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:         7/31/08         

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, 2008             
Principal        Optional Call         
Amount (000)    Description (1)    Provisions (2)    Ratings (3)    Value 
    Municipal Bonds – 155.8% (99.8% of Total Investments)             
    Alabama – 1.7% (1.1% of Total Investments)             
$          3,500    Alabama Special Care Facilities Financing Authority, Revenue Bonds, Ascension Health, Series    11/16 at 100.00    AA   $  3,372,242 
     2008, 5.000%, 11/15/36 (UB)             
5,655    Alabama State Port Authority, Revenue Bonds, State Docks Department Facilities, Series 2001,    10/11 at 100.00    AA (4)    6,072,735 
     5.250%, 10/01/26 (Pre-refunded 10/01/11) – AMBAC Insured (Alternative Minimum Tax)             
9,155    Total Alabama            9,444,977 
    Alaska – 0.1% (0.1% of Total Investments)             
1,000    Northern Tobacco Securitization Corporation, Alaska, Tobacco Settlement Asset-Backed Bonds,    6/14 at 100.00    Baa3    708,610 
     Series 2006A, 5.000%, 6/01/46             
    Arizona – 0.3% (0.2% of Total Investments)             
2,200    Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds, Series 2007,    No Opt. Call    AA–    1,837,286 
     5.000%, 12/01/37             
    Arkansas – 0.7% (0.4% 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    Baa3    1,857,110 
1,900     5.500%, 11/01/14    11/11 at 101.00    Baa3    1,945,296 
3,705    Total Arkansas            3,802,406 
    California – 14.6% (9.4% 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    819,919 
140     5.000%, 3/01/33    3/13 at 100.00    A    130,620 
2,900    California Health Facilities Financing Authority, Revenue Bonds, Sutter Health, Series 2007A,    11/16 at 100.00    Aa3    2,728,175 
     5.000%, 11/15/42 (UB)             
10,000    California Infrastructure Economic Development Bank, First Lien Revenue Bonds, San Francisco Bay    1/28 at 100.00    AAA    10,676,100 
     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+    5,020,350 
     LLC, Series 2001A, 5.550%, 8/01/31             
3,750    California Statewide Community Development Authority, Revenue Bonds, Sutter Health, Tender    5/18 at 100.00    AA–    3,162,525 
     Option Bond Trust 2708, 13.370%, 11/15/48 (IF)             
18,850    California, General Obligation Veterans Welfare Bonds, Series 2001BZ, 5.350%, 12/01/21 – MBIA    12/08 at 100.00    AA    18,850,565 
     Insured (Alternative Minimum Tax) (5)             
11,865    Golden State Tobacco Securitization Corporation, California, Enhanced Tobacco Settlement    6/17 at 100.00    BBB    8,758,980 
     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    AA    14,340,995 
5,000     5.375%, 1/01/21 – AMBAC Insured (Alternative Minimum Tax)    1/12 at 100.00    AA    4,928,600 
1,500     5.250%, 1/01/23 – AMBAC Insured (Alternative Minimum Tax)    1/12 at 100.00    AA    1,454,220 
10,000     5.500%, 1/01/32 – AMBAC Insured (Alternative Minimum Tax)    1/12 at 100.00    AA    9,831,500 
10,000    San Joaquin Hills Transportation Corridor Agency, Orange County, California, Toll Road Revenue    No Opt. Call    AA    1,947,900 
     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    Aa1    920,130 
     2006C, 0.000%, 9/01/30 – MBIA Insured             
96,815    Total California            83,570,579 
    Colorado – 6.6% (4.3% of Total Investments)             
2,250    Canterberry Crossing Metropolitan District II, Parker, Colorado, Limited Tax General    12/12 at 100.00    N/R    2,289,555 
     Obligation Bonds, Series 2002, 7.375%, 12/01/32             
1,575    Colorado Educational and Cultural Facilities Authority, Charter School Revenue Bonds, Belle    3/13 at 100.00    N/R (4)    1,830,245 
     Creek Education Center, Series 2002A, 7.625%, 3/15/32 (Pre-refunded 3/15/13)             
3,160    Colorado Educational and Cultural Facilities Authority, Charter School Revenue Bonds,    3/10 at 102.00    N/R (4)    3,461,559 
     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,    6/11 at 100.00    Ba1 (4)    1,986,633 
     Weld County School District 6 – Frontier Academy, Series 2001, 7.375%, 6/01/31             
     (Pre-refunded 6/01/11)             
3,465    Colorado Educational and Cultural Facilities Authority, Revenue Bonds, Montessori Peaks    5/16 at 102.00    N/R    3,045,111 
     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    3,195,756 
     5.500%, 4/01/31 (Alternative Minimum Tax)             
5,000    Compark Business Campus Metropolitan District, Colorado, General Obligation Limited Tax Bonds,    12/17 at 100.00    A    4,618,650 
     Series 2007, 5.600%, 12/01/34 – RAAI Insured             
