Form N-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q


QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number         811-10345         

        Nuveen Dividend Advantage Municipal Fund 3         
(Exact name of registrant as specified in charter)

Nuveen Investments
        333 West Wacker Drive, Chicago, Illinois 60606         
(Address of principal executive offices) (Zip code)


Kevin J. McCarthy—Vice President and Secretary
        333 West Wacker Drive, Chicago, Illinois 60606         
(Name and address of agent for service)

Registrant's telephone number, including area code:         312-917-7700        

Date of fiscal year end:            10/31          

Date of reporting period:         7/31/07         

Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.

A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

Item 1. Schedule of Investments

    Portfolio of Investments (Unaudited)             
    Nuveen Dividend Advantage Municipal Fund 3 (NZF)             
    July 31, 2007             
Principal        Optional Call         
Amount (000)    Description (1)    Provisions (2)    Ratings (3)    Value 
    Alabama – 1.6% (1.0% of Total Investments)             
$          3,500    Alabama Special Care Facilities Financing Authority, Revenue Bonds, Ascension Health, Series    11/16 at 100.00    AA   $   3,519,110 
     2006C-2, 5.000%, 11/15/36             
5,655    Alabama State Port Authority, Revenue Bonds, State Docks Department Facilities, Series 2001,    10/11 at 100.00    AAA    5,951,209 
     5.250%, 10/01/26 (Pre-refunded 10/01/11) – AMBAC Insured (Alternative Minimum Tax)             
9,155    Total Alabama            9,470,319 
    Alaska – 2.6% (1.6% of Total Investments)             
4,000    Alaska Student Loan Corporation, Student Loan Revenue Bonds, Series 1998A, 5.250%, 7/01/14 –    7/08 at 100.00    AAA    4,032,920 
     AMBAC Insured (Alternative Minimum Tax)             
12,500    Northern Tobacco Securitization Corporation, Alaska, Tobacco Settlement Asset-Backed Bonds,    6/14 at 100.00    Baa3    11,435,875 
     Series 2006A, 5.000%, 6/01/46             
16,500    Total Alaska            15,468,795 
    Arkansas – 0.9% (0.6% of Total Investments)             
    Sebastian County Health Facilities Board, Arkansas, Hospital Revenue Improvement Bonds, Sparks             
    Regional Medical Center, Series 2001A:             
1,805     5.500%, 11/01/13    11/11 at 101.00    Baa2    1,873,482 
1,900     5.500%, 11/01/14    11/11 at 101.00    Baa2    1,968,495 
1,745     5.250%, 11/01/21    11/11 at 101.00    Baa2    1,757,180 
5,450    Total Arkansas            5,599,157 
    California – 12.3% (7.9% of Total Investments)             
    California Health Facilities Financing Authority, Health Facility Revenue Bonds, Adventist             
    Health System/West, Series 2003A:             
855     5.000%, 3/01/28    3/13 at 100.00    A    859,095 
140     5.000%, 3/01/33    3/13 at 100.00    A    140,265 
2,900    California Health Facilities Financing Authority, Revenue Bonds, Sutter Health, Series 2007A,    11/16 at 100.00    AA–    2,915,834 
     5.000%, 11/15/42             
10,000    California Infrastructure Economic Development Bank, First Lien Revenue Bonds, San Francisco    1/28 at 100.00    AAA    10,908,900 
     Bay Area Toll Bridge, Series 2003A. 5.000%, 7/01/33 (Pre-refunded 1/01/28) – AMBAC             
     Insured (UB)             
5,000    California Infrastructure Economic Development Bank, Revenue Bonds, Kaiser Hospital Assistance    8/11 at 102.00    A+    5,180,350 
     LLC, Series 2001A, 5.550%, 8/01/31             
18,850    California, General Obligation Veterans Welfare Bonds, Series 2001BZ, 5.350%, 12/01/21 – MBIA    12/07 at 101.00    AAA    18,876,767 
     Insured (Alternative Minimum Tax)             
365    Golden State Tobacco Securitization Corporation, California, Enhanced Tobacco Settlement    6/17 at 100.00    BBB    341,009 
     Asset-Backed Bonds, Series 2007A-1, 5.125%, 6/01/47             
    Los Angeles Regional Airports Improvement Corporation, California, Lease Revenue Refunding             
    Bonds, LAXFUEL Corporation at Los Angeles International Airport, Series 2001:             
13,955     5.750%, 1/01/16 – AMBAC Insured (Alternative Minimum Tax)    1/12 at 100.00    AAA    14,751,970 
5,000     5.375%, 1/01/21 – AMBAC Insured (Alternative Minimum Tax)    1/12 at 100.00    AAA    5,168,800 
1,500     5.250%, 1/01/23 – AMBAC Insured (Alternative Minimum Tax)    1/12 at 100.00    AAA    1,538,505 
10,000     5.500%, 1/01/32 – AMBAC Insured (Alternative Minimum Tax)    1/12 at 100.00    AAA    10,371,800 
10,000    San Joaquin Hills Transportation Corridor Agency, Orange County, California, Toll Road Revenue    No Opt. Call    AAA    2,690,100 
     Refunding Bonds, Series 1997A, 0.000%, 1/15/35 – MBIA Insured             
3,000    San Mateo County Community College District, California, General Obligation Bonds, Series    No Opt. Call    AAA    1,001,460 
     2006C, 0.000%, 9/01/30 – MBIA Insured             
81,565    Total California            74,744,855 
    Colorado – 6.4% (4.1% of Total Investments)             
2,250    Canterberry Crossing Metropolitan District II, Parker, Colorado, Limited Tax General    12/12 at 100.00    N/R    2,410,852 
     Obligation Bonds, Series 2002, 7.375%, 12/01/32             
1,605    Colorado Educational and Cultural Facilities Authority, Charter School Revenue Bonds, Belle    3/13 at 100.00    N/R (4)    1,860,388 
     Creek Education Center, Series 2002A, 7.625%, 3/15/32 (Pre-refunded 3/15/13)             
3,200    Colorado Educational and Cultural Facilities Authority, Charter School Revenue Bonds,    3/10 at 102.00    N/R (4)    3,524,416 
     Montessori Peaks Building Foundation, Series 2002A, 8.000%, 5/01/32 (Pre-refunded 3/01/10)             
1,775    Colorado Educational and Cultural Facilities Authority, Charter School Revenue Bonds, Weld    6/11 at 100.00    Ba1 (4)    1,992,189 
     County School District 6 – Frontier Academy, Series 2001, 7.375%, 6/01/31             
     (Pre-refunded 6/01/11)             
3,560    Colorado Educational and Cultural Facilities Authority, Revenue Bonds, Montessori Peaks    5/16 at 102.00    N/R    3,447,575 
     Academy, Series 2006, 5.400%, 5/01/26             
3,380    Colorado Housing Finance Authority, Multifamily Project Bonds, Class I, Series 2001A-1,    10/11 at 100.00    AAA    3,447,059 
     5.500%, 4/01/31 (Alternative Minimum Tax)             
10,100    Colorado Springs, Colorado, Utility System Revenue Refunding and Improvement Bonds, Series    11/07 at 100.00    AA    10,137,168 
     1997A, 5.375%, 11/15/26             
    Denver City and County, Colorado, Airport Revenue Bonds, Series 2006:             
5,365     5.000%, 11/15/23 – FGIC Insured (UB)    11/16 at 100.00    AAA    5,622,520 
1,100     7.141%, 11/15/24 – FGIC Insured (IF)    11/16 at 100.00    AAA    1,248,973 
1,445     7.141%, 11/15/25 – FGIC Insured (IF)    11/16 at 100.00    AAA    1,640,696 
2,000    Denver City and County, Colorado, Airport System Revenue Refunding Bonds, Series 2001A,    11/11 at 100.00    AAA    2,093,340 
     5.500%, 11/15/16 – FGIC Insured (Alternative Minimum Tax)             
1,000    Plaza Metropolitan District 1, Lakewood, Colorado, Tax Increment Revenue Bonds, Series 2003,    6/14 at 101.00    N/R    1,095,260 
