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  UNITED STATES
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  SECURITIES AND EXCHANGE COMMISSION OMB Number: 3235-0578
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  FORM N-Q hours per response: 21.09
 
QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED
 
MANAGEMENT INVESTMENT COMPANY
 

Investment Company Act File Number: 811-21076

Registrant Name: PIMCO Municipal Income Fund II

Address of Principal Executive Offices: 1345 Avenue of the Americas New York, New York 10105

Name and Address of Agent for Service: Lawrence G. Altadonna – 1345 Avenue of the Americas New York, New York 10105

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

Date of Fiscal Year End: May 31, 2007

Date of Reporting Period: August 31, 2006

Form N-Q is to be used by the registered management investment company, other than a small business investment company 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 30b 1-5 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 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

PIMCO Municipal Income Fund II Schedule of Investments  
   
August 31, 2006 (unaudited)  
   





Principal
       
   
Amount
       
Credit Rating
   
(000)
       
(Moody's/S&P)
 
Value*








 
MUNICIPAL BONDS & NOTES—91.5%
 
   
      Alabama—3.0%  
   
$10,000     Birmingham Baptist Medical Centers Special Care Facs. Financing Auth. Rev.,  
   
           5.00%, 11/15/30, Ser. A  
Baa1/NR
  $10,154,000
      Birmingham Waterworks & Sewer Board Rev., Ser. B (MBIA),  
   
1,145          5.00%, 1/1/27  
Aaa/AAA
  1,190,800
10,000          5.00%, 1/1/37  
Aaa/AAA
  10,288,400
1,750     Huntsville Health Care Auth. Rev., 5.75%, 6/1/32, Ser. B  
A2/NR
  1,882,125
16,580     Jefferson Cnty. Sewer Rev.,  
   
           4.75%, 2/1/38, Ser. B, (Pre-refunded @ $100, 8/1/12) (FGIC)(a)  
Aaa/AAA
  17,522,076

         
  41,037,401

      Alaska—0.3%  
   
3,550     State Housing Finance Corp. Rev., 5.25%, 6/1/32, Ser. C (MBIA)  
Aaa/AAA
  3,607,013

      Arizona—0.1%  
   
1,300     Health Facs. Auth. Hospital System Rev., 5.75%, 12/1/32  
NR/BBB
  1,375,452

      Arkansas—0.1%  
   
13,000     Arkansas Dev. Finance Auth. Rev., zero coupon, 7/1/46 (AMBAC)  
Aaa/AAA
  1,826,370

      California—2.3%  
   
9,610     Alameda Corridor Transportation Auth. Rev.,  
   
           zero coupon, 10/1/16, Ser. A (AMBAC)  
Aaa/AAA
  6,360,955
      Golden State Tobacco Securitization Corp. Tobacco Settlement Rev., Ser. 2003-A-1,  
   
3,300          6.25%, 6/1/33  
Baa3/BBB
  3,628,086
9,000          6.75%, 6/1/39  
Baa3/BBB
  10,153,530
1,000     Rancho Cucamonga Community Facs. Dist., Special Tax,  
   
           6.30%, 9/1/23, Ser. A  
NR/NR
  1,059,110
4,000     Southern California Public Power Auth., Transmission Project Rev.,  
   
           zero coupon, 7/1/13  
Aa3/A+
  3,055,280
      Univ. of California Rev.,  
   
4,430          4.75%, 5/15/37, Ser. C (MBIA)  
AAA/AAA
  4,512,620
2,900          4.75%, 5/15/38, Ser. B  
Aa3/AA-
  2,942,746

         
  31,712,327

      Colorado—5.1%  
   
30,000     Dawson Ridge Dist. No. 1, GO, zero coupon, 10/1/22, Ser. A  
Aaa/NR
  14,651,100
5,000     Denver City & Cnty., CP,  
   
           5.50%, 12/1/25, Ser. B, (Pre-refunded @ $101, 12/1/10) (AMBAC)(a)  
Aaa/AAA
  5,414,900
      Health Facs. Auth. Rev.,  
   
25,000          Catholic Health Initiatives, 5.50%, 3/1/32  
Aa2/AA
  26,628,000
18,305          Exempla, Inc., 5.625%, 1/1/33, Ser. A  
A1/A-
  19,240,569
6,500          Retirement Facs. Rev., Liberty Height, zero coupon, 7/15/22  
Aaa/AAA
  3,204,435

         
  69,139,004

      District of Columbia—1.3%  
   
17,500     Washington D.C. Convention Center Auth. Tax Rev., 4.75%, 10/1/28 (AMBAC)  
Aaa/AAA
  17,633,175

      Florida—3.9%  
   
6,520     Brevard Cnty. Health Facs. Auth. Rev., 5.00%, 4/1/34  
A2/A
  6,730,009
      Highlands Cnty. Health Facs. Auth. Rev.,  
   
2,830          Adventist, 5.00%, 11/15/31, Ser. C  
A2/A+
  2,903,212
8,000          Adventist/Sunbelt, 6.00%, 11/15/31, Ser. A, (Pre-refunded @ $101, 11/15/11) (a)  
A2/A+
  8,939,600



