMAND NOTES (COST-$39,829,923)                                                  39,830,000
                                                                                                                      ==============

- ------------------------------------------------------------------------------------------------------------------------------------
 U.S. TREASURY BILLS (f)--1.6%
- ------------------------------------------------------------------------------------------------------------------------------------
   20,215            1.0148%-1.0899%, 6/3/04-6/17/04 (cost-$20,210,967)                                     Aaa/AAA       20,210,875
                                                                                                                      ==============

                     TOTAL INVESTMENTS BEFORE CALL OPTIONS WRITTEN
                     (cost-$1,308,777,212+)--100%                                                                      1,299,698,800
                                                                                                                      ==============

</TABLE>

                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 13

<PAGE>

PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

                                                                                                                          Value
====================================================================================================================================
 CALL OPTIONS WRITTEN (h)--(0.0)%
- ------------------------------------------------------------------------------------------------------------------------------------
  Contracts
  ---------
<S>            <C>                                                                                                    <C>
               U.S. Treasury Bond Futures, Chicago Board of Trade:
    (575)         Strike Price $112, expires 8/27/04                                                                  $    (215,625)
    (575)         Strike Price $113, expires 8/27/04                                                                       (152,734)
                                                                                                                      --------------
               Total call options written (premium received-$759,359)                                                      (368,359)
                                                                                                                      ==============

               TOTAL INVESTMENTS, NET OF CALL OPTIONS WRITTEN
               (cost-$1,308,017,853)--100%                                                                            $1,299,330,441
                                                                                                                      ==============
</TABLE>

- --------------------------------------------------------------------------------
+    The cost basis of portfolio  securities  for federal income tax purposes is
     $1,308,794,043.  Aggregate gross unrealized  appreciation for securities in
     which  there is an excess of value over tax cost is  $20,152,677  aggregate
     gross unrealized depreciation for securities in which there is an excess of
     tax cost over value is  $29,247,920  and net  unrealized  depreciation  for
     federal income tax purposes is $9,095,243.


14 PIMCO Municipal  Income Funds II Annual Report | 5.31.04 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

<PAGE>

PIMCO  CALIFORNIA  MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31,2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
 CALIFORNIA MUNICIPAL BONDS & NOTES--84.5%
- ------------------------------------------------------------------------------------------------------------------------------------
<S>             <C>                                                                                      <C>             <C>
  $31,300       ABAG Financing Auth. Rev.,
                  5.20%-5.35%, 11/15/22-11/15/32, Ser. A                                                 NR/BBB         $ 30,503,279
     2,000      ABC Unified School Dist. GO, zero coupon, 8/1/23, Ser. B (FGIC)                          Aaa/AAA             708,500
     1,000      Alpine Union School Dist. GO, zero coupon, 8/1/24, Ser. B (FSA)                          Aaa/AAA             338,210
     8,115      Anaheim City School Dist. GO, 5.00%, 8/1/26 (FGIC)                                       Aaa/AAA           8,082,134
    23,000      Bakersfield, CP, zero coupon, 4/15/21, Ser. B                                             NR/AAA           9,347,660
     1,945      Bay Area Govt. Assoc. Improvement Bd. Act 1915, 6.30%, 9/2/25                             NR/NR            1,971,685
     2,000      Bay Area Govt. Assoc. Lease Rev.,
                  5.00%, 7/1/32, Ser. 2002-1 (AMBAC)                                                     Aaa/AAA           1,973,180
     1,085      Capistrano Unified School Dist., Community Fac. Dist.
                  Special Tax, 5.70%, 9/1/20                                                              NR/NR            1,097,716
       565      Catholic Health Facs. Fin. Auth. Rev., 5.00%, 7/1/28, Ser. A                            Baa1/BBB+            514,896
     2,300      Ceres Unified School Dist., GO, zero coupon, 8/1/27 (FGIC)                               Aaa/AAA             592,848
     9,865      Chula Vista Special Tax, 6.05%-6.20%, 9/1/25-9/1/33                                       NR/NR            9,954,298
     8,035      Clovis Unified School Dist. GO,
                  zero coupon, 8/1/23-8/1/27, Ser. B (FGIC)                                              Aaa/AAA           2,469,845
     1,410      Community College Financing Auth. Lease Rev.,
                  5.00%, 8/1/27, Ser. A (AMBAC)                                                          Aaa/AAA           1,398,438
     6,355      Corona-Norco Unified School Dist., Public Financing Auth.
                  Special Tax, 5.55%-6.10%, 9/1/15-9/1/32, Ser. A                                          NR/NR           6,326,847
     1,110      Corona-Norco Unified School Dist. Special Tax,
                  5.10%, 9/1/25 (AMBAC)                                                                  Aaa/AAA           1,114,362
     2,800      Cotati Redev. Agcy. Tax Allocation,
                  5.00%, 9/1/31, Ser. A (MBIA)                                                           Aaa/AAA           2,722,664
     3,000      Dinuba Financing Auth. Lease Rev., 5.10%, 8/1/32 (MBIA)                                  Aaa/AAA           2,982,030
     2,825      Empire Union School Dist. Special Tax.,
                  zero coupon, 10/1/30-10/1/32 (AMBAC)                                                   Aaa/AAA             594,422
     1,000      Escondido Union School Dist. GO, zero coupon, 8/1/27 (FSA)                               Aaa/AAA             269,620
     2,440      Eureka Unified School Dist. GO, zero coupon, 8/1/27 (FSA)                                Aaa/AAA             657,873
                Foothill Eastern Corrider Agcy. Toll Road Rev.,
    32,010        zero coupon, 1/1/25-1/1/30, Ser. A                                                     Aaa/AAA           8,652,132
     1,500        zero coupon, 1/15/27 (MBIA)                                                            Aaa/AAA           1,199,940
       400      Franklin-McKinley School Dist. GO, 5.00%, 8/1/27, Ser. B (FSA)                           Aaa/AAA             396,720
    47,900      Golden State Tobacco Securitization Corp. Rev.,
                  6.25%-6.75%, 6/1/33-6/1/39, Ser. 2003-A-1                                             Baa3/BBB          42,629,244
     2,115      Health Facs. Financing Auth. Rev., 5.375%, 11/1/20                                        NR/BBB           2,130,947
     1,750      Huntington Beach Community Facs. Dist. Special Tax,
                  6.30%, 9/1/32                                                                            NR/NR           1,766,572
     2,080      Industry Urban Dev. Agcy. Tax Allocation,
                  4.75%, 5/1/21 (MBIA)                                                                   Aaa/AAA           2,056,101
     7,000      Irvine Improvement Board Act 1915 Special Assessment,
                  5.70%, 9/2/26                                                                            NR/NR           6,964,370
     1,900      Jurupa Unified School Dist. GO, zero coupon, 5/1/27 (FGIC)                               Aaa/AAA             512,278
     2,450      Kings Canyon JT Unified School Dist. GO,
                  zero coupon, 8/1/27 (FGIC)                                                             Aaa/AAA             660,569
     5,300      Livermore-Amador Valley Water Management Agcy.,
                Sewer Rev., 5.00%, 8/1/31 (AMBAC)                                                        Aaa/AAA           5,191,668

</TABLE>


                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 15

<PAGE>

PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>              <C>                                                                                    <C>              <C>
$     5,935      Long Beach Unified School Dist. GO,
                   5.00%, 8/1/27, Ser. C (MBIA)                                                         Aaa/NR           $ 5,886,333
                 Los Angeles, CP,
      9,895        5.00%, 2/1/27 (MBIA)                                                                Aaa/AAA             9,814,850
      2,685        5.00%, 10/1/27, Ser. AU (MBIA)                                                      Aaa/AAA             2,662,902
      7,200      Los Angeles Wastewater Syst. Rev.,
                   5.00%, 6/1/30, Ser. A (FGIC)                                                        Aaa/AAA             7,117,344
      3,475      Loyola Marymount University Educational Facs. Auth. Rev.,
                   zero coupon, 10/1/34 (MBIA)                                                          Aaa/NR               617,229
      1,000      Manhattan Beach Unified School Dist. GO,
                   zero coupon, 9/1/25 (FGIC)                                                          Aaa/AAA               306,150
      7,295      Manteca Redev. Agcy. Tax Allocation, 5.00%, 10/1/32 (FSA)                             Aaa/AAA             7,139,762
                 Manteca Unified School Dist. Special Tax,
      2,365        zero coupon, 9/1/25 (MBIA)                                                          Aaa/AAA               716,619
      5,330        5.00%, 9/1/29, Ser. C                                                               Aaa/AAA             5,195,311
      4,000      Merced Cnty. CP, 5.00%, 6/1/32 (AMBAC)                                                 Aaa/NR             3,917,360
      7,320      Modesto Elementary School Dist., Stanislaus Cnty. GO,
                   zero coupon, 8/1/23-5/1/27, Ser. A (FGIC)                                           Aaa/AAA             2,370,390
      2,150      Modesto High School Dist., Stanislaus Cnty. GO,
                   zero coupon, 8/1/26, Ser. A (FGIC)                                                  Aaa/AAA               620,081
      1,000      Modesto Public Financing Auth. Lease Rev.,
                   5.00%, 9/1/29 (AMBAC)                                                               Aaa/AAA               981,630
      2,385      Monrovia Financing Auth. Lease Rev.,
                   5.125%, 12/1/31 (AMBAC)                                                             Aaa/AAA             2,391,726
                 Montebello Unified School Dist. GO,
      7,105        zero coupon, 8/1/24-8/1/27 (FGIC)                                                   Aaa/AAA             2,116,107
      1,485        zero coupon, 8/1/24 (FSA)                                                           Aaa/AAA               492,485
      2,400      Morgan Hill Unified School Dist. GO,
                   zero coupon, 8/1/23 (FGIC)                                                          Aaa/AAA               850,200
      1,500      Mountain View-Whisman School Dist. GO,
                   5.00%, 6/1/27 Ser. D (MBIA)                                                         Aaa/AAA             1,487,850
      1,800      Murrieta Redev. Agcy. Tax, 5.00%, 8/1/32 (MBIA)                                       Aaa/AAA             1,762,596
      3,245      Newark Unified School Dist. GO,
                   zero coupon, 8/1/26, Ser D (FSA)                                                    Aaa/AAA               935,890
      3,580      Oakland Redev. Agcy. Tax Allocation, 5.25%, 9/1/27-9/1/33                               NR/A-             3,438,513
      1,000      Orange Cnty. Community Facs. Dist. Special Tax,
                   6.00%, 8/15/25, Ser. A                                                                NR/NR             1,016,820
     12,000      Orange Cnty. Sanitation Dist. CP, 5.25%, 2/1/30 (FGIC)                                Aaa/AAA            12,147,120
      3,685      Palmdale Community Redev. Agcy. Tax Allocation,
                   zero coupon, 12/1/30-12/1/32 (AMBAC)                                                Aaa/AAA               772,866
      1,750      Paramount Unified School Dist. GO,
                   zero coupon, 9/1/23, Ser. B (FSA)                                                   Aaa/AAA               617,137
                 Perris Public Financing Auth. Rev.,
      1,190        4.75%, 10/1/23, Ser. B (MBIA)                                                       Aaa/AAA             1,157,644
      2,580        5.375%-5.625%, 10/1/20-10/1/31, Ser. C                                               NR/BBB             2,533,679
     14,200      Poway Unified School Dist. Special Tax,
                   5.50%-6.125%, 9/1/25-9/1/33                                                           NR/NR            14,006,083
</TABLE>


16 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>


PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>              <C>                                                                                     <C>              <C>
$     2,000        Rancho Cucamonga Community Facs. Dist. Special Tax,
                     6.375%, 9/1/31, Ser. A                                                              NR/NR           $ 2,013,880
      1,500        Richmond Wastewater Rev., zero coupon, 8/1/30 (FGIC)                                 Aaa/AAA              339,555
      3,510        Riverside CP, 5.00%, 9/1/33 (AMBAC)                                                  NR/AAA             3,430,604
     17,500        Rocklin Unified School Dist. GO,
                     zero coupon, 8/1/24-8/1/27 (FGIC)                                                  Aaa/AAA            5,255,450
      9,250        Roseville Redev. Agcy. Tax Allocation,
                     5.00%, 9/1/27-9/1/33 (MBIA)                                                        Aaa/AAA            9,075,468
                   Sacramento City Financing Auth. Rev.,
      4,500          5.00%, 12/1/32, Ser. A (FSA)                                                       Aaa/AAA            4,406,265
      4,935          6.25%, 9/1/23                                                                       NR/NR             5,029,407
     12,490        Sacramento Cnty. Airport Syst. Rev.,
                     5.00%, 7/1/32, Ser. A (FSA)                                                        Aaa/AAA           12,231,082
     16,285        San Diego Cnty. Water Auth. Water Rev., CP,
                     5.00%, 5/1/28-5/1/29, Ser. A (MBIA)                                                Aaa/AAA           16,002,700
      1,500        San Diego Public Facs. Financing Auth. Lease Rev.,
                     5.00%, 4/1/32 (MBIA)                                                               Aaa/AAA            1,468,995
      1,000        San Diego Public Facs. Financing Auth. Sewer Rev.,
                     5.00%, 5/15/29, Ser. A (FGIC)                                                      Aaa/AAA              988,730
     14,000        San Diego Public Facs. Financing Auth. Water Rev.,
                     5.00%, 8/1/32 (MBIA)                                                               Aaa/AAA           13,692,700
                   San Francisco City & Cnty. Airport Community, Int'l Airport Rev.,
      5,585          4.50%, 5/1/28, Ser. 15B (MBIA)                                                     Aaa/AAA            5,053,252
     20,300          5.00%, 5/1/32, Ser. 28B (MBIA)                                                     Aaa/AAA           19,880,196
     10,405        San Joaquin Hills Transportation Corridor Agcy. Toll Road Rev.,
                     zero coupon, 1/1/25                                                                AAA/AAA            3,386,411
     10,190        San Jose, GO, 5.125%, 9/1/31 (MBIA)                                                  Aa1/AA+           10,210,584
      7,875        San Juan Unified School Dist. GO,
                     zero coupon, 8/1/23-8/1/26 (FSA)                                                   Aaa/AAA            2,387,766
      5,000        Santa Margarita Community Fac. Water Dist. Special Tax,
                     6.00%-6.25%, 9/1/29-9/1/30                                                          NR/NR             5,024,180
      4,835        San Mateo Foster City School Dist. GO, 5.10%, 8/1/31 (FGIC)                          Aaa/AAA            4,837,853
      2,300        San Mateo Union High School Dist. GO,
                     zero coupon, 9/1/20 (FGIC)                                                         Aaa/AAA              986,424
      1,730        San Rafael City High School Dist. GO,
                     5.00% 8/1/23, Ser. B (FSA)                                                         Aaa/AAA            1,715,814
      3,280        San Rafael Elementary School Dist. GO,
                     5.00%, 8/1/27, Ser. B (FSA)                                                        Aaa/AAA            3,253,104
      8,690        Santa Clara Unified School Dist. GO,
                     5.00%, 7/1/25-7/1/27 (MBIA)                                                        Aaa/AAA            8,655,293
      1,260        Santa Cruz Cnty., CP, 5.25%, 8/1/32                                                   A2/NR             1,239,878
      3,465        Saugus Hart School Facs. Financing Auth. Special Tax,
                     6.10%-6.125%, 9/1/32-9/1/33                                                         NR/NR             3,486,737
      1,000        Shasta Union High School Dist. GO, zero coupon, 8/1/24 (FGIC)                        Aaa/AAA              331,640
      4,745        South Tahoe JT Powers Parking Financing Auth. Rev.,
                     7.00%, 12/1/27, Ser. A                                                              NR/NR             4,912,499
      1,800        Southern Mono Health Care Dist. GO,
                     zero coupon, 8/1/26 (MBIA)                                                         Aaa/AAA              508,086

</TABLE>

                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 17

<PAGE>

PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>              <C>                                                                                     <C>              <C>
$    35,000        State Economic Recovery GO, 5.00%, 7/1/11, Ser. A (MBIA)                               Aaa/AAA       $ 38,150,700
      9,375        State Health Facs. Financing Auth. Rev.,
                     5.125%-5.25%, 1/1/22-1/1/26                                                           NR/BBB          9,068,510
        200        State Infrastructure & Economic Dev. Bk. Rev., Bay Area Toll,
                     5.00%, 7/1/36, Ser. B (AMBAC)                                                        Aaa/AAA            196,230
      9,605        State Public Works Board Lease Rev.,
                     5.00%, 10/1/22, Ser. A (FSA)                                                         Aaa/AAA          9,636,793
                   State University Rev. & Colleges,
      1,710          5.00%, 11/1/33, Ser. A (AMBAC)                                                       Aaa/AAA          1,684,008
      1,000          5.00%, 11/1/13, Ser. A (FSA)                                                                          1,085,100
      1,170        Statewide Community Dev. Auth. CP, 6.10%, 11/1/15                                        NR/NR          1,179,688
      6,555        Statewide Community Dev. Auth. Rev.,
                     6.75%, 10/1/30-7/1/32 (d)                                                              NR/NR          6,506,683
      2,770        Statewide Community Dev. Auth., Rev.,
                     5.50%, 11/1/32, Ser. A                                                                  A3/A          2,801,439
      9,700        Statewide Community Dev. Auth., Rev., Jewish Home Health Fac.,
                     5.50%, 11/15/33                                                                       NR/BBB          9,560,514
                   Statewide Financing Auth. Tobacco Settlement Rev.,
      1,865          5.625%, 5/1/29, Ser. A                                                               Baa3/NR          1,539,930
     20,000          6.00%, 5/1/37, Ser. B                                                                Baa3/NR         15,989,600
      7,750        Tamalpais Union High School Dist. GO,
                     5.00%, 8/1/27 (FSA)                                                                  Aaa/AAA          7,686,450
                   Tobacco Securization Agcy. Rev.,
     15,000          5.625%-6.00%, 6/1/23-6/1/35                                                         Baa3/BBB         12,811,200
      1,800          5.875%, 6/1/43, Ser. A                                                               Baa3/NR          1,417,356
      4,500          6.00%, 6/1/42                                                                        Baa3/NR          3,518,235
        995        Tracy Community Facs. Dist. Special Tax, 6.00%, 9/1/27                                   NR/NR            992,413
      6,250        University Revs., 5.00%, 5/15/11, Ser. A (AMBAC)                                       Aaa/AAA          6,783,688
     10,000        Ventura Cnty. Community College Dist. GO,
                     5.00%, 8/1/27, Ser. A (MBIA)                                                         Aaa/AAA          9,918,000
      1,555        Ventura Unified School Dist. GO, 5.00%, 8/1/32, Ser. F (FSA)                           Aaa/AAA          1,522,687
      2,000        Vernon Elec. Syst. Rev., 5.50%, 4/1/33                                                 A2/BBB+          2,001,880
      3,535        Victor Elementary School Dist.,
                     zero coupon, 8/1/24-8/1/26, Ser. A (FGIC)                                            Aaa/AAA          1,068,163
      1,000        Vista Unified School Dist. GO,
                     zero coupon, 8/1/26, Ser. A (FSA)                                                    Aaa/AAA            288,410
      7,320        West Contra Costa University School Dist. GO,
                     5.00%, 8/1/26-8/1/31, Ser. A (MBIA)                                                  Aaa/AAA          7,257,625
      3,375        Westlands Water Dist. Rev. CP, 5.00%, 9/1/34 (MBIA)                                    Aaa/AAA          3,297,544
      2,000        William S. Hart Union High School Dist. Special Tax,
                     5.625%, 9/1/34                                                                       NR/BBB+          2,002,020
      2,110        Yuba City Unfied School Dist. GO, zero coupon, 9/1/25 (FGIC)                           Aaa/AAA            645,976
                                                                                                                       -------------

                   Total California Municipal Bonds & Notes (cost-$571,562,220)                                          557,269,120
                                                                                                                       =============
</TABLE>


18 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>

PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
 OTHER MUNICIPAL BONDS & NOTES--4.3%
- ------------------------------------------------------------------------------------------------------------------------------------
<S>              <C>                                                                                     <C>             <C>
                 PUERTO RICO--0.7%
$     2,000      Electric Power Auth. Rev., 5.125%, 7/1/29, Ser. NN                                     A3/A-            $ 1,976,260
      2,505      Gov't Fac. Public Buildings Auth. Rev., 5.00%, 7/1/36, Ser. I                          Baa1/A-            2,378,497
                                                                                                                         -----------
                                                                                                                           4,354,757
                                                                                                                         ===========
                 TENNESSEE--1.3%
      8,535      Memphis Elec. Syst. Rev., 5.00%, 12/1/16, Ser. A (MBIA)                               Aaa/AAA             8,969,517
                                                                                                                         ===========
                 TEXAS--2.3%
     13,845      State Univ. Revs., 5.25%, 8/15/11-8/15/12, Ser. A                                     Aaa/AAA            15,248,559
                                                                                                                         ===========

                 Total Other Municipal Bonds & Notes (cost-$29,306,664)                                                   28,572,833
                                                                                                                         ===========