     8.000%, 12/01/25             
36,780    Total Colorado            38,520,436 
    Delaware – 0.4% (0.2% of Total Investments)             
2,255    Delaware Housing Authority, Multifamily Mortgage Revenue Bonds, Series 2001A, 5.400%, 7/01/24    7/12 at 100.00    Aa3    2,314,622 
    District of Columbia – 0.9% (0.6% of Total Investments)             
1,375    District of Columbia, Revenue Bonds, Catholic University of America, Series 1999, 5.625%,    10/09 at 101.00    AAA    1,432,007 
     10/01/29 – AMBAC Insured             
1,335    Washington Convention Center Authority, District of Columbia, Senior Lien Dedicated Tax    10/16 at 100.00    Aaa    1,214,757 
     Revenue Bonds, Series 2007, Residuals 1606, 5.774%, 10/01/30 – AMBAC Insured (IF)             
3,335    Washington D.C. Convention Center Authority, Dedicated Tax Revenue Bonds, Residual Series 1730,    10/16 at 100.00    Aaa    3,034,617 
     1731, 1736, 5.774%, 10/01/30 – AMBAC Insured (IF)             
6,045    Total District of Columbia            5,681,381 
    Florida – 2.5% (1.6% of Total Investments)             
2,000    Dade County, Florida, Water and Sewerage System Revenue Bonds, Series 1997, 5.375%, 10/01/16 –    10/07 at 102.00    AAA    2,044,780 
     FGIC Insured             
    Orange County Housing Finance Authority, Florida, Multifamily Housing Revenue Bonds, Oak Glen             
    Apartments, Series 2001G:             
1,105     5.400%, 12/01/32 – FSA Insured    12/11 at 100.00    AAA    1,121,951 
2,195     5.450%, 12/01/41 – FSA Insured    12/11 at 100.00    AAA    2,224,545 
4,175    Pace Property Finance Authority Inc., Florida, Utility System Improvement and Revenue    9/07 at 102.00    AAA    4,263,009 
     Refunding Bonds, Series 1997, 5.250%, 9/01/17 – AMBAC Insured             
5,455    South Miami Health Facilities Authority, Florida, Hospital Revenue, Baptist Health System    8/17 at 100.00    AA–    5,441,417 
     Obligation Group, Series 2007, 5.000%, 8/15/42             
14,930    Total Florida            15,095,702 
    Georgia – 2.4% (1.5% of Total Investments)             
5,000    Atlanta, Georgia, Airport General Revenue Bonds, Series 2000B, 5.625%, 1/01/30 – FGIC Insured    1/10 at 101.00    AAA    5,190,200 
     (Alternative Minimum Tax)             
2,700    Atlanta, Georgia, Tax Allocation Bonds, Atlantic Station Project, Series 2001, 7.900%, 12/01/24    12/11 at 101.00    N/R    2,951,397 
2,000    Fulton County Residential Care Facilities Authority, Georgia, Revenue Bonds, Elderly Care,    7/17 at 100.00    N/R    1,930,640 
     Lenbrook Square Project, Series 2006A, 5.125%, 7/01/42             
3,740    Gainesville and Hall County Hospital Authority, Georgia, Revenue Anticipation Certificates,    5/11 at 100.00    A– (4)    3,954,713 
     Northeast Georgia Health Services Inc., Series 2001, 5.500%, 5/15/31 (Pre-refunded 5/15/11)             
500    Gainesville Redevelopment Authority, Georgia, Educational Facilities Revenue Bonds, Riverside    3/17 at 100.00    N/R    489,540 
     Military Academy Project, Series 2007, 5.125%, 3/01/37             
13,940    Total Georgia            14,516,490 
    Illinois – 19.0% (12.1% of Total Investments)             
16,000    Chicago Greater Metropolitan Area Sanitary District, Illinois, General Obligation Bonds, Series    12/16 at 100.00    AAA    17,219,680 
     2006, 5.000%, 12/01/35 (UB)             
8,375    Chicago, Illinois, Revenue Bonds, Midway Airport, Series 2001A, 5.500%, 1/01/19 – FSA Insured    1/11 at 101.00    AAA    8,730,435 
     (Alternative Minimum Tax)             
1,750    Chicago, Illinois, Sales Tax Revenue Bonds, Series 1998, 5.250%, 1/01/28 – FGIC Insured    7/08 at 102.00    AAA    1,797,950 
4,950    Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Bonds, O’Hare International    1/11 at 101.00    AAA    5,101,371 
     Airport, Series 2001A, 5.375%, 1/01/32 – AMBAC Insured (Alternative Minimum Tax)             
8,610    Chicago, Illinois, Second Lien Wastewater Transmission Revenue Bonds, Series 2001A, 5.500%,    1/11 at 100.00    AAA    9,075,973 
     1/01/26 (Pre-refunded 1/01/11) – AMBAC Insured             
2,220    Chicago, Illinois, Second Lien Wastewater Transmission Revenue Bonds, Series 2001A, 5.500%,    No Opt. Call    AAA    2,450,059 
     1/01/16 – MBIA Insured             
10,000    Chicago, Illinois, Senior Lien Water Revenue Bonds, Series 2001, 5.000%, 11/01/26    11/11 at 100.00    AAA    10,464,300 
     (Pre-refunded 11/01/11) – AMBAC Insured             
1,665    Chicago, Illinois, Third Lien General Airport Revenue Bonds, O’Hare International Airport,    1/16 at 100.00    AAA    1,713,901 
     Series 2005A, 5.000%, 1/01/33 – FGIC Insured             
2,415    Illinois Finance Authority, General Obligation Debt Certificates, Local Government Program –    12/14 at 100.00    Aaa    2,504,065 
     Kankakee County, Series 2005B, 5.000%, 12/01/24 – AMBAC Insured             
1,100    Illinois Health Facilities Authority, Revenue Bonds, Condell Medical Center, Series 2000,    5/10 at 101.00    Baa2    1,155,891 
     6.500%, 5/15/30             
9,000    Illinois Health Facilities Authority, Revenue Bonds, Covenant Retirement Communities Inc.,    12/11 at 101.00    BBB    9,322,020 
     Series 2001, 5.875%, 12/01/31             
15,000    Illinois Health Facilities Authority, Revenue Bonds, Loyola University Health System, Series    7/11 at 100.00    Baa2 (4)    16,169,700 
     2001A, 6.125%, 7/01/31 (Pre-refunded 7/01/11)             
5,000    Lake County School District 38, Big Hallow, Illinois, General Obligation Bonds, Series 2005,    No Opt. Call    Aaa    2,567,450 
     0.000%, 2/01/22 – AMBAC Insured             
7,000    Lombard Public Facilities Corporation, Illinois, First Tier Conference Center and Hotel    1/16 at 100.00    N/R    7,406,420 
     Revenue Bonds, Series 2005A-1, 7.125%, 1/01/36             
16,900    Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, McCormick Place Expansion    12/09 at 101.00    AAA    17,464,460 
     Project, Series 1999A, 5.250%, 12/15/28 – FGIC Insured             
2,000    Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place    No Opt. Call    AAA    2,287,020 
     Expansion Project, Series 1998A, 5.500%, 6/15/29 – FGIC Insured             
111,985    Total Illinois            115,430,695 
    Indiana – 6.1% (3.9% of Total Investments)             
    Clark-Pleasant Community School Building Corporation, Indiana, First Mortgage Bonds,             
    Series 2001:             
1,255     5.000%, 7/15/21 (Pre-refunded 1/15/12) – AMBAC Insured    1/12 at 100.00    AAA    1,314,863 
1,000     5.000%, 1/15/26 (Pre-refunded 1/15/12) – AMBAC Insured    1/12 at 100.00    AAA    1,047,700 
    Evansville Vanderburgh Public Library Lease Corporation, Indiana, First Mortgage Bonds,             
    Series 2001:             
2,000     5.750%, 7/15/18 (Pre-refunded 1/15/12) – MBIA Insured    1/12 at 100.00    AAA    2,156,300 
2,750     5.125%, 1/15/24 (Pre-refunded 1/15/12) – MBIA Insured    1/12 at 100.00    AAA    2,895,117 
1,250    Hamilton Southeastern Cumberland Campus School Building Corporation, Indiana, First Mortgage    1/12 at 100.00    AAA    1,315,962 
     Bonds, Series 2001, 5.125%, 1/15/23 (Pre-refunded 1/15/12) – AMBAC Insured             