2,000    Denver City and County, Colorado, Airport System Revenue Refunding Bonds, Series 2001A,    11/11 at 100.00    A+    2,009,120 
     5.500%, 11/15/16 – FGIC Insured (Alternative Minimum Tax)             
    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    A+    5,313,764 
3,300     5.000%, 11/15/24 – FGIC Insured (UB)    11/16 at 100.00    A+    3,245,649 
4,335     5.000%, 11/15/25 – FGIC Insured (UB)    11/16 at 100.00    A+    4,231,784 
2,000    Maher Ranch Metropolitan District 4, Colorado, General Obligation Limited Tax Bonds, Series    12/17 at 100.00    A    1,745,300 
     2007, 5.250%, 12/01/36 – RAAI Insured             
1,000    Plaza Metropolitan District 1, Lakewood, Colorado, Tax Increment Revenue Bonds, Series 2003,    6/14 at 101.00    N/R    1,049,120 
     8.000%, 12/01/25             
38,605    Total Colorado            38,022,246 
    Delaware – 0.3% (0.2% of Total Investments)             
1,595    Delaware Housing Authority, Multifamily Mortgage Revenue Bonds, Series 2001A, 5.400%, 7/01/24    7/12 at 100.00    Aa3    1,637,491 
    District of Columbia – 0.8% (0.5% of Total Investments)             
1,375    District of Columbia, Revenue Bonds, Catholic University of America, Series 1999, 5.625%,    10/09 at 101.00    AA    1,410,599 
     10/01/29 – AMBAC Insured             
1,335    Washington Convention Center Authority, District of Columbia, Senior Lien Dedicated Tax    10/16 at 100.00    Aa3    963,523 
     Revenue Bonds, Series 2007, Residuals 1606, 8.249%, 10/01/30 – AMBAC Insured (IF)             
3,335    Washington DC Convention Center Authority, Dedicated Tax Revenue Bonds, Residual Series    10/16 at 100.00    Aa3    2,407,003 
     1730,1731, 1736, 5.609%, 10/01/30 – AMBAC Insured (IF)             
6,045    Total District of Columbia            4,781,125 
    Florida – 2.3% (1.5% of Total Investments)             
    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    1,021,948 
2,195     5.450%, 12/01/41 – FSA Insured    12/11 at 100.00    AAA    1,989,592 
4,175    Pace Property Finance Authority Inc., Florida, Utility System Improvement and Revenue    9/08 at 101.00    AA    4,266,808 
     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–    5,124,863 
     Obligation Group, Series 2007, 5.000%, 8/15/42 (UB)             
1,000    Tolomato Community Development District, Florida, Special Assessment Bonds, Series 2007,    5/18 at 100.00    N/R    995,280 
     6.650%, 5/01/40             
13,930    Total Florida            13,398,491 
    Georgia – 2.4% (1.6% 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    A+    4,816,100 
     (Alternative Minimum Tax)             
2,700    Atlanta, Georgia, Tax Allocation Bonds, Atlantic Station Project, Series 2001, 7.900%,    12/11 at 101.00    AAA    3,162,051 
     12/01/24 (Pre-refunded 12/01/11)             
2,000    Fulton County Residential Care Facilities Authority, Georgia, Revenue Bonds, Elderly Care,    7/17 at 100.00    N/R    1,532,720 
     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)    3,984,035 
     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    425,175 
     Military Academy Project, Series 2007, 5.125%, 3/01/37             
13,940    Total Georgia            13,920,081 
    Illinois – 19.7% (12.6% of Total Investments)             
16,000    Chicago Greater Metropolitan Water Area Sanitary District, Illinois, General Obligation Bonds, Series    12/16 at 100.00    AAA    17,682,080 
     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    8,444,513 
     (Alternative Minimum Tax)             
1,750    Chicago, Illinois, Sales Tax Revenue Bonds, Series 1998, 5.250%, 1/01/28 – FGIC Insured    1/09 at 101.50    AAA    1,765,452 
4,950    Chicago, Illinois, Second Lien Passenger Facility Charge Revenue Bonds, O’Hare International    1/11 at 101.00    AA    4,697,253 
     Airport, Series 2001A, 5.375%, 1/01/32 – AMBAC Insured (Alternative Minimum Tax)             
5,000    Chicago, Illinois, Second Lien Wastewater Transmission Revenue Bonds, Series 2001A, 5.500%,    1/11 at 100.00    AA (4)    5,330,750 
     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    AA    2,431,810 
     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    AA (4)    10,704,500 
     (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    A1    1,573,009 
     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    Aa3    2,406,837 
     Kankakee County, Series 2005B, 5.000%, 12/01/24 – AMBAC Insured             
2,385    Illinois Finance Authority, Revenue Bonds, Sherman Health Systems, Series 2007A,    8/17 at 100.00    A–    2,206,674 
     5.500%, 8/01/37             
1,130    Illinois Health Facilities Authority, Revenue Bonds, Condell Medical Center, Series 2000,    5/10 at 101.00    Baa3    1,143,029 