- ------------------------------------------------------------------------------------------------------------------------------------
 CALIFORNIA VARIABLE RATE NOTES (a) (b) (g)--3.5%
- ------------------------------------------------------------------------------------------------------------------------------------
      4,238      Los Angeles Dept. of Water & Power Waterworks Rev.,
                   16.60%, 7/1/41 (FGIC)                                                                Aaa/NR             4,166,988
      1,875      Modesto Public Financing Auth. Lease Rev.,
                   16.10%, 9/1/29, Ser. 354 (AMBAC)                                                     AAA/NR             1,737,225
      4,952      Oakland GO, 16.10%, 1/15/32, Ser. 756 (FGIC)                                           Aaa/NR             4,652,182
                 San Diego Unified School Dist. GO,
      2,209        16.10%, 7/1/26, Ser. 759 (FSA)                                                       NR/NR              2,173,568
      1,944        16.10%, 7/1/27, Ser. 758 (FGIC)                                                      Aaa/NR             1,880,548
      3,743      San Jose GO, 16.10%, 9/1/32 (MBIA)                                                     Aaa/NR             3,540,704
      2,288      San Jose Unified School Dist. Santa Clara Cnty. GO,
                   16.10%, 8/1/27 (FSA)                                                                 Aaa/NR             2,212,470
      2,500      University Revs., 16.10%, 9/1/28, Ser. 762 (FGIC)                                      WR/NR              2,409,650
                                                                                                                         -----------

                 Total California Variable Rate Notes (cost-$24,091,792)                                                  22,773,335
                                                                                                                         ===========

- ------------------------------------------------------------------------------------------------------------------------------------
 CALIFORNIA SHORT-TERM VARIABLE RATE DEMAND NOTES (c) (d)--6.4%
- ------------------------------------------------------------------------------------------------------------------------------------
      2,000      Bay Area Toll Auth., Toll Bridge Rev.,
                   1.04%, 6/3/04 (AMBAC)                                                                Aaa/AAA            2,000,000
      4,200      Irvine Ranch Water Dist., 1.07%, 6/1/04                                                Aaa/AAA            4,200,000
      4,900      Irvine Ranch Water Dist. GO, 1.07%, 6/1/04,                                            Aaa/AAA            4,900,000
      4,400      Irvine Unified School Dist. Special Tax,
                   1.07%, 6/1/04 (Bank of New York)                                                     VMIG1/NR           4,400,000
      3,320      Long Beach Unified School Dist. CP,
                   1.06%, 6/3/04 (AMBAC)                                                                VMIG1/NR           3,320,000
      2,095      Los Angeles Cnty. Metropolitan Transportation Auth. Rev.,
                   Sales Tax Rev., 1.06%, 6/3/04, Ser. A (MBIA)                                         VMIG1/A1+          2,095,000
      2,300      Los Angeles Water & Power Rev., 1.06%, 6/3/04 Ser. B-3                                 VMIG1/AA-          2,300,000
      2,315      Northern California Transmission Agency Rev.,
                   1.08%, 6/3/04 (FSA)                                                                  VMIG1/AAA          2,315,000
      9,000      Orange Cnty. Sanitation Dist. CP, 1.07%, 6/1/04, Ser. B                                VMIG1/A1+          9,000,000
      3,800      State Health Facs. Fin. Auth. Rev.,
                   1.06%, 6/1/04, Ser. B (AMBAC)                                                        VMIG1/A1+          3,800,000
      2,000      Statewide Community Dev. Auth. CP,
                   1.07%, 6/1/04 (AMBAC)                                                                VMIG1/A1           2,000,000

</TABLE>

                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 19

<PAGE>

PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>            <C>                                                                                     <C>              <C>
  $ 2,000      Western Muni. Water Dist. Facs. Rev.,
                  1.06%, 6/2/04, Ser. A (FSA)                                                          NR/AAA         $   2,000,000
                                                                                                                      --------------

               Total California Short-Term Variable Rate Demand Notes
               (cost-$42,330,000)                                                                                        42,330,000
                                                                                                                      ==============

- ------------------------------------------------------------------------------------------------------------------------------------
 U.S. TREASURY BILLS (f)--1.3%
- ------------------------------------------------------------------------------------------------------------------------------------
    8,650      0.83753%-0.9275%, 6/3/04-6/17/04 (cost-$8,648,168)                                      Aaa/AAA            8,648,127
                                                                                                                      --------------

               TOTAL INVESTMENTS BEFORE CALL OPTION WRITTEN
               (cost-$675,938,844+)--100%                                                                               659,593,415
                                                                                                                      ==============

- ------------------------------------------------------------------------------------------------------------------------------------
 CALL OPTIONS WRITTEN (h)--(0.0)%
- ------------------------------------------------------------------------------------------------------------------------------------
  Contracts
  ---------
               U.S. Treasury Bond Futures, Chicago Board of Trade:
    (290)         Strike Price $112, expires 8/27/04                                                                       (108,750)
    (290)         Strike Price $113, expires 8/27/04                                                                        (77,031)
                                                                                                                      --------------

               Total call options written (premiums received-$382,981)                                                     (185,781)
                                                                                                                      ==============

               TOTAL INVESTMENTS, NET OF CALL OPTIONS WRITTEN
               (cost-$675,555,863)--100%                                                                                $659,407,634
                                                                                                                      ==============

</TABLE>

- --------------------------------------------------------------------------------
+    The cost basis of portfolio  securities  for federal income tax purposes is
     $675,938,844.  Aggregate gross  unrealized  appreciation  for securities in
     which  there is an excess of value over tax cost is  $1,968,481;  aggregate
     gross unrealized depreciation for securities in which there is an excess of
     tax cost over value is $18,313,910, net unrealized depreciation for federal
     income tax purposes is $16,345,429.

20 PIMCO Municipal Income Funds II Annual Report | 5.31.04 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

<PAGE>

PIMCO NEW YORK MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
 NEW YORK MUNICIPAL BONDS & NOTES--89.2%
- ------------------------------------------------------------------------------------------------------------------------------------
<S>                <C>                                                                                 <C>               <C>
$     1,250        Buffalo Municipal Water Fin. Auth., Water Syst. Rev.,
                     5.00%-5.125%, 7/1/27-7/1/32, Ser. B (FSA)                                       Aaa/AAA             $ 1,250,547
     10,000        Erie Cnty. Tobacco Asset, 6.50%, 7/15/32                                          Baa1/BBB              9,469,900
                   Metropolitan Transportation Auth. Rev.,
      1,850          5.00%, 11/15/30, Ser. A (FSA)                                                   Aaa/AAA               1,825,894
     10,000          5.25%, 11/15/31, Ser. E                                                         A2/A                 10,013,200
      7,000        Metropolitan Transportation Auth. Service Contract,
                     5.35%, 7/1/31, Ser. B                                                           A3/AAA                7,054,460
                   New York City, GO
      4,000          5.00%, 3/1/33, Ser. I                                                           A2/A                  3,840,680
      1,500          5.75%, 8/1/16, Ser. A                                                           A2/A                  1,620,405
      3,100        New York City Health & Hospital Corp., Rev.,
                     5.375%-5.45%, 2/15/26, Ser. A                                                   A3/BBB                3,112,803
                   New York City Municipal Water Fin. Auth.,
                   Water & Sewer Syst. Rev.,
      3,055          4.75%, 6/15/25, Ser. D (MBIA-IBC)                                               Aaa/AAA               2,963,992
     20,000          5.00%-5.125%, 6/15/32-6/15/34, Ser. A                                           Aa2/AA               19,809,350
      1,245        New York City Indl. Dev. Agcy., Civic Fac. Rev., 6.45%, 7/1/32                    Ba3/NR                1,152,671
      1,000        New York City Indl Dev. Agcy. Rev. 4.95%, 11/20/32 (GNMA)                         NR/AA+                  965,930
                   New York City Transitional Fin. Auth. Rev.,
      7,195          5.00%, 11/15/26, Ser. A                                                         Aa2/AA+               7,099,235
     10,000          5.00%, 11/1/27, Ser. B                                                          Aa2/AA+               9,836,900
      2,000          5.25%, 2/1/12, Ser. C                                                           Aa2/AA+               2,188,300
        500          5.50%, 11/1/29 (Pre-refunded @ 101, 5/1/10) (i)                                 Aa2/AA+                 562,455
      3,600        Port Auth. New York & New Jersey, 5.00%, 4/15/32                                  Aaa/AAA               3,602,556
      6,590        Sachem Central School District of Holbrook,
                     5.00%, 6/15/28-6/15/29                                                          Aaa/AAA               6,558,140
      7,500        State Dormitory Auth. Lease Rev., State Univ. Dormitory Facs.,
                     5.00%, 7/1/32                                                                   A1/AA-                8,197,125
      2,000        State Dormitory Auth. Revs., FHA-Kaleida Health Hospital,
                     5.05%, 2/15/25 (FHA)                                                            NR/AAA                1,969,560
      3,225        State Dormitory Auth. Revs., FHA-NY & Presbyterian Hospital,
                     4.75%, 8/1/27(AMBAC)                                                            Aaa/AAA               3,072,393
      5,000        State Dormitory Auth. Revs., FHA-Saint Barnabas,
                     5.00%, 2/1/31, Ser. A (AMBAC)                                                   Aaa/AAA               4,941,600
      1,250        State Dormitory Auth. Revs., FIT Student Housing Corp.,
                     5.125%, 7/1/34 (FGIC)                                                           Aaa/AAA               1,253,362
      5,300        State Dormitory Auth. Revs., Lenox Hill Hospital, 5.50%, 7/1/30                   A3/NR                 5,403,562
      1,400        State Dormitory Auth. Revs., Long Island Univ., 5.25%, 9/1/28                     Baa3/AA               1,403,220
      5,000        State Dormitory Auth. Revs., Memorial Sloan-Kettering Center,
                     Ser 1, 5.00%, 7/1/34                                                            Aa2/AA                4,893,200
      8,850        State Dormitory Auth. Revs., North General Hospital,
                     5.00%, 2/15/25                                                                  NR/AA-                8,681,496
      8,600        State Dormitory Auth. Revs., State Personal Income Tax,
                     5.00%, 3/15/32                                                                  A1/AA                 8,311,212
      4,270        State Dormitory Auth. Revs., Teachers College,
                     5.00%, 7/1/32 (MBIA)                                                            Aaa/NR                4,212,739

</TABLE>

                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 21

<PAGE>

PIMCO NEW YORK MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
<S>            <C>                                                                                     <C>              <C>
  $ 5,000      State Board Agency School Rev., 5.00%, 6/1/23 Ser. C                                    NR/A+            $  4,945,600
    2,000      State Environmental Facs. Corp., State Clean Water & Drinking,
                  5.125%, 6/15/31                                                                     Aaa/AAA              2,018,960
    6,100      State Urban Dev. Corp., Personal Income Tax,
                  5.00%, 3/15/33, Ser. C                                                               A1/AA               5,883,145
    6,000      State Urban Dev. Correctional & Youth Fac. Corp.,
                  5.50%, 1/1/17, Ser. A                                                                A3/AA-              6,537,540
               TOB Settlement Asset Backed, Inc.
   25,000         5.75%, 7/15/32                                                                      Baa3/BBB            22,037,250
   10,000         6.375%, 7/15/39                                                                     Baa3/BBB+            9,283,700
    4,700      Triborough Bridge & Tunnel Auth. Revs.,
                  5.00%, 1/1/32, Ser. A (FGIC)                                                         Aaa/AAA             4,637,490
    2,000      Warren & Washington Cnty. Indl. Dev. Agy. Fac. Rev.,
                  5.00%, 12/1/35, Ser A (FSA)                                                          Aaa/AAA             1,941,360
      750      Westchester Cnty. Indl Dev. Agcy. Continuing Care,
                  6.50%, 1/1/34                                                                         NR/NR                737,378
                                                                                                                        ------------

               Total New York Municipal Bonds & Notes (cost-$207,021,848)                                                203,289,310
                                                                                                                        ============

- ------------------------------------------------------------------------------------------------------------------------------------
 OTHER MUNICIPAL BONDS & NOTES--3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
    5,675      Children Trust Fund Puerto Rico Tobacco Settlement Rev.,
                  5.625%, 5/15/43                                                                     Baa3/BBB             4,636,475
    1,500      Puerto Rico Commonwealth Highway & Transportation Auth.,
                  5.25%, 7/1/38 Ser. D                                                                 Baa1/A              1,481,160
      750      Puerto Rico Electric Power Authority, Power Revenue
                  5.125%, 7/1/29, Ser. NN                                                               A3/A-                741,098
                                                                                                                        ------------

               Total Other Municipal Bonds & Notes (cost-$7,709,765)                                                       6,858,733
                                                                                                                        ============

- ------------------------------------------------------------------------------------------------------------------------------------
 NEW YORK VARIABLE RATE NOTES (a) (b) (g)--3.2%
- ------------------------------------------------------------------------------------------------------------------------------------
    6,994      Long Island Power Auth. Elec. Syst. Rev.,
                  17.07%, 12/1/26, Ser. 339 (MBIA) (cost $7,006,755)                                   Aaa/NR              7,309,010
                                                                                                                        ============

- ------------------------------------------------------------------------------------------------------------------------------------
 OTHER VARIABLE RATE NOTES (a) (b)--1.2%
- ------------------------------------------------------------------------------------------------------------------------------------
               CALIFORNIA--1.2%
    1,800      State Economic Recovery GO,
                  21.015%, 1/1/10, Ser. A (cost $2,501,979)                                            Aa3/NR              2,624,850
                                                                                                                        ============

- ------------------------------------------------------------------------------------------------------------------------------------
 NEW YORK SHORT-TERM VARIABLE RATE DEMAND NOTES (c) (d)--2.3%
- ------------------------------------------------------------------------------------------------------------------------------------
    2,100      Nasaau Cnty. Interim Fin. Auth. Rev., 1.04%, 6/2/04                                    Aaa/A-1+             2,100,000
    1,200      New York City, GO, 1.06%, 6/1/04 (MBIA)                                                Aaa/AAA              1,200,000
    1,990      New York City, GO, 0.98%, 6/1/04 (AMBAC)                                               Aaa/AAA              1,990,000
                                                                                                                        ------------

               Total New York Short-Term Variable Rate Demand Notes
               (cost-$5,290,000)                                                                                           5,290,000
                                                                                                                        ============

</TABLE>

22 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>


PIMCO NEW YORK MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>

  Principal
   Amount                                                                                          Credit Rating
    (000)                                                                                           Moody's/S&P*            Value
====================================================================================================================================
 U.S. TREASURY BILLS (f) --1.1%
- ------------------------------------------------------------------------------------------------------------------------------------
<S>            <C>                                                                                     <C>            <C>
   $2,615      0.88500%-0.94251%, 6/3/04-6/17/04 (cost-$2,614,676)                                    Aaa/AAA         $   2,614,668
                                                                                                                      --------------

               TOTAL INVESTMENTS BEFORE CALL OPTIONS WRITTEN
               (cost-$232,145,023+)--100%                                                                               227,986,571
                                                                                                                      ==============

- ------------------------------------------------------------------------------------------------------------------------------------
 CALL OPTIONS WRITTEN (h)--(0.0)%
- ------------------------------------------------------------------------------------------------------------------------------------
  Contracts
  ---------
               U.S. Treasury Bond Futures, Chicago Board of Trade:
    (100)         Strike Price $112, expires 8/27/04                                                                        (37,500)
    (100)         Strike Price $113, expires 8/27/04                                                                        (26,563)
                                                                                                                      --------------

               Total call options written (premium received-$132,063)                                                       (64,063)
                                                                                                                      ==============

               TOTAL INVESTMENTS NET OF CALL OPTIONS WRITTEN
               (cost-$232,012,960)--100%                                                                                $227,922,508
                                                                                                                      ==============
</TABLE>

- --------------------------------------------------------------------------------
+    The cost basis of portfolio  securities  for federal income tax purposes is
     $232,145,023.  Aggregate gross  unrealized  appreciation  for securities in
     which  there is an excess of value over tax cost is  $2,155,893,  aggregate
     gross unrealized depreciation for securities in which there is an excess of
     tax cost over  value is  $6,314,345  and net  unrealized  depreciation  for
     federal income tax purposes is $4,158,452.

NOTES TO SCHEDULES OF INVESTMENTS:
- ----------------------------------

*    Unaudited

(a)  Private  Placement.  Restricted  as to  resale  and may not have a  readily
     available  market;  the  aggregate  cost and  value of such  securities  is
     $96,407,843 or 7.4% of investments,  $22,773,335 or 3.5% of investments and
     $9,933,860  or  4.3%  of  investments,   respectively,  for  Municipal  II,
     California Municipal II and New York Municipal II.

(b)  Security exempt from registration  under Rule 144A of the Securities Act of
     1933.  These   securities  may  be  resold  in  transactions   exempt  from
     registration,   typically  to  qualified  institutional  investors.   These
     securities  amounted to $96,407,843 or 7.4% of investments,  $22,773,335 or
     3.5% of investments  and $9,933,860 or 4.3% of  investments,  respectively,
     for Municipal II, California Municipal II and New York Municipal II.

(c)  Variable Rate Notes -- instruments whose interest rates change on specified
     date (such as a coupon date or interest payment date) and/or whose interest
     rates  vary with  changes  in a  designated  base  rate  (such as the prime
     interest rate).

(d)  Maturity date shown is date of next call.

(e)  Security deemed illiquid.

(f)  All or partial  principal amount  segregated as initial margin on financial
     futures contracts.

(g)  Residual Interest Municipal Bonds. The interest rate shown bears an inverse
     relationship  to the interest  rate on another  security or the value of an
     index.

(h)  Non-income producing securities.

(i)  Pre-refunded bonds are collateralized by U.S.  Government or other eligible
     securities  which are held in escrow and used to pay principal and interest
     and retire the bonds at the earliest refunding date.
- --------------------------------------------------------------------------------

GLOSSARY:
- --------
AMBAC -- insured by American  Municipal Bond Assurance  Corp.
CP -- Certificates of  Participation
FGIC -- insured by Financial  Guaranty  Insurance Co.
FNMA -- Federal  National  Mortgage  Association
FSA -- insured by  Financial  Security Assurance, Inc.
GO -- General Obligation Bonds
MBIA -- insured by Municipal Bond Investors Assurance
NR -- Not Rated
XLCA -- insured by XL Capital Assurance

                                  SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
                    | 5.31.04 | PIMCO Municipal Income Funds II Annual Report 23

<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II STATEMENTS OF ASSETS AND LIABILITIES
May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                CALIFORNIA             NEW YORK
                                                                         MUNICIPAL II           MUNICIPAL II           MUNICIPAL II
                                                                      ---------------        ---------------        ---------------
<S>                                                                    <C>                      <C>                    <C>
ASSETS:
Investments, at value (cost-$1,308,777,212, $675,938,844
  and $232,145,023, respectively)                                      $1,299,698,800           $659,593,415           $227,986,571
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Cash                                                                        4,025,605                     --                693,893
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Interest receivable                                                        20,640,058              9,462,264              4,282,348
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Receivable for investments sold                                            14,955,454              5,131,372                     --
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Receivable for variation margin on futures contracts                        3,170,400                850,888                291,593
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Prepaid expenses                                                               63,320                 37,861                 26,895
- -------------------------------------------------------------         ---------------        ---------------        ---------------
  Total Assets                                                          1,342,553,637            675,075,800            233,281,300
=============================================================         ===============        ===============        ===============

LIABILITIES:
Payable to custodian                                                               --                 48,761                     --
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Payable for investments purchased                                          18,828,437              4,306,290              1,239,525
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Dividends payable to common and preferred shareholders                      4,982,961              2,493,328                862,002
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Investment management fees payable                                            557,264                282,195                 98,170
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Options written, at value (premiums received-
  $759,359, $382,981 and $132,063)                                            368,359                185,781                 64,063
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Accrued expenses                                                              146,317                100,289                 59,907
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Total Liabilities                                                          24,883,338              7,416,644              2,323,667
=============================================================         ===============        ===============        ===============
PREFERRED SHARES ($0.00001 PAR VALUE AND $25,000 NET
  ASSET AND LIQUIDATION VALUE PER SHARE APPLICABLE TO
  AN AGGREGATE OF 20,200, 10,400 AND 3,600 SHARES
  ISSUED AND OUTSTANDING, RESPECTIVELY)                                   505,000,000            260,000,000             90,000,000
- -------------------------------------------------------------         ---------------        ---------------        ---------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS                          $   812,670,299        $   407,659,156        $   140,957,633
=============================================================         ===============        ===============        ===============

COMPOSITION OF NET ASSETS APPLICABLE TO
  COMMON SHAREHOLDERS:
Common Stock:
  Par value ($0.00001 per share)                                      $           580        $           301        $           104
- -------------------------------------------------------------         ---------------        ---------------        ---------------
  Paid-in-capital in excess of par                                        824,260,374            428,070,185            147,757,823
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Undistributed net investment income                                         7,765,501              3,271,140                356,073
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Accumulated net realized loss                                             (15,742,017)           (10,574,585)            (3,541,290)
- -------------------------------------------------------------         ---------------        ---------------        ---------------
Net unrealized depreciation of investments, futures
  contracts and options written                                            (3,614,139)           (13,107,885)            (3,615,077)
- -------------------------------------------------------------         ---------------        ---------------        ---------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS                          $   812,670,299        $   407,659,156        $   140,957,633
=============================================================         ===============        ===============        ===============
Common Shares Outstanding                                                  57,992,613             30,132,862             10,409,718
- -------------------------------------------------------------         ---------------        ---------------        ---------------
NET ASSET VALUE PER COMMON SHARE                                      $         14.01        $         13.53        $         13.54
=============================================================         ===============        ===============        ===============
</TABLE>


24 PIMCO Municipal Income Funds II Annual Report | 5.31.04 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II STATEMENTS OF OPERATIONS
For the year ended May 31, 2004
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
                                                                                                  CALIFORNIA           NEW YORK
                                                                             MUNICIPAL II         MUNICIPAL II         MUNICIPAL II
                                                                          ---------------      ---------------      ---------------
<S>                                                                          <C>                  <C>                  <C>
INVESTMENT INCOME:
Interest                                                                     $ 76,529,156         $ 38,413,527         $ 12,783,643
- -------------------------------------------------------------             ---------------      ---------------      ---------------