9,500    Indiana Educational Facilities Authority, Revenue Bonds, Butler University, Series 2001,    2/11 at 100.00    AAA    9,920,090 
     5.500%, 2/01/26 – MBIA Insured             
4,230    Indiana Finance Authority, Educational Facilities Revenue Bonds, Tudor Park Foundation, Series    6/15 at 100.00    Aa3    4,366,671 
     2005B, 5.000%, 6/01/24             
2,800    Indiana Health Facility Financing Authority, Revenue Bonds, Community Hospitals of Indiana,    5/15 at 100.00    AAA    2,884,084 
     Series 2005A, 5.000%, 5/01/35 – AMBAC Insured             
3,500    University of Southern Indiana, Student Fee Bonds, Series 2001H, 5.000%, 10/01/21 –    10/11 at 100.00    Aaa    3,615,955 
     AMBAC Insured             
    Vigo County, Indiana, Hospital Authority, Union Hospital, Revenue Bonds, Series 2007:             
2,500     5.750%, 9/01/42    9/17 at 100.00    N/R    2,514,100 
2,500     5.800%, 9/01/47    9/17 at 100.00    N/R    2,517,875 
    Wayne County Jail Holding Corporation, Indiana, First Mortgage Bonds, Series 2001:             
1,150     5.625%, 7/15/18 – AMBAC Insured    1/13 at 101.00    AAA    1,245,025 
1,090     5.500%, 7/15/22 – AMBAC Insured    1/13 at 101.00    AAA    1,170,976 
35,525    Total Indiana            36,964,718 
    Iowa – 5.9% (3.8% of Total Investments)             
2,000    Iowa Finance Authority, Healthcare Revenue Bonds, Great River Medical Center, Series 2001,    5/11 at 100.00    Aaa    2,054,040 
     5.250%, 5/15/31 – FSA Insured             
    Iowa Tobacco Settlement Authority, Tobacco Settlement Asset-Backed Revenue Bonds, Series 2001B:             
28,000     5.300%, 6/01/25 (Pre-refunded 6/01/11)    6/11 at 101.00    AAA    29,413,720 
3,950     5.600%, 6/01/35 (Pre-refunded 6/01/11)    6/11 at 101.00    AAA    4,222,984 
33,950    Total Iowa            35,690,744 
    Kentucky – 3.2% (2.0% of Total Investments)             
18,500    Louisville and Jefferson County Metropolitan Sewer District, Kentucky, Sewer and Drainage    11/11 at 101.00    AAA    19,296,610 
     System Revenue Bonds, Series 2001A, 5.125%, 5/15/27 – MBIA Insured             
    Louisiana – 3.4% (2.2% of Total Investments)             
19,890    Tobacco Settlement Financing Corporation, Louisiana, Tobacco Settlement Asset-Backed Bonds,    5/11 at 101.00    BBB    20,608,427 
     Series 2001B, 5.875%, 5/15/39             
    Maine – 1.1% (0.7% of Total Investments)             
    Maine State Housing Authority, Single Family Mortgage Purchase Bonds, Series 2001B:             
4,610     5.400%, 11/15/21 (Alternative Minimum Tax)    11/10 at 100.00    AA+    4,673,987 
1,690     5.500%, 11/15/32 (Alternative Minimum Tax)    11/10 at 100.00    AA+    1,700,495 
6,300    Total Maine            6,374,482 
    Maryland – 2.6% (1.7% of Total Investments)             
1,000    Howard County, Maryland, Retirement Community Revenue Bonds, Vantage House, Series 2007B,    4/17 at 100.00    N/R    993,380 
     5.250%, 4/01/37             
1,570    Maryland Community Development Administration, Insured Multifamily Housing Mortgage Loan    7/11 at 100.00    Aa2    1,590,693 
     Revenue Bonds, Series 2001B, 5.250%, 7/01/21 (Alternative Minimum Tax)             
2,000    Maryland Economic Development Corporation, Revenue Bonds, Chesapeake Bay Hyatt Conference    12/16 at 100.00    N/R    1,907,840 
     Center, Series 2006A, 5.000%, 12/01/31             
10,600    Maryland Energy Financing Administration, Revenue Bonds, AES Warrior Run Project, Series 1995,    9/07 at 100.00    N/R    10,628,514 
     7.400%, 9/01/19 (Alternative Minimum Tax)             
555    Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Mercy Ridge    7/17 at 100.00    BBB+    523,226 
     Retirement Community, Series 2007, 4.750%, 7/01/34             
15,725    Total Maryland            15,643,653 
    Massachusetts – 1.2% (0.8% of Total Investments)             
1,000    Massachusetts Development Finance Agency, Revenue Bonds, Orchard Cove, Series 2007,    10/12 at 102.00    BBB-    1,002,660 
     5.250%, 10/01/26             
5,000    Massachusetts Port Authority, Special Facilities Revenue Bonds, Delta Air Lines Inc., Series    1/11 at 101.00    AAA    5,227,750 
     2001A, 5.500%, 1/01/18 – AMBAC Insured (Alternative Minimum Tax)             
1,155    Massachusetts Water Resources Authority, General Revenue Bonds, Series 2007, Residual Trust    2/17 at 100.00    Aaa    974,855 
     7039, 5.809%, 8/01/46 – FSA Insured (IF)             
7,155    Total Massachusetts            7,205,265 
    Michigan – 9.8% (6.3% of Total Investments)             
15,000    Detroit City School District, Wayne County, Michigan, Unlimited Tax School Building and Site    No Opt. Call    AAA    18,090,000 
     Improvement Bonds, Series 2001A, 6.000%, 5/01/29 – FSA Insured             
11,000    Kent Hospital Finance Authority, Michigan, Revenue Bonds, Spectrum Health, Series 2001A,    7/11 at 101.00    AA (4)    11,747,340 
     5.500%, 1/15/31 (Pre-refunded 7/15/11)             
1,235    Michigan State Building Authority, Revenue Bonds, Facilities Program, Series 2001I,    10/11 at 100.00    A+    1,303,777 
     5.500%, 10/15/18             
1,355    Michigan State Hospital Finance Authority, Hospital Revenue Bonds, Detroit Medical Center    8/08 at 101.00    BB-    1,335,488 
     Obligated Group, Series 1998A, 5.250%, 8/15/23             
3,485    Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds, Sisters of Mercy    No Opt. Call    AAA    3,656,671 
     Health Corporation, Series 1993P, 5.375%, 8/15/14 – MBIA Insured (ETM)             
    Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds, Sparrow Obligated             
    Group, Series 2001:             
1,400     5.500%, 11/15/21 (Pre-refunded 11/15/11)    11/11 at 101.00    A+ (4)    1,500,884 
2,500     5.625%, 11/15/31 (Pre-refunded 11/15/11)    11/11 at 101.00    A+ (4)    2,692,400 
3,500    Michigan State Hospital Finance Authority, Revenue Bonds, Trinity Health Care Group, Series    12/16 at 100.00    Aa2    3,515,295 
     2006A, 5.000%, 12/01/31             
12,640    Royal Oak Hospital Finance Authority, Michigan, Hospital Revenue Bonds, William Beaumont    11/11 at 100.00    AAA    13,037,402 
     Hospital, Series 2001M, 5.250%, 11/15/31 – MBIA Insured             
2,395    Ypsilanti Community Utilities Authority, Washtenaw County, Michigan, General Obligation Bonds,    5/11 at 100.00    AAA    2,507,421 
     Sanitary Sewerage System 3, Series 2001, 5.100%, 5/01/31 (Pre-refunded 5/01/11) – FGIC Insured             
54,510    Total Michigan            59,386,678 
    Minnesota – 0.6% (0.4% of Total Investments)             
2,320    Dakota County Community Development Agency, Minnesota, GNMA Collateralized Multifamily Housing    10/11 at 105.00    Aaa    2,434,353 
     Revenue Bonds, Rose Apartments Project, Series 2001, 6.350%, 10/20/37 (Alternative Minimum Tax)             
1,375    Saint Paul Port Authority, Minnesota, Lease Revenue Bonds, Regions Hospital Parking Ramp    8/16 at 100.00    N/R    1,319,147 
     Project, Series 2007-1, 5.000%, 8/01/36             
3,695    Total Minnesota            3,753,500 
    Mississippi – 0.4% (0.2% of Total Investments)             
2,155    Mississippi Business Finance Corporation, GNMA Collateralized Retirement Facility Mortgage    5/09 at 103.00    AAA    2,212,991 