PIMCO Municipal Income Fund II Schedule of Investments  
   
August 31, 2006 (unaudited)  
   





Principal
       
   
Amount
       
Credit Rating
   
(000)
       
(Moody's/S&P)
 
Value*








      Florida—(continued)  
   
$ 2,335     Hillsborough Cnty. Industrial Dev. Auth., Pollution Control Rev.,  
   
           Tampa Electric Co. Project, 5.50%, 10/1/23  
Baa2/BBB-
  $2,448,878
635     Hillsborough Cnty. Industrial Dev. Rev., Health Fac. Project,  
   
           5.625%, 8/15/23  
Baa2/BBB
  661,632
7,135     Jacksonville Health Facs. Auth. Rev., 5.25%, 11/15/32, Ser. A  
Aa2/AA
  7,495,960
11,500     Lakeland Hospital System Rev., Regional Health System,  
   
           5.50%, 11/15/32  
A2/NR
  12,253,250
3,000     Leesburg Hospital Rev., Leesburg Regional Medical Center Project,  
   
           5.50%, 7/1/32  
Baa1/BBB+
  3,114,570
      Orange Cnty. Health Facs. Auth. Rev., Adventist Health System,  
   
2,550          5.625%, 11/15/32  
A2/A+
  2,731,279
5,000          6.25%, 11/15/24  
A2/A+
  5,559,150
1,500     Winter Springs Water & Sewer Rev., zero coupon, 10/1/29 (FGIC)  
Aaa/AAA
  521,805

         
  53,359,345

      Georgia—0.8%  
   
4,000     Atlanta Water & Wastewater Rev., 5.00%, 11/1/39, Ser. A (MBIA)  
Aaa/AAA
  4,110,680
1,500     Grantor Trust Gov't, CP, 4.75%, 6/1/28, Ser. A (MBIA)  
Aaa/AAA
  1,583,700
9,600     Richmond Cnty. Dev. Auth. Rev., zero coupon, 12/1/21  
Aaa/NR
  4,873,152

         
  10,567,532

      Hawaii—1.4%  
   
19,170     Honolulu City & Cnty. Wastewater System Rev., First Board Resolution,  
   
           4.75%, 7/1/28 (FGIC)  
Aaa/NR
  19,523,878

      Illinois—21.3%  
   
      Central Lake Cnty. Water Agcy. Rev., Ser. A (AMBAC),  
   
3,610          5.125%, 5/1/28  
Aaa/NR
  3,791,186
8,150          5.125%, 5/1/32  
Aaa/NR
  8,518,624
5,050     Chicago, GO, 5.125%, 1/1/29, Ser. A (FGIC)  
Aaa/AAA
  5,223,821
      Chicago, Lake Shore East, Special Assessment,  
   
3,162          6.625%, 12/1/22  
NR/NR
  3,413,316
6,700          6.75%, 12/1/32  
NR/NR
  7,239,283
5,110     Chicago, Neighborhoods Alive 21 Project, GO, 5.00%, 1/1/33 (AMBAC)  
Aaa/AAA
  5,277,148
      Chicago Board of Education School Reform, GO (FGIC),  
   
15,535          zero coupon, 12/1/16, Ser. A  
Aaa/AAA
  10,090,759
5,000          zero coupon, 12/1/28, Ser. A  
Aaa/AAA
  1,791,300
4,500          zero coupon, 12/1/31  
Aaa/AAA
  1,383,075
      Chicago City Colleges, GO (FGIC),  
   
32,670          zero coupon, 1/1/37  
Aaa/AAA
  7,987,815
29,145          zero coupon, 1/1/38  
Aaa/AAA
  6,781,750
32,670          zero coupon, 1/1/39  
Aaa/AAA
  7,256,334
7,000     Chicago Midway Airport Rev., 5.00%, 1/1/31, Ser. B (MBIA)  
Aaa/AAA
  7,165,410
5,000     Cicero, GO, 5.25%, 12/1/31 (MBIA)  
Aaa/AAA
  5,320,850
10,000     City of Springfield Rev., 5.00%, 3/1/35 (MBIA)  
AAA/AAA
  10,437,500
      Dev. Finance Auth. Retirement Housing Rev., Regency Park,  
   
10,000          zero coupon, 7/15/23  
NR/AAA
  4,660,800
134,650          zero coupon, 7/15/25  
NR/AAA
  56,901,744
      Health Facs. Auth. Rev.,  
   
5,000          Condell Medical Center Rev., 5.50%, 5/15/32  
Baa2/NR
  5,192,300
20,100          Elmhurst Memorial Healthcare, 5.625%, 1/1/28  
A2/NR
  21,341,778



PIMCO Municipal Income Fund II Schedule of Investments  
     
August 31, 2006 (unaudited)  
     






Principal
       
     
Amount
       
Credit Rating
     
(000)
       
(Moody's/S&P)
   
Value*









      Illinois—(continued)  
     