EXPENSES:
Investment management fees                                                      8,693,428            4,421,478            1,537,186
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Auction agent fees and commissions                                              1,293,163              678,411              236,627
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Custodian and accounting agent fees                                               165,597              133,740               86,315
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Reports to shareholders                                                           121,808               60,522               23,485
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Audit and tax services                                                             73,218               35,265               36,679
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Investor relations                                                                 53,477               27,401               11,728
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Trustees' fees and expenses                                                        52,808               37,612               16,235
- -------------------------------------------------------------             ---------------      ---------------      ---------------
New York Stock Exchange listing fees                                               50,459               32,153               25,864
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Transfer agent fees                                                                38,372               35,546               37,168
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Legal fees                                                                         36,300               18,570                5,821
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Insurance expense                                                                  27,398               15,265                6,635
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Miscellaneous                                                                      14,327               11,467                9,956
- -------------------------------------------------------------             ---------------      ---------------      ---------------
  Total expenses                                                               10,620,355            5,507,430            2,033,699
- -------------------------------------------------------------             ---------------      ---------------      ---------------
  Less: investment management fees waived                                      (2,006,176)          (1,020,341)            (354,735)
- -------------------------------------------------------------             ---------------      ---------------      ---------------
        custody credits earned on cash balances                                   (10,471)             (13,912)              (1,362)
- -------------------------------------------------------------             ---------------      ---------------      ---------------
  Net expenses                                                                  8,603,708            4,473,177            1,677,602
- -------------------------------------------------------------             ---------------      ---------------      ---------------

NET INVESTMENT INCOME                                                        $ 67,925,448         $ 33,940,350         $ 11,106,041
=============================================================             ===============      ===============      ===============

REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments                                                                     2,809,851           (2,181,033)            (142,162)
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Futures contracts                                                              14,107,026            3,729,115              134,738
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Options written                                                                 7,293,851            4,107,736            1,176,416
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Net change in unrealized appreciation/depreciation on:
  Investments                                                                 (93,435,002)         (54,668,595)         (13,736,842)
- -------------------------------------------------------------             ---------------      ---------------      ---------------
  Futures contracts                                                            15,451,270            7,691,912              608,921
- -------------------------------------------------------------             ---------------      ---------------      ---------------
  Options written                                                               9,466,248            3,520,298            1,853,605
- -------------------------------------------------------------             ---------------      ---------------      ---------------
Net realized and unrealized loss on investments,
  futures contracts and options written                                       (44,306,756)         (37,800,567)         (10,105,324)
- -------------------------------------------------------------             ---------------      ---------------      ---------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM
INVESTMENT OPERATIONS                                                          23,618,692           (3,860,217)           1,000,717
=============================================================             ===============      ===============      ===============
DIVIDENDS ON PREFERRED SHARES FROM
  NET INVESTMENT INCOME                                                        (4,680,202)          (2,082,467)            (718,744)
- -------------------------------------------------------------             ---------------      ---------------      ---------------
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO
COMMON SHAREHOLDERS RESULTING FROM INVESTMENT
OPERATIONS                                                                   $ 18,938,490         $ (5,942,684)        $    281,973
=============================================================             ===============      ===============      ===============
</TABLE>

                              SEE  ACCOMPANYING  NOTES TO  FINANCIAL  STATEMENTS
                   | 5.31.04 | PIMCO Municipal  Income Funds II Annual Report 25

<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II STATEMENTS OF CHANGES IN NET ASSETS
                                APPLICABLE TO COMMON SHAREHOLDERS

================================================================================
<TABLE>
<CAPTION>
                                                                                           MUNICIPAL II
                                                                                   ------------------------------
                                                                                                    For the Period
                                                                                    For the Year    June 28, 2002*
                                                                                       ended            through
                                                                                   May 31, 2004      May 31, 2003
                                                                                   ------------      ------------
<S>                                                                                <C>              <C>
INVESTMENT OPERATIONS:
Net investment income                                                              $  67,925,448    $  53,776,637
- --------------------------------------------------------------------------------   -------------    -------------
Net realized gain (loss) on investments, futures contracts and options written        24,210,728      (34,060,562)
- --------------------------------------------------------------------------------   -------------    -------------
Net change in unrealized appreciation/depreciation of investments, futures
  contracts and options written                                                      (68,517,484)      64,903,345
- --------------------------------------------------------------------------------   -------------    -------------
Net increase (decrease) in net assets resulting from investment operations            23,618,692       84,619,420
- --------------------------------------------------------------------------------   -------------    -------------

DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income                                                                 (4,680,202)      (4,384,249)
- --------------------------------------------------------------------------------   -------------    -------------
Net realized gains                                                                            --         (504,626)
- --------------------------------------------------------------------------------   -------------    -------------
Net increase (decrease) in net assets applicable to common shareholders
  resulting from investment operations                                                18,938,490       79,730,545
- --------------------------------------------------------------------------------   -------------    -------------

DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income                                                                (56,205,302)     (48,666,775)
- --------------------------------------------------------------------------------   -------------    -------------
Net realized gains                                                                            --       (5,387,613)
- --------------------------------------------------------------------------------   -------------    -------------
Total dividends and distributions to common shareholders                             (56,205,302)     (54,054,388)
================================================================================   =============    =============

CAPITAL SHARE TRANSACTIONS:
Net proceeds from the sale of common stock                                                    --      823,703,945
- --------------------------------------------------------------------------------   -------------    -------------
Preferred shares underwriting discount charged to paid-in capital
  in excess of par                                                                            --       (5,050,000)
- --------------------------------------------------------------------------------   -------------    -------------
Common stock and preferred shares offering costs charged to paid-in capital
  in excess of par                                                                            --       (1,540,514)
- --------------------------------------------------------------------------------   -------------    -------------
Reinvestment of dividends and distributions                                            3,051,924        3,995,596
- --------------------------------------------------------------------------------   -------------    -------------
Net increase from capital transactions                                                 3,051,924      821,109,027
- --------------------------------------------------------------------------------   -------------    -------------
Total increase (decrease) in net assets applicable to common shareholders            (34,214,888)     846,785,184
================================================================================   =============    =============

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period                                                                  846,885,187          100,003
- --------------------------------------------------------------------------------   -------------    -------------
End of period (including  undistributed  (dividends in excess of) net investment
  income of $7,765,501 and $725,557; $3,271,140 and $(465,795);
  $356,073 and $(322,399); respectively)                                           $ 812,670,299    $ 846,885,187
================================================================================   =============    =============

COMMON SHARES ISSUED AND REINVESTED:
Issued                                                                                        --       57,501,148
- --------------------------------------------------------------------------------   -------------    -------------
Issued in reinvestment of dividends and distributions                                    211,747          272,737
- --------------------------------------------------------------------------------   -------------    -------------
NET INCREASE                                                                             211,747       57,773,885
================================================================================   =============    =============
</TABLE>
* Commencement of operations.





26 PIMCO Municipal Income Funds II Annual Report | 5.31.04 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
<PAGE>

<TABLE>
<CAPTION>
                                                                                   CALIFORNIA MUNICIPAL II
                                                                                  ------------------------------
                                                                                                 For the Period
                                                                                   For the Year   June 28, 2002*
                                                                                      ended          through
                                                                                  May 31, 2004    May 31, 2003
                                                                                  ------------    ------------
<S>                                                                               <C>              <C>
INVESTMENT OPERATIONS:
Net investment income                                                             $  33,940,350    $  26,020,045
- --------------------------------------------------------------------------------  -------------    -------------
Net realized gain (loss) on investments, futures contracts and options written        5,655,818      (16,230,403)
- --------------------------------------------------------------------------------  -------------    -------------
Net change in unrealized appreciation/depreciation of investments, futures
  contracts and options written                                                     (43,456,385)      30,348,500
- --------------------------------------------------------------------------------  -------------    -------------
Net increase (decrease) in net assets resulting from investment operations           (3,860,217)      40,138,142
- --------------------------------------------------------------------------------  -------------    -------------

DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income                                                                (2,082,467)      (2,140,933)
- --------------------------------------------------------------------------------  -------------    -------------
Net realized gains                                                                           --               --
- --------------------------------------------------------------------------------  -------------    -------------
Net increase (decrease) in net assets applicable to common shareholders
  resulting from investment operations                                               (5,942,684)      37,997,209
- --------------------------------------------------------------------------------  -------------    -------------

DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income                                                               (28,120,948)     (24,344,907)
- --------------------------------------------------------------------------------  -------------    -------------
Net realized gains                                                                           --               --
- --------------------------------------------------------------------------------  -------------    -------------
Total dividends and distributions to common shareholders                            (28,120,948)     (24,344,907)
================================================================================  =============    =============

CAPITAL SHARE TRANSACTIONS:
Net proceeds from the sale of common stock                                                   --      428,317,500
- --------------------------------------------------------------------------------  -------------    -------------
Preferred shares underwriting discount charged to paid-in capital
  in excess of par                                                                           --       (2,600,000)
- --------------------------------------------------------------------------------  -------------    -------------
Common stock and preferred shares offering costs charged to paid-in capital
  in excess of par                                                                           --         (951,964)
- --------------------------------------------------------------------------------  -------------    -------------
Reinvestment of dividends and distributions                                           1,752,390        1,452,557
- --------------------------------------------------------------------------------  -------------    -------------
Net increase from capital transactions                                                1,752,390      426,218,093
- --------------------------------------------------------------------------------  -------------    -------------
Total increase (decrease) in net assets applicable to common shareholders           (32,311,242)     439,870,395
================================================================================  =============    =============

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period                                                                 439,970,398          100,003
- --------------------------------------------------------------------------------  -------------    -------------
End of period (including  undistributed  (dividends in excess of) net investment
  income of $7,765,501 and $725,557; $3,271,140 and $(465,795);
  $356,073 and $(322,399); respectively)                                          $ 407,659,156    $ 439,970,398
================================================================================  =============    =============

COMMON SHARES ISSUED AND REINVESTED:
Issued                                                                                       --       29,900,000
- --------------------------------------------------------------------------------  -------------    -------------
Issued in reinvestment of dividends and distributions                                   125,989           99,892
- --------------------------------------------------------------------------------  -------------    -------------
NET INCREASE                                                                            125,989       29,999,892
================================================================================  =============    =============
</TABLE>

<TABLE>
<CAPTION>
                                                                                     NEW YORK MUNICIPAL II
                                                                                  ------------------------------
                                                                                                  For the Period
                                                                                  For the Year    June 28, 2002*
                                                                                     ended            through
                                                                                  May 31, 2004     May 31, 2003
                                                                                  ------------     ------------
<S>                                                                               <C>              <C>
INVESTMENT OPERATIONS:
Net investment income                                                             $  11,106,041    $   8,865,872
- --------------------------------------------------------------------------------  -------------    -------------
Net realized gain (loss) on investments, futures contracts and options written        1,168,992       (4,710,282)
- --------------------------------------------------------------------------------  -------------    -------------
Net change in unrealized appreciation/depreciation of investments, futures
  contracts and options written                                                     (11,274,316)       7,659,239
- --------------------------------------------------------------------------------  -------------    -------------
Net increase (decrease) in net assets resulting from investment operations            1,000,717       11,814,829
- --------------------------------------------------------------------------------  -------------    -------------

DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income                                                                  (718,744)        (794,061)
- --------------------------------------------------------------------------------  -------------    -------------
Net realized gains                                                                           --               --
- --------------------------------------------------------------------------------  -------------    -------------
Net increase (decrease) in net assets applicable to common shareholders
  resulting from investment operations                                                  281,973       11,020,768
- --------------------------------------------------------------------------------  -------------    -------------

DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income                                                                (9,708,825)      (8,394,210)
- --------------------------------------------------------------------------------  -------------    -------------
Net realized gains                                                                           --               --
- --------------------------------------------------------------------------------  -------------    -------------
Total dividends and distributions to common shareholders                             (9,708,825)      (8,394,210)
================================================================================  =============    =============

CAPITAL SHARE TRANSACTIONS:
Net proceeds from the sale of common stock                                                   --      147,473,483
- --------------------------------------------------------------------------------  -------------    -------------
Preferred shares underwriting discount charged to paid-in capital
  in excess of par                                                                           --         (900,000)
- --------------------------------------------------------------------------------  -------------    -------------
Common stock and preferred shares offering costs charged to paid-in capital
  in excess of par                                                                           --         (458,454)
- --------------------------------------------------------------------------------  -------------    -------------
Reinvestment of dividends and distributions                                             778,884          764,011
- --------------------------------------------------------------------------------  -------------    -------------
Net increase from capital transactions                                                  778,884      146,879,040
- --------------------------------------------------------------------------------  -------------    -------------
Total increase (decrease) in net assets applicable to common shareholders            (8,647,968)     149,505,598
================================================================================  =============    =============

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period                                                                 149,605,601          100,003
- --------------------------------------------------------------------------------  -------------    -------------
End of period (including  undistributed  (dividends in excess of) net investment
  income of $7,765,501 and $725,557; $3,271,140 and $(465,795);
  $356,073 and $(322,399); respectively)                                          $ 140,957,633    $ 149,605,601
================================================================================  =============    =============

COMMON SHARES ISSUED AND REINVESTED:
Issued                                                                                       --       10,294,833
- --------------------------------------------------------------------------------  -------------    -------------
Issued in reinvestment of dividends and distributions                                    55,136           52,768
- --------------------------------------------------------------------------------  -------------    -------------
NET INCREASE                                                                             55,136       10,347,601
================================================================================  =============    =============
</TABLE>






                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 27
<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2004
================================================================================

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

PIMCO Municipal  Income Fund II ("Municipal  II"),  PIMCO  California  Municipal
Income Fund II ("California  Municipal II") and PIMCO New York Municipal  Income
Fund II ("New York  Municipal  II")  collectively  referred to as the "Funds" or
"PIMCO  Municipal  Income Funds II", were  organized as  Massachusetts  business
trusts on March 29, 2002.  Prior to commencing  operations on June 28, 2002, the
Funds had no operations  other than matters  relating to their  organization and
registration as closed-end  management investment companies registered under the
Investment  Company  Act of 1940 and the rules and  regulations  thereunder,  as
amended.  PA Fund Management  LLC, (the  "Investment  Manager"),  formerly PIMCO
Advisors Fund Management LLC, serves as the Funds' Investment  Manager and is an
indirect,  wholly-owned  subsidiary  of Allianz  Dresdner  Asset  Management  of
America L.P. ("ADAM"). ADAM is an indirect, majority-owned subsidiary of Allianz
AG.  The Funds have an  unlimited  amount of  $0.00001  par value  common  stock
authorized.

Municipal II invests substantially all of its assets in a portfolio of municipal
bonds,  the interest from which is exempt from federal income taxes.  California
Municipal II invests  substantially  all of its assets in municipal  bonds which
pay interest that is exempt from federal and California  state income taxes. New
York  Municipal II invests  substantially  all of its assets in municipal  bonds
which pay interest that is exempt from federal, New York State and New York City
income  taxes.  The Funds will seek to avoid bonds  generating  interest  income
which could  potentially  subject  individuals to  alternative  minimum tax. The
issuers'  abilities  to meet their  obligations  may be affected by economic and
political developments in a specific state or region.

Municipal  II,  California  Municipal  II  and  New  York  Municipal  II  issued
50,500,000,  26,000,000 and 9,000,000 shares of common stock,  respectively,  in
their initial public offerings. An additional 7,001,148, 3,900,000 and 1,294,833
shares of  Municipal  II,  California  Municipal II and New York  Municipal  II,
respectively,  were issued in connection with the exercises of the underwriters'
over-allotment option on July 15, 2002 and August 6, 2002. These shares were all
issued at $15.00 per share before an underwriting  discount of $0.675 per share.
The Investment  Manager agreed to reimburse the amount by which the aggregate of
each Fund's  organizational  and common  offering  costs (other than sales load)
exceeded $0.03 per common share.  Common offering costs of $1,174,197,  $682,616
and  $308,845  (representing  $0.02  per  common  share  for  Municipal  II  and
California  Municipal II and $0.03 per common share for New York  Municipal II),
were offset  against the proceeds of the  offerings  and were charged to paid-in
capital in excess of par.

In addition,  the  underwriters  discount and offering costs associated with the
Funds'  issuance of Preferred  Shares in the amounts of $5,050,000 and $366,317,
$2,600,000 and $269,348 and $900,000 and $149,609,  for Municipal II, California
Municipal II and New York  Municipal II,  respectively,  were charged to paid-in
capital in excess of par.

The  preparation  of the  financial  statements in  accordance  with  accounting
principles   generally  accepted  in  the  United  States  of  America  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.

In the normal course of business the Funds enter into  contracts  that contain a
variety of representations  which provide general  indemnifications.  The Funds'
maximum  exposure  under  these  arrangements  is unknown as this would  involve
future claims that may be made against the Funds based upon events that have not
yet been asserted. However, the Funds expect the risk of any loss to be remote.

The  following  is a summary of  significant  accounting  policies  consistently
followed by the Funds:

(A) VALUATION OF INVESTMENTS

Portfolio securities and other financial instruments for which market quotations
are readily  available are stated at market value.  The Fund's  investments  are
valued  daily  by an  independent  pricing  service  approved  by the  Board  of
Trustees.  Prices  obtained from an independent  pricing service use information
provided by market makers or estimates of market values obtained from yield data
relating to investments or securities with similar  characteristics.  Short-term
investments  maturing  in sixty days or less are valued at  amortized  cost,  if
their original  maturity was 60 days or less or by amortizing their value on the
61st day prior to maturity,  if the original term to maturity  exceeded 60 days.
Securities  for  which  market  quotations  are not  readily  available  or if a
development/event occurs that may significantly impact the value of the security
may be fair valued, pursuant to guidelines established by the Board of Trustees.
The prices used by the Funds to value  securities may differ from the value that
would be  realized  if the  securities  were sold.  The Funds net asset value is
determined  daily at the close of regular  trading  (normally 4:00 p.m.  Eastern
time) on the New York Stock Exchange.





29 PIMCO Municipal Income Funds II Annual Report | 5.31.04
<PAGE>


PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2004
================================================================================


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(B) INVESTMENT TRANSACTIONS AND INVESTMENT INCOME

Investment  transactions are accounted for on the trade date. Realized gains and
losses on  investments  are determined on the  identified  cost basis.  Interest
income is recorded on an accrual basis.  Original issue discounts or premiums on
debt  securities  purchased  are  accreted  or  amortized  daily to  non-taxable
interest income. Market discount, if any, is accreted daily to taxable income.

(C) FEDERAL INCOME TAXES

The Funds intend to distribute  all of their  taxable  income and to comply with
the other  requirements of the U.S.  Internal  Revenue Code of 1986, as amended,
applicable to regulated investment companies. Accordingly, no provision for U.S.
federal income taxes is required. In addition, by distributing substantially all
of their taxable  ordinary  income and long-term  capital gains,  if any, during
each calendar  year,  the Funds intend not to be subject to U.S.  federal excise
tax.

(D) FUTURES CONTRACTS

A  futures  contract  is an  agreement  between  two  parties  to buy and sell a
financial  instrument at a set price on a future date. Upon entering into such a
contract,  the Funds are  required  to pledge to the broker an amount of cash or
securities,  held in a segregated  account in the name of the futures  broker at
the Fund's custodian bank, equal to the minimum "initial margin" requirements of
the exchange.  Pursuant to the contracts, the Funds agree to receive from or pay
to the broker an amount of cash equal to the daily  fluctuation  in the value of
the contracts. Such receipts or payments are known as "variation margin" and are
recorded  by the Funds as  unrealized  appreciation  or  depreciation.  When the
contracts  are  closed,  the Funds  record a realized  gain or loss equal to the
difference  between the value of the  contracts at the time they were opened and
the  value  at the  time  they  were  closed.  Any  unrealized  appreciation  or
depreciation   recorded  is   simultaneously   reversed.   The  use  of  futures
transactions  involves the risk of an imperfect  correlation in the movements in
the price of futures contracts, interest rates and the underlying hedged assets,
and the  possible  inability  of  counterparties  to meet  the  terms  of  their
contracts.

(E) OPTION TRANSACTIONS

For  hedging  purposes,  the Funds may  purchase  and write  (sell) put and call
options on municipal bonds, U.S. government securities, swap agreements, indexes
or  futures  contracts  which are  standardized  and  traded on a U.S.  or other
exchange,  boards of  trade,  or  similar  entity,  or  quoted  on an  automated
quotation  system.  The risk  associated  with  purchasing an option is that the
Funds pay a premium  whether or not the option is exercised.  Additionally,  the
Funds bear the risk of loss of premium  and  change in market  value  should the
counterparty not perform under the contract.  Put and call options purchased are
accounted for in the same manner as portfolio securities. The cost of securities
acquired through the exercise of call options is increased by the premiums paid.
The  proceeds  from the  securities  sold through the exercise of put options is
decreased by the premiums paid.

When an option is written,  the premium received is recorded as an asset with an
equal liability  which is  subsequently  adjusted to the current market value of
the  option  written.  Premiums  received  from  writing  options  which  expire
unexercised  are  recorded  on the  expiration  date  as a  realized  gain.  The
difference  between the  premium  received  and the amount  paid on  effecting a
closing purchase transaction,  including brokerage commissions,  is also treated
as a realized  gain,  or if the  premium  is less than the  amount  paid for the
closing  purchase  transactions,  as a  realized  loss.  If  a  call  option  is
exercised,  the premium is added to the proceeds from the sale of the underlying
security in determining whether there has been a realized gain or loss. If a put
option is  exercised,  the premium  reduces the cost basis of the  security.  In
writing an option,  the Funds bear the market risk of an  unfavorable  change in
the price of the security  underlying the written option.  Exercise of an option
written  could result in the Funds  purchasing  a security at a price  different
from the current market price.