     6.500%, 5/15/30             
9,000    Illinois Health Facilities Authority, Revenue Bonds, Covenant Retirement Communities Inc.,    12/11 at 101.00    BBB    8,875,530 
     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)    16,354,200 
     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    Aa3    2,441,800 
     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    7,067,480 
     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    17,154,176 
     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    2,163,820 
     Expansion Project, Series 1998A, 5.500%, 6/15/29 – FGIC Insured             
110,790    Total Illinois            112,442,913 
    Indiana – 6.0% (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    AA (4)    1,342,837 
1,000     5.000%, 1/15/26 (Pre-refunded 1/15/12) – AMBAC Insured    1/12 at 100.00    AA (4)    1,069,990 
    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    AA (4)    2,189,000 
2,750     5.125%, 1/15/24 (Pre-refunded 1/15/12) – MBIA Insured    1/12 at 100.00    AA (4)    2,953,720 
1,250    Hamilton Southeastern Cumberland Campus School Building Corporation, Indiana, First Mortgage    1/12 at 100.00    AA (4)    1,342,600 
     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    AA    9,776,545 
     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    4,258,933 
     2005B, 5.000%, 6/01/24             
2,800    Indiana Health Facility Financing Authority, Revenue Bonds, Community Hospitals of Indiana,    5/15 at 100.00    AA    2,646,000 
     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    Aa3    3,520,930 
     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    2,143,150 
2,500     5.800%, 9/01/47    9/17 at 100.00    N/R    2,136,775 
1,090    Wayne County Jail Holding Corporation, Indiana, First Mortgage Bonds, Series 2001, 5.500%,    1/13 at 101.00    AA (4)    1,209,595 
     7/15/22 (Pre-refunded 1/15/13) – AMBAC Insured             
34,375    Total Indiana            34,590,075 
    Iowa – 6.3% (4.0% of Total Investments)             
2,000    Iowa Finance Authority, Healthcare Revenue Bonds, Great River Medical Center, Series 2001,    5/11 at 100.00    Aaa    2,011,160 
     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    29,877,680 
3,950     5.600%, 6/01/35 (Pre-refunded 6/01/11)    6/11 at 101.00    AAA    4,272,636 
33,950    Total Iowa            36,161,476 
    Kansas – 0.3% (0.2% of Total Investments)             
    Manhattan Health Care Facility Revenue Bonds, Kansas, Meadowlarks Hills Retirement,             
    Series 2007B:             
1,000     5.125%, 5/15/37    5/14 at 103.00    N/R    785,330 
1,000     5.125%, 5/15/42    5/14 at 103.00    N/R    772,870 
2,000    Total Kansas            1,558,200 
    Kentucky – 3.3% (2.1% of Total Investments)             
18,500    Louisville and Jefferson County Metropolitan Sewer District, Kentucky, Sewer and Drainage    11/11 at 101.00    AA    18,802,475 
     System Revenue Bonds, Series 2001A, 5.125%, 5/15/27 – MBIA Insured             
    Louisiana – 4.3% (2.7% of Total Investments)             
3,000    Louisiana Local Government Envirnomental Facilities & Community Development Authority, Revenue    11/17 at 100.00    BB+    2,927,640 
     Bonds, Westlake Chemical Corporation Project, Series 2007, 6.750%, 11/01/32             
3,700    Louisiana Public Facilities Authority, Revenue Bonds, Ochsner Clinic Foundation Project,    5/17 at 100.00    A3    3,473,486 
     Series 2007A, 5.500%, 5/15/47             
19,890    Tobacco Settlement Financing Corporation, Louisiana, Tobacco Settlement Asset-Backed Bonds,    5/11 at 101.00    BBB    17,926,658 
     Series 2001B, 5.875%, 5/15/39             
26,590    Total Louisiana            24,327,784 
    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+    4,610,599 
1,610     5.500%, 11/15/32 (Alternative Minimum Tax)    11/10 at 100.00    AA+    1,628,145 
6,220    Total Maine            6,238,744 
    Maryland – 2.5% (1.6% of Total Investments)             
1,000    Howard County, Maryland, Retirement Community Revenue Bonds, Vantage House, Series 2007B,    4/17 at 100.00    N/R    775,100 
     5.250%, 4/01/37             
1,570    Maryland Community Development Administration, Insured Multifamily Housing Mortgage Loan    7/11 at 100.00    Aa2    1,551,097 
     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    1,492,420 
     Center, Series 2006A, 5.000%, 12/01/31             
10,600    Maryland Energy Financing Administration, Revenue Bonds, AES Warrior Run Project, Series 1995,    9/08 at 100.00    N/R    10,281,258 
     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+    460,533 
