UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM N-CSR

   CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

                  Investment Company Act file number 811-21152
                                                     ---------------------

               Nuveen Georgia Dividend Advantage Municipal Fund 2
 ------------------------------------------------------------------------------
               (Exact name of registrant as specified in charter)



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

                                Kevin J. McCarthy
                               Nuveen Investments
                             333 West Wacker Drive
                               Chicago, IL 60606
------------------------------------------------------------------------------
                     (Name and address of agent for service)

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

                  Date of fiscal year end: May 31
                                           ------------------

                  Date of reporting period: November 30, 2008
                                            ------------------

Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.

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





ITEM 1. REPORTS TO STOCKHOLDERS.


SEMI-ANNUAL REPORT | Nuveen Investments
 November 30, 2008 | MUNICIPAL CLOSED-END FUNDS

[PHOTO OF: SMALL CHILD]

                        NUVEEN GEORGIA
                        PREMIUM INCOME
                        MUNICIPAL FUND
                        NPG

                        NUVEEN GEORGIA
                        DIVIDEND ADVANTAGE
                        MUNICIPAL FUND
                        NZX

                        NUVEEN GEORGIA
                        DIVIDEND ADVANTAGE
                        MUNICIPAL FUND 2
                        NKG

                        NUVEEN NORTH
                        CAROLINA PREMIUM
                        INCOME
                        MUNICIPAL FUND
                        NNC

                        NUVEEN NORTH
                        CAROLINA DIVIDEND
                        ADVANTAGE
                        MUNICIPAL FUND
                        NRB

                        NUVEEN NORTH
                        CAROLINA DIVIDEND
                        ADVANTAGE
                        MUNICIPAL FUND 2
                        NNO

                        NUVEEN NORTH
                        CAROLINA DIVIDEND
                        ADVANTAGE
                        MUNICIPAL FUND 3
                        NII

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CHAIRMAN'S
LETTER TO SHAREHOLDERS

[PHOTO OF ROBERT P. BREMNER] | Robert P. Bremner | Chairman of the Board

Dear Shareholders,

I write this letter in a time of continued  uncertainty  about the current state
of the U.S.  financial  system  and  pessimism  about the  future of the  global
economy.  Many have  observed  that the  conditions  that led to the crisis have
built up over time and will complicate and extend the course of recovery. At the
same time,  government  officials in the U.S. and abroad have implemented a wide
range of programs to restore  stability to the  financial  system and  encourage
economic  recovery.  History  teaches us that these  efforts  will  moderate the
extent of the downturn  and hasten the  inevitable  recovery,  even though it is
hard to envision that outcome in the current environment.

As you will read in this report, the continuing  financial and economic problems
are  weighing  heavily  on asset  values  for  equities  and fixed  income,  and
unfortunately the performance of the Nuveen Funds has been similarly affected. I
hope that you will carefully review the Portfolio Manager's Comments, the Common
Share Dividend and Share Price Information and the Performance Overview sections
of this report.  These  comments  highlight the manager's  pursuit of investment
strategies  that  depend  on  thoroughly  researched   securities,   diversified
portfolio holdings and well established  investment  disciplines to achieve your
Fund's investment goals. The Fund Board believes that a consistent focus on long
term investment goals provides the basis for successful investment over time and
we monitor your Fund with that objective in mind.

Nuveen  continues  to  work on  resolving  the  auction  rate  preferred  shares
situation,  but the  unsettled  conditions  in the credit  markets  have  slowed
progress.  Nuveen is actively pursuing a number of solutions,  all with the goal
of providing liquidity for preferred shareholders while preserving the potential
benefits of leverage for common  shareholders.  We  appreciate  the patience you
have shown as we have worked  through the many issues  involved.  Please consult
the Nuveen website: www.Nuveen.com, for the most recent information.

On behalf of myself and the other members of your Fund's Board,  we look forward
to continuing to earn your trust in the months and years ahead.