     Revenue Refunding Bonds, Aldersgate Retirement Community Inc. Project, Series 1999A,             
     5.450%, 5/20/34             
    Missouri – 2.8% (1.8% of Total Investments)             
1,000    Cape Girardeau County Industrial Development Authority, Missouri, Health Facilities Revenue    6/17 at 100.00    N/R    973,860 
     Bonds, Southeast Missouri Hospital Association, Series 2007, 5.000%, 6/01/36             
1,000    Clinton County Industrial Development Authority, Missouri, Revenue Bonds, Cameron Regional    12/17 at 100.00    N/R    955,010 
     Medical Center, Series 2007, 5.000%, 12/01/32             
1,825    Fenton, Missouri, Tax Increment Refunding and Improvement Revenue Bonds, Gravois Bluffs    10/12 at 100.00    N/R (4)    2,016,388 
     Redevelopment Project, Series 2002, 6.125%, 10/01/21 (Pre-refunded 10/01/12)             
    Missouri Development Finance Board, Cultural Facilities Revenue Bonds, Nelson Gallery             
    Foundation, Series 2001A:             
3,335     5.250%, 12/01/19 – MBIA Insured    12/11 at 100.00    AAA    3,493,079 
3,510     5.250%, 12/01/20 – MBIA Insured    12/11 at 100.00    AAA    3,676,374 
3,695     5.250%, 12/01/21 – MBIA Insured    12/11 at 100.00    AAA    3,870,143 
2,040     5.250%, 12/01/22 – MBIA Insured    12/11 at 100.00    AAA    2,130,515 
16,405    Total Missouri            17,115,369 
    Montana – 0.8% (0.5% of Total Investments)             
5,000    Montana Board of Investments, Exempt Facility Revenue Bonds, Stillwater Mining Company, Series    7/10 at 101.00    B2    5,131,200 
     2000, 8.000%, 7/01/20 (Alternative Minimum Tax)             
    Nebraska – 1.6% (1.1% of Total Investments)             
    Nebraska Investment Finance Authority, Single Family Housing Revenue Bonds, Series 2001D:             
2,255     5.250%, 9/01/21 (Alternative Minimum Tax)    9/11 at 100.00    AAA    2,269,364 
3,035     5.375%, 9/01/32 (Alternative Minimum Tax)    9/11 at 100.00    AAA    3,053,938 
4,490    Omaha Public Power District, Nebraska, Separate Electric System Revenue Bonds, Nebraska City    2/17 at 100.00    AAA    4,639,921 
     2, Series 2006A, 5.000%, 2/01/49 – AMBAC Insured (UB)             
9,780    Total Nebraska            9,963,223 
    Nevada – 5.3% (3.4% of Total Investments)             
20,000    Clark County, Nevada, Limited Tax General Obligation Bank Bonds, Series 2000, 5.500%, 7/01/30    7/10 at 100.00    AAA    20,938,000 
     (Pre-refunded 7/01/10) – MBIA Insured (5)             
2,000    Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas    1/10 at 100.00    AAA    2,049,700 
     Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 – AMBAC Insured             
4,000    Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas    1/10 at 102.00    N/R    4,063,680 
     Monorail Project, Second Tier, Series 2000, 7.375%, 1/01/40             
205    Nevada Housing Division, Single Family Mortgage Bonds, Senior Series 1998A-1, 5.300%, 4/01/18    4/08 at 101.50    Aaa    206,132 
     (Alternative Minimum Tax)             
4,290    University of Nevada, Revenue Bonds, Community College System, Series 2001A, 5.250%, 7/01/26    1/12 at 100.00    AAA    4,536,117 
     (Pre-refunded 1/01/12) – FGIC Insured             
30,495    Total Nevada            31,793,629 
    New Hampshire – 0.3% (0.2% of Total Investments)             
2,000    New Hampshire Health and Education Authority, Hospital Revenue Bonds, Concord Hospital, Series    10/11 at 101.00    Aaa    2,119,060 
     2001, 5.500%, 10/01/21 – FSA Insured             
    New Jersey – 4.0% (2.5% of Total Investments)             
10,000    New Jersey Economic Development Authority, Water Facilities Revenue Bonds, American Water    11/12 at 101.00    Aaa    10,365,400 
     Company, Series 2002A, 5.250%, 11/01/32 – AMBAC Insured (Alternative Minimum Tax)             
4,125    New Jersey Transit Corporation, Certificates of Participation, Federal Transit Administration    No Opt. Call    AAA    4,469,726 
     Grants, Series 2002A, 5.500%, 9/15/13 – AMBAC Insured             
20,000    New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2006C,    No Opt. Call    AAA    7,348,600 
     0.000%, 12/15/28 – AMBAC Insured             
2,000    Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds,    6/17 at 100.00    BBB    1,792,020 
     Series 2007-1A, 4.750%, 6/01/34             
36,125    Total New Jersey            23,975,746 
    New York – 4.1% (2.6% of Total Investments)             
900    Albany Industrial Development Agency, New York, Revenue Bonds, Brighter Choice Charter    4/17 at 100.00    N/R    870,831 
     Schools, Series 2007A, 5.000%, 4/01/32             
1,780    East Rochester Housing Authority, New York, GNMA Secured Revenue Bonds, Gates Senior Housing    10/11 at 101.00    AAA    1,832,528 
     Inc., Series 2001, 5.300%, 4/20/31             
220    Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, Driver Trust 1649, 2006,    2/17 at 100.00    AAA    189,552 
     5.931%, 2/15/47 – MBIA Insured (IF)             
4,360    Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, 2006A, 4.500%, 2/15/47 –    2/17 at 100.00    AAA    4,158,830 
     MBIA Insured (UB)             
4,155    Monroe County Airport Authority, New York, Revenue Refunding Bonds, Greater Rochester    No Opt. Call    AAA    4,484,824 
     International Airport, Series 1999, 5.750%, 1/01/13 – MBIA Insured (Alternative Minimum Tax)             
7,000    New York City Industrial Development Agency, New York, American Airlines-JFK International    8/16 at 101.00    B    8,244,950 
     Airport Special Facility Revenue Bonds, Series 2005, 7.750%, 8/01/31 (Alternative Minimum Tax)             
1,715    New York City, New York, General Obligation Bonds, Fiscal Series 2002G, 5.625%, 8/01/20 –    8/12 at 100.00    AAA    1,846,198 
     MBIA Insured             
785    New York City, New York, General Obligation Bonds, Fiscal Series 2002G, 5.625%, 8/01/20    8/12 at 100.00    Aaa    851,356 
     (Pre-refunded 8/01/12) – MBIA Insured             
2,000    New York State Tobacco Settlement Financing Corporation, Tobacco Settlement Asset-Backed and    6/11 at 100.00    AA–    2,102,260 
     State Contingency Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/16             
22,915    Total New York            24,581,329 
    North Carolina – 1.1% (0.7% of Total Investments)             
    Charlotte-Mecklenburg Hospital Authority, North Carolina, Healthcare System Revenue Bonds, DBA             
    Carolinas Healthcare System, Series 2005A:             
1,750     4.875%, 1/15/32    1/15 at 100.00    AA–    1,713,233 
3,000     5.000%, 1/15/45    1/15 at 100.00    AA–    3,000,840 
1,800    North Carolina Municipal Power Agency 1, Catawba Electric Revenue Bonds, Series 2003A,    No Opt. Call    A3    1,914,048 
     5.500%, 1/01/13             
6,550    Total North Carolina            6,628,121 
    Ohio – 2.2% (1.4% of Total Investments)             
2,030    Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities Program Residential Mortgage    3/08 at 101.50    AAA    2,054,401 
     Revenue Bonds, Series 1998A-1, 5.300%, 9/01/19 – FSA Insured (Alternative Minimum Tax)             
7,400    Ohio Water Development Authority, Solid Waste Disposal Revenue Bonds, Bay Shore Power, Series    9/09 at 102.00    N/R    7,648,862 