      Met. Pier & Exposition Auth. Rev. (MBIA),  
     
$60,000          zero coupon, 12/15/30  
Aaa/AAA
    $19,380,000
50,000          zero coupon, 12/15/33  
Aaa/AAA
    13,896,000
2,460          zero coupon, 6/15/38  
Aaa/AAA
    548,358
4,500     Schaumburg, GO, 5.00%, 12/1/41, Ser. B (FGIC)  
Aaa/AAA
    4,656,240
10,000     State, GO, 5.00%, 3/1/34, Ser. A  
Aa3/AA
    10,340,400
68,470     State Sports Facs. Auth. Rev., zero coupon, 6/15/30 (AMBAC)  
Aaa/AAA
    62,000,270

         
    290,596,061

      Indiana—0.6%  
     
      Brownsburg 1999 School Building Corp. Rev., Ser. A,  
     
           (Pre-refunded @ $100, 9/15/13) (FSA)(a),  
     
1,000    
          5.00%, 9/15/25
 
Aaa/AAA
    1,078,480
2,000    
          5.25%, 3/15/25
 
Aaa/AAA
    2,187,620
4,125     Fort Wayne Pollution Control Rev., 6.20%, 10/15/25  
Caa1/B-
    4,186,628
500     State Bank Rev., Hendricks, 5.25%, 4/1/30, Ser. D (AMBAC)  
Aaa/AAA
    525,560

         
    7,978,288

      Iowa—3.9%  
     
46,000     Tobacco Settlement Auth. of Iowa Rev., zero coupon, 6/1/34, Ser. B  
Baa3/BBB
    43,813,160
8,850     Tobacco Settlement Auth. Rev.,  
     
           5.60%, 6/1/35, Ser. B, (Pre-refunded @ $101, 6/1/11) (a)  
Baa3/AAA
    9,640,128

         
    53,453,288

      Kansas—0.2%  
     
2,800     Univ. of Kansas, Hospital Auth. Health Facs. Rev., 5.625%, 9/1/32  
NR/A-
    2,983,316

      Kentucky—0.8%  
     
      Economic Dev. Finance Auth. Hospital Facs. Rev.,  
     
2,500          Catholic Healthcare Partners, 5.25%, 10/1/30  
Aa3/AA-
    2,606,625
7,855          St. Luke's Hospital, 6.00%, 10/1/19  
A3/A
    8,751,805

         
    11,358,430

      Louisiana—4.4%  
     
20,400     Public Facs. Auth. Rev., Ochsner Clinic Foundation, 5.50%, 5/15/32, Ser. B  
A3/NR
    21,136,644
36,395     Tobacco Settlement Financing Corp. Rev., 5.875%, 5/15/39, Ser. 2001-B  
Baa3/BBB
    38,403,640

         
    59,540,284

      Maryland—0.1%  
     
1,000     State Health & Higher Educational Facs. Auth. Rev., Adventist Healthcare,  
     
           5.75%, 1/1/25, Ser. A  
Baa2/NR
    1,063,650

      Massachusetts—2.9%  
     
1,300     Bay Transportation Auth. Rev., General Transportation System,  
     
           4.75%, 3/1/21, Ser. A (MBIA)  
Aaa/AAA
    1,328,457
      State College Building Auth. Project Rev., Ser. B (XLCA),  
     
5,560          5.50%, 5/1/28  
Aaa/AAA
    6,528,385
7,645          5.50%, 5/1/33  
Aaa/AAA
    9,010,244
5,000          5.50%, 5/1/39  
Aaa/AAA
    5,967,550


PIMCO Municipal Income Fund II Schedule of Investments  
   
August 31, 2006 (unaudited)  
   





Principal
       
   
Amount
       
Credit Rating
   
(000)
       
(Moody's/S&P)
 
Value*








      Massachusetts—(continued)  
   
$4,295     State Turnpike Auth. Rev., 4.75%, 1/1/34, Ser. A (AMBAC)  
Aaa/AAA
  $4,320,942
12,050     State Water Res. Auth. Rev., 4.75%, 8/1/37, Ser. A (FSA)  
Aaa/AAA
  12,103,864

         
  39,259,442

      Michigan—2.6%  
   
      Detroit City School Dist., GO, Ser. A (a),  
   
8,500          5.00%, 5/1/32, (Pre-refunded @ $100, 5/1/13) (FGIC)  
Aaa/AAA
  9,135,630
1,750          5.125%, 5/1/31, (Pre-refunded @ $100, 5/1/12) (FSA)  
Aaa/AAA
  1,874,215
2,500     Detroit Water Supply System Rev., 5.00%, 7/1/30, Ser. A (FGIC)  
Aaa/AAA
  2,581,875
      State Hospital Finance Auth. Rev.,  
   
5,000          Ascension Health, 5.25%, 11/15/26, Ser. B  
Aa2/AA
  5,243,550
           Oakwood Group, Ser. A,  
   