(F) RESIDUAL INTEREST MUNICIPAL BONDS

The Funds invest in Residual  Interest Tax Exempt Bonds ("RITES") whose interest
rates bear an inverse  relationship to the interest rate on another  security or
the value of an index,  RITES are created by dividing the income stream provided
by the  underlying  bonds to  create  two  securities,  one  short-term  and one
long-term. The interest rate on the short-term component is reset by an index or
auction  process  normally  every seven to 35 days.  After income is paid on the
short-term  securities at current rates, the residual income from the underlying
bond(s) goes to the long-term securities.  Therefore, rising short-term interest
rates result in lower income for the longer-term  portion,  and vice versa.  The
longer-term  bonds may be more  volatile  and less liquid  than other  Municipal
Bonds of comparable  maturity.  An investment  in RITES  typically  will involve
greater risk than an investment in a fixed rate bond.



                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 29
<PAGE>


PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2004
================================================================================


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)

(G) DIVIDENDS AND DISTRIBUTIONS--COMMON STOCK

The  Funds  declare  dividends  from net  investment  income  monthly  to common
shareholders.  Distributions  of net realized capital gains, if any, are paid at
least  annually.   Each  Fund  records   dividends  and   distributions  to  its
shareholders on the ex-dividend  date. The amount of dividends and distributions
from net  investment  income and net realized  capital  gains are  determined in
accordance with federal income tax regulations,  which may differ from generally
accepted  accounting   principles.   These  "book-tax"  differences  are  either
considered  either  temporary  or  permanent  in  nature.  To the  extent  these
differences are permanent in nature,  such amounts are  reclassified  within the
capital  accounts  based  on  their  federal  income  tax  treatment;  temporary
differences  do not require  reclassification.  To the extent  dividends  and/or
distributions  exceed current and  accumulated  earnings and profits for federal
income tax  purposes  they are  reported as dividends  and/or  distributions  of
paid-in capital in excess of par.

(H) CUSTODY CREDITS EARNED ON CASH BALANCES

The Funds benefit from an expense offset  arrangement  with their custodian bank
whereby uninvested cash balances earn credits which reduce monthly custodian and
accounting  agent  expenses.  Had these cash  balances  been  invested in income
producing securities, they would have generated income for the Funds.

2. INVESTMENT MANAGER AND SUB-ADVISER

Each Fund has entered into an Investment Management Agreement (the "Agreements")
with the Investment Manager to serve as Investment Manager to each Fund. Subject
to the supervision by each Fund's Board of Trustees,  the Investment  Manager is
responsible for managing,  either directly or through others selected by it, the
investment  activities  of the Fund and the Fund's  business  affairs  and other
administrative matters. Pursuant to the Agreements,  the Investment Manager will
receive an annual  fee,  payable  monthly,  at the annual  rate of 0.65% of each
Fund's  average  daily net  assets  (including  net assets  attributable  to any
preferred shares that may be outstanding). In order to reduce Fund expenses, the
Investment Manager has contractually  agreed to reimburse each Fund for fees and
expenses  at the annual rate of 0.15% of each  Fund's  average  daily net assets
(including  net  assets  attributable  to  any  preferred  shares  that  may  be
outstanding) from the commencement of operations  through June 30, 2007, and for
a declining amount thereafter through June 30, 2009.

The Investment Manager has retained its affiliate, Pacific Investment Management
Company LLC (the  "Sub-Adviser") to manage each Fund's  investments.  Subject to
the supervision of the Investment Manager,  the Sub-Adviser makes all investment
decisions  with respect to each Fund's assets.  The Investment  Manager (not the
Funds) pays a portion of the fees it receives to the  Sub-Adviser  in return for
its services,  at the maximum  annual rate of 0.50% of each Fund's average daily
net assets  (including net assets  attributable to any preferred shares that may
be outstanding).  The Sub-Adviser has contractually agreed to waive a portion of
the fees it is entitled to receive from the  Investment  Manager,  such that the
Sub-Adviser  will  receive  0.26%  of  each  Fund's  average  daily  net  assets
(including  net  assets  attributable  to  any  preferred  shares  that  may  be
outstanding)  from the  commencement of the Funds'  operations  through June 30,
2007, and will receive an increasing  amount (not to exceed 0.50% of each Fund's
average  daily net assets,  including net assets  attributable  to any preferred
shares that may be outstanding) thereafter through June 30, 2009. The Investment
Manager informed the Funds that it paid the Sub-Adviser  $3,477,371,  $1,768,591
and  $614,874  in  connection  with  sub-advisory  services  for  Municipal  II,
California  Municipal II and New York Municipal II,  respectively,  for the year
ended May 31, 2004.














30 PIMCO Municipal Income Funds II Annual Report | 5.31.04
<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2004
================================================================================



3. INVESTMENTS IN SECURITIES

(a) For the year ended May 31, 2004,  purchases and sales of investments,  other
than short-term securities, were:

                                             California              New York
                      Municipal II          Municipal II           Municipal II
- --------------------------------------------------------------------------------
Purchases            $334,230,372           $259,463,274           $43,529,999
Sales                 324,063,491            263,853,104            42,062,310


(b) Futures contracts outstanding at May 31, 2004:
<TABLE>
<CAPTION>
                                                                           Unrealized
                                                                 # of      Expiration     Appreciation
Fund                                   Type                    Contracts       Date      (Depreciation)
- -------------------------------------------------------------------------------------------------------
<S>                        <C>                                   <C>          <C>          <C>
Municipal II               Short: U.S. Treasury 30 Year Bond     1,889        6/21/04      $6,094,289
                           Short:U.S. Treasury 30 Year Bond      3,463        9/21/04      (1,021,016)
                                                                                           ----------
                                                                                           $5,073,273
                                                                                           ==========
California Municipal II    Short: U.S. Treasury 30 Year Bond       804        6/21/04      $3,039,719
                           Short: U.S. Treasury 30 Year Bond       634        9/21/04             625
                                                                                           ----------
                                                                                           $3,040,344
                                                                                           ==========
New York Municipal II      Short: U.S. Treasury 30 Year Bond       245        6/21/04        $547,219
                           Short: U.S. Treasury 30 Year Bond       247        9/21/04         (71,844)
                                                                                           ----------
                                                                                             $475,375
                                                                                           ==========
</TABLE>
(c) Transactions in options written for the year ended May 31, 2004:
<TABLE>
<CAPTION>
                                                         Contracts        Premiums
- ------------------------------------------------------------------------------------
<S>                                                   <C>              <C>
Municipal II:
- -------------
Options outstanding, May 31, 2003                            2,587       $2,227,143
Options written                                             20,854       18,212,424
Options expired                                             (5,310)      (3,711,673)
Options terminated in closing purchase transactions         (8,872)      (8,358,370)
Options exercised                                           (8,109)      (7,610,165)
                                                       -----------      -----------
Options outstanding, May 31, 2004                            1,150         $759,359
                                                       ===========      ===========

California Municipal II:
- ------------------------
Options outstanding, May 31, 2003                              947       $  743,511
Options written                                             10,204        8,444,538
Options expired                                             (2,198)      (1,560,661)
Options terminated in closing purchase transactions         (4,602)      (4,388,747)
Options exercised                                           (3,771)      (2,855,660)
                                                       -----------      -----------
Options outstanding, May 31, 2004                              580         $382,981
                                                       ===========      ===========

New York Municipal II:
- ----------------------
Options outstanding, May 31, 2003                              507       $  453,255
Options written                                              2,650        2,383,558
Options expired                                               (603)        (535,741)
Options terminated in closing purchase transactions         (1,296)      (1,137,033)
Options exercised                                           (1,058)      (1,031,976)
                                                       -----------      -----------
Options outstanding, May 31, 2004                              200         $132,063
                                                       ===========      ===========
</TABLE>



                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 31
<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2004

4. INCOME TAX INFORMATION

MUNICIPAL II:

The tax character of dividends and distributions paid were:

                                                     June 28, 2002
                                             (commencement of operations)
                              Year Ended                through
                             May 31, 2004            May 31, 2003
- --------------------------------------------------------------------------------

Ordinary Income              $ 2,962,868             $ 4,567,905
Tax Exempt Income             57,922,636              51,126,211
Long-Term Capital Gain                --               3,249,147

At May 31, 2004, the tax character of  distributable  earnings of $7,765,501 was
composed entirely of tax exempt income.

At May 31, 2004,  Municipal II had a capital loss  carryforward  of $10,260,913,
all of which  will  expire in 2012,  available  as a  reduction,  to the  extent
provided in the  regulations,  of any future net realized  capital gains. To the
extent that these losses are used to offset future realized capital gains,  such
gains will not be distributed.

CALIFORNIA MUNICIPAL II:

The tax character of dividends paid were:
                                                     June 28, 2002
                                              (commencement of operations)
                              Year Ended                through
                             May 31, 2004            May 31, 2003
- --------------------------------------------------------------------------------

Ordinary Income                $ 649,740              $  406,539
Tax Exempt Income             29,553,675              26,079,301

At May 31, 2004, the tax character of  distributable  earnings of $3,271,140 was
composed entirely of tax exempt income.

At May 31, 2004,  California  Municipal II had a capital  loss  carryforward  of
$7,337,041 ($1,122,615 of which will expire in 2011 and $6,214,426 of which will
expire in  2012),  available  as a  reduction,  to the  extent  provided  in the
regulations,  of any future net realized capital gains. To the extent that these
losses are used to offset future realized capital gains,  such gains will not be
distributed.

NEW YORK MUNICIPAL II:

The tax character of dividends paid were:
                                                     June 28, 2002
                                             (commencement of operations)
                              Year Ended                through
                             May 31, 2004            May 31, 2003
- --------------------------------------------------------------------------------

Ordinary Income                 $ 66,166               $  35,774
Tax Exempt Income             10,361,403               9,152,497

At May 31, 2004,  the tax  character of  distributable  earnings of $356,073 was
composed entirely of tax exempt income.

At May 31,  2004,  New York  Municipal  II had a capital  loss  carryforward  of
$2,997,915  ($214,685  of which  expires  in 2011 and  $2,783,230  of which will
expire in  2012),  available  as a  reduction,  to the  extent  provided  in the
regulations,  of any future net realized capital gains. To the extent that these
losses are used to offset future realized capital gains,  such gains will not be
distributed.

5. AUCTION PREFERRED SHARES

Municipal II has issued 4,040 shares of Preferred  Shares Series A, 4,040 shares
of Preferred  Shares Series B, 4,040 shares of Preferred  Shares Series C, 4,040
shares of Preferred  Shares Series D and 4,040 shares of Preferred Shares Series
E, each with a net asset and liquidation value of $25,000 per share plus accrued
dividends.



32 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>


PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2004

5. AUCTION PREFERRED SHARES (CONCLUDED)

California  Municipal II has issued 2,080 shares of Preferred  Shares  Series A,
2,080 shares of  Preferred  Shares  Series B, 2,080  shares of Preferred  Shares
Series  C,  2,080  shares  of  Preferred  Shares  Series D and  2,080  shares of
Preferred  Shares  Series E, each  with a net  asset  and  liquidation  value of
$25,000 per share plus accrued dividends.

New York  Municipal II has issued 1,800 shares of Preferred  Shares Series A and
1,800 shares of Preferred Shares Series B, each with a net asset and liquidation
value of $25,000 per share, plus accrued dividends.

Dividends  are  accumulated   daily  at  an  annual  rate  set  through  auction
procedures.  Distributions  of net  realized  capital  gains,  if any,  are paid
annually.

For the year ended May 31, 2004, the annualized dividend rates ranged from:


                                           High           Low       At 5/31/04
- --------------------------------------------------------------------------------
MUNICIPAL II:
Series A                                   2.00%         0.70%         1.05%
Series B                                   1.75%         0.70%         1.10%
Series C                                   2.00%         0.65%         1.07%
Series D                                   1.75%         0.45%         1.15%
Series E                                   1.75%         0.64%         1.05%

CALIFORNIA MUNICIPAL II:
- ------------------------
Series A                                   1.75%         0.39%         1.04%
Series B                                   1.75%         0.40%         1.05%
Series C                                   1.30%         0.40%         1.07%
Series D                                   1.75%         0.40%         1.07%
Series E                                   1.75%         0.40%         1.05%

NEW YORK MUNICIPAL II:
- ----------------------
Series A                                   1.15%         0.40%         0.95%
Series B                                   1.75%         0.45%         1.05%

The Funds are subject to certain  limitations and  restrictions  while Preferred
Shares  are   outstanding.   Failure  to  comply  with  these   limitations  and
restrictions   could   preclude  the  Funds  from  declaring  any  dividends  or
distributions to common  shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of Preferred Shares at their liquidation value.

Preferred Shares, which are entitled to one vote per share,  generally vote with
the common stock but vote separately as a class to elect two Trustees and on any
matters affecting the rights of the Preferred Shares.

6. SUBSEQUENT COMMON DIVIDEND DECLARATIONS

On June 1, 2004, the following  dividends  were declared to common  shareholders
payable July 1, 2004 to shareholders of record on June 11, 2004:

              Municipal II                         $0.084375 per common share
              California Municipal II              $0.08125 per common share
              New York Municipal II                $0.08125 per common share

On July 1, 2004, the following  dividends  were declared to common  shareholders
payable August 2, 2004 to shareholders of record on July 16, 2004:

              Municipal II                         $0.084375 per common share
              California Municipal II              $0.08125 per common share
              New York Municipal II                $0.08125 per common share

                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 23
<PAGE>


PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2004
================================================================================

7. LEGAL PROCEEDINGS

On May 6, 2004, the Securities and Exchange  Commission (the "Commission") filed
a complaint  in the U.S.  District  Court in the  Southern  District of New York
alleging that the  Investment  Manager,  certain  affiliates  of the  Investment
Manager and Stephen J. Treadway (the chief  executive  officer of the Investment
Manager as well as the  Chairman  and a trustee of the Funds)  had,  among other
things,  violated  and/or aided and abetted  violations  of,  various  antifraud
provisions of the federal  securities  laws in connection  with alleged  "market
timing"  arrangements in certain open-end  investment  companies  advised by the
Investment  Manager.  The complaint seeks injunctive  relief,  disgorgement plus
pre-judgment  interest,  monetary penalties,  and an order permanently enjoining
the  defendants  from serving as investment  advisers,  principal  underwriters,
officers,  directors,  or  members  of any  advisory  boards  to any  registered
investment companies.

The above complaint does not allege that any  inappropriate  activity took place
in the Funds and the Funds are not named in the complaint.

In  addition,  on June  1,  2004,  ADAM  and  certain  other  affiliates  of the
Investment  Manager  entered into a consent  order and final  judgment  with the
Attorney  General of the State of New Jersey  (the  "NJAG") in  settlement  of a
lawsuit  filed by the NJAG on  February  17,  2004 in  connection  with  alleged
"market  timing"  arrangements.  Under  the  terms of the  settlement,  ADAM and
certain of its affiliates agreed to pay the State of New Jersey a civil monetary
penalty of $15 million and $3 million for investigative costs. In addition, ADAM
and  certain  of its  affiliates  agreed to make  several  corporate  governance
changes.  Also on June 1,  2004,  the NJAG  dismissed  its  claims  against  the
Sub-Adviser, which had been filed as part of the same lawsuit.

If the Commission (or other regulator) were to obtain a court injunction against
the Investment  Manager,  its affiliates or Mr.  Treadway,  they  (including the
Sub-Adviser)   would,  in  the  absence  of  exemptive  relief  granted  by  the
Commission,  be barred  from  serving as an  investment  adviser/sub-adviser  or
principal underwriter to any registered investment company, including the Funds.
In such a case, the Investment  Manager and the  Sub-Adviser  would in turn seek
exemptive relief from the Commission,  as contemplated by the Investment Company
Act, although there is no assurance that such exemptive relief would be granted.
The Commission  also has the power by order to prohibit the Investment  Manager,
the  Sub-Adviser and their  affiliates  from serving as investment  advisers and
underwriters,  although to date it has not exercised such powers with respect to
market timing arrangements involving other mutual fund complexes.

Since  February,  2004, the Investment  Manager,  the Sub-Adviser and certain of
their affiliates, various investment companies advised by the Investment Manager
or the Sub-Adviser and their trustees  (including Mr.  Treadway) have been named
as defendants in multiple  lawsuits filed in U.S. District Court in the Southern
District of New York,  the Central  District of California  and the Districts of
New Jersey and  Connecticut.  The lawsuits have been commenced as putative class
actions on behalf of investors  who  purchased,  held or redeemed  shares of the
specified  funds during specific  periods or as derivative  actions on behalf of
the specified  funds.  The lawsuits  generally relate to the same facts that are
the subject of the regulatory  proceedings  discussed  above. The lawsuits seek,
among other things,  unspecified compensatory damages plus interest and, in some
cases, punitive damages, the rescission of investment advisory contracts, and/or
the return of fees paid under those  contracts and  restitution.  The Funds have
been named in several  class action  lawsuits.  The  Investment  Manager and the
Sub-Adviser  believe that other similar lawsuits may be filed in U.S. federal or
state courts naming ADAM,  the  Investment  Manager,  the  Sub-Adviser,  various
investment  companies they advise (which may include the Funds), their boards of
trustees and/or their affiliates.

In November  2003,  the  Commission  settled an  enforcement  action  against an
unaffiliated  broker-dealer  relating  to the  undisclosed  receipt of fees from
certain mutual fund  companies in return for preferred  marketing of their funds
and announced that it would be investigating mutual funds and their distributors
generally  with  respect to  compensation  arrangements  relating to the sale of
mutual fund shares. In that connection,  the Investment Manager, the Sub-Adviser
and  certain  of their  affiliates  are under  investigation  by the  Commission
relating to revenue-sharing arrangements and the use of brokerage commissions to
recognize  brokers effecting sales of open-end  investment  companies advised by
the Investment Manager, the Sub-Adviser and their affiliates.  In addition,  the
Attorney  General  of  the  State  of  California  has  publicly   announced  an
investigation into the brokerage recognition and revenue-sharing  arrangement of
these open-end investment companies.

It is possible that these matters and/or other developments resulting from these
matters  could lead to a decrease  in the market  price of the Funds'  shares or
other  adverse  consequences  to the Funds and its  shareholders.  However,  the
Investment Manager and the Sub-Adviser believe that these matters are not likely
to have a material adverse effect on the Funds or on the Investment Manager's or
the Sub-Adviser's ability to perform its respective investment advisory services
related to the Funds.



34 PIMCO Municipal Income Funds II Annual Report | 5.31.04


<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II FINANCIAL HIGHLIGHTS
For a share of common stock outstanding throughout each period


================================================================================
<TABLE>
<CAPTION>
                                                                      MUNICIPAL II
                                                              ---------------------------------
                                                                                For the Period
                                                               For the Year     June 28, 2002*
                                                                   ended            through
                                                               May 31, 2004      May 31, 2003
                                                               ------------      ------------

<S>                                                               <C>              <C>
Net asset value, beginning of period                              $14.66           $14.33**
- -----------------------------------------------------------    ------------      ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income                                               1.17             0.93
- -----------------------------------------------------------    ------------      ------------
Net realized and unrealized gain (loss) on investments,
  futures contracts and options written                            (0.77)            0.53
- -----------------------------------------------------------    ------------      ------------
Total from investment operations                                    0.40             1.46
- -----------------------------------------------------------    ------------      ------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income                                              (0.08)           (0.08)
- -----------------------------------------------------------    ------------      ------------
Net realized gains                                                    --            (0.01)
- -----------------------------------------------------------    ------------      ------------
Total dividends and distributions on preferred shares              (0.08)           (0.09)
- -----------------------------------------------------------    ------------      ------------
Net increase in net assets applicable to common
shareholders resulting from investment operations                   0.32             1.37
- -----------------------------------------------------------    ------------      ------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income                                              (0.97)           (0.84)
- -----------------------------------------------------------    ------------      ------------
Net realized gains                                                    --            (0.09)
- -----------------------------------------------------------    ------------      ------------
Total dividends and distributions to common shareholders           (0.97)           (0.93)
- -----------------------------------------------------------    ------------      ------------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in capital
  in excess of par                                                    --            (0.02)
- -----------------------------------------------------------    ------------      ------------
Preferred shares offering costs/underwriting discounts
charged to paid-in capital in excess of par                           --            (0.09)
- -----------------------------------------------------------    ------------      ------------
Total capital share transactions                                      --            (0.11)
- -----------------------------------------------------------    ------------      ------------
Net asset value, end of period                                    $14.01           $14.66
- -----------------------------------------------------------    ------------      ------------
Market price, end of period                                       $13.31           $14.80
- -----------------------------------------------------------    ------------      ------------
TOTAL INVESTMENT RETURN (1)                                       (3.69)%           5.19%
- -----------------------------------------------------------    ------------      ------------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders,
  end of period (000)                                           $812,670         $846,885
- -----------------------------------------------------------    ------------      ------------
Ratio of expenses to average net assets (2)(3)(5)                   1.03%            0.95%(4)
- -----------------------------------------------------------    ------------      ------------
Ratio of net investment income to average net assets (2)(5)         8.16%            6.99%(4)
- -----------------------------------------------------------    ------------      ------------
Preferred shares asset coverage per share                        $65,224          $66,920
- -----------------------------------------------------------    ------------      ------------
Portfolio turnover                                                    26%             27%
- -----------------------------------------------------------    ------------      ------------
</TABLE>
*   Commencement of operations

**  Initial public offering price of $15.00 per share less underwriting discount
    of $0.675 per share.

(1) Total investment return is calculated assuming a purchase of common stock at
    the current  market  price on the first day of each period and a sale at the
    current market price on the last day for each period reported. Dividends and
    distributions  are  assumed,  for  purposes  of  this  calculation,   to  be
    reinvested at prices obtained under the Fund's dividend  reinvestment  plan.
    Total  investment  return does not reflect  brokerage  commissions  or sales
    charges.  Total investment  return for a period of less than one year is not
    annualized.