Sincerely,

/s/ Robert P. Bremner
----------------------------------
Robert P. Bremner
Chairman of the Nuveen Fund Board
January 20, 2009



Portfolio Manager's COMMENTS

NUVEEN INVESTMENTS MUNICIPAL CLOSED-END FUNDS | NPG, NZX, NKG, NNC,
                                              | NRB, NNO, NII

Portfolio  manager  Daniel Close  discusses key  investment  strategies  and the
six-month  performance of the Nuveen Georgia and North Carolina Funds.  Dan, who
joined Nuveen in 2000,  assumed portfolio  management  responsibility  for these
seven Funds in 2007.

WHAT KEY  STRATEGIES  WERE USED TO MANAGE THE GEORGIA AND NORTH  CAROLINA  FUNDS
DURING THE SIX-MONTH REPORTING PERIOD ENDED NOVEMBER 30, 2008?

During this period,  stress in the financial and credit markets led to increased
price volatility for many securities,  reduced liquidity and a general flight to
quality.  We sought to capitalize on this  environment by continuing to focus on
relative value,  using a fundamental  approach to find  undervalued  sectors and
individual credits with the potential to perform well over the long term.

As events  unfolded,  we were able to find  attractive  value  opportunities  in
various  sectors of the municipal bond market.  All three Georgia Funds added an
Atlanta tax increment  financing  (TIF)  district issue and NPG also purchased a
water and sewer bond during this period.  In the North Carolina Funds, we bought
a highly rated hospital  issue for all four Funds,  while NRB and NNO also added
water and sewer bonds.  The majority of these  additions to our portfolios  were
purchased  at the  longer end of the yield  curve,  which we  believed  not only
offered more value during this period, but also had the potential to help extend
the Funds' durations(1) and enhance yields.

To generate cash for  purchases,  the three Georgia Funds reduced their exposure
to the health care  sector by paring  back our holding of a BBB rated  hospital,
and NZX and NKG also reduced their positions in a charter school credit.  In the
North Carolina Funds, we monitored the types of credits and bond structures that
were  attractive to the retail market and took  advantage of strong bids to sell
selected bonds, including  pre-refunded(2)  issues, into solid retail demand. In
addition,  some of our new purchases were financed by  reinvesting  the proceeds
from matured bonds.

As a key dimension of risk  management,  we employed a  disciplined  approach to
duration positioning as an important component of our overall strategy.  As part
of this approach,  we used inverse  floating rate  securities(3) in all seven of
these Funds. Inverse floaters typically provide the dual benefit of bringing the
Funds'   durations   closer  to  our  strategic   target  and  enhancing   their
income-generation  capabilities.  NZX, NNC and

Certain statements in this report are forward-looking statements. Discussions of
specific  investments  are  for  illustration  only  and  are  not  intended  as
recommendations of individual  investments.  The forward-looking  statements and
other views expressed  herein are those of the portfolio  manager as of the date
of this report.  Actual future results or occurrences  may differ  significantly
from those anticipated in any forward-looking statements and the views expressed
herein  are  subject  to change at any time,  due to  numerous  market and other
factors.  The Funds  disclaim any  obligation  to update  publicly or revise any
forward-looking statements or views expressed herein.

(1)  Duration  is a measure of a bond's  price  sensitivity  as  interest  rates
change,  with longer duration bonds displaying more sensitivity to these changes
than bonds with shorter durations.

(2) Pre-refundings, also known as advance refundings or refinancings, occur when
an issuer sells new bonds and uses the proceeds to fund  principal  and interest
payments of older existing bonds.  This process often results in lower borrowing
costs for bond issuers.

(3) An inverse floating rate security,  also known as an inverse  floater,  is a
financial  instrument  designed to pay long-term  tax-exempt  interest at a rate
that varies inversely with a short-term  tax-exempt interest rate index. For the
Nuveen Funds, the index typically used is the Securities  Industry and Financial
Markets (SIFM) Municipal Swap Index  (previously  referred to as the Bond Market
Association Index or BMA).  Inverse  floaters,  including those inverse floating
rate  securities in which the Funds invested during this reporting  period,  are
further  defined within the Notes to Financial  Statements and Glossary of Terms
Used in this Report sections of this shareholder report.