13,500                5.75%, 4/1/32  
A2/A
  14,316,210
1,925                6.00%, 4/1/22  
A2/A
  2,088,721

         
  35,240,201

      Mississippi—0.3%  
   
3,605     Business Finance Corp., Pollution Control Rev., 5.875%, 4/1/22  
Ba1/BBB-
  3,610,263
1,000     Dev Bank Special Obligation, Projects & Equipment Acquisitions Rev.,  
   
           5.00%, 7/1/24 (AMBAC)  
Aaa/AAA
  1,016,490

         
  4,626,753

      Missouri—0.2%  
   
940     Hanley Road & North of Folk Ave Transportation Dist. Rev., 5.00%, 10/1/25  
NR/NR
  940,451
1,500     St. Louis Parking Facs. Rev., Downtown Parking Fac., 6.00%, 2/1/28  
NR/NR
  1,523,355

         
  2,463,806

      Nevada—1.9%  
   
3,400     Clark Cnty., GO, 5.00%, 6/1/31 (FGIC)  
Aaa/AAA
  3,497,852
      Reno Transportation Project Rev., (Pre-refunded @ $100, 6/1/12) (AMBAC)(a),  
   
3,960          5.125%, 6/1/27  
Aaa/AAA
  4,255,376
2,000          5.125%, 6/1/32  
Aaa/AAA
  2,149,180
3,500          5.125%, 6/1/37  
Aaa/AAA
  3,761,065
7,570          5.25%, 6/1/41  
Aaa/AAA
  8,183,170
3,290     Truckee Meadows Water Auth. Rev., 5.125%, 7/1/30, Ser. A (FSA)  
Aaa/AAA
  3,428,608

         
  25,275,251

      New Hampshire—0.2%  
   
      Health & Education Facs. Auth., Catholic Medical Center,  
   
360          6.125%, 7/1/32  
Baa1/BBB+
  393,376
2,640          6.125%, 7/1/32, (Pre-refunded @ $101, 6/1/12) (a)  
Baa1/BBB+
  2,983,226

         
  3,376,602

      New Jersey—2.6%  
   
      Camden Cnty. Improvement Auth. Rev., Cooper Health System,  
   
           (Pre-refunded @ $102, 2/15/07) (a),  
   
20          5.875%, 2/15/15  
Baa3/BBB
  20,588
40          6.00%, 2/15/27  
Baa3/BBB
  41,197


PIMCO Municipal Income Fund II Schedule of Investments  
   
August 31, 2006 (unaudited)  
   





Principal
       
   
Amount
       
Credit Rating
   
(000)
       
(Moody's/S&P)
 
Value*








      New Jersey—(continued)  
   
      Economic Dev. Auth., Kapkowski Landfill,  
   
$4,000          5.75%, 10/1/21  
Baa3/NR
  $4,430,040
11,405          5.75%, 4/1/31  
Baa3/NR
  12,475,017
      Economic Dev. Auth. Rev., Arbor Glen,  
   
525          6.00%, 5/15/28  
NR/NR
  541,139
225          6.00%, 5/15/28, Ser. A, (Pre-refunded @ $102, 5/15/09) (a)  
NR/NR
  242,386
3,500     State Educational Facs. Auth. Rev., 6.00%, 7/1/25, Ser. D  
NR/NR
  3,822,280
      Tobacco Settlement Financing Corp. Rev.,  
   
1,285          6.00%, 6/1/37  
Baa3/BBB
  1,363,398
3,095          6.125%, 6/1/42  
Baa3/BBB
  3,301,436
6,150          6.25%, 6/1/43  
Baa3/BBB
  6,716,661
2,500          6.75%, 6/1/39  
Baa3/BBB
  2,801,950

         
  35,756,092

      New Mexico—0.4%  
   
5,000     Farmington Pollution Control Rev., 5.80%, 4/1/22  
Baa2/BBB
  5,054,050

      New York—2.9%  
   
1,200     Erie Cnty. Industrial Dev. Agcy., Orchard Park Rev., 6.00%, 11/15/36  
NR/NR
  1,266,348
      Met. Transportation Auth. Rev.,  
   
10,600          5.00%, 11/15/30, Ser. A (FSA)  
Aaa/AAA
  11,022,304
10,000          5.25%, 11/15/32, Ser. B  
A2/A
  10,613,400
7,000     New York City Municipal Water Finance Auth., Water & Sewer System Rev.,  
   
           5.00%, 6/15/39, Ser. A  
Aa2/AA+
  7,250,250
6,700     State Dormitory Auth. Rev., Sloan-Kettering Center Memorial, 5.00%, 7/1/34, Ser. 1  
Aa2/AA
  6,930,212
2,000     State Environmental Facs. Corp. Rev., 5.00%, 6/15/28  
Aaa/AAA
  2,100,580

         
  39,183,094

      Ohio—0.6%  
   
7,500     Lorain Cnty. Hospital Rev., Catholic Healthcare, 5.375%, 10/1/30  
Aa3/AA-
  7,848,975

      Oklahoma—0.5%  
   
6,500     Tulsa Cnty. Industrial Auth. Rev., Legacy Apartments, 4.90%, 11/20/46 (FHA-GNMA)  
Aaa/NR
  6,658,600