(2) Calculated on the basis of income and expenses applicable to both common and
    preferred shares relative to the average net assets of common shareholders.

(3) Inclusive of expenses  offset by custody  credits earned on cash balances at
    the custodian bank. (See note 1(h) in Notes to Financial Statements).

(4) Annualized.

(5) During the periods indicated above, the Investment  Manager waived a portion
    of its investment management fee. If such waiver had not been in effect, the
    ratio of  expenses  to average  net  assets and the ratio of net  investment
    income to average net assets  would have been 1.28% and 7.92%,  respectively
    for  the  year  ended  May  31,  2004  and  1.18%   (annualized)  and  6.76%
    (annualized),  respectively  for the period June 28, 2002  (commencement  of
    operations) through May 31, 2003.

                      SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS | 5.31.04 |
                            PIMCO Municipal  Income  Funds II  Annual  Report 35
<PAGE>


PIMCO MUNICIPAL INCOME FUNDS II FINANCIAL HIGHLIGHTS
For a share of common stock outstanding throughout each period

================================================================================
<TABLE>
<CAPTION>
                                                                  CALIFORNIA MUNICIPAL II
                                                               ------------------------------
                                                                               For the Period
                                                               For the Year    June 28, 2002*
                                                                   ended           through
                                                               May 31, 2004     May 31, 2003
                                                               ------------     ------------

<S>                                                               <C>              <C>
Net asset value, beginning of period                              $14.66           $14.33**
- -----------------------------------------------------------    ------------     ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income                                               1.13             0.87
- -----------------------------------------------------------    ------------     ------------
Net realized and unrealized gain (loss) on investments,
  futures contracts and options written                            (1.26)            0.46
- -----------------------------------------------------------    ------------     ------------
Total from investment operations                                   (0.13)            1.33
- -----------------------------------------------------------    ------------     ------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income                                              (0.07)           (0.07)
- -----------------------------------------------------------    ------------     ------------
Net realized gains                                                    --               --
- -----------------------------------------------------------    ------------     ------------
Total dividends and distributions on preferred shares              (0.07)           (0.07)
- -----------------------------------------------------------    ------------     ------------
Net increase (decrease) in net assets applicable to common
  shareholders resulting from investment operations                (0.20)            1.26
- -----------------------------------------------------------    ------------     ------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income                                              (0.93)           (0.81)
- -----------------------------------------------------------    ------------     ------------
Net realized gains                                                    --               --
- -----------------------------------------------------------    ------------     ------------
Total dividends and distributions to common shareholders           (0.93)           (0.81)
- -----------------------------------------------------------    ------------     ------------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in capital
  in excess of par                                                    --            (0.02)
- -----------------------------------------------------------    ------------     ------------
Preferred shares offering costs/underwriting discounts
  charged to paid-in capital in excess of par                         --            (0.10)
- -----------------------------------------------------------    ------------     ------------
Total capital share transactions                                      --            (0.12)
- -----------------------------------------------------------    ------------     ------------
Net asset value, end of period                                    $13.53           $14.66
- -----------------------------------------------------------    ------------     ------------
Market price, end of period                                       $13.27           $14.78
- -----------------------------------------------------------    ------------     ------------
TOTAL INVESTMENT RETURN (1)                                        (3.92)%           4.23%
- -----------------------------------------------------------    ------------     ------------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders,
  end of period (000)                                           $407,659         $439,970
- -----------------------------------------------------------    ------------     ------------
Ratio of expenses to average net assets (2)(3)(5)                   1.07%            0.97%(4)
- -----------------------------------------------------------    ------------     ------------
Ratio of net investment income to average net assets (2)(5)         8.08%            6.56%(4)
- -----------------------------------------------------------    ------------     ------------
Preferred shares asset coverage per share                        $64,191          $67,301
- -----------------------------------------------------------    ------------     ------------
Portfolio turnover                                                    43%              84%
- -----------------------------------------------------------    ------------     ------------
</TABLE>
*   Commencement of operations

**  Initial public offering price of $15.00 per share less underwriting discount
    of $0.675 per share.

(1) Total investment return is calculated assuming a purchase of common stock at
    the current  market  price on the first day of each period and a sale at the
    current market price on the last day for each period reported. Dividends and
    distributions  are  assumed,  for  purposes  of  this  calculation,   to  be
    reinvested at prices obtained under the Fund's dividend  reinvestment  plan.
    Total  investment  return does not reflect  brokerage  commissions  or sales
    charges.  Total investment  return for a period of less than one year is not
    annualized.

(2) Calculated on the basis of income and expenses applicable to both common and
    preferred shares relative to the average net assets of common shareholders.

(3) Inclusive of expenses  offset by custody  credits earned on cash balances at
    the custodian bank. (See note 1(h) in Notes to Financial Statements).

(4) Annualized.

(5) During the periods indicated above, the Investment  Manager waived a portion
    of its investment management fee. If such waiver had not been in effect, the
    ratio of  expenses  to average  net  assets and the ratio of net  investment
    income to average net assets  would have been 1.31% and 7.83%,  respectively
    for  the  year  ended  May  31,  2004  and  1.20%   (annualized)  and  6.34%
    (annualized),  respectively  for the period June 28, 2002  (commencement  of
    operations) through May 31, 2003.

36  PIMCO Municipal  Income Funds II Annual Report | 5.31.04 |
SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS



<PAGE>

PIMCO  MUNICIPAL  INCOME  FUNDS  II  FINANCIAL
HIGHLIGHTS For a share of common stock outstanding throughout each period

================================================================================
<TABLE>
<CAPTION>
                                                                  NEW YORK MUNICIPAL II
                                                               ----------------------------
                                                                             For the Period
                                                               For the Year  June 28, 2002*
                                                                   ended         through
                                                               May 31, 2004   May 31, 2003
                                                               ------------   ------------
<S>                                                               <C>            <C>
Net asset value, beginning of period                              $14.45         $14.33**
- -----------------------------------------------------------    ------------   ------------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income                                               1.06           0.86
- -----------------------------------------------------------    ------------   ------------
Net realized and unrealized gain (loss) on investments,
  futures contracts and options written                            (0.97)          0.28
- -----------------------------------------------------------    ------------   ------------
Total from investment operations                                    0.09           1.14
- -----------------------------------------------------------    ------------   ------------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income                                              (0.07)         (0.08)
- -----------------------------------------------------------    ------------   ------------
Net realized gains                                                    --             --
- -----------------------------------------------------------    ------------   ------------
Total dividends and distributions on preferred shares              (0.07)         (0.08)
- -----------------------------------------------------------    ------------   ------------
Net increase in net assets applicable to common
  shareholders resulting from investment operations                 0.02           1.06
- -----------------------------------------------------------    ------------   ------------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income                                              (0.93)         (0.81)
- -----------------------------------------------------------    ------------   ------------
Net realized gains                                                    --             --
- -----------------------------------------------------------    ------------   ------------
Total dividends and distributions to common shareholders           (0.93)         (0.81)
- -----------------------------------------------------------    ------------   ------------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in capital
  in excess of par                                                    --          (0.03)
- -----------------------------------------------------------    ------------   ------------
Preferred shares offering costs/underwriting discounts
  charged to paid-in capital in excess of par                         --          (0.10)
- -----------------------------------------------------------    ------------   ------------
Total capital share transactions                                      --          (0.13)
- -----------------------------------------------------------    ------------   ------------
Net asset value, end of period                                    $13.54         $14.45
- -----------------------------------------------------------    ------------   ------------
Market price, end of period                                       $13.05         $14.71
- -----------------------------------------------------------    ------------   ------------
TOTAL INVESTMENT RETURN (1)                                        (5.15)%         3.76%
- -----------------------------------------------------------    ------------   ------------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders,
  end of period (000)                                           $140,958       $149,606
- -----------------------------------------------------------    ------------   ------------
Ratio of expenses to average net assets (2)(3)(5)                   1.15%          1.02%(4)
- -----------------------------------------------------------    ------------   ------------
Ratio of net investment income to average net assets (2)(5)         7.58%          6.47%(4)
- -----------------------------------------------------------    ------------   ------------
Preferred shares asset coverage per share                        $64,148        $66,552
- -----------------------------------------------------------    ------------   ------------
Portfolio turnover                                                    18%            27%
- -----------------------------------------------------------    ------------   ------------
</TABLE>
*   Commencement of operations

**  Initial public offering price of $15.00 per share less underwriting discount
    of $0.675 per share.

(1) Total investment return is calculated assuming a purchase of common stock at
    the current  market  price on the first day of each period and a sale at the
    current market price on the last day for each period reported. Dividends are
    assumed,  for  purposes  of this  calculation,  to be  reinvested  at prices
    obtained  under the Fund's  dividend  reinvestment  plan.  Total  investment
    return  does not  reflect  brokerage  commissions  or sales  charges.  Total
    investment return for a period of less than one year is not annualized.

(2) Calculated on the basis of income and expenses applicable to both common and
    preferred shares relative to the average net assets of common shareholders.

(3) Inclusive of expenses  offset by custody  credits earned on cash balances at
    the custodian bank. (See note 1(h) in Notes to Financial Statements).

(4) Annualized.

(5) During the periods indicated above, the Investment  Manager waived a portion
    of its investment management fee. If such waiver had not been in effect, the
    ratio of  expenses  to average  net  assets and the ratio of net  investment
    income to average net assets  would have been 1.39% and 7.34%,  respectively
    for  the  year  ended  May  31,  2004,  and  1.25%  (annualized)  and  6.25%
    (annualized),  respectively  for the period June 28, 2002  (commencement  of
    operations) through May 31, 2003.






                                  SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
                    | 5.31.04 | PIMCO Municipal Income Funds II Annual Report 37
<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II REPORT OF INDEPENDENT REGISTERED
                                PUBLIC ACCOUNTING FIRM
================================================================================
To the Shareholders and Board of Trustees of:

PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II



In our opinion, the accompanying statements of assets and liabilities, including
the schedules of  investments,  and the related  statements of operations and of
changes  in net  assets  applicable  to common  shareholders  and the  financial
highlights present fairly, in all material  respects,  the financial position of
PIMCO Municipal  Income Fund II,  PIMCOCalifornia  Municipal  Income Fund II and
PIMCO New York Municipal Income Fund II (collectively  hereafter  referred to as
the "Funds") at May 31, 2004,  the results of each of their  operations  for the
year then  ended,  and the  changes  in each of their net assets  applicable  to
common shareholders and the financial highlights for the year then ended and for
the period June 28, 2002  (commencement of operations)  through May 31, 2003, 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 Funds' 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),  which  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  May  31,  2004  by
correspondence  with the custodian and brokers,  provide a reasonable  basis for
our opinion.





PricewaterhouseCoopers LLP
New York, New York
July 26, 2004









38 PIMCO Municipal Income Funds II Annual Report | 5.31.04
<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II PRIVACY POLICY, PROXY VOTING POLICIES AND
                                PROCEDURES, OTHER INFORMATION (unaudited)
================================================================================

PRIVACY POLICY:

OUR COMMITMENT TO YOU

We consider customer privacy to be a fundamental aspect of our relationship with
clients.  We are committed to maintaining the  confidentiality,  integrity,  and
security of our current,  prospective and former clients' personal  information.
We have  developed  policies  designed to protect  this  confidentiality,  while
allowing client needs to be served.

OBTAINING PERSONAL INFORMATION

In the  course of  providing  you with  products  and  services,  we may  obtain
non-public  personal  information  about  you.  This  information  may come from
sources  such as account  applications  and other  forms,  from  other  written,
electronic or verbal correspondence, from your transactions, from your brokerage
or  financial  advisory  firm,  financial  adviser or  consultant,  and/or  from
information captured on our internet web sites.

RESPECTING YOUR PRIVACY

We do not  disclose  any  personal  or account  information  provided  by you or
gathered by us to non-affiliated third parties,  except as required or permitted
by law. As is common in the industry,  non-affiliated companies may from time to
time be  used to  provide  certain  services,  such  as  preparing  and  mailing
prospectuses,  reports,  account  statements and other  information,  conducting
research on client satisfaction,  and gathering shareholder proxies. We may also
retain  non-affiliated  companies  to  market  our  products  and enter in joint
marketing  agreements with other  companies.  These companies may have access to
your personal and account information,  but are permitted to use the information
solely to provide the specific service or as otherwise  permitted by law. We may
also  provide  your  personal  and  account  information  to your  brokerage  or
financial advisory firm and/or to your financial adviser or consultant.

SHARING INFORMATION WITH THIRD PARTIES

We  do  reserve  the  right  to  disclose  or  report  personal  information  to
non-affiliated  third parties in limited  circumstances where we believe in good
faith that disclosure is required under law, to cooperate with regulators or law
enforcement  authorities,  to protect our rights or property, or upon reasonable
request by any mutual fund in which you have chosen to invest.  In addition,  we
may disclose  information  about you or your accounts to a non-affiliated  third
party at your request or if you consent in writing to the disclosure.

SHARING INFORMATION WITH AFFILIATES
We may share client information with our affiliates in connection with servicing
your account or to provide you with information about products and services that
we believe may be of interest to you. The information we share may include,  for
example,  your  participation in our mutual funds or other investment  programs,
your ownership of certain types of accounts (such as IRAs),  or other data about
your  accounts.  Our  affiliates,  in turn,  are not  permitted  to  share  your
information  with  non-affiliated  entities,  except as required or permitted by
law.

IMPLEMENTATION OF PROCEDURES

We  take  seriously  the  obligation  to  safeguard  your  non-public   personal
information.  We have implemented procedures designed to restrict access to your
non-public  personal  information  to  our  personnel  who  need  to  know  that
information  to provide  products or  services to you. To guard your  non-public
personal  information,  physical,  electronic,  and procedural safeguards are in
place.

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

PROXY VOTING POLICIES AND PROCEDURES:

A  description  of the  policies and  procedures  that the Funds have adopted to
determine how to vote proxies relating to portfolio  securities is available (i)
without charge, upon request, by calling the Funds at (800) 331-1710 (ii) on the
Funds' website at www.pimcoadvisors.com and (iii) on the Securities and Exchange
Commission's website at www.sec.gov.

- --------------------------------------------------------------------------------
OTHER INFORMATION:

Since May 31,  2003,  there  have been  no:(ii)  material  changes in the Funds'
investment  objectives  or  policies;  (ii)  changes  to the  Funds'  charter or
by-laws;  (iii) material  changes in the principal risk factors  associated with
investment in the Funds: or (iv) change in the persons primarily responsible for
the day-to-day management of the Funds' portfolios.



                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 39

<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II TAX INFORMATION (unaudited)

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

Subchapter M of the  Internal  Revenue  Code of 1986,  as amended,  requires the
Funds to advise  shareholders within 60 days of the Funds' tax year end (May 31,
2004) as to the federal tax status of dividends  and  distributions  received by
shareholders during such tax year.  Accordingly,  please note that substantially
all  dividends  paid from net  investment  income from the Funds  during the tax
period ended May 31, 2004 were federally  exempt  interest  dividends.  However,
these Funds  invested in  municipal  bonds  containing  market  discount,  whose
accretion is taxable.  Accordingly,  the  percentage of dividends  paid from net
investment income during the tax period which are taxable were:


Municipal II                                             4.87%
California Municipal II                                  2.15%
New York Municipal II                                    0.63%

Since the Funds' fiscal year is not the calendar year, another notification will
be sent with respect to calendar year 2004. In January 2005, you will be advised
on  IRS  Form  1099  DIV as to the  federal  tax  status  of the  dividends  and
distributions  received  during the calendar year 2004.  The amount that will be
reported,  will be the amount to use on your 2004 federal  income tax return and
may differ from the amount which must be reported in connection with each Fund's
tax year ended May 31, 2004.  Shareholders are advised to consult with their tax
advisers as to the  federal,  state and local tax status of the income  received
from the Funds.  In January  2005,  an  allocation  of interest by state will be
provided  which may be of value in reducing a  shareholder's  state or local tax
liability, if any.










40 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II DIVIDEND REINVESTMENT PLAN (unaudited)

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

Pursuant  to the Funds'  Dividend  Reinvestment  Plan (the  "Plan"),  all Common
Shareholders  whose  shares  are  registered  in their own  names  will have all
dividends,  including any capital gain dividends,  reinvested  automatically  in
additional Common Shares by PFPC Inc., as agent for the Common Shareholders (the
"Plan  Agent"),  unless the  shareholder  elects to receive cash. An election to
receive cash may be revoked or reinstated at the option of the  shareholder.  In
the case of record  shareholders  such as banks,  brokers or other nominees that
hold Common Shares for others who are the beneficial owners, the Plan Agent will
administer  the Plan on the basis of the number of Common Shares  certified from
time to  time  by the  record  shareholder  as  representing  the  total  amount
registered  in such  shareholder's  name and held for the account of  beneficial
owners who are to participate in the Plan. Shareholders whose shares are held in
the name of a bank,  broker or nominee should contact the bank,  whose broker or
nominee elects not to participate  on the  investor's  behalf),  will be paid in
cash by check mailed, in the case of direct shareholder, to the record holder by
PFPC Inc., as the Fund's dividend disbursement agent.

Unless you (or your broker or nominee)  elects not to  participate  in the Plan,
the number of Common Shares you will receive will be determined as follows:

(1)    If Common  Shares are  trading at or above net asset value on the payment
       date,  the Fund will issue new shares at the greater of (i) the net asset
       value per  Common  Share on the  payment  date or (ii) 95% of the  market
       price per Common Share on the payment date; or

(2)    If Common  Shares are  trading  below net asset  value  (minus  estimated
       brokerage  commissions that would be incurred upon the purchase of Common
       Shares on the open  market)  on the  payment  date,  the Plan  Agent will
       receive the dividend or  distribution  in cash and will  purchase  Common
       Shares in the open market,  on the New York Stock  Exchange or elsewhere,
       for the participants'  accounts. It is possible that the market price for
       the Common  Shares may increase  before the Plan Agent has  completed its
       purchases.  Therefore,  the average  purchase price per share paid by the
       Plan Agent may exceed the market price on the payment date,  resulting in
       the  purchase of fewer shares than if the  dividend or  distribution  had
       been paid in Common  Shares  issued by the Fund.  The Plan Agent will use
       all  dividends  and  distributions  received in cash to  purchase  Common
       Shares in the open market on or shortly after the payment date, but in no
       event later than the ex-dividend date for the next distribution. Interest
       will not be paid on any uninvested cash payments.

You may withdraw  from the Plan at any time by giving  notice to the Plan Agent.
If you withdraw or the Plan is  terminated,  you will receive a certificate  for
each  whole  share in your  account  under the Plan and you will  receive a cash
payment for any fraction of a share in your account. If you wish, the Plan Agent
will sell your shares and send you the proceeds, minus brokerage commissions.

The Plan  Agent  maintains  all  shareholders'  accounts  in the Plan and  gives
written confirmation of all transactions in the accounts,  including information
you may need for tax  records.  The Plan Agent will also furnish each person who
buys Common  Shares with  written  instructions  detailing  the  procedures  for
electing not to participate in the Plan and to instead receive  distributions in
cash.  Common  Shares  in  your  account  will  be held  by the  Plan  Agent  in
non-certificated  form. Any proxy you receive will include all Common Shares you
have received under the Plan.

There is no brokerage charge for reinvestment of your dividends or distributions
in  Common  Shares.  However,  all  participants  will pay a pro  rata  share of
brokerage  commissions  incurred  by the Plan Agent  when it makes  open  market
purchases.

Automatically  reinvested  dividends  and  distributions  are  taxed in the same
manner as cash dividends and distributions.

The Funds and the Plan Agent  reserve the right to amend or terminate  the Plan.
There is no direct  service charge to  participants  in the Plan;  however,  the
Funds reserve the right to amend the Plan to include a service charge payable by
the participants. Additional information about the Plan may be obtained from the
Funds' transfer agent,  PFPC Inc.,  P.O. Box 43027,  Providence,  RI 02940-3027,
telephone number 1-800-331-1710.







