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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0001133228-05-000143.txt : 20050330
<SEC-HEADER>0001133228-05-000143.hdr.sgml : 20050330
<ACCEPTANCE-DATETIME>20050330135848
ACCESSION NUMBER:		0001133228-05-000143
CONFORMED SUBMISSION TYPE:	N-Q
PUBLIC DOCUMENT COUNT:		3
CONFORMED PERIOD OF REPORT:	20050131
FILED AS OF DATE:		20050330
DATE AS OF CHANGE:		20050330
EFFECTIVENESS DATE:		20050330

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MUNICIPAL HIGH INCOME FUND INC
		CENTRAL INDEX KEY:			0000830487
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1031

	FILING VALUES:
		FORM TYPE:		N-Q
		SEC ACT:		1940 Act
		SEC FILE NUMBER:	811-05497
		FILM NUMBER:		05713190

	BUSINESS ADDRESS:	
		STREET 1:		CITIGROUP ASSET MANAGEMENT
		STREET 2:		125 BROAD STREET, 10TH FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10004
		BUSINESS PHONE:		212-291-2556

	MAIL ADDRESS:	
		STREET 1:		CITIGROUP ASSET MANAGEMENT
		STREET 2:		125 BROAD STREET, 10TH FLOOR
		CITY:			NEW YORK
		STATE:			NY
		ZIP:			10004

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	SPECIAL OPPORTUNITIES MUNICIPAL FUND INC
		DATE OF NAME CHANGE:	19881025
</SEC-HEADER>
<DOCUMENT>
<TYPE>N-Q
<SEQUENCE>1
<FILENAME>sb142027.htm
<DESCRIPTION>SCHEDULE OF INVESTMENTS
<TEXT>
<HTML>
<HEAD>
<TITLE></TITLE>
</HEAD>
<BODY>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>UNITED STATES<BR>
                                    SECURITIES AND EXCHANGE COMMISSION<BR>
                                          Washington, D.C. 20549 </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>FORM N-Q </FONT></H1>


<!-- MARKER FORMAT-SHEET="Head Major Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>QUARTERLY SCHEDULE OF
PORTFOLIO HOLDINGS OF REGISTERED <BR>MANAGEMENT
INVESTMENT COMPANY </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Investment Company Act
file number 811-5497 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center Bold-TNR" FSL="Project" -->
<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Municipal High Income
Fund Inc. </FONT></H1>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(Exact name of
registrant as specified in charter) </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>125 Broad Street, New
York, NY 10004 <BR>(Address of principal executive offices) (Zip
code) </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Robert I. Frenkel, Esq.<BR>
                                  Salomon Brothers Asset Management Inc.<BR>
                                         300 First Stamford Place<BR>
                                            Stamford, CT 06902<BR>
                                 (Name and address of agent for service) </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Registrant&#146;s telephone
number, including area code: 1-800-725-6666 </FONT></P>

<!-- MARKER FORMAT-SHEET="Head Minor Center-TNR" FSL="Project" -->
<P ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date of fiscal year
end: <B>October 31</B><BR> Date of reporting period: <B>January 31, 2005</B> </FONT> </P>


<!-- MARKER PAGE="sheet: 1; page: 1" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 1.</FONT>
</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SCHEDULE OF INVESTMENTS</FONT>
</TD>
</TR>
</TABLE>
<BR>

<TABLE width="600" BORDER="0" CELLPADDING="0" CELLSPACING="0">
<TR VALIGN="BOTTOM">
     <TH><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><BR><B>MUNICIPAL HIGH INCOME
FUND INC.</B></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><BR><B>FORM N-Q <BR>JANUARY 31, 2005</B></FONT>
</TD></TR>
</TABLE>

<DIV STYLE="page-break-after:always"></DIV>

<TABLE width="600" border="0" cellpadding="0" cellspacing="0">
<tr>
  <td width="106"><IMG src="star.jpg" width="80" height="70"></td>
  <td align="right" valign="top"><FONT face="Times New Roman, Times, Serif" size=2><B><I>Municipal High Income Fund Inc.<BR>
  </I></B>Schedule of Investments


(unaudited)<BR>January 31, 2005</FONT>
</TD>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
</TABLE>
<TABLE width="600" border="0" cellspacing="0" cellpadding="0">
  <TR valign="bottom">
    <TD colspan="2" align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>FACE<BR>
    AMOUNT</B></FONT>
</TD>
    <TD><font size="1">&nbsp;</FONT>
</TD>
    <TD nowrap><FONT face="Times New Roman, Times, Serif" size=1><B>RATING(a)</B></FONT>
</TD>
    <TD align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>SECURITY</B></FONT>
</TD>
    <TD colspan="2" align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>VALUE</B></FONT>
</TD>
  </TR>
  <TR>        <td colspan="7"><HR size="2" noshade></td>
  </TR>
  <TR>
    <TD colspan="7"><FONT face="Times New Roman, Times, Serif" size=2><B>MUNICIPAL BONDS &#151; 98.9%<BR>
Alabama &#151; 1.1%</B></FONT>
</TD>
  </TR>
  <TR valign="top">
    <TD width="2%"><FONT face="Times New Roman, Times, Serif" size=2>$</FONT>
</TD>
    <TD width="10%" align="right"><FONT face="Times New Roman, Times, Serif" size=2>615,000</FONT>
</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%"><FONT face="Times New Roman, Times, Serif" size=2>NR</FONT>
</TD>
    <TD><FONT face="Times New Roman, Times, Serif" size=2>Capstone Improvement District of Brookwood, AL, Series A,</FONT>
</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" align="right" valign="bottom">&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.700% due 8/15/23 (b)</FONT>
</TD>
    <TD valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>$</FONT>
</TD>
    <TD align="right" valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>61,500</FONT>
</TD>
  </TR>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">11,765</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">D</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Mobile, AL IDB, Solid Waste Disposal Revenue, (Mobile</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Energy Services Co. Project), 6.950% due 1/1/20 (b)</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">74</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Rainbow City, AL Special Health Care Facility Financing</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Authority, Series A, 8.250% due 1/1/31 (b) </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">691,670</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">AAA</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">West Jefferson, AL Amusement &amp; Public Park Authority</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Revenue, (Visionland Project), (Call 12/1/06 @ 102),</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">8.000% due 12/1/26 (c)</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,119,620</FONT>
</TD>
  </tr>
  <tr>        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,872,864</FONT>
</TD>
  </tr>
  <tr>        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr>
    <td colspan="7" valign="top"><FONT size="2"><b> <FONT face="Times New Roman, Times, serif">Alaska</FONT></b><FONT face="Times New Roman, Times, serif"><b> &#151; 1.9%</b></FONT></FONT>
</TD>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">AAA</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Alaska Housing Finance Corporation, Series A, FGIC-Insured, </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">5.000% due 12/1/26 (d)</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,116,060</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,055,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Alaska Industrial Development &amp; Export Authority Revenue,</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Williams Lynxs Alaska Cargoport, 8.125% due 5/1/31 (e)</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,122,066</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">3,238,126</FONT>
</TD>
  </tr>
  <tr>        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr>
    <td colspan="7" valign="top"><FONT size="2"><b> <FONT face="Times New Roman, Times, serif">Arizona</FONT></b><FONT face="Times New Roman, Times, serif"><b> &#151; 3.1%</b></FONT></FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,500,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Casa Grande, AZ IDA, Hospital Revenue, Casa Grande</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Regional Medical Center, Series A, 7.625% due 12/1/29</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,604,370</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">BB-</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Gila County, AZ IDA Revenue, ASARCO Inc.,</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">5.550% due 1/1/27</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">839,930</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">935,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Maricopa, AZ IDA, MFH Revenue, (Gran Victoria Housing</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">LLC Project), Series B, 10.000% due 5/1/31 (f)</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">943,733</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,795,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Phoenix, AZ IDA, MFH Revenue, (Ventana Palms </FONT>
<FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Apartments </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Project), Series B, 8.000% due 10/1/34</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,792,667</FONT>
</TD>
  </tr>
  <tr>        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">5,180,700</FONT>
</TD>
  </tr>
  <tr>        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr>
    <td colspan="7" valign="top"><font size="2" face="Times New Roman, Times, serif"><b> Arkansas &#151; 1.1% </b></FONT>   </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Arkansas State Development Finance Authority:</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">BBB-</FONT>
</TD>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Hospital Revenue, (Washington Regional Medical Center</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Project), 7.375% due 2/1/29</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,115,920</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">600,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">BB+</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Industrial Facilities Revenue, (Potlatch Corp. Project),</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Series A, 7.750% due 8/1/25 (e)</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">661,596</FONT>
</TD>
  </tr>
  <tr>        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,777,516</FONT>
</TD>
  </tr>
  <tr>        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr>
    <td colspan="7" valign="top"><font size="2" face="Times New Roman, Times, serif"><b> California &#151; 8.5%</b></FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,500,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Barona, CA Band of Mission Indians, GO,</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">8.250% due 1/1/20 (f)</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,619,160</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">3,000,000</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">A-1+</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">California Pollution Control Financing Authority, Pollution </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Control Revenue, Pacific Gas &amp; Electric Corp., Series F, </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">1.890% due 11/1/26 (g) </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">3,000,000</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
</table>