     1998B, 6.625%, 9/01/20 (Alternative Minimum Tax)             
    Portage County, Ohio, General Obligation Bonds, Series 2001:             
1,870     5.000%, 12/01/21 – FGIC Insured    12/11 at 100.00    AAA    1,934,964 
1,775     5.000%, 12/01/23 – FGIC Insured    12/11 at 100.00    AAA    1,832,048 
13,075    Total Ohio            13,470,275 
    Oklahoma – 2.6% (1.7% of Total Investments)             
    Oklahoma Development Finance Authority, Revenue Bonds, Saint John Health System, Series 2007:             
6,000     5.000%, 2/15/37    2/17 at 100.00    AA–    6,038,340 
3,440     5.000%, 2/15/42    2/17 at 100.00    AA–    3,443,818 
2,500    Oklahoma Development Finance Authority, Revenue Refunding Bonds, Hillcrest Healthcare System,    8/09 at 101.00    AAA    2,611,300 
     Series 1999A, 5.625%, 8/15/29 (Pre-refunded 8/15/09)             
3,600    Tulsa County Industrial Authority, Oklahoma, Health Care Revenue Bonds, Saint Francis Health    12/16 at 100.00    AA    3,622,572 
     System, Series 2006, 5.000%, 12/15/36             
15,540    Total Oklahoma            15,716,030 
    Oregon – 2.5% (1.6% of Total Investments)             
4,700    Oregon Health, Housing, Educational and Cultural Facilities Authority, Revenue Bonds,    11/11 at 101.00    AAA    4,907,787 
     PeaceHealth Project, Series 2001, 5.250%, 11/15/21 – AMBAC Insured             
10,000    Oregon Housing and Community Services Department, Multifamily Housing Revenue Bonds, Series    7/10 at 100.00    Aaa    10,173,000 
     2000A, 6.050%, 7/01/42 (Alternative Minimum Tax)             
14,700    Total Oregon            15,080,787 
    Pennsylvania – 2.0% (1.3% of Total Investments)             
    Allegheny County Hospital Development Authority, Pennsylvania, Revenue Bonds, West Penn             
    Allegheny Health System, Series 2000B:             
2,000     9.250%, 11/15/22 (Pre-refunded 11/15/10)    11/10 at 102.00    AAA    2,363,680 
2,000     9.250%, 11/15/30 (Pre-refunded 11/15/10)    11/10 at 102.00    AAA    2,363,680 
500    Bucks County Industrial Development Authority, Pennsylvania, Charter School Revenue Bonds,    3/17 at 100.00    BBB    486,045 
     School Lane Charter School, Series 2007A, 5.000%, 3/15/37             
3,500    Pennsylvania Economic Development Financing Authority, Senior Lien Resource Recovery Revenue    1/08 at 100.00    B+    3,534,265 
     Bonds, Northampton Generating Project, Series 1994A, 6.600%, 1/01/19 (Alternative Minimum Tax)             
3,205    Philadelphia School District, Pennsylvania, General Obligation Bonds, Series 2002B, 5.625%,    8/12 at 100.00    AAA    3,465,278 
     8/01/16 (Pre-refunded 8/01/12) – FGIC Insured             
11,205    Total Pennsylvania            12,212,948 
    Puerto Rico – 0.4% (0.3% of Total Investments)             
2,500    Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, Series 2007A, 5.250%,    8/17 at 100.00    A+    2,621,925 
     8/01/57 – MBIA Insured             
    South Carolina – 1.2% (0.8% of Total Investments)             
6,850    South Carolina Transportation Infrastructure Bank, Revenue Bonds, Series 2001A, 5.500%,    10/11 at 100.00    Aaa    7,282,235 
     10/01/22 (Pre-refunded 10/01/11) – AMBAC Insured             
    Tennessee – 1.8% (1.2% of Total Investments)             
3,680    Knox County Health, Educational and Housing Facilities Board, Tennessee, Hospital Revenue    1/17 at 30.07    A–    612,205 
     Refunding Bonds, Covenant Health, Series 2006, 0.000%, 1/01/41             
5,210    Memphis-Shelby County Airport Authority, Tennessee, Airport Revenue Bonds, Series 2001A,    3/11 at 100.00    AAA    5,423,818 
     5.500%, 3/01/14 – FSA Insured (Alternative Minimum Tax)             
275    Sullivan County Health Educational and Housing Facilities Board, Tennessee, Revenue Bonds,    9/16 at 100.00    BBB+    276,466 
     Wellmont Health System, Series 2006C, 5.250%, 9/01/36             
2,800    Sumner County Health, Educational, and Housing Facilities Board, Tennessee, Revenue Refunding    11/17 at 100.00    N/R    2,827,944 
     Bonds, Sumner Regional Health System Inc., Series 2007, 5.500%, 11/01/46             
     (WI/DD, Settling 8/15/07)             
900    Tennessee Housing Development Agency, Homeownership Program Bonds, Series 1998-2, 5.350%,    1/09 at 101.00    AA    908,469 
     7/01/23 (Alternative Minimum Tax)             
880    Tennessee Housing Development Agency, Homeownership Program Bonds, Series 2001-3A, 5.200%,    7/11 at 100.00    AA    889,108 
     7/01/22 (Alternative Minimum Tax)             
13,745    Total Tennessee            10,938,010 
    Texas – 18.4% (11.8% of Total Investments)             
5,445    Board of Regents, University of Texas System, Financing System Revenue Bonds, Series 2006F,    2/17 at 100.00    AAA    5,030,527 
     4.250%, 8/15/36 (UB)             
1,125    Brushy Creek Municipal Utility District, Williamson County, Texas, Combination Unlimited Tax    6/09 at 100.00    Aaa    1,143,709 
     and Revenue Refunding Bonds, Series 2001, 5.125%, 6/01/26 – FSA Insured             
    Collins and Denton Counties, Frisco, Texas, General Obligation Bonds, Series 2001:             
1,910     5.000%, 2/15/20 – FGIC Insured    2/11 at 100.00    AAA    1,961,303 
2,005     5.000%, 2/15/21 – FGIC Insured    2/11 at 100.00    AAA    2,061,521 
3,850    Dallas-Ft. Worth International Airport, Texas, Joint Revenue Refunding and Improvement Bonds,    11/11 at 100.00    AAA    4,008,466 
     Series 2001A, 5.500%, 11/01/35 – FGIC Insured (Alternative Minimum Tax)             
5,000    Decatur Hospital Authority, Texas, Revenue Bonds, Wise Regional Health System, Series 2004A,    9/14 at 100.00    N/R    5,405,900 
     7.000%, 9/01/25             
4,040    Harris County, Texas, Tax and Revenue Certificates of Obligation, Series 2001, 5.000%, 8/15/27    8/11 at 100.00    AA+    4,121,972 
6,000    Houston, Texas, Junior Lien Water and Sewerage System Revenue Refunding Bonds, Series 2001B,    No Opt. Call    AAA    6,908,760 
     5.500%, 12/01/29 – MBIA Insured (ETM)             
7,000    Houston, Texas, Subordinate Lien Airport System Revenue Bonds, Series 1998B, 5.250%, 7/01/14 –    7/08 at 101.00    AAA    7,146,510 
     FGIC Insured (Alternative Minimum Tax)             
    Houston, Texas, Subordinate Lien Airport System Revenue Refunding Bonds, Series 2001A:             
2,525     5.500%, 7/01/13 – FGIC Insured (Alternative Minimum Tax)    1/12 at 100.00    AAA    2,663,269 
2,905     5.500%, 7/01/14 – FGIC Insured (Alternative Minimum Tax)    1/12 at 100.00    AAA    3,057,483 
4,735    Hutto Independent School District, Williamson County, Texas, General Obligation Bonds, Series    8/16 at 100.00    AAA    4,553,981 
     2007, Residuals 07-1001, 6.605%, 8/01/43 (IF)             
    Jefferson County Health Facilities Development Corporation, Texas, FHA-Insured Mortgage             
    Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001:             
8,500     5.400%, 8/15/31 – AMBAC Insured    8/11 at 100.00    AAA    8,826,485 
8,500     5.500%, 8/15/41 – AMBAC Insured    8/11 at 100.00    AAA    8,867,965 
10,700    Laredo Independent School District, Webb County, Texas, General Obligation Refunding Bonds,    8/11 at 100.00    AAA    10,989,970 
     Series 2001, 5.000%, 8/01/25             