                      5.31.04 | PIMCO Municipal Income Funds II Annual Report 41

<PAGE>

PIMCO MUNICIPAL INCOME FUNDS II BOARD OF TRUSTEES (unaudited)

================================================================================
<TABLE>
<CAPTION>
                                                            PRINCIPAL OCCUPATION(S) DURING PAST 5 YEARS:
- -------------------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>
STEPHEN TREADWAY                                            Managing  Director,  Allianz  Dresdner  Asset  Management of America
1345 Avenue of the Americas                                 L.P.: Managing Director and Chief Executive officer, PA Distributors
New York, NY 10105                                          LLC;  Member of the Board of  Management of Allianz  Dresdner  Asset
Age: 56                                                     Management GmbH. Mr. Treadway serves as a director/trustee and holds
TRUSTEE SINCE: 2002                                         various  executive  officer  positions  in  connection  with Allianz
TERM OF OFFICE: EXPECTED TO STAND FOR                       Dresdner  Asset  Management of America  L.P.'s  affiliated  open and
  RE-ELECTION AT 2005 ANNUAL MEETING OF SHAREHOLDERS        closed-end mutual funds.
TRUSTEE/DIRECTOR OF 62 FUNDS IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE OF FUND COMPLEX

PAUL BELICA
1345 Avenue of the Americas                                 Director,  Student Loan Finance Corp.,  Education Loans,  Inc., Goal
New York, NY 10105                                          Funding I, Inc.,  Goal  Funding  II, Inc.  and Surety Loan  Funding,
Age: 82                                                     Inc.;  Formerly,  senior  executive and member of the Board of Smith
TRUSTEE SINCE: 2002                                         Barney,  Harris  Upham & Co.;  and the CEO of five State of New York
TERM OF OFFICE: EXPECTED TO STAND FOR                       Agencies.
  RE-ELECTION AT 2004 ANNUAL MEETING OF SHAREHOLDERS
TRUSTEE/DIRECTOR OF 20 FUNDS IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE OF FUND COMPLEX

ROBERT E. CONNOR
1345 Avenue of the Americas                                 Corporate  Affairs  Consultant;  Formerly,  Senior  Vice  President,
New York, NY 10105                                          Corporate Office, Smith Barney, Inc.
Age: 69
TRUSTEE SINCE: 2002
TERM OF OFFICE: EXPECTED TO STAND FOR
  RE-ELECTION AT 2006 ANNUAL MEETING OF SHAREHOLDERS
TRUSTEE/DIRECTOR OF 20 FUNDS IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE OF FUND COMPLEX

JOHN J. DALESSANDRO II
1345 Avenue of the Americas                                 Formerly,   President  and  Director,   J.J.  Dalessandro  II  Ltd.,
New York, NY 10105                                          registered broker-dealer and member of the New York Stock Exchange.
Age: 66
TRUSTEE SINCE: 2002
TERM OF OFFICE: EXPECTED TO STAND FOR
  RE-ELECTION AT 2004 ANNUAL MEETING OF SHAREHOLDERS
TRUSTEE OF 15 FUNDS IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE OF FUND COMPLEX

HANS W. KERTESS
1345 Avenue of the Americas                                 President, H Kertess & Co.; Formerly,  Managing Director, Royal Bank
New York, NY 10105                                          of Canada Capital Markets.
Age: 64
TRUSTEE SINCE: 2002
TERM OF OFFICE: EXPECTED TO STAND FOR
  RE-ELECTION AT 2006 ANNUAL MEETING OF SHAREHOLDERS
TRUSTEE OF 15 FUNDS IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE OF FUND COMPLEX

R. PETER SULLIVAN III
1345 Avenue of the Americas                                 Formerly,  Managing Partner,  Bear Wagner Specialists LLC (formerly,
New York, NY 10105                                          Wagner Scott  Mercator LLC),  specialist  firm on the New York Stock
Age: 62                                                     Exchange.
TRUSTEE SINCE: 2002
TERM OF OFFICE: EXPECTED TO STAND FOR
  RE-ELECTION AT 2005 ANNUAL MEETING OF SHAREHOLDERS
TRUSTEE OF 11 FUNDS IN FUND COMPLEX
TRUSTEE OF NO FUNDS OUTSIDE OF FUND COMPLEX
</TABLE>

42 PIMCO Municipal Income Funds II Annual Report | 5.31.04

<PAGE>


TRUSTEES AND PRINCIPAL OFFICERS

Stephen Treadway
  Trustee, Chairman, Chairman of the Board

Paul Belica
  Trustee

Robert E. Connor
  Trustee

John J. Dalessandro II
  Trustee

Hans W. Kertess
  Trustee

R. Peter Sullivan III
  Trustee

Brian S. Shlissel
  President & Chief Executive Officer

Newton B. Schott, Jr.
  Vice President & Secretary

Mark V. McCray
  Vice President

Lawrence G. Altadonna
  Treasurer, Principal Financial & Accounting Officer

Jennifer A. Patula
  Assistant Secretary

INVESTMENT MANAGER
PA Fund Management LLC
1345 Avenue of the Americas
New York, NY 10105

SUB-ADVISER
Pacific Investment Management Company LLC
840 Newport Center Drive
Newport Beach, CA 92660

TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR
PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036

LEGAL COUNSEL
Ropes & Gray LLP
One International Place
Boston, MA 02210-2624

This report,  including the financial  information herein, is transmitted to the
shareholders  of PIMCO  Municipal  Income Fund II,  PIMCO  California  Municipal
Income  Fund  II  and  PIMCO  New  York  Municipal  Income  Fund  II  for  their
information. It is not a prospectus, circular or representation intended for use
in the  purchase  of  shares of the Funds or any  securities  mentioned  in this
report.

Notice  is hereby  given in  accordance  with  Section  23(c) of the  Investment
Company Act of 1940,  as amended,  that from time to time each Fund may purchase
shares of its common stock in the open market.

Information  on the Funds is  available at  www.pimcoadvisors.com  or by calling
1-800-331-1710.

<PAGE>

ITEM 2. CODE OF ETHICS

         (a)      As of the end of the period covered by this report, the
                  registrant has adopted a code of ethics (the "Section 406
                  Standards for Investment Companies -- Ethical Standards for
                  Principal Executive and Financial Officers") that applies to
                  the registrant's Principal Executive Officer and Principal
                  Financial Officer; the registrant's Principal Financial
                  Officer also serves as the Principal Accounting Officer. The
                  registrant undertakes to provide a copy of such code of ethics
                  to any person upon request, without charge, by calling
                  1-800-331-1710.

         (b)      During the period covered by this report, there were not any
                  amendments to a provision of the code of ethics adopted in
                  2(a) above.

         (c)      During the period covered by this report, there were not any
                  waivers or implicit waivers to a provision of the code of
                  ethics adopted in 2(a) above.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT The registrant's Board has determined
that Mr. Paul Belica, a member of the Board's Audit Oversight Committee is an
"audit committee financial expert," and that he is "independent," for purposes
of this Item.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES

         a)       Audit fees. The aggregate fees billed for each of the last two
                  fiscal years (the "Reporting Periods") for professional
                  services rendered by the Registrant's principal accountant
                  (the "Auditor")for the audit of the Registrant's annual
                  financial statements, or services that are normally provided
                  by the Auditor in connection with the statutory and regulatory
                  filings or engagements for the Reporting Periods, were $43,450
                  in 2003 and $48,350 in 2004.

         b)       Audit-Related Fees. The aggregate fees billed in the Reporting
                  Periods for assurance and related services by the principal
                  accountant that are reasonably related to the performance of
                  the audit registrant's financial statements and are not
                  reported under paragraph (e) of this Item were $66,832 in 2003
                  and $11,800 in 2004. These services consist of accounting
                  consultations, agreed upon procedure reports (inclusive of
                  annual review of basic maintenance testing associated with the
                  Preferred Shares), attestation reports and comfort letters.

         c)       Tax Fees. The aggregate fees billed in the Reporting Periods
                  for professional services rendered by the Auditor for tax
                  compliance, tax service and tax planning ("Tax Services") were
                  $4,700 in 2003 and $4,700 in 2004. These services consisted of
                  review or preparation of U.S. federal, state, local and excise
                  tax returns.

         d)       All Other Fees. There were no other fees billed in the
                  Reporting Periods for products and services provided by the
                  Auditor to the Registrant.

         e)       1. Audit Committee Pre-Approval Policies and Procedures. The
                  Registrant's Audit Committee has established policies and
                  procedures for pre-approval of all audit and permissible
                  non-

<PAGE>

                  audit services by the Auditor for the Registrant, as well as
                  the Auditor's engagements for non-audit services to the when
                  the engagement relates directly to the operations and
                  financial reporting of the Registrant. The Registrant's policy
                  is stated below.

                   PIMCO Municipal Income Funds (THE "FUNDS")

AUDIT OVERSIGHT COMMITTEE POLICY FOR PRE-APPROVAL OF SERVICES PROVIDED BY THE
INDEPENDENT ACCOUNTANTS

The Funds' Audit Oversight Committee ("Committee") is charged with the oversight
of the Funds' financial reporting policies and practices and their internal
controls. As part of this responsibility, the Committee must pre-approve any
independent accounting firm's engagement to render audit and/or permissible
non-audit services, as required by law. In evaluating a

proposed engagement by the independent accountants, the Committee will assess
the effect that the engagement might reasonably be expected to have on the
accountant's independence. The Committee's evaluation will be based on:

   a review of the nature of the professional services expected to provided,

   the fees to be charged in connection with the services expected to be
   provided,

   a review of the safeguards put into place by the accounting firm to
   safeguard independence, and

   periodic meetings with the accounting firm.

POLICY FOR AUDIT AND NON-AUDIT SERVICES TO BE PROVIDED TO THE FUNDS

On an annual basis, the Funds' Committee will review and pre-approve the scope
of the audits of the Funds and proposed audit fees and permitted non-audit
(including audit-related) services that may be performed by the Funds'
independent accountants. At least annually, the Committee will receive a report
of all audit and non-audit services that were rendered in the previous calendar
year pursuant to this Policy. In addition to the Committee's pre-approval of
services pursuant to this Policy, the engagement of the independent accounting
firm for any permitted non-audit service provided to the Funds will also require
the separate written pre-approval of the President of the Funds, who will
confirm, independently, that the accounting firms's engagement will not
adversely affect the firm's independence. All non-audit services performed by
the independent accounting firm will be disclosed, as required, in filings with
the Securities and Exchange Commission.

AUDIT SERVICES

The categories of audit services and related fees to be reviewed and
pre-approved annually by the Committee are:

   Annual Fund financial statement audits
   Seed audits (related to new product filings, as required)
   SEC and regulatory filings and consents
   Semiannual financial statement reviews

AUDIT-RELATED SERVICES

The following categories of audit-related services are considered to be
consistent with the role of the Fund's independent accountants and services

<PAGE>

falling under one of these categories will be pre-approved by the Committee on
an annual basis if the Committee deems those services to be consistent with the
accounting firm's independence:

   Accounting consultations
   Fund merger support services
   Agreed upon procedure reports (inclusive of quarterly review of Basic
      Maintenance testing associated with issuance of Preferred Shares and
      semiannual report review)
   Other attestation reports
   Comfort letters
   Other internal control reports

Individual audit-related services that fall within one of these categories and
are not presented to the Committee as part of the annual pre-approval process
described above, may be pre-approved, if deemed consistent with the accounting
firm's independence, by the Committee Chair (or any other Committee member who
is a disinterested trustee under the Investment Company Act to whom this
responsibility has been delegated) so long as the estimated fee for those
services does not exceed $75,000. Any such pre-approval shall be reported to the
full Committee at its next regularly scheduled meeting.

TAX SERVICES

The following categories of tax services are considered to be consistent with
the role of the Funds' independent accountants and services falling under one of
these categories will be pre-approved by the Committee on an annual basis if the
Committee deems those services to be consistent with the accounting firm's
independence:

   Tax compliance services related to the filing or amendment of the following:
      Federal, state and local income tax compliance; and, sales and use tax
         compliance
      Timely RIC qualification reviews
      Tax distribution analysis and planning
      Tax authority examination services
      Tax appeals support services
      Accounting methods studies
      Fund merger support service
      Other tax consulting services and related projects

Individual tax services that fall within one of these categories and are not
presented to the Committee as part of the annual pre-approval process described
above, may be pre-approved, if deemed consistent with the accounting firm's
independence, by the Committee Chairman (or any other Committee member who is a
disinterested trustee under the Investment Company Act to whom this
responsibility has been delegated) so long as the estimated fee for those
services does not exceed $75,000. Any such pre-approval shall be reported to the
full Committee at its next regularly scheduled meeting.

PROSCRIBED SERVICES

The Funds' independent accountants will not render services in the following
categories of non-audit services:

   Bookkeeping or other services related to the accounting records or financial
      statements of the Funds
   Financial information systems design and implementation
   Appraisal or valuation services, fairness opinions, or
      contribution-in-kind reports

<PAGE>

   Actuarial services
   Internal audit outsourcing services
   Management functions or human resources
   Broker or dealer, investment adviser or investment banking services
   Legal services and expert services unrelated to the audit
   Any other service that the Public Company Accounting Oversight Board
      determines, by regulation, is impermissible

PRE-APPROVAL OF NON-AUDIT SERVICES PROVIDED TO OTHER ENTITIES WITHIN THE FUND
COMPLEX

The Committee will pre-approve annually any permitted non-audit services to be
provided to PA Fund Management LLC (Formerly, PIMCO Advisors Fund Management
LLC) or any other investment manager to the Funds (but not including any
sub-adviser whose role is primarily portfolio management and is sub-contracted
by the investment manager) (the "Investment Manager") and any entity
controlling, controlled by, or under common control with the Investment Manager
that provides ongoing services to the Funds (including affiliated sub-advisers
to the Funds), provided, in each case, that the engagement relates directly to
the operations and financial reporting of the Funds (such entities, including
the Investment Manager, shall be referred to herein as the "Accounting
Affiliates"). Individual projects that are not presented to the Committee as
part of the annual pre-approval process, may be pre-approved, if deemed
consistent with the accounting firm's independence, by the Committee Chairman
(or any other Committee member who is a disinterested trustee under the
Investment Company Act to whom this responsibility has been delegated) so long
as the estimated fee for those services does not exceed $100,000. Any such
pre-approval shall be reported to the full Committee at its next regularly
scheduled meeting.

Although the Committee will not pre-approve all services provided to the
Investment Manager and its affiliates, the Committee will receive an annual
report from the Funds' independent accounting firm showing the aggregate fees
for all services provided to the Investment Manager and its affiliates.

DE MINIMUS EXCEPTION TO REQUIREMENT OF PRE-APPROVAL OF NON-AUDIT SERVICES

With respect to the provision of permitted non-audit services to a Fund or
Accounting Affiliates, the pre-approval requirement is waived if:

   (1)   The aggregate amount of all such permitted non-audit services provided
         constitutes no more than (i) with respect to such services provided to
         the Fund, five percent (5%) of the total amount of revenues paid by the
         Fund to its independent accountant during the fiscal year in which the
         services are provided, and(ii) with respect to such services provided
         to Accounting Affiliates, five percent (5%)of the total amount of
         revenues paid to the Fund's independent accountant by the Fund and the
         Accounting Affiliates during the fiscal year in which the services are
         provided;

   (2)   Such services were not recognized by the Fund at the time of the
         engagement for such services to be non-audit services; and

   (3)   Such services are promptly brought to the attention of the Committee
         and approved prior to the completion of the audit by the Committee or
         by the Committee Chairman (or any other Committee member who is a
         disinterested trustee under the Investment Company Act to whom this
         Committee Chairman or other delegate shall be reported to the full
         Committee at its next regularly scheduled meeting.

<PAGE>

         e)    2. No services were approved pursuant to the procedures contained
               in paragraph (C) (7) (i) (C) of Rule 2-01 of Registration S-X.

         f)    Not applicable

         g)    Non-audit fees. The aggregate non-audit fees billed by the
               Auditor for services rendered to the Registrant, and rendered to
               the Adviser, for the 2003 Reporting Period was $3,475,413 and the
               2004 Reporting Period was $4,065,376.

         h)    Auditor Independence. The Registrant's Audit Oversight Committee
               has considered whether the provision of non-audit services that
               were rendered to the Adviser which were not pre-approved is
               compatible with maintaining the Auditor's independence.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANT

ITEM 6. SCHEDULE OF INVESTMENTS Schedule of Investments 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 registrant has delegated the voting of
proxies relating to its voting securities to its sub-adviser, Pacific Investment
Management Co. (the "Sub-Adviser"). The Proxy Voting Policies and Procedures of
the Sub-Adviser are included as an Exhibit 99.PROXYPOL hereto.

ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED COMPANIES. The registrant or any affiliated purchaser did
not purchase shares or other units of any class of the registrant's equity
securities that is registered by the registrant pursuant to Section 12 of the
Exchange Act (15 U.S.C. 781).

ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS In January 2004, the
Registrant's Board of Trustees adopted a Nominating Committee Charter governing
the affairs of the Nominating Committee of the Board, which is posted on the
PIMCO Advisors website at www.pimcoadvisors.com. Appendix B to the Nominating
Committee Charter includes "Procedures for Shareholders to Submit Nominee
Candidates," which sets forth the procedures by which shareholders may recommend
nominees to the Registrant's Board of Trustees. Among other requirements, the
procedures provide that the recommending shareholder must submit any
recommendation in writing to the Registrant to the attention of the Registrant's
Secretary, at the address of the principal executive offices of the Registrant
and that such submission must be received at such offices not less than 45 days
nor more than 75 days prior to the date of the Board or shareholder meeting at
which the nominee would be elected. Any recommendation must include certain
biographical and other information regarding the candidate and the recommending
shareholder, and must include a written and signed consent of the candidate to
be named as a nominee and to serve as a Trustee if elected. The foregoing
description of the requirements is only a summary and is qualified in its
entirety by reference to Appendix B of the Nominating Committee Charter.

ITEM 10. CONTROLS AND PROCEDURES

(a) The registrant's President and Chief Executive Officer and Principal
Financial Officer have concluded that the registrant's disclosure controls and
procedures (as defined in Rule 30a-2(c) under the Investment Company Act of
1940, as amended are effective based on their evaluation of these

<PAGE>

controls and procedures as of a date within 90 days of the filing date of this
document.

(b) There were no significant changes in the registrant's internal controls or
in factors that could affect these controls subsequent to the date of their
evaluation, including any corrective actions with regard to significant
deficiencies and material weaknesses.

ITEM 11. EXHIBITS

(a)(1)  Exhibit 99.CODE ETH- Code of Ethics

(a)(2)  Exhibit 99.CERT - Certification pursuant to Section 302 of the
        Sarbanes-Oxley Act of 2002

(b)     Exhibit 99.906CERT - Certification pursuant to Section 906 of
        the Sarbanes-Oxley Act of 2002

Exhibit 99.PROXYPOL - Proxy Voting Policies and Procedures

Signature

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.

PIMCO Municipal Income Fund II

By /s/ Brian S. Shlissel
- ------------------------
Brian S. Shlissel, President & Chief Executive Officer

Date: August 5, 2004

By /s/ Lawrence G. Altadonna
- ----------------------------
Lawrence G. Altadonna, Treasurer, Principal Financial & Accounting Officer

Date: August 5, 2004

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 /s/ Brian S. Shlissel
- ------------------------
Brian S. Shlissel, President & Chief Executive Officer

Date: August 5, 2004

By /s/ Lawrence G. Altadonna
- ----------------------------
Lawrence G. Altadonna, Treasurer, Principal Financial & Accounting Officer

Date: August 5, 2004

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CODE ETH
<SEQUENCE>2
<FILENAME>c32583_ex99codeeth.txt
<TEXT>
                                                                  EX-99.CODE ETH

          CODE OF ETHICS PURSUANT TO SECTION 406 OF THE SARBANES-OXLEY
            ACT OF 2002 FOR PRINCIPAL EXECUTIVE AND SENIOR FINANCIAL
                                    OFFICERS

                               SEPTEMBER 16, 2003

I.       COVERED OFFICERS/PURPOSE OF THE CODE

         This Code of Ethics (this "Code") pursuant to Section 406 of the
Sarbanes-Oxley Act of 2002 has been adopted by the registered investment
companies (each a "Fund" and, collectively, the "Funds") listed on Exhibit A and
applies to each Fund's Principal Executive Officer, Principal Financial Officer
and Principal Accounting Officer (the "Covered Officers" each of whom is
identified in Exhibit B) for the purpose of promoting:

         o        honest and ethical conduct,  including the ethical handling of
                  actual or apparent  conflicts of interest between personal and
                  professional relationships;

         o        full, fair, accurate,  timely and understandable disclosure in
                  reports and  documents  that a Fund files with, or submits to,
                  the  Securities and Exchange  Commission  ("SEC") and in other
                  public communications made by a Fund;

         o        compliance  with applicable  laws and  governmental  rules and
                  regulations;

         o        the prompt internal  reporting of violations of the Code to an
                  appropriate person or persons identified in the Code; and

         o        accountability for adherence to the Code.

         Each Covered Officer should adhere to a high standard of business
ethics and should be sensitive to situations that may give rise to conflicts of
interest.

II.      COVERED OFFICERS SHOULD HANDLE ETHICALLY ANY ACTUAL OR APPARENT
         CONFLICTS OF INTEREST

         OVERVIEW. A "conflict of interest" occurs when a Covered Officer's
private interest interferes with the interests of, or his service to, the
relevant Fund. For example, a conflict of interest would arise if a Covered
Officer, or a member of the Covered Officer's family, receives improper personal
benefits as a result of the Covered Officer's position with the relevant Fund.

         Certain conflicts of interest arise out of the relationships between
Covered Officers and the relevant Fund and already are subject to conflict of
interest provisions

<PAGE>

and procedures in the Investment Company Act of 1940 (including the regulations
thereunder, the "1940 Act") and the Investment Advisers Act of 1940 (including
the regulations thereunder, the "Investment Advisers Act"). Indeed, conflicts of
interest are endemic for certain registered management investment companies and
those conflicts are both substantially and procedurally dealt with under the
1940 Act. For example, Covered Officers may not engage in certain transactions
with a Fund because of their status as "affiliated persons" of such Fund. The
compliance program of each Fund and the compliance programs of its investment
advisers (including sub-advisers), principal underwriter and administrator or
sub-administrator (each a "Service Provider" and, collectively, the "Service
Providers") are reasonably designed to prevent, or identify and correct,
violations of many of those provisions, although they are not designed to
provide absolute assurance as to those matters. This Code does not, and is not
intended to, repeat or replace these programs and procedures, and such conflicts
fall outside of the parameters of this Code. See also Section V of this Code.