     Retirement Community, Series 2007, 4.750%, 7/01/34             
15,725    Total Maryland            14,560,408 
    Massachusetts – 1.3% (0.8% of Total Investments)             
1,375    Massachusetts Development Finance Agency, Revenue Bonds, Orchard Cove, Series 2007,    10/12 at 102.00    BB–    1,198,464 
     5.250%, 10/01/26             
1,000    Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Milton Hospital    7/15 at 100.00    BBB–    888,550 
     Project, Series 2005D, 5.250%, 7/01/30             
5,000    Massachusetts Port Authority, Special Facilities Revenue Bonds, Delta Air Lines Inc., Series    1/11 at 101.00    AA    4,645,000 
     2001A, 5.500%, 1/01/18 – AMBAC Insured (Alternative Minimum Tax)             
870    Massachusetts Water Resources Authority, General Revenue Bonds, Tender Option Bond Trust 2848,    2/17 at 100.00    AAA    509,298 
     9.722%, 8/01/46 – FSA Insured (IF)             
8,245    Total Massachusetts            7,241,312 
    Michigan – 10.0% (6.4% of Total Investments)             
15,000    Detroit City School District, Wayne County, Michigan, Unlimited Tax School Building and Site    No Opt. Call    AAA    17,481,975 
     Improvement Bonds, Series 2001A, 6.000%, 5/01/29 – FSA Insured (UB)             
2,000    Garden City Hospital Finance Authority, Michigan, Revenue Bonds, Garden City Hospital    8/17 at 100.00    N/R    1,419,840 
     Obligated Group, Series 2007A, 5.000%, 8/15/38             
11,000    Kent Hospital Finance Authority, Michigan, Revenue Bonds, Spectrum Health, Series 2001A,    7/11 at 101.00    AA (4)    11,911,570 
     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+    1,308,445 
     5.500%, 10/15/18             
1,355    Michigan State Hospital Finance Authority, Hospital Revenue Bonds, Detroit Medical Center    8/08 at 101.00    Ba3    1,192,183 
     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    AA (4)    3,763,033 
     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)    1,524,460 
2,500     5.625%, 11/15/31 (Pre-refunded 11/15/11)    11/11 at 101.00    A+ (4)    2,731,975 
3,500    Michigan State Hospital Finance Authority, Revenue Bonds, Trinity Health Care Group, Series    12/16 at 100.00    Aa2    3,424,295 
     2008, 5.000%, 12/01/31 (UB)             
12,640    Royal Oak Hospital Finance Authority, Michigan, Hospital Revenue Bonds, William Beaumont    11/11 at 100.00    AA    12,665,406 
     Hospital, Series 2001M, 5.250%, 11/15/31 – MBIA Insured             
54,115    Total Michigan            57,423,182 
    Minnesota – 0.6% (0.4% of Total Investments)             
2,290    Dakota County Community Development Agency, Minnesota, GNMA Collateralized Multifamily Housing    10/11 at 105.00    Aaa    2,259,772 
     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    1,114,369 
     Project, Series 2007-1, 5.000%, 8/01/36             
3,665    Total Minnesota            3,374,141 
    Mississippi – 0.9% (0.6% of Total Investments)             
2,155    Mississippi Business Finance Corporation, GNMA Collateralized Retirement Facility Mortgage    5/09 at 103.00    AAA    2,148,880 
     Revenue Refunding Bonds, Aldersgate Retirement Community Inc. Project, Series 1999A,             
     5.450%, 5/20/34             
3,000    Mississippi Hospital Equipment and Facilities Authority, Revenue Bonds, Baptist Memorial    9/14 at 100.00    AA    2,951,070 
     Healthcare, Series 2008, 5.000%, 9/01/24 (UB)             
5,155    Total Mississippi            5,099,950 
    Missouri – 3.0% (1.9% of Total Investments)             
1,495    Cape Girardeau County Industrial Development Authority, Missouri, Health Facilities Revenue    6/17 at 100.00    N/R    1,246,367 
     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    791,690 
     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)    2,036,499 
     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    AA    3,499,282 
3,510     5.250%, 12/01/20 – MBIA Insured    12/11 at 100.00    AA    3,668,301 
3,695     5.250%, 12/01/21 – MBIA Insured    12/11 at 100.00    AA    3,837,812 
2,040     5.250%, 12/01/22 – MBIA Insured    12/11 at 100.00    AA    2,116,847 
16,900    Total Missouri            17,196,798 
    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    BB–    4,715,450 
     2000, 8.000%, 7/01/20 (Alternative Minimum Tax)             
    Nebraska – 1.1% (0.7% of Total Investments)             
    Nebraska Investment Finance Authority, Single Family Housing Revenue Bonds, Series 2001D:             
2,245     5.250%, 9/01/21 (Alternative Minimum Tax)    9/11 at 100.00    AAA    2,268,168 
3,015     5.375%, 9/01/32 (Alternative Minimum Tax)    9/11 at 100.00    AAA    3,047,924 