      Pennsylvania—2.5%  
   
      Allegheny Cnty. Hospital Dev. Auth. Rev., Ser. B,  
   
550          9.25%, 11/15/15  
Ba3 /B+
  655,149
1,000          9.25%, 11/15/22  
Ba3/B+
  1,190,750
5,700          9.25%, 11/15/30  
Ba3/B+
  6,792,120
      Cumberland Cnty. Auth. Retirement Community Rev.,  
   
           Wesley Affiliated Services, Ser. A,  
   
1,255                7.25%, 1/1/35  
NR/NR
  1,354,597
3,245                7.25%, 1/1/35, (Pre-refunded @ $101, 1/1/13) (a)  
NR/NR
  3,889,976
      Montgomery Cnty. Higher Education & Health Auth. Hospital Rev.,  
   
           Abington Memorial Hospital, Ser. A,  
   
5,000                5.125%, 6/1/27  
NR/A
  5,182,450
3,750                5.125%, 6/1/32  
NR/A
  3,873,637
3,000     Philadelphia, GO, 5.25%, 9/15/25 (FSA)  
Aaa/AAA
  3,144,930
5,000     Philadelphia Auth. Industrial Dev. Lease Rev., 5.25%, 10/1/30, Ser. B (FSA)  
Aaa/AAA
  5,240,350
500     Pittsburgh & Allegheny Cnty. Public Auditorium Auth. Rev., 5.00%, 2/1/29 (AMBAC)  
Aaa/AAA
  511,530


PIMCO Municipal Income Fund II Schedule of Investments  
   
August 31, 2006 (unaudited)  
   





Principal
       
   
Amount
       
Credit Rating
   
(000)
       
(Moody's/S&P)
 
Value*








      Pennsylvania—(continued)  
   
$2,500     Radnor Township School Dist., GO, 5.00%, 2/15/35, Ser. B (FSA)  
Aaa/NR
  $2,626,825

         
  34,462,314

      Puerto Rico—0.3%  
   
4,200     Electric Power Auth., Power Rev., 5.125%, 7/1/29, Ser. NN  
A3/BBB+
  4,374,930

 
      Rhode Island—4.8%  
   
62,000     Tobacco Settlement Financing Corp. Rev., 6.25%, 6/1/42, Ser. A  
Baa3/BBB
  65,344,280

 
      South Carolina—5.8%  
   
27,745     Greenville Cnty. School Dist. Rev., Building Equity Sooner Tomorrow,  
   
           5.50%, 12/1/28, (Pre-refunded @ $101, 12/1/12) (a)  
Aa3/AA-
  30,689,854
18,120     Jobs Economic Dev. Auth. Rev., Bon Secours Health System, 5.625%, 11/15/30  
A3/A-
  19,139,431
      Lexington Cnty., Health Services Dist. Hospital Rev.,  
   
15,000          5.50%, 11/1/32  
A2 /A
  15,973,800
3,500          5.50%, 5/1/37  
A2 /A
  3,726,590
5,000          5.75%, 11/1/28  
A2/A
  5,429,200
3,250     Tobacco Settlement Rev. Management Auth. Rev., 6.375%, 5/15/28, Ser. B  
Baa3/BBB
  3,488,485
1,180     Transportation Infrastructure Rev., 5.00%, 10/1/29, Ser. A,  
   
           (Pre-refunded @ $100, 10/1/11) (AMBAC)(a)  
Aaa/NR
  1,254,777

         
  79,702,137

      Tennessee—0.3%  
   
3,750     Knox Cnty. Health Educational & Housing Facs., Board Hospital Facs. Rev.,  
   
           5.25%, 10/1/30  
Aa3/AA-
  3,918,037

      Texas—11.0%  
   
      Arlington Independent School Dist. GO (PSF-GTD),  
   
10          5.00%, 2/15/24  
Aaa/AAA
  10,230
990          5.00%, 2/15/24, (Pre-refunded @ $100, 2/15/09) (a)  
Aaa/AAA
  1,022,799
4,480     Aubrey Independent School Dist., GO, 5.50%, 2/15/33 (PSF-GTD)  
Aaa/NR
  4,895,027
6,500     Brazos Cnty. Health Facs. Dev. Corp., Franciscan Services Corp. Rev.,  
   
           5.375%, 1/1/32  
NR/A-
  6,813,755
2,700     Comal Cnty. Health Facs., McKenna Memorial Hospital Project Rev., 6.25%, 2/1/32  
Baa3/BBB-
  2,924,613
5,000     Dallas Area Rapid Transit Rev., 5.00%, 12/1/31 (AMBAC)  
Aaa/AAA
  5,150,400
20,000     Frisco Independent School Dist., GO, zero coupon, 8/15/34 (PSF-GTD)  
Aaa/NR
  5,256,400
      Harris Cnty. ,  
   