         Although typically not presenting an opportunity for improper personal
benefit, conflicts arise from, or as a result of, the contractual relationship
between a Fund and its Service Providers of which the Covered Officers are also
officers or employees. As a result, this Code recognizes that the Covered
Officers will, in the normal course of their duties (whether for the Funds or
for a Service Provider, or for both), be involved in establishing policies and
implementing decisions that will have different effects on the Service Providers
and the Funds. The participation of the Covered Officers in such activities is
inherent in the contractual relationships between the Funds and their Service
Providers and is consistent with the performance by the Covered Officers of
their duties as officers of the relevant Fund. Thus, if performed in conformity
with the provisions of the 1940 Act, the Investment Advisers Act, other
applicable law and the relevant Fund's constitutional documents, such activities
will be deemed to have been handled ethically. Frequently, the 1940 Act
establishes, as a mechanism for dealing with conflicts, disclosure to and
approval by the Directors/Trustees of a Fund who are not "interested persons" of
such Fund under the 1940 Act. In addition, it is recognized by the Funds' Boards
of Directors/Trustees ("Boards") that the Covered Officers may also be officers
or employees of one or more other investment companies covered by this or other
codes and that such service, by itself, does not give rise to a conflict of
interest.

         Other conflicts of interest are covered by the Code, even if such
conflicts of interest are not the subject of provisions of the 1940 Act and the
Investment Advisers Act. The following list provides examples of conflicts of
interest under the Code, but Covered Officers should bear in mind that these
examples are not exhaustive. The overarching principle is that the personal
interest of a Covered Officer should not be placed improperly before the
interest of the relevant Fund, unless the personal interest has been disclosed
to and approved by other officers of such Fund or such Fund's Board or a
committee of such Fund's Board that has no such personal interest.

                       *          *          *          *

                                      -2-
<PAGE>

         Each Covered Officer must not:

         o        use his personal influence or personal relationships
                  improperly to influence investment decisions or financial
                  reporting by the relevant Fund whereby the Covered Officer
                  would benefit personally to the detriment of such Fund;

         o        cause the relevant Fund to take action, or fail to take
                  action, for the individual personal benefit of the Covered
                  Officer rather than the benefit such Fund; or

         o        retaliate against any other Covered Officer or any employee of
                  the Funds or their Service Providers for reports of potential
                  violations that are made in good faith.

         There are some conflict of interest situations that should always be
approved by the President of the relevant Fund (or, with respect to activities
of the President, by the Chairman of the relevant Fund). These conflict of
interest situations are listed below:

         o        service on the board of directors or governing board of a
                  publicly traded entity;

         o        acceptance of any investment opportunity or of any material
                  gift or gratuity from any person or entity that does business,
                  or desires to do business, with the relevant Fund. For these
                  purposes, material gifts do not include (i) gifts from a
                  single giver so long as their aggregate annual value does not
                  exceed the equivalent of $100.00 or (ii) attending business
                  meals, business related conferences, sporting events and other
                  entertainment events at the expense of a giver, so long as the
                  expense is reasonable and both the Covered Person and the
                  giver are present.(1)

         o        any ownership interest in, or any consulting or employment
                  relationship with, any entities doing business with the
                  relevant Fund, other than a Service Provider or an affiliate
                  of a Service Provider. This restriction shall not apply to or
                  otherwise limit the ownership of publicly traded securities so
                  long as the Covered Person's ownership does not exceed more
                  than 2% of the outstanding securities of the relevant class.

         o        a direct or indirect financial interest in commissions,
                  transaction charges or spreads paid by the relevant Fund for
                  effecting portfolio transactions or for selling or redeeming
                  shares other than an interest arising from the Covered
                  Officer's employment with a Service Provider or its affiliate.
                  This restriction shall not apply to or otherwise limit the
                  ownership of

- -------------------------------
        (1) The $100.00 threshold was taken from the ADAMA Code of Ethics.

                                      -3-
<PAGE>

                  publicly traded securities so long as the Covered Person's
                  ownership does not exceed more than 2% of the particular class
                  of security outstanding.

III.     DISCLOSURE AND COMPLIANCE

         o        no Covered Officer should knowingly misrepresent, or cause
                  others to misrepresent, facts about the relevant Fund to
                  others, whether within or outside such Fund, including to such
                  Fund's Board and auditors, and to governmental regulators and
                  self-regulatory organizations;

         o        each Covered Officer should, to the extent appropriate within
                  his area of responsibility, consult with other officers and
                  employees of the Funds and the Service Providers or with
                  counsel to the Funds with the goal of promoting full, fair,
                  accurate, timely and understandable disclosure in the
                  registration statements or periodic reports that the Funds
                  file with, or submit to, the SEC (which, for sake of clarity,
                  does not include any sales literature, omitting prospectuses,
                  or "tombstone" advertising prepared by the relevant Fund's
                  principal underwriter(s)); and

         o        it is the responsibility of each Covered Officer to promote
                  compliance with the standards and restrictions imposed by
                  applicable laws, rules and regulations.

IV.      REPORTING AND ACCOUNTABILITY

         Each Covered Officer must:

         o        upon adoption of the Code (or thereafter as applicable, upon
                  becoming a Covered Officer), affirm in writing to the relevant
                  Fund that he has received, read, and understands the Code;

         o        provide full and fair responses to all questions asked in any
                  Trustee and Officer Questionnaire provided by the relevant
                  Fund as well as with respect to any supplemental request for
                  information; and

         o        notify the President of the relevant Fund promptly if he is
                  convinced to a moral certainty that there has been a material
                  violation of this Code (with respect to violations by a
                  President, the Covered Officer shall report to the Chairman of
                  the relevant Fund).

         The President of each Fund is responsible for applying this Code to
specific situations in which questions are presented under it and has the
authority to interpret this Code in any particular situation. However, any
approvals or waivers sought by the President will be considered by the Chairman
of the relevant Fund.

         The Funds will follow these procedures in investigating and enforcing
this Code:

                                      -4-
<PAGE>

         o        the President will take all appropriate action to investigate
                  any potential material violations reported to him, which
                  actions may include the use of internal or external counsel,
                  accountants or other personnel;

         o        if, after such investigation, the President believes that no
                  material violation has occurred, the President is not required
                  to take any further action;

         o        any matter that the President believes is a material violation
                  will be reported to the Committee;

         o        if the Committee concurs that a material violation has
                  occurred, it will inform and make a recommendation to the
                  Board, which will consider appropriate action, which may
                  include review of, and appropriate modifications to applicable
                  policies and procedures; notification to appropriate personnel
                  of a Service Provider or its board; or a recommendation to
                  dismiss the Covered Officer;

         o        the Committee will be authorized to grant waivers, as it deems
                  appropriate; and

         o        any changes to or waivers of this Code will, to the extent
                  required, be disclosed as provided by SEC rules.

V.       OTHER POLICIES AND PROCEDURES

         This Code shall be the sole code of ethics adopted by the Funds for
purposes of Section 406 of the Sarbanes-Oxley Act and the rules and forms
applicable to registered investment companies thereunder. Insofar as other
policies or procedures of the Funds or the Funds' Service Providers govern or
purport to govern the behavior or activities of the Covered Officers who are
subject to this Code, they are superseded by this Code to the extent that they
conflict with the provisions of this Code. The Funds' and their Service
Providers's codes of ethics under Rule 17j-1 under the 1940 Act and the Service
Providers's more detailed compliance policies and procedures are separate
requirements applying to the Covered Officers and others, and are not part of
this Code.

VI.      AMENDMENTS

         Any material amendments to this Code, other than amendments to Exhibit
A, must be approved or ratified by a majority vote of the Board.

VII.     CONFIDENTIALITY

         All reports and records prepared or maintained pursuant to this Code
will be considered confidential and shall be maintained and protected
accordingly. Except as otherwise required by law or this Code, such matters
shall not be disclosed to anyone except as permitted by the Board.

                                      -5-
<PAGE>

VIII.    INTERNAL USE

         The Code is intended solely for the internal use by the Funds and does
not constitute an admission, by or on behalf of any Fund, as to any fact,
circumstance, or legal conclusion.

Date:  September 16, 2003

                                      -6-
<PAGE>

EXHIBIT A

Registered Investment Companies
- -------------------------------

PIMCO Municipal Income Fund I/II/III

PIMCO California Municipal Income Fund I/II/III

PIMCO New York Municipal Income Fund I/II/III

PIMCO Corporate Income Fund

PIMCO Corporate Opportunity Fund

Nicholas-Applegate Convertible & Income Fund

PIMCO High Income Fund

Nicholas-Applegate Convertible & Income Fund II

PIMCO Floating Rate Income Fund

Municipal Advantage Fund Inc.

Fixed Income Shares

                                      -7-
<PAGE>

EXHIBIT B

Persons Covered by this Code of Ethics
- --------------------------------------

<TABLE>
<CAPTION>
     --------------------------------- ------------------------------- ---------------------------------
       PRINCIPAL EXECUTIVE OFFICER       PRINCIPAL FINANCIAL OFFICER     PRINCIPAL ACCOUNTING OFFICER
     --------------------------------- ------------------------------- ---------------------------------

     --------------------------------- ------------------------------- ---------------------------------
            <S>                            <C>                              <C>
            Brian S. Shlissel              Lawrence G. Altadonna            Lawrence G. Altadonna
     --------------------------------- ------------------------------- ---------------------------------
</TABLE>

Note that the listed officers are "Covered Officers" of each of the Funds listed
on Exhibit A.

                                      -8-

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>3
<FILENAME>c32583_ex99cert.txt
<TEXT>

                                                                 EX-99.CERT

                            FORM N-CSR CERTIFICATION

I, Brian S. Shlissel, certify that:

1.       I have reviewed this report on the Form N-CSR of the PIMCO Municipal
         Income Fund II;

2.       Based on my knowledge, the report does not contain any untrue statement
         of a material fact or omit to state a material fact necessary to make
         the statements made, in light of the circumstances under which such
         statements were made, not misleading with respect to the period covered
         by the report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations, changes in net
         assets, and cash flows (if the financial statements are required to
         include a statement of cash flows) of the registrant as of, and for,
         the periods in the report:

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Rule 30a-2(c) under the Investment Company Act of 1940) for
         the registrant and have:

         (a)      Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this report is being prepared:

         (b)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this report (the "Evaluation Date"); and

         (c)      Presented in this report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of the registrant's board of directors (or persons
         performing the equivalent functions):

         (a)      All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize, and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         (b)      Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         report whether or not there were significant changes in internal
         controls or in other factors that could

<PAGE>

         significantly affect internal controls subsequent to the date of most
         recent evaluation, including any corrective actions with regard to
         significant deficiencies and material weaknesses.

Dated: August 5, 2004

/s/ Brian S. Shlissel
- ---------------------
Brian S. Shlissel
President & Chief Executive Officer


                            FORM N-CSR CERTIFICATION

I, Lawrence G. Altadonna, certify that:

1.       I have reviewed this report on the Form N-CSR of the PIMCO Municipal
         Income Fund II;

2.       Based on my knowledge, the report does not contain any untrue statement
         of a material fact or omit to state a material fact necessary to make
         the statements made, in light of the circumstances under which such
         statements were made, not misleading with respect to the period covered
         by the report;

3.       Based on my knowledge, the financial statements, and other financial
         information included in this report, fairly present in all material
         respects the financial condition, results of operations, changes in net
         assets, and cash flows (if the financial statements are required to
         include a statement of cash flows) of the registrant as of, and for,
         the periods in the report:

4.       The registrant's other certifying officers and I are responsible for
         establishing and maintaining disclosure controls and procedures (as
         defined in Rule 30a-2(c) under the Investment Company Act of 1940) for
         the registrant and have:

         (a)      Designed such disclosure controls and procedures to ensure
                  that material information relating to the registrant,
                  including its consolidated subsidiaries, is made known to us
                  by others within those entities, particularly during the
                  period in which this report is being prepared:

         (b)      Evaluated the effectiveness of the registrant's disclosure
                  controls and procedures as of a date within 90 days prior to
                  the filing date of this report (the "Evaluation Date"); and

         (c)      Presented in this report our conclusions about the
                  effectiveness of the disclosure controls and procedures based
                  on our evaluation as of the Evaluation Date;

5.       The registrant's other certifying officers and I have disclosed, based
         on our most recent evaluation, to the registrant's auditors and the
         audit committee of the registrant's board of directors (or persons
         performing the equivalent functions):

<PAGE>

         (a)      All significant deficiencies in the design or operation of
                  internal controls which could adversely affect the
                  registrant's ability to record, process, summarize, and report
                  financial data and have identified for the registrant's
                  auditors any material weaknesses in internal controls; and

         (b)      Any fraud, whether or not material, that involves management
                  or other employees who have a significant role in the
                  registrant's internal controls; and

6.       The registrant's other certifying officers and I have indicated in this
         report whether or not there were significant changes in internal
         controls or in other factors that could significantly affect internal
         controls subsequent to the date of most recent evaluation, including
         any corrective actions with regard to significant deficiencies and
         material weaknesses.

Dated: August 5, 2004

/s/ Lawrence G. Altadonna
- -------------------------
Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.906CERT
<SEQUENCE>4
<FILENAME>c32583_ex99-906cert.txt
<TEXT>

                                                                   EX-99.906CERT

Pursuant to 18 U.S.C ss. 1350, the undersigned officer of PIMCO Municipal Income
Fund II (the "Registrant"), hereby certifies, to the best of his knowledge, that
the Registrant's report on Form N-CSR for the period ended May 31, 2004 (the
"Report") fully complies with the requirements of Section 13(a) or 15(d), as
applicable, of the Securities Exchange Act of 1934, as amended, and that the
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Registrant.

Dated: August 5, 2004

BY /s/ Brian S. Shlissel
- ------------------------
Brian S. Shlissel
President and Chief Executive Officer

A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the version of this written statement required by
Section 906, has been provided to PIMCO Municipal Income Fund II and will be
retained by PIMCO Municipal Income Fund II and furnished to the Securities and
Exchange Commission or its staff upon request.

This certification is being furnished solely pursuant to 18 U.S.C. ss 1350 and
is not being filed as part of the Report or as a separate disclosure document.

Pursuant to 18 U.S.C ss. 1350, the undersigned officer of PIMCO Municipal Income
Fund II (the "Registrant"), hereby certifies, to the best of his knowledge, that
the Registrant's report on Form N-CSR for the period ended May 31, 2004 (the
"Report") fully complies with the requirements of Section 13(a) or 15(d), as
applicable, of the Securities Exchange Act of 1934, as amended, and that the
information contained in the Report fairly presents, in all material respects,
the financial condition and results of operations of the Registrant.

Dated: August 5, 2004

BY /s/ Lawrence G. Altadonna
- ----------------------------
Lawrence G. Altadonna
Treasurer, Principal Financial & Accounting Officer

A signed original of this written statement required by Section 906, or other
document authenticating, acknowledging, or otherwise adopting the signature that
appears in typed form within the version of this written statement required by
Section 906, has been provided to PIMCO Municipal Income Fund II and will be
retained by PIMCO Municipal Income Fund II and furnished to the Securities and
Exchange Commission or its staff upon request.

This certification is being furnished solely pursuant to 18 U.S.C. ss 1350 and
is not being filed as part of the Report or as a separate disclosure document.

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.PROXYPOL
<SEQUENCE>5
<FILENAME>c32583_ex99proxypol.txt
<TEXT>
                                                             EXHIBIT-99.PROXYPOL

                    PACIFIC INVESTMENT MANAGEMENT COMPANY LLC

                      PROXY VOTING POLICIES AND PROCEDURES

The following are general proxy voting  policies and  procedures  ("Policies and
Procedures") adopted by Pacific Investment Management Company LLC ("PIMCO"),  an
investment  adviser  registered  under the  Investment  Advisers Act of 1940, as
amended  ("Advisers  Act").(1) PIMCO serves as the investment  adviser to a wide
range of domestic and  international  clients,  including  investment  companies
registered under the Investment Company Act of 1940, as amended ("1940 Act") and
separate investment accounts for other clients.(2) These Policies and Procedures
are adopted to ensure  compliance  with Rule  206(4)-6  under the Advisers  Act,
other  applicable  fiduciary  obligations of PIMCO and the applicable  rules and
regulations   of  the   Securities   and   Exchange   Commission   ("SEC")   and
interpretations  of  its  staff.  In  addition  to  SEC  requirements  governing
advisers,  PIMCO's Policies and Procedures  reflect the long-standing  fiduciary
standards and responsibilities applicable to investment advisers with respect to
accounts  subject  to the  Employee  Retirement  Income  Security  Act  of  1974
("ERISA"), as set forth in the Department of Labor's rules and regulations.(3)

PIMCO will  implement  these  Policies and Procedures for each of its respective
clients as required under applicable law, unless expressly  directed by a client
in writing to refrain from voting that client's  proxies.  PIMCO's  authority to
vote proxies on behalf of its clients is established by its advisory  contracts,
comparable documents or by an overall delegation of discretionary authority over
its client's assets.  Recognizing that proxy voting is a rare event in the realm
of fixed income investing and is typically limited to solicitation of consent to
changes in features of debt securities, these Policies and Procedures also apply
to any voting rights and/or consent  rights of PIMCO,  on behalf of its clients,
with  respect  to debt  securities,  including  but not  limited  to,  plans  of
reorganization, and waivers and consents under applicable indentures.(4)

- --------

(1)      These  Policies and  Procedures  are adopted by PIMCO  pursuant to Rule
         206(4)-6  under the Advisers Act,  effective  August 6, 2003. SEE PROXY
         VOTING BY INVESTMENT ADVISERS, IA Release No. 2106 (January 31, 2003).

(2)      These Policies and Procedures address proxy voting considerations under
         U.S. law and regulations and do not address the laws or requirements of
         other jurisdictions.

(3)      Department of Labor Bulletin 94-2, 29 C.F.R. 2509.94-2 (July 29, 1994).
         If a client is subject to ERISA,  PIMCO will be responsible  for voting
         proxies  with respect to the  client's  account,  unless the client has
         expressly  retained the right and  obligation to vote the proxies,  and
         provided prior written notice to PIMCO of this retention.

(4)      For purposes of these Policies and  Procedures,  proxy voting  includes
         any voting rights, consent rights or other voting authority of PIMCO on
         behalf of its clients.

<PAGE>

Set forth below are PIMCO's  Policies and Procedures  with respect to any voting
or consent rights of advisory clients over which PIMCO has discretionary  voting
authority. These Policies and Procedures may be revised from time to time.

GENERAL STATEMENTS OF POLICY

These  Policies  and  Procedures  are  designed  and  implemented  in  a  manner
reasonably  expected to ensure that voting and consent  rights are  exercised in
the best  interests of PIMCO's  clients.  Each proxy is voted on a  case-by-case
basis taking into consideration any relevant contractual  obligations as well as
other relevant facts and circumstances.

PIMCO may abstain from voting a client proxy under the following  circumstances:
(1) when the  economic  effect on  shareholders'  interests  or the value of the
portfolio holding is  indeterminable  or insignificant;  or (2) when the cost of
voting the proxies outweighs the benefits.

CONFLICTS OF INTEREST

PIMCO  seeks to resolve  any  material  conflicts  of interest by voting in good
faith in the best  interest of its clients.  If a material  conflict of interest
should  arise,  PIMCO will seek to resolve such  conflict in the  client's  best
interest by pursuing any one of the following courses of action:

         1.       convening  an ad-hoc  committee  to  assess  and  resolve  the
                  conflict;(5)

         2.       voting in accordance with the instructions/consent of a client
                  after providing  notice of and disclosing the conflict to that
                  client;

         3.       voting the proxy in accordance with the  recommendation  of an
                  independent third-party service provider;

         4.       suggesting  that the client engage  another party to determine
                  how the proxies should be voted;

         5.       delegating  the  vote to an  independent  third-party  service
                  provider; or

         6.       voting  in  accordance  with the  factors  discussed  in these
                  Policies and Procedures.

PIMCO will document the process of resolving any identified material conflict of
interest.

- --------

(5)      Any  committee  must be  comprised  of  personnel  who  have no  direct
         interest in the outcome of the potential conflict.

                                       2
<PAGE>

REPORTING REQUIREMENTS AND THE AVAILABILITY OF PROXY VOTING RECORDS

Except to the extent required by applicable law or otherwise  approved by PIMCO,
PIMCO will not  disclose  to third  parties  how it voted a proxy on behalf of a
client. However, upon request from an appropriately authorized individual, PIMCO
will disclose to its clients or the entity  delegating  the voting  authority to
PIMCO for such clients (E.G.,  trustees or consultants  retained by the client),
how PIMCO voted such client's  proxy.  In addition,  PIMCO  provides its clients
with a copy of these  Policies  and  Procedures  or a concise  summary  of these
Policies  and  Procedures:  (i) in Part II of Form  ADV;  (ii)  together  with a
periodic account  statement in a separate  mailing;  or (iii) any other means as
determined by PIMCO.  The summary will state that these  Policies and Procedures
are available  upon request and will inform clients that  information  about how
PIMCO voted that client's proxies is available upon request.

PIMCO RECORD KEEPING

PIMCO or its agent  maintains  proxy voting records as required by Rule 204-2(c)
of the  Advisers  Act.  These  records  include:  (1) a copy of all proxy voting
policies and procedures; (2) proxy statements (or other disclosures accompanying
requests for client consent) received  regarding client securities (which may be
satisfied  by relying on  obtaining a copy of a proxy  statement  from the SEC's
Electronic Data  Gathering,  Analysis,  and Retrieval  (EDGAR) system or a third
party  provided that the third party  undertakes to provide a copy promptly upon
request);  (3) a record of each vote cast by PIMCO on behalf of a client;  (4) a
copy of any document  created by PIMCO that was material to making a decision on
how to vote  proxies  on behalf of a client or that  memorializes  the basis for
that  decision;  and (5) a copy of each written  client request for proxy voting
records  and any written  response  from PIMCO to any  (written or oral)  client
request  for such  records.  Additionally,  PIMCO  or its  agent  maintains  any
documentation related to an identified material conflict of interest.

Proxy voting books and records are maintained by PIMCO or its agent in an easily
accessible  place for a period of five  years  from the end of the  fiscal  year
during which the last entry was made on such record,  the first two years in the
offices of PIMCO or its agent.