1,125    Omaha Public Power District, Nebraska, Separate Electric System Revenue Bonds, Nebraska    2/17 at 100.00    AAA    1,065,037 
     City 2, Series 2006A, Residuals 1508-2, 12.189%, 2/01/49 – BHAC Insured (IF)             
6,385    Total Nebraska            6,381,129 
    Nevada – 1.3% (0.8% of Total Investments)             
2,000    Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas    1/10 at 100.00    AA    1,326,860 
     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    1,152,640 
     Monorail Project, Second Tier, Series 2000, 7.375%, 1/01/40             
200    Nevada Housing Division, Single Family Mortgage Bonds, Senior Series 1998A-1, 5.300%, 4/01/18    10/08 at 101.50    Aaa    201,910 
     (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    AA– (4)    4,622,089 
     (Pre-refunded 1/01/12) – FGIC Insured             
10,490    Total Nevada            7,303,499 
    New Hampshire – 0.4% (0.2% of Total Investments)             
2,000    New Hampshire Health and Education Authority, Hospital Revenue Bonds, Concord Hospital, Series    10/11 at 101.00    A3    2,108,360 
     2001, 5.500%, 10/01/21 – FSA Insured             
    New Jersey – 3.9% (2.5% of Total Investments)             
10,000    New Jersey Economic Development Authority, Water Facilities Revenue Bonds, American Water    11/12 at 101.00    Aa3    9,106,400 
     Company, Series 2002A, 5.250%, 11/01/32 – AMBAC Insured (Alternative Minimum Tax)             
375    New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Somerset Medical Center,    7/13 at 100.00    Ba2    304,024 
     Series 2003, 5.500%, 7/01/33 (WI/DD, Settling 8/01/08)             
4,125    New Jersey Transit Corporation, Certificates of Participation, Federal Transit Administration    No Opt. Call    AA    4,455,619 
     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    AA    6,849,000 
     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    1,434,180 
     Series 2007-1A, 4.750%, 6/01/34             
36,500    Total New Jersey            22,149,223 
    New York – 3.8% (2.4% of Total Investments)             
900    Albany Industrial Development Agency, New York, Revenue Bonds, Brighter Choice Charter    4/17 at 100.00    N/R    773,262 
     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    1,798,904 
     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    AA    135,876 
     5.121%, 2/15/47 – MBIA Insured (IF)             
4,360    Hudson Yards Infrastructure Corporation, New York, Revenue Bonds, Series 2006A,    2/17 at 100.00    AA    3,804,187 
     4.500%, 2/15/47 – MBIA Insured (UB)             
4,155    Monroe County Airport Authority, New York, Revenue Refunding Bonds, Greater Rochester    No Opt. Call    AA    4,348,914 
     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–    5,957,210 
     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    AA    1,835,067 
     MBIA Insured             
785    New York City, New York, General Obligation Bonds, Fiscal Series 2002G, 5.625%, 8/01/20    8/12 at 100.00    Aa3 (4)    868,210 
     (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–    2,078,940 
     State Contingency Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/16             
22,915    Total New York            21,600,570 
    North Carolina – 1.0% (0.7% of Total Investments)             
1,285    Charlotte-Mecklenberg Hospital Authority, North Carolina, Carolinas HealthCare System Revenue    1/18 at 100.00    AA–    986,469 
     Bonds, Series 2008, Trust 1149, 12.043%, 1/15/47 – AGC Insured (IF)             
1,200    Charlotte-Mecklenburg Hospital Authority, North Carolina, Health Care System Revenue Bonds,    1/17 at 100.00    AA–    1,176,180 
     Carolinas Health Care, Series 2007A, 5.000%, 1/15/31             
1,750    Charlotte-Mecklenburg Hospital Authority, North Carolina, Healthcare System Revenue Bonds, DBA    1/15 at 100.00    AA– (4)    1,872,797 
     Carolinas Healthcare System, Series 2005A, 4.875%, 1/15/32 (Pre-refunded 1/15/15)             
1,800    North Carolina Municipal Power Agency 1, Catawba Electric Revenue Bonds, Series 2003A,    No Opt. Call    A2    1,923,282 
     5.500%, 1/01/13             
6,035    Total North Carolina            5,958,728 
    Ohio – 3.2% (2.0% of Total Investments)             
    Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco Settlement Asset-Backed Revenue             
    Bonds, Senior Lien, Series 2007A-2:             
3,435     5.125%, 6/01/24    6/17 at 100.00    BBB    3,062,440 
710     5.875%, 6/01/30    6/17 at 100.00    BBB    614,122 
685     5.750%, 6/01/34    6/17 at 100.00    BBB    567,084 
1,570     5.875%, 6/01/47    6/17 at 100.00    BBB    1,275,531 
1,715    Ohio Housing Finance Agency, GNMA Mortgage-Backed Securities Program Residential Mortgage    9/08 at 101.50    Aaa    1,717,161 