<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2><B>See Notes to Schedule of Investments.</B></FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>1</FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><BR>
<TABLE width="600" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="106"><IMG src="star.jpg" width="80" height="70"></td>
    <td align="right" valign="top"><FONT face="Times New Roman, Times, Serif" size=2><B><I>Municipal High Income Fund Inc.<BR>
      </I></B>Schedule of Investments (unaudited) (continued)<BR>
      January 31, 2005</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="2"><hr size="5" noshade ></td>
  </tr>
</TABLE>
<table width="600" border="0" cellpadding="0" cellspacing="0">
  <tr valign="bottom">
    <td colspan="2" align="center"><font face="Times New Roman, Times, Serif" size="1"><b>FACE<br>
      AMOUNT</b></FONT>
</TD>
    <td><font size="1">&nbsp;</FONT>
</TD>
    <td nowrap><font face="Times New Roman, Times, Serif" size="1"><b>RATING(a)</b></FONT>
</TD>
    <td align="center"><font face="Times New Roman, Times, Serif" size="1"><b>SECURITY</b></FONT>
</TD>
    <td colspan="3" align="center"><font face="Times New Roman, Times, Serif" size="1"><b>VALUE</b></FONT>
</TD>
  </tr>
  <tr>
    <td colspan="8"><HR size="2" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="5"><font size="2" face="Times New Roman, Times, serif"><b> California &#151; 8.5% (continued) </b></FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td width="2%">&nbsp;</td>
    <td width="10%" align="right">&nbsp;</td>
    <td width="3%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">California State Department of Water Resources, </FONT>
</TD>
    <td width="1%">&nbsp;</td>
    <td width="12%" align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Power Supply Revenue: </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">$</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,500,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">AAA&#135;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
<FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">MBIA-Insured, RITES, 8.311% due 5/1/11 (h)</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">$</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,829,490</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"> 750,000 </font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"> NR </font></font> </td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
<FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">XLCA-Insured, RITES, 7.798% due 5/1/10 (h)</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"> <font size="2" face="Times New Roman, Times, serif">934,035 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2" face="Times New Roman, Times, serif">1,500,000</FONT>
<FONT size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font face="Times New Roman, Times, serif"><font size="2">NR</font></FONT>
<FONT size="2"></font></font> </td>
    <td><font size="2" face="Times New Roman, Times, serif"> California Statewide Communities Development Authority </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2">&nbsp;</font> </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Revenue, (East Valley Tourist Project), Series A, </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">9.250% due 10/1/20 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,623,330</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">Golden State Tobacco Securitization Corp., Tobacco </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Settlement Revenue: </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">A-</FONT>
</TD>
    <td><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.625% due 6/1/38</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,078,070</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">BBB</FONT>
</TD>
    <td><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.800% due 6/1/42 (d)</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,205,460</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,865,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">Ba2*</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">Vallejo, CA COP, Touro University, 7.375% due 6/1/29</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,937,660</FONT>
</TD>
  </tr>
  <tr valign="bottom">        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">14,227,205</FONT>
</TD>
  </tr>
  <tr valign="bottom">        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr valign="bottom">
    <td colspan="7"><font size="2" face="Times New Roman, Times, serif"><b> Colorado &#151; 2.7% </b></font> <font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><font size="2" face="Times New Roman, Times, serif">Colorado Education and Cultural Facilities Authority Revenue:</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Colorado Lutheran High School Project, Series A,</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.625% due 6/1/34 (d)</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,039,060</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">910,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">AAA</FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Peak to Peak Project, (Call 8/5/11 @ 100),</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.500% due 8/15/21 (c)</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,105,195</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">785,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">Elbert County Charter, 7.375% due 3/1/35</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">793,454</font></FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">500,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">Southlands Medical District, CO, 7.125% due 12/1/34</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">513,245</FONT>
</TD>
  </tr>
  <tr valign="bottom">        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">4,450,954</FONT>
</TD>
  </tr>
  <tr valign="bottom">        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr valign="bottom">
    <td colspan="7"><font size="2" face="Times New Roman, Times, serif"><b> District of Columbia &#151; 1.3% </b></FONT>
<FONT face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,895,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">AAA</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">District of Columbia COP, AMBAC-Insured,</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">5.500% due 1/1/20 (d)</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,125,868</FONT>
</TD>
  </tr>
  <tr valign="bottom">        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr valign="bottom">
    <td colspan="7"><font size="2" face="Times New Roman, Times, serif"><b> Florida &#151; 11.6%</b></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">Beacon Lakes Community Development District, Special</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Assessment, Series A, 6.900% due 5/1/35</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,041,250</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,500,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">Bonnet Creek Resort Community Development District, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">FL Special Assessment, 7.500% due 5/1/34</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,613,670</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><font size="2" face="Times New Roman, Times, serif">Capital Projects Finance Authority, FL:</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Continuing Care Retirement, Glenridge on Palmer Ranch,</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Series A, 8.000% due 6/1/32 (d)</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,111,200</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Student Housing Revenue, Florida University, Series A,</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.850% due 8/15/31 (d)</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,012,220</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">Capital Trust Agency Revenue, Seminole Tribe Convention</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Center, Series A, 10.000% due 10/1/33</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,144,940</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">980,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">Century Parc Community Development District, Special</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Assessment, 7.000% due 11/1/31</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,042,279</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">A</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">Highlands County, FL Health Facilities Authority Revenue, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adventist Health Systems, 6.000% due 11/15/25 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">1,108,580</font></FONT>
</TD>
  </tr>
</table>
<br>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2><B>See Notes to Schedule of Investments.</B></FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>2</FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><BR>

<TABLE width="600" border="0" cellpadding="0" cellspacing="0">
<tr>
  <td width="106"><IMG src="star.jpg" width="80" height="70"></td>
  <td align="right" valign="top"><FONT face="Times New Roman, Times, Serif" size=2><B><I>Municipal High Income Fund Inc.<BR>
  </I></B>Schedule of Investments (unaudited) (continued)<BR>
  January 31, 2005</FONT>
</TD>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
</TABLE>
<TABLE width="600" border="0" cellspacing="0" cellpadding="0">
  <TR valign="bottom">
    <TD colspan="2" align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>FACE<BR>
      AMOUNT</B></FONT>
</TD>
    <TD><font size="1">&nbsp;</FONT>
</TD>
    <TD nowrap><FONT face="Times New Roman, Times, Serif" size=1><B>RATING(a)</B></FONT>
</TD>
    <TD align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>SECURITY</B></FONT>
</TD>
    <TD colspan="2" align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>VALUE</B></FONT>
</TD>
  </TR>
  <TR>
    <td colspan="7"><HR size="2" noshade></td>
  </TR>
  <TR>
    <TD colspan="7"><p> <font size="2" face="Times New Roman, Times, serif"><b>Florida &#151; 11.6% (continued)</b></font></p></TD>
  </TR>
  <TR valign="top">
    <TD width="2%"><FONT face="Times New Roman, Times, Serif" size=2>$</FONT>
</TD>
    <TD width="10%" align="right"><FONT face="Times New Roman, Times, Serif" size=2> 875,000 </FONT>
</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="10%"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <TD><FONT face="Times New Roman, Times, Serif" size=2> Homestead , FL IDR, Community Rehabilitation Providers </FONT>
</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" align="right" valign="bottom">&nbsp;</TD>
  </TR>
  <TR valign="top">
    <TD>&nbsp;</TD>
    <TD align="right">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Program, Series A, 7.950% due 11/1/18 &nbsp;</FONT>
</TD>
    <TD valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>$</FONT>
</TD>
    <TD align="right" valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>888,606</FONT>
</TD>
  </TR>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">BB+</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Martin County , FL IDA Revenue, (Indiantown Cogeneration <br>
    </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Project), Series A, 7.875% due 12/15/25 (d)(e) </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,051,500</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Orange County , FL Health Facilities Authority Revenue, First </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Mortgage, (GF/Orlando, Inc. Project), 9.000% due 7/1/31 </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,028,270</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">535,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">AAA</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Palm Beach County , FL Health Facilities Authority Revenue, </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">(John F. Kennedy Memorial Hospital Inc. Project), </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">9.500% due 8/1/13 (i) </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">689,481</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Reunion East Community Development District, Special </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Assessment, Series A, 7.375% due 5/1/33 </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,177,340</FONT> </td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">B-</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Santa Rosa Bay Bridge Authority, FL Revenue, <br>
    </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">6.250% due 7/1/28 </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">924,970</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif"> 1,450,000 </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Waterlefe Community Development District, Golf Course </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Revenue, 8.125% due 10/1/25 </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,573,120</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">19,407,426</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>

    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td colspan="2" valign="bottom"><HR size="1" noshade></td>
  </tr>
  <TR>
    <TD colspan="7"><p> <font size="2" face="Times New Roman, Times, serif"><b>Georgia &#151; 4.2%</b></font></p></TD>
  </TR>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">AAA</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Atlanta, GA Airport Revenue, Series B, FGIC-Insured, </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">5.625% due 1/1/30 (e) </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><p><font size="2" face="Times New Roman, Times, serif"> 1,058,430 </font></p></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif"> 2,500,000 </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Atlanta, GA Tax Allocation, (Atlantic Station Project), </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.900% due 12/1/24 (d) </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><p><font size="2" face="Times New Roman, Times, serif"> 2,751,300 </font></p></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Brunswick &amp; Glynn County, GA Development Authority </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Revenue, First Mortgage, Coastal Community Retirement, </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Series A, 7.250% due 1/1/35 </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif"> 1,015,350 </FONT>
</TD>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">BBB+&#135;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Gainesville &amp; Hall County, GA Development Authority Revenue, </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Senior Living Facility, Lanier Village Estates, Series C, <br>
    </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.250% due 11/15/29 </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif"> 1,085,400 </FONT>
</TD>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,005,000</FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Walton County, GA IDA Revenue, (Walton Manufacturing Co. </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Project), 8.500% due 9/1/07 </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><p><font size="2" face="Times New Roman, Times, serif"> 1,045,170 </font></p></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td colspan="2" valign="bottom"><HR size="1" noshade></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td align="right" valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">6,955,650</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr>
    <td colspan="7" valign="top"><p> <b><font size="2" face="Times New Roman, Times, serif">Illinois &#151; 1.3%</font></b></p></td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">AAA</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">Chicago , IL GO, Neighborhoods Alive 21 Program,<br>
    </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom">&nbsp;</td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">FGIC-Insured, 5.500% due 1/1/31 (d) </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,186,160</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr>
    <td colspan="7" valign="top"><FONT size="2"><b> <FONT face="Times New Roman, Times, serif">Indiana</FONT></b><FONT face="Times New Roman, Times, serif"><b> &#151; 2.1%</b></FONT></FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,500,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">BBB-</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> East Chicago , IN PCR, (Inland Steel Co. Project No. 10), <br>
    </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">6.800% due 6/1/13 (d) </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">2,530,800</FONT>
</TD>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">BB+</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif"> Indiana State Development Finance Authority, PCR, </FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">(Inland Steel Co. Project No. 13), 7.250% due 11/1/11 (e) </FONT>
</TD>
    <td valign="bottom">&nbsp;</td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">1,050,740</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr>
    <td valign="top"><p>&nbsp; </p></td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td valign="bottom"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT> </td>
    <td align="right" valign="bottom"><font size="2" face="Times New Roman, Times, serif">3,581,540</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
</table>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2><B>See Notes to Schedule of Investments.</B></FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>3</FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><BR>

<TABLE width="600" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="106"><IMG src="star.jpg" width="80" height="70"></td>
    <td align="right" valign="top"><FONT face="Times New Roman, Times, Serif" size=2><B><I>Municipal High Income Fund Inc.<BR>
      </I></B>Schedule of Investments (unaudited)  (continued)<BR>
      January 31, 2005</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="2"><hr size="5" noshade ></td>
  </tr>
</TABLE>
<table width="600" border="0" cellpadding="0" cellspacing="0">
  <tr valign="bottom">
    <td colspan="2" align="center"><font face="Times New Roman, Times, serif" size="1"><b>FACE<br>
      AMOUNT</b></FONT>
</TD>
    <td><font size="1" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td nowrap><font face="Times New Roman, Times, serif" size="1"><b>RATING(a)</b></FONT>
</TD>
    <td align="center"><font face="Times New Roman, Times, serif" size="1"><b>SECURITY</b></FONT>
</TD>
    <td colspan="3" align="center"><font face="Times New Roman, Times, serif" size="1"><b>VALUE</b></FONT>
</TD>
  </tr>
  <tr>
    <td colspan="8"><HR size="2" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="5">
      <p> <b><font size="2" face="Times New Roman, Times, serif">Kentucky &#151; 0.6% </font></b></p>
    </td>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td width="2%"><font size="2" face="Times New Roman, Times, serif">$</FONT>
</TD>
    <td width="10%" align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td width="3%">&nbsp;</td>
    <td width="10%"><font size="2" face="Times New Roman, Times, serif">A-1+</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Louisville &amp; Jefferson County, KY Metropolitan Sewer District, <br>
</FONT>
</TD>
    <td width="1%">&nbsp;</td>
    <td width="12%" align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Sewer &amp; Drain System, Series B, FSA-Insured, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">1.830% due 5/15/23 (g) </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">$</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
  </tr>
  <tr valign="bottom">        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr valign="bottom">
    <td colspan="7">
      <p> <b><font size="2" face="Times New Roman, Times, serif">Louisiana &#151; 2.1% </font></b></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><FONT size=2 face="Times New Roman, Times, serif"> Epps , LA COP, 8.000% due 6/1/18 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">1,039,710</font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,600,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>Louisiana Local Government Environmental Facilities, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Community Development Authority Revenue Refunding, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">St. James Place , Series A, 7.000% due 11/1/25 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,542,768</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">BB-</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Port of New Orleans, LA IDR, (Continental Grain Co. Project), </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.500% due 7/1/13 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,014,590</FONT>
</TD>
  </tr>
  <tr valign="bottom">        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">3,597,068</FONT>
</TD>
  </tr>
  <tr valign="bottom">        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr valign="bottom">
    <td colspan="7">
    <p> <b><font size="2" face="Times New Roman, Times, serif">Maryland &#151; 1.9% </font></b></p>     </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">3,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Maryland State Economic Development Corp. Revenue, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Chesapeake Bay, Series A, 7.730% due 12/1/27 (d) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">3,183,930</FONT>
</TD>
  </tr>
  <tr valign="bottom">        <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>