(4) Each Fund may invest in derivatives  instruments such as forwards,  futures,
option  and  swap  transactions.   For  additional   information  on  derivative
instruments  in  which  each  Fund  was  invested  during  and at the end of the
reporting  period,  please  refer to the  Portfolio  of  Investments,  Financial
Statements  and  Notes to  Financial  Statements  sections  of this  shareholder
report.

4



NNO also  invested in certain  types of  derivative(4)  instruments  during this
period.  The goal of this  strategy was to help us manage common share net asset
value (NAV)  volatility  without  having a negative  impact on income streams or
common  share  dividends  over the short  term.  As of  November  30,  2008,  we
continued  to use inverse  floaters in all of the Funds,  while all  derivatives
have been removed from the Funds.

HOW DID THE FUNDS PERFORM?

Individual results for these Nuveen Georgia and North Carolina Funds, as well as
relevant  index and peer group  information,  are presented in the  accompanying
table.

Average  Annual Total Returns on Common Share Net Asset Value*
For periods ended 11/30/08

                                         Six-Month   1-Year    5-Year   10-Year
Georgia Funds
NPG                                       -13.08%    -13.46%    0.92%      3.51%
NZX                                       -11.42%    -11.43%    1.61%       N/A
NKG                                       -14.73%    -15.14%    0.53%       N/A

North Carolina Funds
NNC                                       -10.35%    -10.39%    1.18%      3.76%
NRB                                        -7.62%     -6.93%    2.49%       N/A
NNO                                        -9.25%     -8.90%    1.84%       N/A
NII                                        -8.65%     -8.07%    2.24%       N/A

Lipper Other States
Municipal Debt Funds
Average(5)                                -14.13%    -14.38%    0.64%      3.22%

Barclays Capital
Municipal Bond Index(6)                    -4.98%     -3.61%    2.59%      4.14%

S&P National Municipal
Bond Index(7)                              -5.48%     -4.43%    2.55%       N/A

For the six months ended  November 30, 2008,  the  cumulative  returns on common
share NAV for NPG, NZX,  NNC,  NRB, NNO and NII exceeded the average  return for
the Lipper  Other States  Municipal  Debt Funds  Average,  while NKG trailed the
Lipper average.  All of the Funds  underperformed  the national Barclays Capital
Municipal  Bond  Index and  Standard & Poor's  National  Municipal  Bond  Index.
Shareholders  should note the Lipper Other States  Municipal  Debt Funds Average
and the Barclays  Capital  Municipal  Bond Index  include  bonds from states not
covered in this report,  which may make direct comparisons between the Funds and
these benchmarks less meaningful.

Key  management  factors that  influenced  the Funds' returns during this period
included duration and yield curve  positioning,  the use of derivatives,  credit
exposure  and  sector  allocations.  In  addition,  the use of  leverage  was an
important  factor

*  Six-month  returns  are  cumulative;  returns for  one-year,  five-year,  and
ten-year are annualized.

Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown.  Returns do not reflect  the  deduction  of
taxes that  shareholders may have to pay on Fund  distributions or upon the sale
of Fund shares.

For additional  information,  see the individual  Performance  Overview for your
Fund in this report.

(5) The Lipper Other States Municipal Debt Funds Average is calculated using the
returns of all closed-end funds in this category for each period as follows: six
months,  46; 1 year, 46; 5 years,  46; and 10 years,  18. The performance of the
Lipper Other States Municipal Debt Funds Average  represents the overall average
of returns for funds from ten different  states with a wide variety of municipal
market conditions. Fund and Lipper returns assume reinvestment of dividends.

(6) The Barclays Capital  (formerly Lehman Brothers)  Municipal Bond Index is an
unleveraged,   unmanaged   national   index   comprising   a  broad   range   of
investment-grade  municipal  bonds.  Results for the Lehman index do not reflect
any expenses.

(7) The Standard & Poor's (S&P) National Municipal Bond Index is an unleveraged,
market   value-weighted  index  designed  to  measure  the  performance  of  the
investment-grade U.S. municipal bond market.

                                                                               5



affecting each Fund's  performance.  The impact of leverage is discussed in more
detail on page 7.