2,500    Matagorda County Navigation District 1, Texas, Collateralized Revenue Refunding Bonds, Houston    No Opt. Call    AAA    2,633,000 
     Light and Power Company, Series 1997, 5.125%, 11/01/28 – AMBAC Insured (Alternative             
     Minimum Tax)             
1,540    Medina Valley Independent School District, Medina County, Texas, General Obligation Bonds,    2/11 at 100.00    Aaa    1,612,226 
     Series 2001, 5.250%, 2/15/26 (Pre-refunded 2/15/11)             
5,430    Mineral Wells Independent School District, Pale Pinto and Parker Counties, Texas, Unlimited    2/08 at 100.00    Aaa    5,441,077 
     School Tax Building and Refunding Bonds, Series 1998, 4.750%, 2/15/22             
95    North Central Texas Health Facilities Development Corporation, Revenue Bonds, Texas Health    2/08 at 102.00    Aaa    97,692 
     Resources System, Series 1997B, 5.375%, 2/15/26 (Pre-refunded 2/15/08) – MBIA Insured             
3,045    Port of Houston Authority, Harris County, Texas, General Obligation Port Improvement Bonds,    10/11 at 100.00    AAA    3,175,174 
     Series 2001B, 5.500%, 10/01/17 – FGIC Insured (Alternative Minimum Tax)             
6,300    Tarrant County Cultural & Educational Facilities Financing Corporation, Texas Revenue Bonds, Series    2/17 at 100.00    AA–    6,335,469 
     2007, 5.000%, 2/15/36             
10,590    Texas Department of Housing and Community Affairs, Residential Mortgage Revenue Bonds, Series    7/11 at 100.00    AAA    10,857,927 
     2001A, 5.350%, 7/01/33 (Alternative Minimum Tax)             
    White Settlement Independent School District, Tarrant County, Texas, General Obligation Bonds,             
    Series 2006:             
9,110     0.000%, 8/15/37    8/15 at 31.98    AAA    1,954,004 
9,110     0.000%, 8/15/40    8/15 at 27.11    AAA    1,655,196 
7,110     0.000%, 8/15/44    8/15 at 21.88    AAA    1,039,127 
129,070    Total Texas            111,548,713 
    Utah – 0.8% (0.5% of Total Investments)             
    Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001E:             
1,555     5.200%, 1/01/18 (Alternative Minimum Tax)    7/11 at 100.00    AA–    1,582,181 
515     5.500%, 1/01/23 (Alternative Minimum Tax)    7/11 at 100.00    Aaa    525,388 
    Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001F-1:             
1,995     4.950%, 7/01/18 (Alternative Minimum Tax)    7/11 at 100.00    Aaa    2,006,830 
530     5.300%, 7/01/23 (Alternative Minimum Tax)    7/11 at 100.00    Aaa    534,987 
4,595    Total Utah            4,649,386 
    Virginia – 0.9% (0.6% of Total Investments)             
7,000    Pocahontas Parkway Association, Virginia, Senior Lien Revenue Bonds, Route 895 Connector Toll    8/08 at 77.58    AAA    5,221,160 
     Road, Series 1998B, 0.000%, 8/15/13 (Pre-refunded 8/15/08)             
    Washington – 15.5% (10.0% of Total Investments)             
    Bellingham Housing Authority, Washington, Housing Revenue Bonds, Varsity Village Project,             
    Series 2001A:             
1,000     5.500%, 12/01/27 – MBIA Insured    12/11 at 100.00    Aaa    1,051,360 
2,000     5.600%, 12/01/36 – MBIA Insured    12/11 at 100.00    Aaa    2,110,560 
2,475    Klickitat County Public Utility District 1, Washington, Electric Revenue Bonds, Series 2001B,    12/11 at 100.00    AAA    2,591,993 
     5.000%, 12/01/26 (Pre-refunded 12/01/11) – AMBAC Insured             
12,955    Port of Seattle, Washington, Passenger Facility Charge Revenue Bonds, Series 1998B, 5.300%,    12/08 at 101.00    AAA    13,243,637 
     12/01/16 – AMBAC Insured (Alternative Minimum Tax)             
    Port of Seattle, Washington, Revenue Bonds, Series 2001B:             
2,535     5.625%, 4/01/18 – FGIC Insured (Alternative Minimum Tax)    10/11 at 100.00    AAA    2,661,218 
16,000     5.100%, 4/01/24 – FGIC Insured (Alternative Minimum Tax)    10/08 at 100.00    AAA    16,088,800 
2,090    Public Utility District 1, Benton County, Washington, Electric Revenue Refunding Bonds, Series    11/11 at 100.00    AAA    2,229,967 
     2001A, 5.625%, 11/01/15 – FSA Insured             
5,680    Seattle, Washington, Municipal Light and Power Revenue Refunding and Improvement Bonds, Series    3/11 at 100.00    AAA    5,950,993 
     2001, 5.500%, 3/01/18 – FSA Insured             
4,530    Tacoma, Washington, Solid Waste Utility Revenue Refunding Bonds, Series 2001, 5.250%, 12/01/21    12/11 at 100.00    AAA    4,788,980 
     (Pre-refunded 12/01/11) – AMBAC Insured             
3,720    Washington State Healthcare Facilities Authority, Revenue Bonds, Children’s Hospital and    10/11 at 100.00    Aaa    3,936,988 
     Regional Medical Center, Series 2001, 5.375%, 10/01/18 (Pre-refunded 10/01/11) – AMBAC Insured             
    Washington State Healthcare Facilities Authority, Revenue Bonds, Good Samaritan Hospital,             
    Series 2001:             
5,480     5.500%, 10/01/21 (Pre-refunded 10/01/11) – RAAI Insured    10/11 at 101.00    AA (4)    5,872,532 
25,435     5.625%, 10/01/31 (Pre-refunded 10/01/11) – RAAI Insured    10/11 at 101.00    AA (4)    27,378,234 
    Washington State Healthcare Facilities Authority, Revenue Bonds, Group Health Cooperative of             
    Puget Sound, Series 2001:             
3,005     5.375%, 12/01/17 – AMBAC Insured    12/11 at 101.00    AAA    3,168,111 
2,915     5.375%, 12/01/18 – AMBAC Insured    12/11 at 101.00    AAA    3,069,553 
89,820    Total Washington            94,142,926 
    Wisconsin – 4.4% (2.8% of Total Investments)             
    Appleton, Wisconsin, Waterworks Revenue Refunding Bonds, Series 2001:             
3,705     5.375%, 1/01/20 (Pre-refunded 1/01/12) – FGIC Insured    1/12 at 100.00    Aaa    3,936,229 
1,850     5.000%, 1/01/21 (Pre-refunded 1/01/12) – FGIC Insured    1/12 at 100.00    Aaa    1,937,505 
12,250    La Crosse, Wisconsin, Pollution Control Revenue Refunding Bonds, Dairyland Power Cooperative,    12/08 at 102.00    AAA    12,725,423 
     Series 1997B, 5.550%, 2/01/15 – AMBAC Insured             
1,000    Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Franciscan Sisters of    9/17 at 100.00    BBB+    958,500 
     Christian Charity HealthCare Ministry, Series 2007, 5.000%, 9/01/33             
350    Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Froedtert and Community    10/11 at 101.00    AA–    367,521 
     Health Obligated Group, Series 2001, 5.375%, 10/01/30             
3,650    Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Froedtert and Community    10/11 at 101.00    N/R (4)    3,886,812 
     Health Obligated Group, Series 2001, 5.375%, 10/01/30 (Pre-refunded 10/01/11)             
2,500    Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Marshfield Clinic,    2/12 at 100.00    BBB+    2,621,525 
     Series 2001B, 6.000%, 2/15/25             
50    Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Wheaton Franciscan    8/13 at 100.00    A–    48,668 
     Services Inc., Series 2003A, 5.125%, 8/15/33             
25,355    Total Wisconsin            26,482,183 
$      958,735    Total Investments (cost $912,383,573) – 156.0%            944,653,775 
    Floating Rate Obligations – (5.0)%            (30,345,000) 
    Other Assets Less Liabilities – 0.5%            3,167,359 
    Preferred Shares, at Liquidation Value – (51.5)%            (312,000,000) 
    Net Assets Applicable to Common Shares – 100%          $  605,476,134 