     Revenue Bonds, Series 1998A-1, 5.300%, 9/01/19 – FSA Insured (Alternative Minimum Tax)             
7,200    Ohio Water Development Authority, Solid Waste Disposal Revenue Bonds, Bay Shore Power, Series    9/09 at 102.00    N/R    7,211,880 
     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    AA    1,907,512 
1,775     5.000%, 12/01/23 – FGIC Insured    12/11 at 100.00    AA    1,804,820 
18,960    Total Ohio            18,160,550 
    Oklahoma – 2.5% (1.6% of Total Investments)             
    Oklahoma Development Finance Authority, Revenue Bonds, Saint John Health System, Series 2007:             
4,930     5.000%, 2/15/37    2/17 at 100.00    AA–    4,720,524 
955     5.000%, 2/15/42    2/17 at 100.00    AA–    903,134 
2,500    Oklahoma Development Finance Authority, Revenue Refunding Bonds, Hillcrest Healthcare System,    8/09 at 101.00    AAA    2,616,450 
     Series 1999A, 5.625%, 8/15/29 (Pre-refunded 8/15/09)             
40    Tulsa County Industrial Authority, Oklahoma, Health Care Revenue Bonds, Saint Francis Health    12/16 at 100.00    AA    27,492 
     System, Series 2006, Trust 3500, 12.105%, 12/15/36 (IF)             
6,305    Tulsa County Industrial Authority, Oklahoma, Health Care Revenue Bonds, Saint Francis Health    12/16 at 100.00    AA    5,812,138 
     System, Series 2006, 5.000%, 12/15/36 (UB)             
14,730    Total Oklahoma            14,079,738 
    Oregon – 2.6% (1.6% of Total Investments)             
4,700    Oregon Health, Housing, Educational and Cultural Facilities Authority, Revenue Bonds,    11/11 at 101.00    AA    4,791,697 
     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    9,829,600 
     2000A, 6.050%, 7/01/42 (Alternative Minimum Tax)             
14,700    Total Oregon            14,621,297 
    Pennsylvania – 2.1% (1.4% 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    2,335,920 
2,000     9.250%, 11/15/30 (Pre-refunded 11/15/10)    11/10 at 102.00    AAA    2,335,920 
500    Bucks County Industrial Development Authority, Pennsylvania, Charter School Revenue Bonds,    3/17 at 100.00    BBB    405,550 
     School Lane Charter School, Series 2007A, 5.000%, 3/15/37             
3,500    Pennsylvania Economic Development Financing Authority, Senior Lien Resource Recovery Revenue    1/09 at 100.00    B+    3,499,545 
     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    Aa3 (4)    3,531,974 
     8/01/16 (Pre-refunded 8/01/12) – FGIC Insured             
11,205    Total Pennsylvania            12,108,909 
    Puerto Rico – 0.4% (0.3% of Total Investments)             
2,500    Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, Series 2007A,    8/17 at 100.00    A+    2,473,925 
     5.250%, 8/01/57             
    South Carolina – 1.3% (0.8% of Total Investments)             
6,850    South Carolina Transportation Infrastructure Bank, Revenue Bonds, Series 2001A, 5.500%,    10/11 at 100.00    Aa3 (4)    7,427,044 
     10/01/22 (Pre-refunded 10/01/11) – AMBAC Insured             
    Tennessee – 1.9% (1.2% of Total Investments)             
3,680    Knox County Health, Educational and Housing Facilities Board, Tennessee, Hospital Revenue    1/17 at 30.07    A–    445,611 
     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    5,480,503 
     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+    244,090 
     Wellmont Health System, Series 2006C, 5.250%, 9/01/36             
    Sumner County Health, Educational, and Housing Facilities Board, Tennessee, Revenue Refunding             
    Bonds, Sumner Regional Health System Inc., Series 2007:             
800     5.500%, 11/01/37    11/17 at 100.00    N/R    728,736 
2,800     5.500%, 11/01/46    11/17 at 100.00    N/R    2,490,460 
745    Tennessee Housing Development Agency, Homeownership Program Bonds, Series 1998-2, 5.350%,    1/09 at 101.00    AA    730,718 
     7/01/23 (Alternative Minimum Tax)             
760    Tennessee Housing Development Agency, Homeownership Program Bonds, Series 2001-3A, 5.200%,    7/11 at 100.00    AA    744,496 
     7/01/22 (Alternative Minimum Tax)             
14,270    Total Tennessee            10,864,614 
    Texas – 18.2% (11.7% of Total Investments)             
5,445    Board of Regents, University of Texas System, Financing System Revenue Bonds, Series 2006F,    2/17 at 100.00    AAA    4,924,471 
     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    1,129,061 
     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    AA    1,939,280 
2,005     5.000%, 2/15/21 – FGIC Insured    2/11 at 100.00    AA    2,031,406 
3,850    Dallas-Ft. Worth International Airport, Texas, Joint Revenue Refunding and Improvement Bonds,    11/11 at 100.00    A+    3,607,527 