  </tr>
  <tr valign="bottom">
    <td colspan="7">
      <p> <b><font size="2" face="Times New Roman, Times, serif">Massachusetts &#151; 4.2% </font></b></p>
    </td>
  </tr>
  <tr valign="bottom">
    <td><font size="2">&nbsp;</font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><p><font size="2" face="Times New Roman, Times, serif"> Boston, MA IDA Financing Revenue: </font></p>      </td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">750,000</font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
<FONT size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Crosstown Center Project, 8.000% due 9/1/35 (e) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">767,010</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">970,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Roundhouse Hospitality LLC Project, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.875% due 3/1/25 (e) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">985,365</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">1,000,000</font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2">BBB</font></font> </td>
    <td><font size="2" face="Times New Roman, Times, serif"> Caritas Christi Obligation, Series B, 6.750% due 7/1/16 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">1,138,790</font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><FONT size=2 face="Times New Roman, Times, serif"> Massachusetts State Development Finance Agency </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Revenue Briarwood, Series B, (Call 12/1/10 @ 101), </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">8.250% due 12/1/30 (c) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">1</FONT>
<FONT size="2" face="Times New Roman, Times, serif">,277,860</font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">200,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">A-1+</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2> Massachusetts State Health &amp; Educational Facilities </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Authority Revenue, Partners Healthcare System, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td> <FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Series D-5, 1.880% due 7/1/17 (g) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">200,000</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,900,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif"> Massachusetts State Industrial Finance Agency Revenue, <br>
</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Assisted Living Facility, (Marina Bay LLC Project), <br>
    </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.500% due 12/1/27 (d)(e) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,951,851</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">455,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">AAA</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2> Massachusetts State Port Authority Revenue, <br>
</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">13.000% due 7/1/13 (i) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><p><font size="2" face="Times New Roman, Times, serif"> 662,607 </font></p>      </td>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">6,983,483</font></font> </td>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="7"><p>  <b><font size="2" face="Times New Roman, Times, serif">Michigan &#151; 6.3%</font></b> <b></b></p></td>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">2,130,000</font></font> </td>
    <td>&nbsp;</td>
    <td><font face="Times New Roman, Times, serif"><font size="2" face="Times New Roman, Times, serif">NR</FONT>
<FONT size="2"></font></font> </td>
    <td><FONT size=2 face="Times New Roman, Times, serif"> Allen Academy, COP, 7.500% due 6/1/23 (d) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">2,129,659</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font face="Times New Roman, Times, serif"><font size="2"></font></font> </td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Cesar Chavez Academy, COP, 8.000% due 2/1/33 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font face="Times New Roman, Times, serif"><font size="2">1,041,850</font></font> </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,900,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif"> Ba2* </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Garden City, MI Hospital Finance Authority, Hospital Revenue, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Garden City Hospital Obligation Group, Series A, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.625% due 9/1/10</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,888,695</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Gaudior Academy, MI COP, 7.250% due 4/1/34 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,019,780 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,750,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Kalamazoo Advantage Academy, COP, 8.000% due 12/1/33 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><p><font size="2" face="Times New Roman, Times, serif"> 1,780,083 </font></p></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,000,000</FONT>
</TD>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif">NR</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Merritt Academy, MI COP, 7.250% due 12/1/24 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><p><font size="2" face="Times New Roman, Times, serif"> 1,011,730 </font></p></td>
  </tr>
</table>
<br>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2><B>See Notes to Schedule of Investments.</B></FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>4</FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><BR>
<TABLE width="600" border="0" cellpadding="0" cellspacing="0">
<tr>
  <td width="106"><IMG src="star.jpg" width="80" height="70"></td>
  <td align="right" valign="top"><FONT face="Times New Roman, Times, Serif" size=2><B><I><a name="a4"></a>Municipal High Income Fund Inc.<BR>
  </I></B>Schedule of Investments (unaudited) (continued)<BR>Janury 31, 2005</FONT>
</TD>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
</TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR valign="bottom">
  <TD colspan="2" align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>FACE<BR>
    AMOUNT</B></FONT>
</TD>
  <TD><font size="1">&nbsp;</FONT>
</TD>
  <TD nowrap><FONT face="Times New Roman, Times, Serif" size=1><B>RATING(a)</B></FONT>
</TD>
  <TD align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>SECURITY</B></FONT>
</TD>
  <TD colspan="2" align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>VALUE</B></FONT>
</TD>
</TR>
<TR VALIGN=Bottom>
  <TD colspan="7" ALIGN=LEFT><HR NOSHADE SIZE=1></TD>
  </TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Michigan &#151; 6.3% (continued)</b></FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD width="2%" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT>
</TD>
     <TD width="10%" ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 1,000,000  </FONT>
</TD><TD width="3%" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD width="10%" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Star International Academy, MI COP, 7.000% due 3/1/33</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>  1,020,920</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>700,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>William C. Abney Academy, MI COP, 6.750% due 7/1/19</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>696,759</FONT>
</TD>
  </TR>
<TR>
     <TD>&nbsp;</TD>
     <TD>&nbsp;</TD>
     <TD>&nbsp;</TD>
     <TD>&nbsp;</TD>
     <TD>&nbsp;</TD>
     <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>10,589,476</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
  <TD colspan="5" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Minnesota &#151; 0.6%</b></FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Minneapolis &amp; St. Paul, MN Metropolitan Airports Community</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Special Facility Revenue, (Northwest Airlines Project),</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Series A, 7.000% due 4/1/25 (e)</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>940,410</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Missouri &#151; 0.2%</b></FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>250,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>St. Joseph, MO IDA, (Living Community of St. Joseph Project),</FONT>
</TD></TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">7.000% due 8/15/32</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>265,150</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Montana &#151; 2.3%</b></FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,515,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Montana State Board of Investment, Resource Recovery</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Revenue, (Yellowstone Energy L.P. Project),</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">7.000% due 12/31/19 (d)(e)</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,780,816</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>New Jersey &#151; 3.8%</b></FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>New Jersey EDA, Series A, Retirement Community Revenue,</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">8.250% due 11/15/30</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,104,730</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BBB-</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>New Jersey Health Care Facilities Financing Authority Revenue,</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Trinitas Hospital Obligation Group, 7.500% due 7/1/30 (d)</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3,401,940</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,750,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BBB</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Tobacco Settlement Financing Corp. Revenue,</FONT>
</TD></TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">6.750% due 6/1/39</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,780,958</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>6,287,628</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>New Mexico &#151; 1.5%</b></FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Albuquerque, NM Hospital Revenue, Southwest Community</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Health Services:</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>220,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AAA</FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Call 8/1/08 @ 100, 10.000% due 8/1/12 (c)</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>262,651</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>115,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AAA</FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Call 8/1/08 @ 100, 10.125% due 8/1/12 (c)</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>137,695</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR </FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Otero County, (Detention Facility Project), COP,</FONT>
</TD></TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">7.500% due 12/1/24</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,003,830</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR </FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Sandoval County, NM Project Revenue, (Santa Ana Pueblo</FONT>
</TD></TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Project), 7.750% due 7/1/15</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,042,300</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,446,476</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>New York &#151; 5.5%</b></FONT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>700,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR </FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Brookhaven, NY IDA, Civic Facility Revenue, Memorial</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Hospital Medical Center, Series A, 8.250% due 11/15/30</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>754,593</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AAA</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Metropolitan Transportation Authority, NY, Series A,</FONT>
</TD></TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">AMBAC-Insured, 5.000% due 7/1/30 (d)</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,086,680</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR </FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Monroe County, NY IDA, Woodland Village Project,</FONT>
</TD></TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">8.550% due 11/15/32</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,088,430</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,000,000</FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> A-1+</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>New York, NY GO, Series B2, Sub. Series B9, LOC-JPMorgan</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=LEFT></TD>
     <TD ALIGN=right></TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT size="2" face="Times New Roman, Times, serif">Chase &amp; Co., 1.820% due 8/15/23 (g)</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,000,000</FONT>
</TD>
  </TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2><B>See Notes to Schedule of Investments.</B></FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>5</FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><br>


  <TABLE width="600" border="0" cellpadding="0" cellspacing="0">
<tr>
  <td width="106"><IMG src="star.jpg" width="80" height="70"></td>
  <td align="right" valign="top"><FONT face="Times New Roman, Times, Serif" size=2><B><I>Municipal High Income Fund Inc.<BR>
  </I></B>Schedule of Investments (unaudited) (continued)<BR>Janury 31, 2005</FONT>
</TD>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
</TABLE>
<TABLE CELLPADDING=0 CELLSPACING=0 BORDER=0 WIDTH=600>
<TR valign="bottom">
  <TD colspan="2" align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>FACE<BR>
    AMOUNT</B></FONT>
</TD>
  <TD><font size="1">&nbsp;</FONT>
</TD>
  <TD nowrap><FONT face="Times New Roman, Times, Serif" size=1><B>RATING(a)</B></FONT>
</TD>
  <TD align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>SECURITY</B></FONT>
</TD>
  <TD colspan="2" align="center"><FONT face="Times New Roman, Times, Serif" size=1><B>VALUE</B></FONT>
</TD>
</TR>
<TR VALIGN=Bottom>
  <TD colspan="7" ALIGN=left><HR NOSHADE SIZE=1></TD>
  </TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>New York &#151; 5.5% (continued)</b></FONT>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD WIDTH=1% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD WIDTH=12% ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD width="2%" ALIGN=right>&nbsp;</TD>
     <TD width="10%" ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD width="3%" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD width="10%" ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>New York City, NY IDA, Civic Facility Revenue:</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT>
</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 1,360,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Community Residence for the Developmentally Disabled,</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.500% due 8/1/26</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>$</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2> 1,446,020</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,120,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Special Needs Facility Pooled Program, Series A-1,</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">8.125% due 7/1/19</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,221,416</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>500,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>A-1+</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Port Authority of New York &amp; New Jersey, Special Obligation</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Revenue, Versatile Structure Obligation, Series 3,</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">1.930% due 6/1/20 (g)</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>500,000</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>970,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Suffolk County, NY IDA, Civic Facility Revenue, Southampton</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Hospital Association, Series A, 7.750% due 1/1/22</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,011,739</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>9,108,878</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>North Carolina &#151; 1.7%</b></FONT>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Charlotte, NC Special Facilities Revenue, Charlotte/Douglas</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">International Airport, 5.600% due 7/1/27 (b)(e)</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>463,720</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>965,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>North Carolina Medical Care Commission, Health Care</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Facilities Revenue, First Mortgage, (De Paul Community</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Facilities Project), 7.625% due 11/1/29</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,010,529</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AAA</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>North Carolina Municipal Power Agency, Catawba Electric</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Revenue, MBIA-Insured, TICS, 9.389% due 1/1/11 (h)</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,294,720</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,768,969</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Ohio &#151; 2.9%</b></FONT>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,500,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BBB</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Cuyahoga County, OH Hospital Facilities Revenue,</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">(Canton Inc. Project), 7.500% due 1/1/30</FONT>
</TD>
     <TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,695,630</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Montgomery County, OH Health Systems Revenue, Series B-1:</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,035,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AAA</FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Call 7/1/06 @ 102, 8.100% due 7/1/18 (c)</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,136,358</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>315,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>AAA</FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Unrefunded Balance, 8.100% due 7/1/18</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>339,132</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,500,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BB+</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ohio State Air Quality Development Authority Revenue, Cleveland</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Pollution Control, Series A, 6.000% due 12/1/13</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,598,580</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,250,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Ohio State Solid Waste Revenue, Republic Engineered</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Steels Inc., 9.000% due 6/1/21 (b)(e)(j)</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>0</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4,769,700</FONT>
</TD>
  </TR>
<TR>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD>&nbsp;</TD>
  <TD COLSPAN=2><HR NOSHADE SIZE=1></TD>
</TR>
<TR VALIGN=Bottom>
     <TD colspan="5" ALIGN=left><FONT FACE="Times New Roman, Times, Serif" SIZE=2><b>Pennsylvania &#151; 6.0%</b></FONT>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,200,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>NR</FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Allegheny County, PA IDA, Airport Special Facilities Revenue,</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">(USAir Inc. Project), Series B, 8.500% due 3/1/21 (b)(e)</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>46,750</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Beaver County, PA IDA, PCR:</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,500,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BBB-</FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Cleveland Electric Illuminating Co. Project,</FONT>
</TD>
     <TD ALIGN=LEFT></TD>
     <TD ALIGN=LEFT></TD>
</TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.625% due 5/1/25</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1,550,430</FONT>
</TD>
  </TR>
<TR VALIGN=Bottom>
  <TD ALIGN=right>&nbsp;</TD>
     <TD ALIGN=right><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,000,000  </FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=LEFT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>BBB-</FONT>
</TD>
     <TD ALIGN=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Toledo Edison Co. Project, 7.625% due 5/1/20 (d)</FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT>
</TD><TD ALIGN=RIGHT><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2,067,340</FONT>
</TD>
  </TR>
<TR>
     <TD COLSPAN=4 align="right"></TD>
     <TD></TD>
     <TD COLSPAN=2></TD></TR>
</TABLE>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2><B>See Notes to Schedule of Investments.</B></FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>6</FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>