Forward Swaps outstanding at July 31, 2007:                         
        Fund            Fixed Rate            Unrealized 
    Notional    Pay/Receive    Floating Rate    Fixed Rate    Payment    Effective    Termination    Appreciation 
Counterparty    Amount    Floating Rate    Index    (Annualized)    Frequency    Date (6)    Date    (Depreciation) 
Merrill Lynch    $26,750,000    Pay    3-Month USD-LIBOR    5.184%    Semi-Annually    10/30/07    10/30/16    $(508,834) 
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)                     
    The Fund may invest in “zero coupon” securities. A zero coupon security does not pay a regular interest 
    coupon to its holders during the life of the security. Tax-exempt income to the holder of the security 
    comes from accretion of the difference between the original purchase price of the security at issuance 
    and the par value of the security at maturity and is effectively paid at maturity. Such securities are 
    included in the portfolio with a 0.00% coupon rate in their description. The market prices of zero 
    coupon securities generally are more volatile than the market prices of securities that pay 
    interest periodically. 
(1)    All percentages shown in the Portfolio of Investments are based on net assets applicable to Common 
    shares unless otherwise noted. 
(2)    Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. 
    There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities 
    may be subject to periodic principal paydowns. 
(3)    Ratings: Using the higher of Standard & Poor’s or Moody’s rating. Ratings below BBB by Standard & 
    Poor’s Group or Baa by Moody’s Investor Service, Inc. are considered to be below investment grade. 
(4)    Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities 
    which ensure the timely payment of principal and interest. Such investments are normally considered to 
    be equivalent to AAA rated securities. 
(5)    Portion of the investment, with an aggregate market value of $1,036,431, has been pledged to collateralize 
    the net payment obligations under forward swap contract. 
(6)    Effective date represents the date on which both the Fund and counterparty commence interest payment 
    accruals on each forward swap contract. 
N/R    Not rated. 
WI/DD    Purchased on a when-issued or delayed delivery basis. 
(ETM)    Escrowed to maturity. 
(IF)    Inverse floating rate investment. 
(UB)    Underlying bond of an inverse floating rate trust reflected as a financing transaction pursuant to the provisions 
    of SFAS No. 140. 