     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    5,040,100 
     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    AAA    4,078,420 
6,000    Houston, Texas, Junior Lien Water and Sewerage System Revenue Refunding Bonds, Series 2001B,    No Opt. Call    AA (4)    6,711,960 
     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 –    1/09 at 100.50    A+    7,020,790 
     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    A+    2,583,580 
2,905     5.500%, 7/01/14 – FGIC Insured (Alternative Minimum Tax)    1/12 at 100.00    A+    2,955,431 
4,735    Hutto Independent School District, Williamson County, Texas, General Obligation Bonds, Series    8/16 at 100.00    AAA    3,688,376 
     2007, Residuals 07-1001, 9.205%, 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    AA    8,580,240 
8,500     5.500%, 8/15/41 – AMBAC Insured    8/11 at 100.00    AA    8,573,270 
10,700    Laredo Independent School District, Webb County, Texas, General Obligation Refunding Bonds,    8/11 at 100.00    AAA    10,836,639 
     Series 2001, 5.000%, 8/01/25             
2,500    Matagorda County Navigation District 1, Texas, Collateralized Revenue Refunding Bonds, Houston    No Opt. Call    Aaa    2,265,700 
     Light and Power Company, Series 1997, 5.125%, 11/01/28 – AMBAC Insured (Alternative             
     Minimum Tax)             
3,150    North Texas Thruway Authority, Second Tier System Revenue Refunding Bonds, Series 2008,    1/18 at 100.00    A3    3,041,609 
     5.750%, 1/01/38             
3,045    Port of Houston Authority, Harris County, Texas, General Obligation Port Improvement Bonds,    10/11 at 100.00    AAA    3,058,063 
     Series 2001B, 5.500%, 10/01/17 – FGIC Insured (Alternative Minimum Tax)             
7,700    Tarrant County, Texas, Cultural & Educational Facilities Financing Corporation, Texas, Revenue Bonds,    2/17 at 100.00    Aa3    7,335,174 
     Series 2007A, 5.000%, 2/15/36 (UB)             
10,485    Texas Department of Housing and Community Affairs, Residential Mortgage Revenue Bonds, Series    7/11 at 100.00    AAA    10,712,420 
     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    1,756,226 
9,110     0.000%, 8/15/40    8/15 at 27.11    AAA    1,460,060 
7,110     0.000%, 8/15/44    8/15 at 21.88    AAA    897,851 
126,450    Total Texas            104,227,654 
    Utah – 0.6% (0.4% of Total Investments)             
    Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001E:             
1,165     5.200%, 1/01/18 (Alternative Minimum Tax)    7/11 at 100.00    AA–    1,192,774 
295     5.500%, 1/01/23 (Alternative Minimum Tax)    7/11 at 100.00    Aaa    304,236 
    Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001F-1:             
1,600     4.950%, 7/01/18 (Alternative Minimum Tax)    7/11 at 100.00    AA–    1,628,304 
400     5.300%, 7/01/23 (Alternative Minimum Tax)    7/11 at 100.00    Aaa    408,444 
3,460    Total Utah            3,533,758 
    Virginia – 1.1% (0.7% of Total Investments)             
1,000    Chesterfield County Health Center Commission, Virginia, Mortgage Revenue Bonds, Lucy Corr    12/15 at 100.00    N/R    860,370 
     Village, Series 2005, 5.375%, 12/01/28             
7,000    Pocahontas Parkway Association, Virginia, Senior Lien Revenue Bonds, Route 895 Connector Toll    8/08 at 77.58    AAA    5,425,980 
     Road, Series 1998B, 0.000%, 8/15/13 (Pre-refunded 8/15/08)             
8,000    Total Virginia            6,286,350 
    Washington – 15.9% (10.2% 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    A1    1,037,180 
2,000     5.600%, 12/01/36 – MBIA Insured    12/11 at 100.00    A1    2,048,540 
12,955    Port of Seattle, Washington, Passenger Facility Charge Revenue Bonds, Series 1998B, 5.300%,    12/08 at 101.00    AA    13,015,500 
     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    Aa2    2,546,661 
16,000     5.100%, 4/01/24 – FGIC Insured (Alternative Minimum Tax)    10/08 at 100.00    Aa2    14,974,880 
2,090    Public Utility District 1, Benton County, Washington, Electric Revenue Refunding Bonds, Series    11/11 at 100.00    AAA    2,251,390 
     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    5,951,618 
     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    AA (4)    4,884,880 
     (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    Aa3 (4)    4,014,661 
     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    A (4)    5,984,927 
25,435     5.625%, 10/01/31 (Pre-refunded 10/01/11) – RAAI Insured    10/11 at 101.00    A (4)    27,874,471 
    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    3,127,754 
2,915     5.375%, 12/01/18 – AMBAC Insured    12/11 at 101.00    AAA    3,021,427 
87,345    Total Washington            90,733,889 