  <P style="PAGE-BREAK-AFTER:always"></P><PAGE><br>

<TABLE width="600" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="106"><IMG src="star.jpg" width="80" height="70"></td>
    <td align="right" valign="top"><FONT face="Times New Roman, Times, Serif" size=2><B><I>Municipal High Income Fund Inc.<BR>
      </I></B>Schedule of Investments (unaudited) (continued)<BR>
      January 31, 2005 </FONT>
</TD>
  </tr>
  <tr>
    <td colspan="2"><hr size="5" noshade ></td>
  </tr>
</TABLE>
<table width="600" border="0" cellpadding="0" cellspacing="0">
  <tr valign="bottom">
    <td colspan="2" align="center" nowrap><font face="Times New Roman, Times, Serif" size="1"><b>FACE<br>
      AMOUNT</b></FONT>
</TD>
    <td><font size="1">&nbsp;</FONT>
</TD>
    <td nowrap><font face="Times New Roman, Times, Serif" size="1"><b>RATING(a)</b></FONT>
</TD>
    <td align="center" nowrap><font face="Times New Roman, Times, Serif" size="1"><b>SECURITY</b></FONT>
</TD>
    <td colspan="3" align="center" nowrap><font face="Times New Roman, Times, Serif" size="1"><b>VALUE</b></FONT>
</TD>
  </tr>
  <tr>
    <td colspan="7"><HR size="2" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="7"><FONT size="2" face="Times New Roman, Times, serif"><b> Pennsylvania &#151; 6.0% (continued) </b></FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td width="2%"><FONT size="2" face="Times New Roman, Times, serif"> $ </FONT>
</TD>
    <td width="10%" align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td width="3%">&nbsp;</td>
    <td width="10%"><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Cumberland County, PA Municipal Authority Retirement </FONT>
</TD>
    <td width="1%">&nbsp;</td>
    <td width="12%" align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Community Revenue, (Wesley Affiliated Services Inc. </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Project), Series A, 7.250% due 1/1/35 </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif">$</FONT>
</TD>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,064,790</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 2,640,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Montgomery County, PA Higher Education &amp; Health Authority </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Revenue, Temple Continuing Care Center, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">6.625% due 7/1/19 (b) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">158,400</font> </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Northumberland County, PA IDA, (NHS Youth Services Inc. </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Project), Series A, 7.500% due 2/15/29 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,024,000 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Philadelphia, PA Authority for IDR, (Host Marriott L.P. Project) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Remarketed 10/31/95, 7.750% due 12/1/17 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,019,530</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> A-1+ </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Philadelphia, PA Hospitals &amp; Higher Education Facilities </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Authority Revenue, (Children&#146;s Hospital Project), </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">MBIA-Insured, Series C, 1.890% due 7/1/31 (g) </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 2,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Westmoreland County, PA IDA, Healthcare Facilities, Redstone </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Highlands Health, Series B, 8.125% due 11/15/30 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"> <font size="2" face="Times New Roman, Times, serif">2,165,100 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 10,096,340</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="7"><FONT size="2" face="Times New Roman, Times, serif"><b> South Carolina &#151; 2.0% </b></FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Connector 2000 Association Inc., SC Toll Road Revenue: </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Capital Appreciation, Series B: </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 3,100,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> B- </FONT>
</TD>
    <td> <FONT SIZE=2 FACE="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Zero coupon bond to yield 8.600% due 1/1/27 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2">479,725 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 7,750,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> B- </FONT>
</TD>
    <td> <FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Zero coupon bond to yield 9.730% due 1/1/34 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2">720,052 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 2,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> B- </FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Southern Connector Project, Series A, 5.375% due 1/1/38 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2">1,522,080 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 225,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Florence County, SC IDR, Stone Container Corp., </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.375% due 2/1/07 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2">226,260 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 460,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> McCormick County, SC COP, 9.750% due 7/1/09 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 465,423</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 3,413,540</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="7"><FONT size="2" face="Times New Roman, Times, serif"><b> Texas &#151; 10.9% </b></FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Bexar County, TX Housing Financial Corp., MFH: </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 980,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Continental Lady Ester, Series A, 6.875% due 6/1/29 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">921,886 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,165,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Ba1* </FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Nob Hill Apartments, Series B, 8.500% due 6/1/31 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,117,701 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 235,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Baa3* </FONT>
</TD>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Waters at Northern Hills, Series C, 7.750% due 8/1/36 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">226,451 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,515,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Baa2* </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> El Paso County, TX Housing Financial Corp., MFH, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Las Lomas Apartments, Series A, 6.450% due 12/1/19</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,531,968 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Grand Prairie, TX Housing Finance Corp., Independent </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Senior Living Center Revenue, 7.750% due 1/1/34 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">1,014,640</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td width="10%" align="right"><FONT size="2" face="Times New Roman, Times, serif"> 2,000,000 </FONT>
</TD>
    <td width="2%">&nbsp;</td>
    <td width="10%"><FONT size="2" face="Times New Roman, Times, serif"> Ba2* </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Gulf Coast, TX IDA, Solid Waste Disposal Revenue, (CITGO </FONT>
</TD>
    <td width="1%">&nbsp;</td>
    <td width="10%" align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Petroleum Corp. Project), 7.500% due 5/1/25 (d)(e) </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif">&nbsp; </FONT>
</TD>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">2,210,240

</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 2,750,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> B- </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Houston, TX Airport Systems Revenue, Special Facilities, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">(Continental Airlines Inc. Project), Series C, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">6.125% due 7/15/27 (d)(e) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">2,125,200
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,100,000 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Intercontinental Airport/Houston, Public Facility Corp. </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"></FONT>
<FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif"></FONT>
<FONT size="2" face="Times New Roman, Times, serif">Project Revenue, 7.750% due 5/1/26 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,095,259 </FONT>
</TD>
  </tr>
</table>
<br>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2><b>See Notes to Schedule of Investments.</b></FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>7</FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><PAGE><BR>
<TABLE width="600" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="106"><IMG src="star.jpg" width="80" height="70"></td>
    <td align="right" valign="top"><FONT face="Times New Roman, Times, Serif" size=2><B><I>Municipal High Income Fund Inc.<BR>
      </I></B>Schedule of Investments (unaudited) (continued)<BR>
January 31, 2005</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="2"><hr size="5" noshade ></td>
  </tr>
</TABLE>
<table width="600" border="0" cellpadding="0" cellspacing="0">
  <tr valign="bottom">
    <td colspan="2" align="center" nowrap><font face="Times New Roman, Times, Serif" size="1"><b>FACE<br>
    AMOUNT</b></FONT>
</TD>
    <td><font size="1">&nbsp;</FONT>
</TD>
    <td nowrap><font face="Times New Roman, Times, Serif" size="1"><b>RATING(a)</b></FONT>
</TD>
    <td align="center" nowrap><font face="Times New Roman, Times, Serif" size="1"><b>SECURITY</b></FONT>
</TD>
    <td colspan="3" align="center" nowrap><font face="Times New Roman, Times, Serif" size="1"><b>VALUE</b></FONT>
</TD>
  </tr>
  <tr>
    <td colspan="7"><HR size="2" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="7"><FONT size="2" face="Times New Roman, Times, serif"><b> Texas &#151; 10.9% (continued) </b></FONT> </td>
  </tr>
  <tr valign="bottom">
    <td width="2%"><FONT size="2" face="Times New Roman, Times, serif"> $ </FONT>
</TD>
    <td width="10%" align="right"><FONT size="2" face="Times New Roman, Times, serif">1,000,000
</FONT>
</TD>
    <td width="3%"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td width="10%"><FONT size="2" face="Times New Roman, Times, serif">AAA
</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Laredo, TX Independent School District Public Facility Corp. </FONT>
</TD>
    <td width="1%"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td width="12%" align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td> <FONT SIZE=2 FACE="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Lease Revenue, Series A, AMBAC-Insured, </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">&nbsp; </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td> <FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">5.000% due 8/1/29 </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> $ </FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,029,020 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif">Midlothian, TX Development Authority, Tax Increment
</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td> <FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, serif" size=2>Contract Revenue, 6.200% due 11/15/29 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,015,430 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> BB </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Port Corpus Christi, TX Industrial Development Corp., </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td> <FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">(CITGO Petroleum Corp. Project), 8.250% due 11/1/31 (e) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,082,630
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 970,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Ba3* </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Texas State Affordable Housing Corp., MFH Revenue, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">HIC Arborstone Baybrook, Series C, 7.250% due 11/1/31 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">894,330
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,865,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> West Texas Detention Facility Corp. Revenue, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">8.000% due 2/1/25 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,926,433
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Willacy County, TX, (Public Facility Corp. Project): </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.500% due 11/1/25 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,020,380</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Series A-1, 8.250% due 12/1/23</FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,038,660
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">18,250,228
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="5"><p><font size="2" face="Times New Roman, Times, serif"> <b>Utah &#151; 0.6% </b></font></p></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> A-1+ </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> Weber County, UT Hospital Revenue, IHC Health Services, </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"></FONT>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif"></FONT>
<FONT size="2" face="Times New Roman, Times, serif">Series C, 1.900% due 2/15/35 (g) </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="7"><FONT size="2" face="Times New Roman, Times, serif"><b> Virginia &#151; 5.9% </b></FONT> </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 510,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Alexandria, VA Redevelopment &amp; Housing Authority, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">MFH Revenue, (Parkwood Court Apartments Project), </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td> <FONT size=2 face="Times New Roman, Times, serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Series C, 8.125% due 4/1/30 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 515,243 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Broad Street Community Development Authority Revenue, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">7.500% due 6/1/33 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,048,170
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Fairfax County, VA EDA Revenue, Retirement Community, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Greenspring Village Inc, Series A, 7.500% due 10/1/29 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,071,900
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Pocahontas Parkway Association, VA Toll Road Revenue, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Capital Appreciation, Series B: </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 5,000,000 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"> BB </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif"></FONT>
<FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, serif" size=2></FONT>
<FONT size="2" face="Times New Roman, Times, serif">Zero coupon bond to yield 6.170% due 8/15/30 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif"> 1,139,000 </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 10,000,000 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> BB </FONT>
</TD>
    <td> <FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, serif" size=2></FONT>
<FONT face="Times New Roman, Times, serif" size=2>Zero coupon bond to yield 7.250% due 8/15/33 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,892,100
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 23,400,000 </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"> BB </FONT>
</TD>
    <td> <FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, serif" size=2>Zero coupon bond to yield 8.110% due 8/15/34 (d) </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">4,175,496
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">9,841,909
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="7"><FONT size="2" face="Times New Roman, Times, serif"><b> Wisconsin &#151; 1.0% </b></FONT> </td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Wisconsin State Health &amp; Educational Facilities </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Authority Revenue: </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,000,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> BBB+ </FONT>
</TD>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, serif" size=2>Aurora Health Care, 6.400% due 4/15/33 </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,108,030
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> 1,745,000 </FONT>
</TD>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> NR </FONT>
</TD>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, serif" size=2>Benchmark Healthcare of Green Bay Inc Project, </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, serif" size=2>Series A, 7.750% due 5/1/27 (b) </FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">575,850
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,683,880
</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"><b> TOTAL MUNICIPAL BONDS &#151; 98.9% </b></FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td> <font size="2" face="Times New Roman, Times, serif">(Cost &#151; $166,709,493) </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"><b> </b></FONT>
</TD>
    <td align="right"><b><FONT size="2" face="Times New Roman, Times, serif"> 165,011,890 </FONT></b></td>
  </tr>
  <tr valign="bottom">
    <td colspan="5">&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
</table>
<br>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2><b>See Notes to Schedule of Investments.</b></FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>8</FONT>
</TD>
  </TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><PAGE><BR>
<TABLE width="600" border="0" cellpadding="0" cellspacing="0">
  <tr>
    <td width="106"><IMG src="star.jpg" width="80" height="70"></td>
    <td align="right" valign="top"><FONT face="Times New Roman, Times, Serif" size=2><B><I>Municipal High Income Fund Inc.<BR>
      </I></B>Schedule of Investments (unaudited) (continued)<BR>
January 31, 2005</FONT>
</TD>
  </tr>
  <tr>
    <td colspan="2"><hr size="5" noshade ></td>
  </tr>
</TABLE>
<table width="600" border="0" cellpadding="0" cellspacing="0">
  <tr valign="bottom">
    <td colspan="2" align="center"><FONT size="1" face="Times New Roman, Times, serif"><b> SHARES </b></FONT>
</TD>
    <td><font size="1">&nbsp;</FONT>
</TD>
    <td align="center"><font size="1">&nbsp;</FONT>
</TD>
    <td align="center"><FONT size="1" face="Times New Roman, Times, serif"><b> SECURITY </b></FONT>
</TD>
    <td><font size="1">&nbsp;</FONT>
</TD>
    <td align="center"><FONT size="1" face="Times New Roman, Times, serif"><b> VALUE </b></FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td colspan="7"><HR size="2" noshade></td>
  </tr>
  <tr valign="bottom">
    <td colspan="5"><FONT size="2" face="Times New Roman, Times, serif"><b> COMMON STOCK &#151; 0.0% </b></FONT>
</TD>
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
  </tr>
  <tr valign="bottom">
    <td width="2%">&nbsp;</td>
    <td width="10%" align="right"><FONT size="2" face="Times New Roman, Times, serif"> 3,180 </FONT>
</TD>
    <td width="3%">&nbsp;</td>
    <td width="10%">&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"> Mobile Energy Services Co. LLC (j)(k) (Cost &#151; $988,235) </FONT>
</TD>
    <td width="1%"><b><FONT size="2" face="Times New Roman, Times, serif"> $ </FONT></b></td>
    <td width="12%" align="right"><b><font size="2" face="Times New Roman, Times, serif">0</font> </b></td>
  </tr>
  <tr valign="bottom">
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><p><font size="2" face="Times New Roman, Times, serif"> <b>TOTAL INVESTMENTS &#151; 98.9% </b></font></p></td>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif"> (Cost &#151; $167,697,728**) </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"><b> </b></FONT>
</TD>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> <b>165,011,890</b> </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><font size="2" face="Times New Roman, Times, serif"> Other Assets in Excess of Liabilities &#151; 1.1% </FONT>
</TD>
    <td><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif">1,916,321

</FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="2"><HR size="1" noshade></td>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td><FONT size="2" face="Times New Roman, Times, serif"><b> TOTAL NET ASSETS &#151; 100.0%</b> </FONT>
</TD>
    <td><FONT size="2" face="Times New Roman, Times, serif"><b> $</b></FONT>
</TD>
    <td align="right"><FONT size="2" face="Times New Roman, Times, serif"> <b>166,928,211</b> </FONT>
</TD>
  </tr>
  <tr valign="bottom">
    <td>&nbsp;</td>
    <td align="right">&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td>&nbsp;</td>
    <td colspan="2"><HR size="2" noshade></td>
  </tr>
</table>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD colspan="2" vAlign=top><font size="2" face="Times New Roman, Times, serif">___________</FONT>
</TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(a)</font></P></TD>
    <TD vAlign=top><P align="justify"><font size="2" face="Times New Roman, Times, serif">
All ratings are by Standard &amp; Poor&#146;s Rating Service, except for those identified by an asterisk (*),
which are rated by Moody&#146;s Investors Service and for those identified by a double dagger (&#135;), which are rated by Fitch Ratings.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(b)</font></P></TD>
    <TD vAlign=top width=661><P><font size="2" face="Times New Roman, Times, serif">Security is currently in default.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(c)</font></P></TD>
    <TD vAlign=top width=661><P align="justify"><font size="2" face="Times New Roman, Times, serif">Pre-Refunded bonds are escrowed with U.S. government securities and/or U.S. government agency securities and are considered by the investment adviser to be triple-A rated even if the issuer has not applied for new ratings.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(d)</font></P></TD>
    <TD vAlign=top width=661><P><font size="2" face="Times New Roman, Times, serif">All or a portion of this security is segregated for open futures contracts.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(e)</font></P></TD>
    <TD vAlign=top width=661><P align="justify"><font size="2" face="Times New Roman, Times, serif">Income from this issue is considered a preference item for purposes of calculating the alternative minimum tax.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(f)</font></P></TD>
    <TD vAlign=top width=661><P><font size="2" face="Times New Roman, Times, serif">All or a portion of this security is held as collateral for open futures contracts.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(g)</font></P></TD>
    <TD vAlign=top width=661><P><font size="2" face="Times New Roman, Times, serif">Variable rate obligation &#151; payable at par on demand at any time on no more than seven days notice.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(h)</font></P></TD>
    <TD vAlign=top width=661><P align="justify"><font size="2" face="Times New Roman, Times, serif">Inverse floating rate security &#151; coupon varies inversely with level of short-term tax-exempt interest rates.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(i)</font></P></TD>
    <TD vAlign=top width=661><P align="justify"><font size="2" face="Times New Roman, Times, serif">Bonds escrowed to maturity with U.S. government securities are considered by the investment adviser to be triple-A rated even if the issuer has not applied for new ratings.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(j)</font></P></TD>
    <TD vAlign=top width=661><P><font size="2" face="Times New Roman, Times, serif">Security is valued in good faith by or under the direction of the Board of Directors.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">(k)</font></P></TD>
    <TD vAlign=top width=661><P><font size="2" face="Times New Roman, Times, serif">Non-income producing security.</font></P></TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><P><font size="2" face="Times New Roman, Times, serif">**</font></P></TD>
    <TD vAlign=top width=661><P><font size="2" face="Times New Roman, Times, serif">Aggregate cost for federal income tax purposes is substantially the same.</font></P></TD>
  </TR>
  <TR>
    <TD width="5%" vAlign=top><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <TD vAlign=top><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
  </TR>
  <TR>
    <TD vAlign=top width=5%><font size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
    <TD vAlign=top width=661><P><font size="2" face="Times New Roman, Times, serif">Please see pages 11 through 13 for definitions of ratings and certain abbreviations.</font></P></TD>
  </TR>
</TABLE>
<br>
<TABLE cellSpacing="0" cellPadding="0" width="600" border="0">
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2> <b>See Notes to Schedule of Investments.</b></FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top><FONT face="Times New Roman, Times, Serif" size=2>9</FONT>
</TD>
  </TR>
  <TR>
    <TD align="center" vAlign=top>&nbsp;</TD>
  </TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><PAGE><BR>

<table width="600"  border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="20%"><img src="star.jpg" width="80" height="70"></td>
<td align="right" valign="top"><font face="Times New Roman, Times, Serif" size=2><b><i>Municipal High Income Fund Inc.</i></b><BR>
</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Summary of Investments by Industry* (unaudited)<BR>January 31, 2005</FONT> </td>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
</table>
<TABLE cellpadding=0 cellspacing=0 border=0 width=600>
<TR valign=Bottom>
     <TH><FONT face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;</FONT></TH>
     <TH colspan=3><FONT face="Times New Roman, Times, Serif" size=1>&nbsp;&nbsp;</FONT></TH>
</TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Hospitals</FONT>
</TD>
     <TD width=1% align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD width=8% align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>13.4</FONT>
</TD>
        <TD width=2% align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>%</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Transportation</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>11.4</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Industrial Development</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>10.9</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Education</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>10.7</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Lifecare Systems</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>10.5</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Pollution Control</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>4.9</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Multi-Family Housing</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>4.8</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Congeneration Facilities</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>3.5</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>General Obligation</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>3.2</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Public Facilities</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>3.2</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Tobacco</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>3.1</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Utilities</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>2.6</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Other</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>17.8</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD></TR>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right"><hr size="1" noshade ></td>
<td align="left">&nbsp;</td>
</tr>
<TR valign=Bottom>
     <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD><TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>100.0</FONT>
</TD>
        <TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>%</FONT>
</TD></TR>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
<td align="right"><hr size="2" noshade ></td>
<td align="left">&nbsp;</td>
</tr>
</TABLE>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD colspan="2" valign=top><font size="2" face="Times New Roman, Times, serif">____________</FONT>
</TD>
</TR>
<TR>
<TD valign=top width=24><font size="2" face="Times New Roman, Times, Serif">*</FONT>
</TD>
<TD valign=top><p align="justify"><FONT size="2" face="Times New Roman, Times, serif">As a percentage of total investments. Please note that Fund holdings are as of January 31, 2005 and are subject to change.</FONT></p></TD>
</TR>
</TABLE>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
</TR>
<TR>
<TD valign=top><P align=center><FONT size="2"><B><FONT face="Times New Roman, Times, serif"> See Notes to Schedule of Investments.</FONT></B></FONT></P></TD>
</TR>
<TR>
<TD align="center" valign=top>&nbsp;</TD>
</TR>
<TR>
<TD align="center" valign=top><font face="Times New Roman, Times, Serif" size=2>10</FONT>
</TD>
</TR>
<TR>
<TD align="center" valign=top>&nbsp;</TD>
</TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><BR>
<table width="600"  border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="20%"><img src="star.jpg" width="106" height="93"></td>
<td align="right" valign="top"><font face="Times New Roman, Times, Serif" size=2><b><i>Municipal High Income Fund Inc.</i></b><br>
Bond Ratings (unaudited)</FONT>
</TD>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
</table>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD colspan="3" valign=top>&nbsp;</TD>
</TR>
<TR>
<TD colspan="3" valign=top><FONT face="Times New Roman, Times, Serif" size=2>The definitions of the applicable ratings symbols are set forth below:</FONT>
</TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD colspan="3" valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2><I>Standard &amp; Poor&#146;s Ratings Service (&#147;Standard &amp; Poor&#146;s&#148;)</I>&nbsp;&#151; Ratings from &#147;AA&#148; to &#147;CCC&#148; may be modified by the addition of a plus (+) or a minus (&#150;) sign to show relative standings within the major rating categories.</FONT></div></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD width=12% valign=top><FONT face="Times New Roman, Times, Serif" size=2>AAA</FONT>
</TD>
<TD width="4%" align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2><FONT face="Times New Roman, Times, Serif" size=2></FONT>Bonds rated &#147;AAA&#148; have the highest rating assigned by Standard &amp; Poor&#146;s. Capacity to pay interest and repay principal is extremely strong.</FONT></div></TD>
</TR>
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>AA</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2><FONT face="Times New Roman, Times, Serif" size=2></FONT>Bonds rated &#147;AA&#148; have a very strong capacity to pay interest and repay principal and differ from the highest rated issue only in a small degree.</FONT></div></TD>
</TR>
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>A</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2><FONT face="Times New Roman, Times, Serif" size=2></FONT>Bonds rated &#147;A&#148; have a strong capacity to pay interest and repay principal although it is somewhat more susceptible to the adverse effects of changes in circumstances and economic conditions than bonds in higher rated categories.</FONT></div></TD>
</TR>
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>BBB</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2><FONT face="Times New Roman, Times, Serif" size=2></FONT>Bonds rated &#147;BBB&#148; are regarded as having an adequate capacity to pay interest and repay principal. Whereas they normally exhibit adequate protection parameters, adverse economic conditions or changing circumstances are more likely to lead to a weakened capacity to pay interest and repay principal for bonds in this category than in higher rated categories.</FONT></div></TD>
</TR>
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>BB, B, CCC,<br>
CC and C </FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;BB&#148;, &#147;B&#148;, &#147;CCC&#148;, &#147;CC&#148; and &#147;C&#148; are regarded, on balance, as predominantly speculative and with respect to capacity to pay interest and repay principal in accordance with the terms of the obligation. &#147;BB&#148; represents a lower degree of speculation than &#147;B&#148;, and &#147;C&#148; the highest degree of speculation. While such bonds will likely have some quality and protective characteristics, these are outweighed by large uncertainties or major risk exposures to adverse conditions.</FONT></div></TD>
</TR>
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>D</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2>Bond rated &#147;D&#148; are in default, and payment of interest and/or repayment of principal is in arrears.</FONT></div></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD colspan="3" valign=top><FONT face="Times New Roman, Times, Serif" size=2><I>Moody&#146;s Investors Service (&#147;Moody&#146;s&#148;)</I>&nbsp;&#151; Numerical modifiers 1, 2 and 3 may be applied to each generic rating from &#147;Aa&#148; to &#147;Caa,&#148; where 1 is the highest and 3 the lowest rating within its generic category.</FONT>
</TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>Aaa</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;Aaa&#148; are judged to be of the best quality. They carry the smallest degree of investment risk and are generally referred to as &#147;gilt edge.&#148; Interest payments are protected by a large or by an exceptionally stable margin and principal is secure. While the various protective elements are likely to change, such changes as can be visualized are most unlikely to impair the fundamentally strong position of such issues.</FONT></div></TD>
</TR>
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>Aa</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;Aa&#148; are judged to be of high quality by all standards. Together with the &#147;Aaa&#148; group they comprise what are generally known as high grade bonds. They are rated lower than the best bonds because margins of protection may not be as large in &#147;Aaa&#148; securities or fluctuation of protective elements may be of greater amplitude or there may be other elements present which make the long-term risks appear somewhat larger than in &#147;Aaa&#148; securities.</FONT></div></TD>
</TR>
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>A</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;A&#148; possess many favorable investment attributes and are to be considered as upper medium grade obligations. Factors giving security to principal and interest are considered adequate but elements may be present which suggest a susceptibility to impairment some time in the future.</FONT></div></TD>
</TR>
</TABLE>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
</TR>
<TR>
<TD valign=top><P align=center><font size="2" face="Times New Roman, Times, Serif">11</font></P></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
</TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><BR>