19,750          GO, 5.125%, 8/15/31, (Pre-refunded @ $100, 8/15/12) (a)  
Aa1/AA+
  21,162,323
5,250          Health Facs. Dev. Corp. Rev., St. Luke's Episcopal Hospital,  
   
     
          5.375%, 2/15/26, Ser. A, (Pre-refunded @ $100, 8/15/11) (a)
 
NR/AAA
  5,651,048
25,000          Senior Lien Toll Road Rev., 5.00%, 8/15/30 (FSA)  
Aaa/AAA
  25,895,000
7,500     Keller Independent School Dist., GO, 4.875%, 8/15/31 (PSF-GTD)  
Aaa/AAA
  7,601,250
3,170     Little Elm Independent School Dist., GO, 5.30%, 8/15/29, Ser. A (PSF-GTD)  
NR/AAA
  3,399,698
6,250     North Dallas Thruway Auth. Rev., 4.75%, 1/1/29 (FGIC)  
Aaa/AAA
  6,300,125
5,000     Quinlan Independent School Dist., GO, 5.10%, 2/15/32 (PSF-GTD)  
Aaa/NR
  5,179,850
2,000     Sabine River Auth. Rev., 5.20%, 5/1/28  
Baa2/BBB-
  2,075,080
17,500     State, GO, 4.75%, 4/1/36  
Aa1/AA
  17,782,100
      State Turnpike Auth. Central Turnpike System Rev., Ser. A (AMBAC),  
   
10,000          zero coupon, 8/15/19  
Aaa/AAA
  5,707,900
8,880          5.00%, 8/15/42  
Aaa/AAA
  9,127,663


PIMCO Municipal Income Fund II Schedule of Investments  
   
August 31, 2006 (unaudited)  
   





Principal
       
   
Amount
       
Credit Rating
   
(000)
       
(Moody's/S&P)
 
Value*








      Texas—(continued)  
   
      State Water Financial Assistance, GO,  
   
$3,250          5.00%, 8/1/36  
Aa1/AA
  $3,367,358
1,650          5.25%, 8/1/35  
Aa1/AA
  1,737,928
8,000     Wichita Falls Water & Sewer Rev., 5.00%, 8/1/27 (AMBAC)  
Aaa/AAA
  8,269,840

         
  149,330,387

      Virginia—0.5%  
   
      Fredericksburg Industrial Dev. Medicorp Health System Rev., Ser. B,  
   
2,500          5.125%, 6/15/33  
A3/NR
  2,561,900
4,000          5.25%, 6/15/27  
A3/NR
  4,128,200

         
  6,690,100

      Washington—0.8%  
   
5,000     Douglas Cnty. Public Utility Dist. No. 1, Wells Hydroelectric,  
   
           5.00%, 9/1/30, Ser. B (FGIC)  
AAA/AAA
  5,239,550
5,000     Tacoma Sewer Rev., 5.00%, 12/1/31, Ser. A (FGIC)  
Aaa/AAA
  5,152,750

         
  10,392,300

      Wisconsin—0.8%  
   
      Badger Tobacco Asset Securitization Corp.,  
   
1,125          6.00%, 6/1/17  
Baa3/BBB
  1,190,745
8,240          6.125%, 6/1/27  
Baa3/BBB
  8,806,583
      State Health & Educational Facs. Auth. Rev., Froedert & Community Health Oblig.,  
   
90          5.375%, 10/1/30  
NR/AA-
  94,480
910          5.375%, 10/1/30, (Pre-refunded @ $101, 10/1/11) (a)  
NR/AA-
  990,926

         
  11,082,734

      Total Municipal Bonds & Notes (cost—$1,136,304,256)  
  1,246,794,899

VARIABLE RATE NOTES (c)(d)—8.2%  
   
      Alabama—0.9%  
   
3,600     Birmingham Waterworks & Sewer Board Rev., 11.57%, 1/1/33, Ser. 947 (MBIA)(b)  
Aaa/NR
  4,658,940
4,450     Jefferson Cnty. Sewer Rev., 11.51%, 2/1/36, Ser. 352 (FGIC)(b)  
Aaa/NR
  5,494,726
1,400     Montgomery Special Care Facs., Financing Auth. Rev.,  
   
           10.32%, 11/15/29, Ser. 435 (MBIA)(b)  
Aaa/NR
  1,573,670

         
  11,727,336

      Arizona—0.8%  
   
8,200     Salt River Project Agricultural Improvement & Power Dist.,  
   
           10.35%, 1/1/37, Ser. 1430 (b)  
NR/AA
  10,285,670

      Colorado—0.2%  
   
2,250     Denver City & Cnty. Airport Rev., 10.32%, 11/15/25, Ser. 425 (FSA)(b)  
Aaa/NR
  2,598,300

      Florida—0.5%  
   
1,782     Orange Cnty. School Board, CP, 10.32%, 8/1/24, Ser. 328 (MBIA)(b)  
Aaa/NR
  2,210,482
3,241     State Governmental Utilities Auth. Rev., 10.32%, 10/1/29, Ser. 327 (AMBAC)(b)  
Aaa/NR
  3,804,934
1,000     Sumter Landing Community Dev. Dist. Rev., 9.10%, 10/1/35, Ser. 1208 (MBIA)(b)  
Aaa/AAA
  1,073,500