REVIEW AND OVERSIGHT

PIMCO's proxy voting  procedures are described below.  PIMCO's  Compliance Group
will  provide  for the  supervision  and  periodic  review,  no  less  than on a
quarterly basis, of its proxy voting activities and the  implementation of these
Policies and Procedures.

Because PIMCO has contracted with State Street Investment Manager Solutions, LLC
("IMS  West")  to  perform  portfolio  accounting,   securities  processing  and
settlement  processing on behalf of PIMCO,  certain of the following  procedures
involve IMS West in administering and implementing the proxy voting process. IMS
West will review and monitor the proxy voting process to ensure that proxies are
voted on a timely basis.

                                       3
<PAGE>

         1.  TRANSMIT  PROXY TO PIMCO.  IMS West will forward to PIMCO's  Middle
Office  Group  each  proxy  received  from  registered  owners of record  (E.G.,
custodian bank or other third party service providers).

         2. CONFLICTS OF INTEREST.  PIMCO's Middle Office Group will review each
proxy to determine  whether there may be a material  conflict  between PIMCO and
its client. As part of this review,  the group will determine whether the issuer
of the  security or  proponent  of the  proposal  is a client of PIMCO,  or if a
client has  actively  solicited  PIMCO to support a particular  position.  If no
conflict exists, this group will forward each proxy to the appropriate portfolio
manager for  consideration.  However,  if a conflict does exist,  PIMCO's Middle
Office  Group will seek to resolve any such  conflict in  accordance  with these
Policies and Procedures.

         3. VOTE. The portfolio  manager will review the information,  will vote
the proxy in accordance  with these  Policies and Procedures and will return the
voted proxy to PIMCO's Middle Office Group.

         4. REVIEW.  PIMCO's Middle Office Group will review each proxy that was
submitted to and completed by the appropriate portfolio manager.  PIMCO's Middle
Office  Group will  forward the voted proxy back to IMS West with the  portfolio
manager's decision as to how it should be voted.

         5.  TRANSMITTAL TO THIRD PARTIES.  IMS West will document the portfolio
manager's decision for each proxy received from PIMCO's Middle Office Group in a
format  designated by the custodian bank or other third party service  provider.
IMS West will maintain a log of all corporate  actions,  including proxy voting,
which  indicates,  among  other  things,  the date the notice was  received  and
verified,  PIMCO's response, the date and time the custodian bank or other third
party service provider was notified, the expiration date and any action taken.

         6. INFORMATION BARRIERS.  Certain entities controlling,  controlled by,
or under  common  control with PIMCO  ("Affiliates")  may be engaged in banking,
investment  advisory,  broker-dealer and investment  banking  activities.  PIMCO
personnel  and  PIMCO's  agents  are  prohibited  from  disclosing   information
regarding  PIMCO's  voting  intentions  to any  Affiliate.  Any PIMCO  personnel
involved in the proxy voting process who are contacted by an Affiliate regarding
the manner in which  PIMCO or its  delegate  intend to vote on a specific  issue
must terminate the contact and notify the Compliance Group immediately.

CATEGORIES OF PROXY VOTING ISSUES

In general,  PIMCO reviews and considers corporate  governance issues related to
proxy  matters and  generally  supports  proposals  that  foster good  corporate
governance  practices.  PIMCO  considers each proposal on a case-by-case  basis,
taking  into   consideration   various   factors  and  all  relevant  facts  and
circumstances  at the time of the vote. PIMCO may vote proxies as recommended by
management  on routine  matters  related to the  operation  of the issuer and on
matters not expected to have a significant  economic impact on the issuer and/or
shareholders, because PIMCO believes the recommendations by the issuer generally
are in shareholders' best

                                       4
<PAGE>

interests,  and therefore in the best economic interest of PIMCO's clients.  The
following  is a  non-exhaustive  list of issues  that may be  included  in proxy
materials  submitted to clients of PIMCO, and a  non-exhaustive  list of factors
that PIMCO may consider in determining how to vote the client's proxies.

         BOARD OF DIRECTORS

         1.  INDEPENDENCE.  PIMCO may consider the following factors when voting
on director independence issues: (i) majority requirements for the board and the
audit, nominating,  compensation and/or other board committees; and (ii) whether
the issuer adheres to and/or is subject to legal and regulatory requirements.

         2.  DIRECTOR  TENURE AND  RETIREMENT.  PIMCO may consider the following
factors  when  voting  on  limiting  the  term  of  outside  directors:  (i) the
introduction  of new viewpoints on the board;  (ii) a reasonable  retirement age
for the outside  directors;  and (iii) the impact on the board's  stability  and
continuity.

         3. NOMINATIONS IN ELECTIONS.  PIMCO may consider the following  factors
when voting on uncontested elections: (i) composition of the board; (ii) nominee
availability  and  attendance  at  meetings;  (iii) any  investment  made by the
nominee in the issuer; and (iv) long-term corporate performance and the price of
the issuer's securities.

         4.  SEPARATION  OF CHAIRMAN AND CEO  POSITIONS.  PIMCO may consider the
following  factors  when voting on  proposals  requiring  that the  positions of
chairman of the board and the chief executive  officer not be filled by the same
person:  (i) any  potential  conflict  of interest  with  respect to the board's
ability to review  and  oversee  management's  actions;  and (ii) any  potential
effect on the issuer's productivity and efficiency.

         5. D&O INDEMNIFICATION AND LIABILITY PROTECTION. PIMCO may consider the
following  factors  when voting on proposals  that include  director and officer
indemnification and liability protection: (i) indemnifying directors for conduct
in the normal course of business;  (ii) limiting  liability for monetary damages
for violating the duty of care;  (iii) expanding  coverage beyond legal expenses
to acts that  represent  more serious  violations of fiduciary  obligation  than
carelessness  (E.G.  negligence);  and (iv) providing expanded coverage in cases
where a director's  legal defense was  unsuccessful if the director was found to
have acted in good faith and in a manner that he or she reasonably  believed was
in the best interests of the company.

         6. STOCK  OWNERSHIP.  PIMCO may  consider  the  following  factors when
voting on proposals on mandatory share ownership requirements for directors: (i)
the  benefits of  additional  vested  interest in the issuer's  stock;  (ii) the
ability of a  director  to fulfill  his duties to the issuer  regardless  of the
extent of his stock  ownership;  and (iii) the impact of limiting  the number of
persons qualified to be directors.

                                       5
<PAGE>

         PROXY CONTESTS AND PROXY CONTEST DEFENSES

         1.  CONTESTED  DIRECTOR  NOMINATIONS.  PIMCO may consider the following
factors when voting on proposals for director nominees in a contested  election:
(i)  background  and reason for the proxy contest;  (ii)  qualifications  of the
director nominees;  (iii) management's track record; (iv) the issuer's long-term
financial  performance within its industry;  (v) assessment of what each side is
offering  shareholders;  (vi) the  likelihood  that the proposed  objectives and
goals can be met; and (vii) stock ownership positions of the director nominees.

         2.  REIMBURSEMENT FOR PROXY SOLICITATION  EXPENSES.  PIMCO may consider
the  following  factors  when  voting on  reimbursement  for proxy  solicitation
expenses: (i) identity of the persons who will pay the expenses;  (ii) estimated
total cost of  solicitation;  (iii) total  expenditures to date; (iv) fees to be
paid to proxy  solicitation  firms;  and (v) when  applicable,  terms of a proxy
contest settlement.

         3.  ABILITY TO ALTER THE SIZE OF THE BOARD BY  SHAREHOLDERS.  PIMCO may
consider  whether the proposal seeks to fix the size of the board and/or require
shareholder approval to alter the size of the board.

         4.  ABILITY TO REMOVE  DIRECTORS  BY  SHAREHOLDERS.  PIMCO may consider
whether the proposal  allows  shareholders  to remove  directors with or without
cause and/or allow shareholders to elect directors and fill board vacancies.

         5.  CUMULATIVE  VOTING.  PIMCO may consider the following  factors when
voting  on  cumulative  voting   proposals:   (i)  the  ability  of  significant
stockholders to elect a director of their choosing; (ii) the ability of minority
shareholders  to  concentrate  their support in favor of a director(s)  of their
choosing; and (iii) any potential limitation placed on the director's ability to
work for all shareholders.

         6.  SUPERMAJORITY  SHAREHOLDER  REQUIREMENTS.  PIMCO may  consider  all
relevant  factors,  including  but  not  limited  to  limiting  the  ability  of
shareholders  to effect  change when  voting on  supermajority  requirements  to
approve  an  issuer's  charter  or  bylaws,  or to  approve  a  merger  or other
significant  business  combination that would require a level of voting approval
in excess of a simple majority.

         TENDER OFFER DEFENSES

         1.  CLASSIFIED  BOARDS.  PIMCO may consider the following  factors when
voting on  classified  boards:  (i)  providing  continuity  to the issuer;  (ii)
promoting  long-term  planning  for  the  issuer;  and  (iii)  guarding  against
unsolicited takeovers.

         2. POISON PILLS.  PIMCO may consider the following  factors when voting
on poison pills: (i) supporting proposals to require a shareholder vote on other
shareholder  rights  plans;  (ii)  ratifying  or  redeeming a poison pill in the
interest of protecting the value of the issuer;  and (iii) other alternatives to
prevent a takeover at a price clearly below the true value of the issuer.

                                       6
<PAGE>

         3. FAIR PRICE PROVISIONS. PIMCO may consider the following factors when
voting on proposals with respect to fair price provisions: (i) the vote required
to approve the proposed  acquisition;  (ii) the vote required to repeal the fair
price  provision;  (iii) the  mechanism  for  determining  fair price;  and (iv)
whether these  provisions are bundled with other  anti-takeover  measures (E.G.,
supermajority  voting  requirements) that may entrench management and discourage
attractive tender offers.

         CAPITAL STRUCTURE

         1. STOCK  AUTHORIZATIONS.  PIMCO may consider the following  factors to
help distinguish  between legitimate  proposals to authorize increases in common
stock for expansion and other corporate  purchases and those proposals  designed
primarily  as an  anti-takeover  device:  (i) the purpose and need for the stock
increase;  (ii)  the  percentage  increase  with  respect  to the  authorization
currently  in  place;  (iii)  voting  rights  of the  stock;  and  (iv)  overall
capitalization structure of the issuer.

         2.  ISSUANCE OF  PREFERRED  STOCK.  PIMCO may  consider  the  following
factors  when voting on the  issuance of  preferred  stock:  (i) whether the new
class  of  preferred  stock  has  unspecified   voting,   conversion,   dividend
distribution,  and other rights;  (ii) whether the issuer  expressly states that
the  stock  will not be used as a  takeover  defense  or carry  superior  voting
rights; (iii) whether the issuer specifies the voting, dividend, conversion, and
other  rights  of such  stock  and  the  terms  of the  preferred  stock  appear
reasonable;  and (iv)  whether  the stated  purpose is to raise  capital or make
acquisitions in the normal course of business.

         3. STOCK SPLITS.  PIMCO may consider the following  factors when voting
on stock  splits:  (i) the  percentage  increase  in the  number of shares  with
respect to the issuer's existing  authorized  shares; and (ii) the industry that
the issuer is in and the issuer's performance in that industry.

         4. REVERSED STOCK SPLITS. PIMCO may consider the following factors when
voting on reverse stock splits:  (i) the percentage  increase in the shares with
respect to the issuer's  existing  authorized  stock; and (ii) issues related to
delisting the issuer's stock.

         EXECUTIVE AND DIRECTOR COMPENSATION

         1. STOCK OPTION PLANS.  PIMCO may consider the  following  factors when
voting on stock  option  plans:  (i)  whether the stock  option  plan  expressly
permits the repricing of options; (ii) whether the plan could result in earnings
dilution of greater than a specified  percentage  of shares  outstanding;  (iii)
whether the plan has an option  exercise price below the market price on the day
of the grant;  (iv) whether the  proposal  relates to an amendment to extend the
term of options for persons leaving the firm  voluntarily or for cause;  and (v)
whether the stock option plan has certain other embedded features.

                                       7
<PAGE>

         2. DIRECTOR COMPENSATION. PIMCO may consider the following factors when
voting on director  compensation:  (i) whether  director  shares are at the same
market risk as those of the  issuer's  shareholders;  and (ii) how stock  option
programs  for outside  directors  compare with the  standards of internal  stock
option programs.

         3. GOLDEN AND TIN PARACHUTES.  PIMCO may consider the following factors
when voting on golden and/or tin parachutes:  (i) whether they will be submitted
for  shareholder  approval;  and (ii) the employees  covered by the plan and the
quality of management.

         STATE OF INCORPORATION

         STATE TAKEOVER STATUTES.  PIMCO may consider the following factors when
voting on proposals to opt out of a state  takeover  statute:  (i) the power the
statute  vests with the  issuer's  board;  (ii) the  potential of the statute to
stifle  bids;  and (iii) the  potential  for the statute to empower the board to
negotiate a better deal for shareholders.

         MERGERS AND RESTRUCTURINGS

         1. MERGERS AND  ACQUISITIONS.  PIMCO may consider the following factors
when  voting on a merger  and/or  acquisition:  (i)  anticipated  financial  and
operating  benefits as a result of the merger or acquisition;  (ii) offer price;
(iii) prospects of the combined companies; (iv) how the deal was negotiated; and
(v) changes in corporate  governance  and the  potential  impact on  shareholder
rights.  PIMCO may also consider what impact the merger or acquisition  may have
on groups/organizations other than the issuer's shareholders.

         2.  CORPORATE  RESTRUCTURINGS.  With respect to a proxy  proposal  that
includes a  spin-off,  PIMCO may  consider  the tax and  regulatory  advantages,
planned use of sale  proceeds,  market focus,  and managerial  incentives.  With
respect to a proxy proposal that includes an asset sale,  PIMCO may consider the
impact on the balance  sheet or working  capital and the value  received for the
asset.  With respect to a proxy proposal that includes a liquidation,  PIMCO may
consider  management's  efforts to pursue  alternatives,  the appraisal value of
assets, and the compensation plan for executives managing the liquidation.

         INVESTMENT COMPANY PROXIES

For a client that is invested in an investment  company,  PIMCO votes each proxy
of the investment company on a case-by-case basis and takes all reasonable steps
to ensure  that  proxies are voted  consistent  with all  applicable  investment
policies  of  the  client  and in  accordance  with  any  resolutions  or  other
instructions approved by authorized persons of the client.

For a client that is invested in an investment  company that is advised by PIMCO
or its  affiliates,  if there is a conflict of interest  which may be  presented
when voting for the client (E.G., a proposal to approve a contract between PIMCO
and the investment company), PIMCO will resolve the conflict by doing any one of
the following:  (i) voting in accordance  with the  instructions/consent  of the
client after  providing  notice of and  disclosing  the conflict to that

                                       8
<PAGE>

client;  (ii)  voting  the proxy in  accordance  with the  recommendation  of an
independent  third-party  service  provider;  or (iii) delegating the vote to an
independent third-party service provider.

         1. ELECTION OF DIRECTORS OR TRUSTEES.  PIMCO may consider the following
factors  when voting on the director or trustee  nominees of a mutual fund:  (i)
board structure, director independence and qualifications, and compensation paid
by the fund and the family of funds;  (ii)  availability and attendance at board
and committee meetings;  (iii) investments made by the nominees in the fund; and
(iv) the fund's performance.

         2. CONVERTING  CLOSED-END FUND TO OPEN-END FUND. PIMCO may consider the
following  factors when voting on  converting  a closed-end  fund to an open-end
fund: (i) past  performance as a closed-end  fund;  (ii) the market in which the
fund invests;  (iii)  measures taken by the board to address any discount of the
fund's shares;  (iv) past  shareholder  activism;  (v) board activity;  and (vi)
votes on related proposals.

         3. PROXY CONTESTS.  PIMCO may consider the following factors related to
a proxy contest:  (i) past performance of the fund; (ii) the market in which the
fund  invests;  (iii)  measures  taken by the board to address past  shareholder
activism; (iv) board activity; and (v) votes on related proposals.

         4.  INVESTMENT  ADVISORY  AGREEMENTS.  PIMCO may consider the following
factors related to approval of an investment  advisory  agreement:  (i) proposed
and current fee arrangements/schedules; (ii) fund category/investment objective;
(iii)  performance  benchmarks;  (iv) share price  performance  as compared with
peers;  and (v) the  magnitude  of any fee increase and the reasons for such fee
increase.

         5.  POLICIES  ESTABLISHED  IN ACCORDANCE  WITH THE 1940 ACT.  PIMCO may
consider the  following  factors:  (i) the extent to which the proposed  changes
fundamentally  alter  the  investment  focus  of the fund  and  comply  with SEC
interpretation;  (ii) potential competitiveness;  (iii) regulatory developments;
and (iv) current and potential returns and risks.

         6. CHANGING A FUNDAMENTAL RESTRICTION TO A NON-FUNDAMENTAL RESTRICTION.
PIMCO  may  consider  the  following  when  voting  on a  proposal  to  change a
fundamental restriction to a non-fundamental  restriction:  (i) reasons given by
the board and  management for the change;  and (ii) the projected  impact of the
change on the fund's portfolio.

         7.  DISTRIBUTION  AGREEMENTS.  PIMCO may  consider the  following  when
voting on a proposal to approve a  distribution  agreement:  (i) fees charged to
comparably   sized  funds  with   similar   investment   objectives;   (ii)  the
distributor's reputation and past performance;  and (iii) competitiveness of the
fund among other similar funds in the industry.

         8. NAMES RULE PROPOSALS.  PIMCO may consider the following factors when
voting on a proposal  to change a fund name,  consistent  with Rule 35d-1 of the
1940 Act:  (i)  whether  the fund  invests a minimum of 80% of its assets in the
type of  investments  suggested by the

                                       9
<PAGE>

proposed name; (ii) the political and economic changes in the target market; and
(iii) current asset composition.

         9.  DISPOSITION OF  ASSETS/TERMINATION/LIQUIDATION.  PIMCO may consider
the following when voting on a proposal to dispose of fund assets, terminate, or
liquidate the fund: (i) strategies employed to salvage the fund; (ii) the fund's
past performance; and (iii) the terms of the liquidation.

         10. CHANGES TO CHARTER DOCUMENTS. PIMCO may consider the following when
voting on a proposal to change a fund's charter documents:  (i) degree of change
implied by the proposal;  (ii)  efficiencies  that could result;  (iii) state of
incorporation; and (iv) regulatory standards and implications.

         11.  CHANGING THE DOMICILE OF A FUND.  PIMCO may consider the following
when voting on a proposal to change the domicile of a fund:  (i)  regulations of
both states;  (ii) required  fundamental  policies of both states; and (iii) the
increased flexibility available.

         12.  CHANGE  IN  FUND'S  SUBCLASSIFICATION.   PIMCO  may  consider  the
following when voting on a change in a fund's subclassification from diversified
to  non-diversified  or to permit  concentration  in an industry:  (i) potential
competitiveness;   (ii)   current   and   potential   returns;   (iii)  risk  of
concentration; and (iv) consolidation in the target industry.

         DISTRESSED AND DEFAULTED SECURITIES

         1.  WAIVERS  AND  CONSENTS.  PIMCO  may  consider  the  following  when
determining  whether to support a waiver or consent to changes in  provisions of
indentures  governing debt securities  which are held on behalf of clients:  (i)
likelihood that the granting of such waiver or consent will potentially increase
recovery to clients;  (ii)  potential  for avoiding  cross-defaults  under other
agreements;  and (iii) likelihood that deferral of default will give the obligor
an opportunity to improve its business operations.

         2. VOTING ON CHAPTER 11 PLANS OF LIQUIDATION OR  REORGANIZATION.  PIMCO
may consider the  following  when  determining  whether to vote for or against a
Chapter  11 plan  in a case  pending  with  respect  to an  obligor  under  debt
securities  which are held on behalf of clients:  (i) other  alternatives to the
proposed plan; (ii) whether clients are treated  appropriately and in accordance
with applicable law with respect to their distributions;  (iii) whether the vote
is likely to increase or decrease recoveries to clients.

                                       10
<PAGE>

         MISCELLANEOUS PROVISIONS

         1. SUCH OTHER  BUSINESS.  Proxy  ballots  sometimes  contain a proposal
granting the board  authority to "transact  such other  business as may properly
come  before  the  meeting."  PIMCO may  consider  the  following  factors  when
developing  a position on proxy  ballots  that  contain a proposal  granting the
board authority to "transact such other business as may properly come before the
meeting":  (i) whether the board is limited in what  actions it may legally take
within such  authority;  and (ii)  PIMCO's  responsibility  to consider  actions
before supporting them.

         2. EQUAL ACCESS.  PIMCO may consider the following  factors when voting
on equal access:  (i) the opportunity for  significant  company  shareholders to
evaluate and propose  voting  recommendations  on proxy  proposals  and director
nominees, and to nominate candidates to the board; and (ii) the added complexity
and burden of providing shareholders with access to proxy materials.

         3. CHARITABLE  CONTRIBUTIONS.  PIMCO may consider the following factors
when  voting  on  charitable  contributions:   (i)  the  potential  benefits  to
shareholders; and (ii) the potential impact on the issuer's resources that could
have been used to increase shareholder value.

         4. SPECIAL  INTEREST ISSUES.  PIMCO may consider the following  factors
when  voting  on  special  interest  issues:   (i)  the  long-term   benefit  to
shareholders of promoting corporate  accountability and responsibility on social
issues;  (ii)  management's  responsibility  with  respect to  special  interest
issues; (iii) any economic costs and restrictions on management; (iv) a client's
instruction  to vote proxies in a specific  manner and/or in a manner  different
from these Policies and Procedures;  and (v) the  responsibility to vote proxies
for the greatest long-term shareholder value.

                                    * * * * *



232626.11.03

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