<table width="600"  border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="20%"><img src="star.jpg" width="80" height="70"></td>
<td align="right" valign="top"><font face="Times New Roman, Times, Serif" size=2><b><i>Municipal High Income Fund Inc.</i></b><br>
Bond Ratings (unaudited) (continued)</FONT>
</TD>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
</table>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD width=12% valign=top><FONT face="Times New Roman, Times, Serif" size=2>Baa</FONT>
</TD>
<TD width="4%" align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2><FONT face="Times New Roman, Times, Serif" size=2></FONT>Bonds rated &#147;Baa&#148; are considered as medium grade obligations, i.e., they are neither highly protected nor poorly secured. Interest payments and principal security appear adequate for the present but certain protective elements may be lacking or may be characteristically unreliable over any great length of time. Such bonds lack outstanding investment characteristics and in fact have speculative characteristics as well.</FONT></div></TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>Ba</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;Ba&#148; are judged to have speculative elements; their future cannot be considered as well assured. Often the protection of interest and principal payments may be very moderate thereby not well safeguarded during both good and bad times over the future. Uncertainty of position characterizes bonds in this class.</font></div></TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>B</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;B&#148; generally lack characteristics of desirable investments. Assurance of interest and principal payments or of maintenance of other terms of the contract over a long period of time may be small.</font></div></TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>Caa</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;Caa&#148; are of poor standing. These issues may be in default, or there may be present elements of danger with respect to principal or interest.</font></div></TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>Ca</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;Ca&#148; represent obligations which are speculative in a high degree. Such issues are often in default or have other marked shortcomings.</font></div></TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>C&nbsp;</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;C&#148; are the lowest rated class of bonds, and issues so rated can be regarded as having extremely poor prospects of ever attaining any real investment standing.</font></div></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD colspan="3" valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2><i>Fitch Ratings (&#147;Fitch&#148;)</i>&nbsp;&#151; Ratings from &#147;A&#148; to &#147;CCC&#148; may be modified by the addition of a plus (+) or a minus (-) sign to show relative standings with the major ratings categories.</font></div></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>AAA </FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;AAA&#148; by Fitch have the lowest expectation of credit risk. The obligor has an exceptionally strong capacity for timely payment of financial commitments which is highly unlikely to be adversely affected by foreseeable events.</font></div></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>A</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;A&#148; have a low expectation of credit risk. The capacity for timely payment of financial commitments is considered strong. This capacity may, nevertheless, be more vulnerable to changes in circumstances or in economic conditions than is the case for higher ratings.</font></div></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>BBB&nbsp;</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;BBB&#148; currently have a low expectation of credit risk. The capacity for timely payment of financial commitments is considered to be adequate. Adverse changes in economic conditions and circumstances, however, are more likely to impair this capacity. This is the lowest investment grade category assigned by Fitch.</font></div></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>BB</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;BB&#148; carry the possibility of credit risk developing, particularly as the result of adverse economic change over time. Business or financial alternatives may, however, be available to allow financial commitments to be met. Securities rated in this category are not considered by Fitch to be investment grade.</font></div></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>CCC, <br>
CC and C&nbsp;</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2>Bonds rated &#147;CCC&#148;, &#147;CC&#148; and &#147;C&#148; carry the real possibility of defaulting. The capacity to meet financial commitments depends solely on a sustained, favorable business and economic environment. Default of some kind on bonds rated &#147;CC&#148; appears probable, a &#147;C&#148; rating indicates imminent default.</font></div></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD valign=top><font face="Times New Roman, Times, Serif" size=2>NR</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><font face="Times New Roman, Times, Serif" size=2> Indicates that the bond is not rated by Standard &amp; Poor&#146;s, Moody&#146;s or Fitch.</font></div></TD>
</TR>
</TABLE>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
</TR>
<TR>
<TD valign=top><P align=center><font size="2" face="Times New Roman, Times, Serif">12</font></P></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
</TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><BR>

<table width="600"  border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="20%"><img src="star.jpg" width="80" height="70"></td>
<td align="right" valign="top"><font face="Times New Roman, Times, Serif" size=2><b><i>Municipal High Income Fund Inc.</i></b><br>
Short-Term Bond Ratings (unaudited)</FONT>
</TD>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
</table>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD width=12% valign=top><FONT face="Times New Roman, Times, Serif" size=2>A-1</FONT>
</TD>
<TD width="4%" align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><div align="justify"><FONT face="Times New Roman, Times, Serif" size=2>Standard &amp; Poor&#146;s highest commercial paper and variable-rate demand obligation (VRDO) rating indicating that the degree of safety regarding timely payment is either overwhelming or very strong; those issues determined to possess overwhelming safety characteristics are denoted with a plus (+) sign.</FONT></div></TD>
</TR>
<TR>
<TD valign=top></TD>
<TD valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>VMIG 1</FONT>
</TD>
<TD align="center" valign=top><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>Moody&#146;s highest rating for issues having a demand feature &#151; VRDO.</FONT>
</TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
<TD align="center" valign=top>&nbsp;</TD>
<TD valign=top>&nbsp;</TD>
</TR>
</TABLE>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD align="right"><P><FONT face="Times New Roman, Times, Serif" size=2><B>Abbreviations* </B><B>(unaudited)</B></FONT></P></TD>
</TR>
<TR>
<TD valign=top><hr size="5" noshade ></TD>
</TR>
</TABLE>
<table width="600" cellpadding="0" cellspacing="0">
<tr align="left" valign="top">
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<td>&nbsp;</td>
<td height="20">&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr align="left" valign="top">
<td width="13%" height="20"><font face="Times New Roman, Times, Serif" size=2>ABAG</FONT>
</TD>
<td width="3%" height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td width="230" height="20"><font face="Times New Roman, Times, Serif" size=2>Association of Bay Area Governments</FONT>
</TD>
<td><font face="Times New Roman, Times, Serif" size=2>IDA</FONT>
</TD>
<td width="3%" height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td><font face="Times New Roman, Times, Serif" size=2>Industrial Development </FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>AIG</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>American International Guaranty</FONT>
</TD>
<td>&nbsp;</td>
<td height="20"><p>&nbsp;</p></td>
<td><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Authority/Agency</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>AMBAC</FONT>
</TD>
<td height="20" valign="top"><p><font size="2" face="Times New Roman, Times, serif">&#151; </font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Ambac Assurance Corporation</FONT>
</TD>
<td><font face="Times New Roman, Times, Serif" size=2>IDB</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td><font face="Times New Roman, Times, Serif" size=2>Industrial Development Board</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>BAN</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Bond Anticipation Notes</FONT>
</TD>
<td><font face="Times New Roman, Times, Serif" size=2>IDR</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td><font face="Times New Roman, Times, Serif" size=2>Industrial Development Revenue</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>BIG&nbsp;</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Bond Investors Guaranty</FONT>
</TD>
<td><font face="Times New Roman, Times, Serif" size=2>INFLOS</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td><font face="Times New Roman, Times, Serif" size=2>Inverse Floaters</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>CGIC</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Capital Guaranty Insurance Company</FONT>
</TD>
<td><font face="Times New Roman, Times, Serif" size=2>ISD</FONT>
</TD>
<td><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td><font face="Times New Roman, Times, Serif" size=2>Independent School District</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>CHFCLI</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>California Health Facility </FONT>
</TD>
<TD width=74><FONT face="Times New Roman, Times, Serif" size=2>LOC</FONT>
</TD>
<td><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Letter of Credit</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20">&nbsp;</td>
<td height="20"><p>&nbsp;</p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Construction Loan Insurance</FONT>
</TD>
<TD width=74><FONT face="Times New Roman, Times, Serif" size=2>MBIA</FONT>
</TD>
<td><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Municipal Bond Investors</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>CONNIE</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>College Construction Loan</FONT>
</TD>
<TD width=74>&nbsp;</TD>
<td><p>&nbsp;</p></td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Assurance Corporation</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;LEE</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif"></font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Insurance Association</FONT>
</TD>
<TD><FONT face="Times New Roman, Times, Serif" size=2>MFH</FONT>
</TD>
<td><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Multi-Family Housing</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>COP</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Certificate of Participation</FONT>
</TD>
<TD width=74><FONT face="Times New Roman, Times, Serif" size=2>MVRICS</FONT>
</TD>
<td><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Municipal Variable Rate Inverse</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>EDA</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Economic Development Authority</FONT>
</TD>
<TD width=74>&nbsp;</TD>
<td><p>&nbsp;</p></td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Coupon Security</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>ETM</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Escrowed to Maturity</FONT>
</TD>
<TD width=74><FONT face="Times New Roman, Times, Serif" size=2>PCR</FONT>
</TD>
<td><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Pollution Control Revenue</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>FGIC</FONT>
</TD>
<td height="20"><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Financial Guaranty Insurance</FONT>
</TD>
<TD width=74><FONT face="Times New Roman, Times, Serif" size=2>PSFG</FONT>
</TD>
<td><p><font size="2" face="Times New Roman, Times, serif">&#151;</font></p></td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Permanent School Fund</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Company</FONT>
</TD>
<TD>&nbsp;</TD>
<td>&nbsp;</td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Guaranty</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>FHA</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Federal Housing Administration</FONT>
</TD>
<TD><FONT face="Times New Roman, Times, Serif" size=2>RADIAN</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Radian Asset Assurance</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>FHLMC</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Federal Home Loan Mortgage</FONT>
</TD>
<TD><FONT face="Times New Roman, Times, Serif" size=2>RAN</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Revenue Anticipation Notes</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Corporation</FONT>
</TD>
<TD><FONT face="Times New Roman, Times, Serif" size=2>RIBS</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Residual Interest Bonds</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>FLAIRS</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Floating Adjustable Interest Rate</FONT>
</TD>
<TD><FONT face="Times New Roman, Times, Serif" size=2>RITES</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><FONT face="Times New Roman, Times, Serif" size=2>Residual Interest </FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Securities</FONT>
</TD>
<TD>&nbsp;</TD>
<td>&nbsp;</td>
<TD><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Tax-Exempt&nbsp;Securities</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>FNMA</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Federal National Mortgage</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>SYCC</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>Structured Yield Curve </FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Association</FONT>
</TD>
<TD>&nbsp;</TD>
<td>&nbsp;</td>
<TD><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Certificate</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>FRTC</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Floating Rate Trust Certificates</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>TAN&nbsp;</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>Tax Anticipation Notes</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>FSA</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Financing Security Assurance</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>TECP</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>Tax-Exempt Commercial Paper</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>GIC</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Guaranteed Investment Contract</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>TICS</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>Tender Inverse Certificates</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>GNMA</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Government National Mortgage </FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>TOB&nbsp;</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>Tender Option Bonds</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Association</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>TRAN</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>Tax and Revenue Anticipation</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>GO</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>General Obligation</FONT>
</TD>
<TD>&nbsp;</TD>
<td>&nbsp;</td>
<TD><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Notes</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>HDC</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Housing Development Corporation</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>VA</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>Veterans Administration</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>HFA</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2>Housing Finance Authority</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>VRDD</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>Variable Rate Daily Demand</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20"><font face="Times New Roman, Times, Serif" size=2>IBC</FONT>
</TD>
<td height="20"><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<td height="20"><font face="Times New Roman, Times, Serif" size=2> Insured Bond Certificates</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>VRWE </FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font face="Times New Roman, Times, Serif" size=2>Variable Rate Wednesday</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<TD>&nbsp;</TD>
<td>&nbsp;</td>
<TD><font face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;Demand</FONT>
</TD>
</tr>
<tr align="left" valign="top">
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<td height="20">&nbsp;</td>
<TD><font size="2" face="Times New Roman, Times, serif">XLCA</FONT>
</TD>
<td><font size="2" face="Times New Roman, Times, serif">&#151;</FONT>
</TD>
<TD><font size="2" face="Times New Roman, Times, serif">XL Capital Assurance Inc. </FONT>
</TD>
</tr>
</table>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD colspan="2" valign=top><font size="2" face="Times New Roman, Times, serif">__________</FONT>
</TD>
</TR>
<TR valign="middle">
<TD width=24><font size="2" face="Times New Roman, Times, Serif">*</FONT>
</TD>
<TD valign=bottom><FONT face="Times New Roman, Times, Serif" size=2>Abbreviations may or may not appear in the schedule of investments.</FONT>
</TD>
</TR>
</TABLE>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
</TR>
<TR>
<TD valign=top><P align=center><font size="2" face="Times New Roman, Times, Serif">13</font></P></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
</TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><BR>