         
  7,088,916



PIMCO Municipal Income Fund II Schedule of Investments        
August 31, 2006 (unaudited)        

   




Principal
             
Amount
        Credit Rating    
(000)
        (Moody's/S&P)  
Value*








      Illinois—0.7%        
      Chicago, GO (b),        
$1,780          10.95%, 1/1/28, Ser. 332 (MBIA)   Aaa/NR   $2,101,557
2,200          12.82%, 1/1/40, Ser. 426 (FGIC)   Aaa/NR   2,881,010
1,288     Cook Cnty., GO, 10.32%, 11/15/28, Ser. 403 (FGIC)(b)   Aaa/NR   1,543,410
2,000     State, GO, 11.57%, 4/1/27, Ser. 783 (FSA)(b)   Aaa/NR   2,618,300

              9,144,277

      Louisiana—0.3%        
4,000     Tobacco Settlement Financing Corp. Rev., 7.159%, 5/15/39 (b)   NR/NR   4,441,520

      Massachusetts—1.9%        
1,400     Boston Water & Sewer Community Rev., 10.36%, 11/1/28, Ser. 434 (FGIC)(b)   Aaa/NR   1,584,170
2,900     Massachusetts Bay Transportation Auth., Special Assessment, 9.43%, 7/1/34   Aa1/NR   3,160,565
2,200     State, GO, 11.62%, 11/1/30, Ser. 785 (FGIC-TCRS)   Aaa/NR   3,117,400
      State Turnpike Auth. Rev. (b),        
7,366          10.36%, 1/1/37, Ser. 334 (MBIA)   Aaa/NR   7,918,818
3,000          10.36%, 1/1/37, Ser. 489 (MBIA)   NR/AAA   3,225,150
5,668          10.36%, 1/1/39, Ser. 335 (AMBAC)   Aaa/NR   6,297,443

              25,303,546

      Nevada—0.2%        
2,200     State, GO, 10.32%, 5/15/28, Ser. 344 (FGIC)(b)   Aaa/NR   2,368,058

 
      New York—0.3%        
2,000     Liberty Dev. Corp. Rev., 11.68%, 10/1/35, Ser. 1207 (b)   Aa3/NR   3,315,000
950     New York City Municipal Water Finance Auth., Water & Sewer System Rev.,        
           10.43%, 6/15/37, Ser. 1226 (b)   Aa2/NR   1,144,750

              4,459,750

      Ohio—0.1%        
1,580     Hamilton Cnty. Sales Tax Rev., 10.32%, 12/1/27, Ser. 356 (MBIA)(b)   Aaa/NR   1,772,049

 
      Pennsylvania—0.6%        
3,050     Philadelphia Auth. Industrial Dev. Rev., Doubletree,        
           6.50%, 10/1/27, (Pre-refunded @ $102, 2/1/07) (a)   NR/NR   3,144,581
      Philadelphia School Dist., GO (MBIA)(b),        
1,670          9.07%, 4/1/27, Ser. 345   Aaa/NR   1,768,363
2,677          9.07%, 4/1/27, Ser. 496   NR/AAA   2,834,675

              7,747,619

      Texas—0.9%        
2,460     Denton Utility System Rev., 10.95%, 12/1/29, Ser. 428 (MBIA)(b)   Aaa/NR   2,736,504
1,100     Houston Airport System Rev., 10.32%, 7/1/25, Ser. 404 (FGIC)(b)   Aaa/NR   1,192,400
      Houston Water & Sewer System Rev. (b),        
2,200          10.32%, 12/1/28, Ser. 427 (FSA)   Aaa/NR   2,676,080
3,070          11.57%, 12/1/30, Ser. 495 (FGIC)   NR/AAA   4,031,217
2,005     State, GO, 9.07%, 4/1/35, Ser. 1147 (b)   NR/NR   2,145,651

              12,781,852

      Utah—0.7%        
8,830     Utah Transit Auth. Rev., 9.10%, 6/15/35, Ser. 1197 (FSA)(b)   Aaa/AAA   9,622,934



PIMCO Municipal Income Fund II Schedule of Investments          
August 31, 2006 (unaudited)          






Principal
               
Amount
        Credit Rating      
(000)
        (Moody's/S&P)   Value*  








 
      Washington—0.1%          
$1,820     Central Puget Sound Regional Transit Auth. Sales Tax & Motor Rev.,          
           9.07%, 2/1/28, Ser. 360 (FGIC)(b)   Aaa/NR   $1,960,413  

 
 
      Total Variable Rate Notes (cost—$94,678,189)       111,302,240  

 
 
U.S. TREASURY BILLS (e)—0.4%          
6,100     4.72%-4.85%, 9/14/06 (cost—$6,089,402)       6,089,402  

 
 
      Total Investments before options written (cost—$1,237,071,847)—100.1%       1,364,186,541  

 
 