Income Tax Information

The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to the treatment of paydown gains and losses, timing differences in recognizing taxable market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate transactions subject to SFAS No.140.

At July 31, 2007, the cost of investments was $881,728,110.

Gross unrealized appreciation and gross unrealized depreciation of investments at July 31, 2007, were as follows:

Gross unrealized:     
  Appreciation    $35,915,976 
  Depreciation    (3,300,777) 
Net unrealized appreciation (depreciation) of investments    $32,615,199 

Item 2. Controls and Procedures.

  1. The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).
  2. There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.

Item 3. Exhibits.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)), exactly as set forth below: EX-99 CERT Attached hereto.


SIGNATURES

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

(Registrant)         Nuveen Dividend Advantage Municipal Fund 3        

By (Signature and Title)*          /s/ Kevin J. McCarthy                    
                                                    Kevin J. McCarthy
                                                    Vice President and Secretary

Date         September 28, 2007        

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

By (Signature and Title)*         /s/ Gifford R. Zimmerman                    
                                                   Gifford R. Zimmerman
                                                   Chief Administrative Officer (principal executive officer) 

Date         September 28, 2007        

By (Signature and Title)*         /s/ Stephen D. Foy                              
                                                   Stephen D. Foy
                                                   Vice President and Controller (principal financial officer) 

Date        September 28, 2007        

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