<table width="600"  border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="20%"><img src="star.jpg" width="80" height="70"></td>
<td align="right" valign="top"><font face="Times New Roman, Times, Serif" size=2><b><i>Municipal High Income Fund Inc.</i></b><BR>
</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Notes to Schedule of Investments (unaudited) </FONT>
</TD>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
<tr>
<td colspan="2">&nbsp;</td>
</tr>
</table>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD><P align="justify"> <FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif"><B>1. &nbsp;Organization and Significant Accounting Policies </B></FONT></P>
<p align="justify"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif">
Municipal High Income Fund Inc. (&#147;Fund&#148;), a Maryland corporation, is
registered under the Investment Company Act of 1940, as amended, as a
diversified, closed-end management investment company. </FONT></p>
<p align="justify"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif">
The following are significant accounting policies consistently followed by the
Fund and are in conformity with U.S. generally accepted accounting principles
(&#147;GAAP&#148;). </FONT></p>
<p align="justify"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif"><B>
(a) Investment Valuation. </B>&nbsp; Fixed income securities are valued at the
mean between the bid and asked prices provided by an independent pricing service
that are based on transactions in municipal obligations, quotations from
municipal bond dealers, market transactions in comparable securities and various
relationships between securities. When market quotations or official closing
prices are not readily available, or are determined not to reflect
fair value, the Fund may value such investments at fair value as determined in
accordance with the procedures approved by the Fund&#146;s Board of Directors.
Short-term obligations with maturities of 60 days or less are valued at
amortized cost, which approximates value.</FONT></p>
<p align="justify"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif"><B>
(b) Financial Futures Contracts.</B>&nbsp; The Fund may enter into futures
contracts to the extent permitted by its investment policies and objectives.
Upon entering into a futures contract, the Fund is required to deposit cash or
securities as initial margin. Additional securities are also segregated up to
the current market value of the futures contracts. Subsequent payments, which
are dependent on the daily fluctuations in the value of the underlying financial
instrument, are made or received by the Fund each day (daily variation margin)
and are recorded as unrealized gains or losses until the contracts are closed.
When the contracts are closed, the Fund records a realized gain or loss equal to
the difference between the proceeds from (or cost of) the closing transactions
and the Fund&#146;s basis in the contracts. The Fund enters into such contracts
typically to hedge a portion of the portfolio. The risks associated with
entering into futures contracts include the possibility that a change in the
value of the contract may not correlate with the changes in the value of the
underlying financial instruments. In addition, investing in futures contracts
involves the risk that the Fund could lose more than the original margin deposit
and subsequent payments required for a futures transaction.</FONT></p>
<p align="justify"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif"><B>(c) Security Transactions.&nbsp;</B>&nbsp; Security transactions are accounted for on a trade date basis. </FONT></p>
<p align="justify"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif"><B>(d) Credit and Market Risk.</B>&nbsp; The Fund invests in high-yield
instruments that are subject to certain credit and market risks. The yields of
high-yield debt obligations reflect, among other things, perceived credit risk.
The Fund&#146;s investments in securities rated below investment-grade typically
involve risks not associated with higher rated securities including, among
others, greater risk of timely and ultimate payment of interest and principal,
greater market price volatility and less liquid secondary market
trading.</FONT></p>
</TD>
</TR>
</TABLE>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD valign=top><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
</TR>
<TR>
<TD valign=top><P align=center><font size="2" face="Times New Roman, Times, Serif">14</font></P></TD>
</TR>
<TR>
<TD valign=top>&nbsp;</TD>
</TR>
</TABLE>
<P style="PAGE-BREAK-AFTER:always"></P><page><BR>

<table width="600" border="0" cellspacing="0" cellpadding="0">
<tr>
<td width="20%" align="left"><P align=left><img src="star.jpg" width="80" height="70"></P></td>
<td align="right" valign="top"><font face="Times New Roman, Times, Serif" size=2><b><i>Municipal High Income Fund Inc.</i></b><BR>
</FONT>
<FONT size="2" face="Times New Roman, Times, serif">Notes to Schedule of Investments (unaudited) (continued)</FONT>
</TD>
</tr>
<tr>
<td colspan="2"><hr size="5" noshade ></td>
</tr>
</table>
<table width="600"  border="0" cellspacing="0" cellpadding="0">
<tr>
<td>&nbsp;</td>
</tr>
<tr>
<td><P><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif"><B></B></FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B>2. &nbsp;Investments</B></FONT></P>
<p align="justify"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif"><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif">At January 31, 2005, the aggregate gross unrealized appreciation and depreciation of investments for federal income tax purposes were substantially as follows:</FONT></p>
</td>
</tr>
<tr>
<td>&nbsp;</td>
</tr>
</table>
<TABLE cellpadding=0 cellspacing=0 border=0 width=600>
<TR valign=Bottom>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Gross unrealized appreciation</FONT>
</TD>
<TD width=1% align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>$</FONT>
</TD>
<TD width=12% align=RIGHT><FONT size="2" face="Times New Roman, Times, serif">9,338,986 </FONT>
</TD>
<TD width=2% align=LEFT><FONT face="Times New Roman, Times, serif" size=2>&nbsp;</FONT>
</TD>
</TR>
<TR valign=Bottom>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Gross unrealized depreciation</FONT>
</TD>
<TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
<TD align=RIGHT><FONT face="Times New Roman, Times, serif" size=2>(12,024,824</FONT>
</TD>
<TD align=LEFT><FONT face="Times New Roman, Times, serif" size=2>)</FONT>
</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
<TD colspan=2><HR size="1" noshade ></TD>
<TD><FONT size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
</TR>
<TR valign=Bottom>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>Net unrealized depreciation</FONT>
</TD>
<TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>$</FONT>
</TD>
<TD align=RIGHT><FONT face="Times New Roman, Times, serif" size=2> (2,685,838</FONT>
</TD>
<TD align=LEFT><FONT face="Times New Roman, Times, serif" size=2>)</FONT>
</TD>
</TR>
<TR>
<TD>&nbsp;</TD>
<TD colspan=2><HR size="2" noshade ></TD>
<TD><FONT size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
</TD>
</TR>
</TABLE>
<table width="600"  border="0" cellspacing="0" cellpadding="0">
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
<tr>
<td colspan="2"><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif"><B></B></FONT>
<FONT size="2" face="Times New Roman, Times, serif">&nbsp;</FONT>
<FONT face="Times New Roman, Times, serif" size=2>At Janury 31, 2005, the Fund had the following open futures contracts:</FONT>
</TD>
</tr>
<tr>
<td>&nbsp;</td>
<td>&nbsp;</td>
</tr>
</table>
<TABLE cellpadding=0 cellspacing=0 border=0 width=600>
<TR valign=Bottom>
<TD rowspan="2" align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
<FONT face="Times New Roman, Times, Serif" size=2>&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
</TD>
<TD width=11% rowspan="2" align=center nowrap><font size="1"><b><FONT face="Times New Roman, Times, serif">Number of<br>
Contracts</FONT></b></FONT>
</TD>
<TD width=2% align=center nowrap><font size="1">&nbsp;</FONT>
</TD>
<TD width=11% rowspan="2" align=center nowrap><font size="1"><b><FONT face="Times New Roman, Times, serif">Expiration<br>
Date</FONT></b></FONT>
</TD>
<TD width=2% align=center nowrap><font size="1">&nbsp;</FONT>
</TD>
<TD colspan="2" rowspan="2" align=center nowrap><font size="1"><b><FONT face="Times New Roman, Times, serif">Basis<br>
Value</FONT></b></FONT>
</TD>
<TD width=2% align=center nowrap><font size="1">&nbsp;</FONT>
</TD>
<TD colspan="2" rowspan="2" align=center nowrap><font size="1"><b><FONT face="Times New Roman, Times, serif">Market<br>
Value</FONT></b></FONT>
</TD>
<TD width=2% align=center nowrap><font size="1">&nbsp;</FONT>
</TD>
<TD colspan="2" rowspan="2" align=center nowrap><font size="1"><b><FONT face="Times New Roman, Times, serif">Unrealized<br>
Loss</FONT></b></FONT>
</TD>
<TD width=2% align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
</TR>
<TR valign=Bottom>
<TD align=center nowrap><font size="1">&nbsp;</FONT>
</TD>
<TD align=center nowrap><font size="1">&nbsp;</FONT>
</TD>
<TD align=center nowrap><font size="1">&nbsp;</FONT>
</TD>
<TD align=center nowrap><font size="1">&nbsp;</FONT>
</TD>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
</TR>
<TR valign=Bottom>
<TD align=LEFT>&nbsp;</TD>
<TD align=LEFT><HR size="1" noshade ></TD>
<TD align=LEFT>&nbsp;</TD>
<TD align=LEFT><HR size="1" noshade ></TD>
<TD align=LEFT>&nbsp;</TD>
<TD colspan="2" align=LEFT><HR size="1" noshade ></TD>
<TD align=LEFT>&nbsp;</TD>
<TD colspan="2" align=LEFT><HR size="1" noshade ></TD>
<TD align=LEFT>&nbsp;</TD>
<TD colspan="2" align=LEFT><HR size="1" noshade ></TD>
<TD align=LEFT>&nbsp;</TD>
</TR>
<TR valign=Bottom>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2><b>Contracts to Sell:</b></FONT>
</TD>
</TR>
<TR valign=Bottom>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>U.S. Treasury 20 Year Bond</FONT>
</TD>
<TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>400</FONT>
</TD>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
<TD align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>3/05</FONT>
</TD>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
<TD width="1%" align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>$</FONT>
</TD>
<TD width="10%" align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2> 43,800,000</FONT>
</TD>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
<TD width="1%" align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>$</FONT>
</TD>
<TD width="10%" align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2> 45,937,500</FONT>
</TD>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>&nbsp;</FONT>
</TD>
<TD width="1%" align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2>$</FONT>
</TD>
<TD width="11%" align=RIGHT><FONT face="Times New Roman, Times, Serif" size=2> (2,137,500</FONT>
</TD>
<TD align=LEFT><FONT face="Times New Roman, Times, Serif" size=2>)</FONT>
</TD>
</TR>
</TABLE>
<br>
<TABLE cellspacing="0" cellpadding="0" width="600" border="0">
<TR>
<TD align="center" valign=top><FONT face="Times New Roman, Times, Serif" size=2><BR><BR>15</FONT>
</TD>
</TR>
<TR>
<TD align="center" valign=top>&nbsp;</TD>
</TR>
</TABLE>