OPTIONS WRITTEN (f)—(0.1)%          
Contracts                
      Call Options—(0.1)%          
      U.S. Treasury Notes 10 yr. Futures, Chicago Board of Trade,          
1,497          strike price $108, expires 11/21/06 (premiums received—-$275,822)       (795,281 )

 
 
 
      Total Investments net of options written (cost—$1,236,796,025)—100.0%       $1,363,391,260  

 


Notes to Schedule of Investments:

*      Portfolio securities and other financial instruments for which market quotations are readily available are stated at market value. Portfolio securities and other financial instruments for which market quotations are not readily available or if a development/event occurs that may significantly impact the value of a security are fair-valued, in good faith, pursuant to guidelines established by the Board of Trustees. The Fund’s investments are valued daily using prices supplied by an independent pricing service or dealer quotations, by using the last sale price on the exchange that is the primary market for such securities, or the last quoted mean price for those securities for which the over-the-counter market is the primary market or for listed securities in which there were no sales. Independent pricing services use information provided by market makers or estimates of market values obtained from yield data relating to investments or securities with similar characteristics. Exchange traded options and futures are valued at the settlement price determined by the relevant exchange. Short-term securities maturing in 60 days or less are valued at amortized cost, if their original term to maturity was 60 days or less, or by amortizing their value on the 61st day prior to maturity, if the original term to maturity exceeded 60 days. The prices used by the Fund to value securities may differ from the value that would be realized if the securities were sold. The Fund’s net asset value is determined daily as of the close of regular trading (normally, 4:00 p.m. Eastern time) on the New York Stock Exchange ("NYSE") on each day the NYSE is open for business.
   
(a) Pre-refunded bonds are collateralized by U.S. Government or other eligible securities which are held in escrow and used to pay principal and interest and retire
the bonds at the earliest refunding date (payment date) and/or whose interest rates vary with changes in a designated base rate (such as the prime interest
rate).
(b) 144A Security - Security exempt from registration, under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from
registration, typically only to qualified institutional buyers. Unless otherwise indicated, these securities are not considered to be illiquid.
(c) Residual Interest Municipal Bonds ("RIBS")/Residual Interest Tax Exempt Bonds ("RITES") - The interest rate shown bears an inverse relationship to the interest rate on
(d) Variable Rate Notes - Instruments whose interest rates change on specified date (such as a coupon date or interest payment date) and/or whose interest
another security or the value of an index. rates vary with changes in a designated base rate (such as the prime interest rate). The interest rate disclosed
reflects the rate in effect on August 31, 2006.
(e) All or partial amount segregated as collateral for futures contracts.
(f) Non-income producing.

Glossary

AMBAC - insured by American Municipal Bond Assurance Corp.
CP - Certificates of Participation
FGIC - insured by Financial Guaranty Insurance Co.
FHA - insured by Federal Housing Administration FSA - insured by Financial Security Assurance, Inc.
GNMA - insured by Government National Mortgage Association
GO - General Obligation Bond
MBIA - insured by Municipal Bond Investors Assurance
NR - Not Rated
PSF-GTD - Permanent School Fund Guaranteed
TCRS - Temporary Custodian Receipts
XLCA - insured by XL Capital Assurance


Other Investments:                  
 
(1) Futures contracts outstanding at August 31, 2006:                  
                   
 
       
Notional
     
Unrealized
 
       
Amount
   
Expiration
   
Appreciation
 
   
Type
 
(000)
Date
(Depreciation)
 











 
Long:   Financial Future Euro — 90 day, June 2007   $575     6/18/07     $(10,925 )
    Financial Future Euro — 90 day, September 2007   575     9/17/07     (4,888 )
    Financial Future Euro — 90 day, December 2007   575     12/17/07     (1,438 )
    Financial Future Euro — 90 day, March 2008   575     3/17/08     0  
    U.S. Treasury Notes 5 yr. Futures December 2006   46,890     12/31/06     1,150,391  
 
Short:   U.S. Treasury Bond Futures September 2006   (51,590 )   9/20/06     (16,496,048 )
    U.S. Treasury Notes 10 yr. Futures September 2006   (3,650 )   9/20/06     (153,984 )


 
                    $(15,516,892 )


 
 
(2) Transactions in options written for the three months ended August 31, 2006:                  
              Contracts     Premiums  











 
Options outstanding, May 31, 2006         0   $0  
Options written         5,221     741,782  
Options expired         (2,227 )   (260,309 )
Options terminated in closing transactions         (1,497 )   (205,651 )




 
Options outstanding, August 31, 2006         1,497   $275,822  




 


Item 2. Controls and Procedures

(a) The registrant's President and Chief Executive Officer and Principal Financial Officer have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940, as amended are effective based on their evaluation of these controls and procedures as of a date within 90 days of the filing date of this document.

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

Item 3. Exhibits

(a) Exhibit 99.302 Cert. – Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



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: PIMCO Municipal Income Fund II

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

Date: October 27, 2006

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

Date: October 27, 2006

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

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

Date: October 27, 2006

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

Date: October 27, 2006