    Wisconsin – 4.6% (2.9% 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    N/R (4)    4,006,809 
1,850     5.000%, 1/01/21 (Pre-refunded 1/01/12) – FGIC Insured    1/12 at 100.00    N/R (4)    1,978,261 
12,250    La Crosse, Wisconsin, Pollution Control Revenue Refunding Bonds, Dairyland Power Cooperative,    12/08 at 102.00    Aaa    12,549,023 
     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+    839,340 
     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–    354,988 
     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    AA– (4)    3,972,587 
     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+    2,516,500 
     Series 2001B, 6.000%, 2/15/25             
50    Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Wheaton Franciscan    8/13 at 100.00    A–    42,535 
     Services Inc., Series 2003A, 5.125%, 8/15/33             
25,355    Total Wisconsin            26,260,043 
$       946,370    Total Long-Term Municipal Bonds (cost $896,524,695) – 155.8%            891,135,480 
Shares    Description (1)        Value 
    Investment Companies – 0.3% (0.2% of Total Investments)         
29,113    BlackRock MuniHoldings Fund Inc.       $  414,862 
26,880    Dreyfus Strategic Municipal Fund        215,578 
27,920    PIMCO Municipal Income Fund II        371,057 
42,020    Van Kampen Investment Grade Municipal Trusst        573,993 
19,260    Van Kampen Municipal Trust        285,433 
    Total Investment Companies (cost $1,842,034)        1,860,923 
    Total Investments (cost $898,366,729) – 156.1%        892,996,403 
    Floating Rate Obligations – (12.2)%        (69,870,650)
    Other Assets Less Liabilities – 3.4%        19,608,986 
    Preferred Shares, at Liquidation Value – (47.3)% (6)        (270,775,000)
    Net Assets Applicable to Common Shares – 100%       $  571,959,739 

Forward Swaps outstanding at July 31, 2008:                         
        Fund            Fixed Rate            Unrealized 
    Notional    Pay/Receive    Floating Rate    Fixed Rate    Payment    Effective    Termination    Appreciation 
Counterparty    Amount    Floating Rate    Index    (Annualized)    Frequency    Date (7)    Date    (Depreciation) 
JP Morgan    $21,500,000    Pay    SIFM    4.383%    Quarterly    8/06/08    8/06/37    $1,690,798 
SIFM - The daily arithmetic average of the weekly Securities Industry and Financial Markets (SIFM) Municipal Swap Index, previously referred to as the Bond Market 
Association or BMA.                                 

Futures Contracts outstanding at July 31, 2008:                     
                    Unrealized 
    Contract      Number of    Contract    Value at    Appreciation 
Type    Position    Contracts      Expiration      July 31, 2008      (Depreciation) 
U.S. Treasury Bond    Long    158    9/08    $18,249,000    $416,745 

(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 Group (“Standard & Poor’s”) or Moody’s Investor Service, 
    Inc. (“Moody’s”) rating. Ratings below BBB by Standard & Poor’s or Baa by Moody’s are considered to be 
    below investment grade. 
    The Portfolio of Investments may reflect the ratings on certain bonds insured by ACA, AMBAC, CIFG, FGIC, 
    MBIA, RAAI and XLCA as of July 31, 2008. Subsequent to July 31, 2008, and during the period this Portfolio 
    of Investments was prepared, there may have been reductions to the ratings of certain bonds resulting from 
    changes to the ratings of the underlying insurers both during the period and after period end. Such 
    reductions would likely reduce the effective rating of many of the bonds insured by that insurer or insurers 
    presented at period end. 
(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 investment, with an aggregate market value of $385,012, has been pledged to collateralize the 
    net payment obligations under futures contracts. 
(6)    Preferred Shares, at Liquidation Value as percentage of total investments is (30.3)%. 
(7)    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 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. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.

At July 31, 2008, the cost of investments was $828,020,556.

Gross unrealized appreciation and gross unrealized depreciation of investments at July 31, 2008, were as follows:

Gross unrealized:     
 Appreciation    $ 25,088,924 
 Depreciation    (29,980,924)
Net unrealized appreciation (depreciation) of investments    $  (4,892,000)

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: See 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 29, 2008        

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 29, 2008        

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

Date        September 29, 2008