<DIV STYLE="page-break-after:always"></DIV>


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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 2.</FONT>
</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          CONTROLS AND PROCEDURES.</FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT>
</TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(a) </FONT>
</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
registrant&#146;s principal executive officer and principal financial officer have concluded
                           that the registrant&#146;s disclosure controls and procedures (as
defined in Rule                            30a-3(c) under the Investment Company Act of
1940, as amended (the &#147;1940                            Act&#148;)) are effective as of a date
within 90 days of the filing date of this                            report that includes
the disclosure required by this paragraph, based on their
                           evaluation of the disclosure controls and procedures required
by Rule 30a-3(b)                            under the 1940 Act and 15d-15(b) under the
Securities Exchange Act of 1934  </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>&nbsp;</FONT>
</TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>(b) </FONT>
</TD>
<TD WIDTH=85%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>There
were no changes in the registrant&#146;s internal control over financial reporting (as defined
                           in Rule 30a-3(d) under the 1940 Act) that occurred during the
registrant&#146;s                            last fiscal quarter that have materially
affected, or are likely to materially                            affect the registrant&#146;s
internal control over financial reporting.  </FONT>
</TD>
</TR>
</TABLE>
<BR>



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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>ITEM 3.</FONT>
</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
          EXHIBITS.</FONT>
</TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=10%>&nbsp;</TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>
Certifications
 pursuant to Rule 30a-2(a) under the  Investment  Company Act of 1940, as
                                                      amended, are
                  attached hereto. </FONT>
</TD>
</TR>
</TABLE>
<BR>

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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>SIGNATURES </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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. </FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Municipal High Income Fund Inc.</FONT></P>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">By <U>/s/ R. Jay Gerken&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> <BR>R. Jay Gerken <BR>Chief Executive Officer</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date <U>March 30, 2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>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. </FONT></P>



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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">By <U>/s/ R. Jay Gerken&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> <BR>R. Jay Gerken <BR>Chief Executive Officer</FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date <U>March 30, 2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">By <U>/s/ Kaprel Ozsolak&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>Kaprel
Ozsolak <BR>Chief Financial Officer </FONT> </P>


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<P><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date <U>March 30, 2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></P>

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`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.CERT
<SEQUENCE>3
<FILENAME>ex99cert.htm
<DESCRIPTION>CERTIFICATION
<TEXT>

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<TITLE></TITLE>
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<H1 ALIGN=CENTER><FONT FACE="Times New Roman, Times, Serif" SIZE=2>CERTIFICATIONS </FONT></H1>

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<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, R. Jay Gerken, certify that: </FONT></P>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
have reviewed this report on Form N-Q of Municipal High Income Fund Inc.;</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on my knowledge, this 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 this report;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on my knowledge, the schedules of investments included in this report fairly present in
all material       respects the investments of the registrant as of the end of the fiscal
quarter for which the report is filed;</FONT></TD>
</TR>
</TABLE>
<BR>

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<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
registrant&#146;s other certifying officer(s) and I are responsible for establishing and
maintaining       disclosure controls and procedures (as defined in Rule 30a-3(c) under
the Investment Company Act of 1940) and       internal control over financial reporting
(as defined in Rule 30a-3(d) under the Investment Company Act of       1940) for the
registrant and have:</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Designed
such  disclosure  controls and procedures,  or caused such disclosure  controls and
procedures to be          designed under our supervision,  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;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Designed
such internal  control over  financial  reporting,  or caused such internal  control over
 financial          reporting to be designed under our supervision,  to provide
 reasonable  assurance  regarding the reliability          of financial  reporting and
the preparation of financial  statements for external purposes in accordance with
         generally accepted accounting principles;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Evaluated
   the    effectiveness    of    the    registrant&#146;s    disclosure    controls    and
   procedures          and          presented in this report our conclusions about the
 effectiveness of the disclosure  controls and procedures,          as of a date within
90 days prior to the filing date of this report based on such evaluation; and</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>d) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Disclosed
in this report any change in the  registrant&#146;s  internal  control  over  financial
 reporting  that          occurred during the registrant&#146;s  most recent fiscal quarter
that has materially  affected,  or is reasonably          likely to materially affect,
the registrant&#146;s internal control over financial reporting; and</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
   registrant&#146;s    other    certifying    officer(s)   and   I   have    disclosed   to
  the    registrant&#146;s      auditors                                       and the audit
 committee  of the  registrant&#146;s  board of  directors  (or persons      performing the
equivalent functions):</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All
 significant  deficiencies  and material  weaknesses in the design or operation of
internal  control over          financial  reporting  which are reasonably  likely to
adversely  affect the  registrant&#146;s  ability to record,          process, summarize, and
report financial information; and</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any
fraud,  whether or not material,  that involves management or other employees who have a
significant role          in the registrant&#146;s internal control over financial reporting.</FONT></TD>
</TR>
</TABLE>
<BR>


<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
     <TH ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH>
     <TH ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%" ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date: <U>March 30, 2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></TD>
     <TD WIDTH="50%" ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>/s/ R. Jay Gerken&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
R. Jay Gerken<BR>
Chief Executive Officer</FONT></TD></TR>
</TABLE>

<!-- MARKER PAGE="sheet: 3; page: 3" -->
<HR SIZE=5 COLOR=GRAY NOSHADE>



<!-- MARKER FORMAT-SHEET="Para Flush Lv 0-TNR" FSL="Project" -->
<P><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I, Kaprel Ozsolak, certify that: </FONT></P>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>1.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>I
have reviewed this report on Form N-Q of Municipal High Income Fund Inc.;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>2.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on my  knowledge,  this  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 this report;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>3.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Based
on my  knowledge,  the  schedules  of  investments  included in this report  fairly
 present in all  material      respects the investments of the registrant as of the end
of the fiscal quarter for which the report is filed;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>4.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
 registrant&#146;s  other certifying  officer(s) and I are responsible for  establishing and
maintaining  disclosure      controls and  procedures  (as defined in Rule  30a-3(c)
 under the  Investment  Company Act of 1940) and internal      control over financial
 reporting (as defined in Rule 30a-3(d) under the Investment  Company Act of 1940) for
the      registrant and have:</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Designed
such  disclosure  controls and procedures,  or caused such disclosure  controls and
procedures to be          designed under our supervision,  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;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Designed
such internal  control over  financial  reporting,  or caused such internal  control over
 financial          reporting to be designed under our supervision,  to provide
 reasonable  assurance  regarding the reliability          of financial  reporting and
the preparation of financial  statements for external purposes in accordance with
         generally accepted accounting principles;</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>c) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Evaluated
   the    effectiveness    of    the    registrant&#146;s    disclosure    controls    and
   procedures          and presented in
this report our conclusions about the  effectiveness of the disclosure  controls and
procedures,          as of a date within 90 days prior to the filing date of this report
based on such evaluation; and</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>d) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Disclosed
in this report any change in the  registrant&#146;s  internal  control  over  financial
 reporting  that          occurred during the registrant&#146;s  most recent fiscal quarter
that has materially  affected,  or is reasonably          likely to materially affect,
the registrant&#146;s internal control over financial reporting; and</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 0-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>5.  </FONT></TD>
<TD WIDTH=95%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>The
  registrant&#146;s   other   certifying   officer(s)   and  I  have   disclosed  to  the
  registrant&#146;s   auditors      and the audit committee of the registrant&#146;s board of
directors (or persons performing the equivalent functions):</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>a) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>All
 significant  deficiencies  and material  weaknesses in the design or operation of
internal  control over          financial  reporting  which are reasonably  likely to
adversely  affect the  registrant&#146;s  ability to record,          process, summarize, and
report financial information; and</FONT></TD>
</TR>
</TABLE>
<BR>

<!-- MARKER FORMAT-SHEET="Para Hang Lv 1-TNR" FSL="Project" -->
<TABLE WIDTH=600 CELLPADDING=0 CELLSPACING=0 BORDER=0>
<TR VALIGN=TOP>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2></FONT></TD>
<TD WIDTH=5%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>b) </FONT></TD>
<TD WIDTH=90%><FONT FACE="Times New Roman, Times, Serif" SIZE=2>Any
fraud,  whether or not material,  that involves management or other employees who have a
significant role          in the registrant&#146;s internal control over financial reporting.</FONT></TD>
</TR>
</TABLE>
<BR>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%">
<TR VALIGN="BOTTOM">
     <TH ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH>
     <TH ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"></FONT></TH></TR>
<TR VALIGN="TOP">
     <TD WIDTH="50%" ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE="2">Date: <U>March 30, 2005&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> </FONT></TD>
     <TD WIDTH="50%" ALIGN="LEFT" VALIGN="TOP"><FONT FACE="Times New Roman, Times, Serif" SIZE="2"><U>/s/ Kaprel Ozsolak&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><BR>
Kaprel Ozsolak<BR>
Chief Financial Officer</FONT></TD></TR>
</TABLE>

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</SEC-DOCUMENT>
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