Over this period,  we saw the yield curve steepen as interest rates at the short
end of the curve  declined  and longer  rates rose.  Given these  changes in the
interest rate  environment,  bonds in the Barclays Capital  Municipal Bond Index
with  maturities  of ten years or less  generally  outperformed  the market as a
whole,  with bonds maturing in two to four years  benefiting  the most.  Because
they were less sensitive to interest rate changes, these shorter bonds generally
outperformed  credits with longer maturities,  with the biggest losses posted by
bonds with the longest  maturities  (twenty-two  years and longer).  In general,
these Funds had less exposure to the outperforming  short end of the yield curve
compared with the index.  In NNC, NRB, NNO and NZF the negative  impact of being
underweighted  in the short  part of the curve was  offset by an  overweight  in
bonds with intermediate maturities, which performed well, and a lower allocation
to the underperforming long end of the curve. Overall,  duration and yield curve
positioning was a comparative positive for the performances of NZX, NNC, NRB and
NNO and a comparative negative in NPG, NKG and NII.

As mentioned  earlier,  NZX and NNO used  derivative  positions  throughout this
period to  synthetically  extend  duration  and move it closer to our  strategic
duration target. Despite the fact that longer duration municipal bonds generally
underperformed  those  with  shorter  durations,  the use of  these  derivatives
actually had a positive impact on NNO and NZX's total return  performance.  This
positive  impact  was  attributable  to the fact that the  derivative  positions
provided  exposure to taxable bond markets  during a period when, in contrast to
historical  trends,  the  taxable  markets  and the  municipal  market  moved in
opposite  directions.  As municipal market  performance  lagged the gains in the
taxable markets,  these derivatives  performed well. The derivatives used in NNC
did not have a meaningful impact on performance.

At the same  time,  the  inverse  floaters  used by all  seven  of  these  Funds
generally had a negative impact on performance. This resulted from the fact that
the  inverse  floaters  effectively  increased  the  Funds'  exposure  to longer
maturity bonds at a time when shorter maturities were in favor in the market.

Credit  exposure was also an important  factor in performance  during these past
six months.  Because  risk-averse  investors  generally  sought  higher  quality
investments as disruptions in the financial markets deepened,  bonds with higher
credit  quality  typically  performed  very  well.  At the  same  time,  as many
investors avoided high-yield securities,  bonds rated BBB or below and non-rated
bonds generally posted poor returns.  Insured bonds with underlying credits that
were rated BBB or non-rated,  originally  purchased because of the higher yields
they offered, were disproportionately

6



impacted (compared with bonds with underlying ratings of AA or A) if the insurer
backing the bond was downgraded.

During  this  period,  pre-refunded  bonds,  which are  backed by U.S.  Treasury
securities, were one of the top performing segments of the market, due primarily
to their  shorter  effective  maturities,  higher  credit  quality and perceived
safety.  Among the Georgia Funds, NZX had the largest allocation of pre-refunded
bonds as of November 30, 2008,  while NRB and NII held the heaviest  holdings of
these bonds among the North  Carolina  Funds.  Additional  sectors of the market
that  generally   contributed  to  the  Funds'  performances   included  general
obligation and other  tax-backed bonds and water and sewer,  electric  utilities
and education  credits.  However,  the Funds  generally had lower  weightings of
tax-backed  bonds  than  the  index,   which  lessened  the  relative   positive
contribution from this sector.

In general, bonds that were lower rated, regardless of sector, continued to post
weak  performance.  Revenue  bonds as a whole,  and the  industrial  development
sector in particular,  underperformed the general municipal market.  Next to the
industrial  development  revenue sector,  zero coupon bonds were among the worst
performing  categories  in the  municipal  market.  The health  care and housing
sectors also performed poorly.

IMPACT OF THE FUNDS' CAPITAL STRUCTURES AND LEVERAGE STRATEGIES ON PERFORMANCE

In addition  to the factors  previously  discussed,  one of the primary  factors
impacting  the  six-month  returns  of  these  Funds  relative  to  those of the
unleveraged  Barclays  Capital  Municipal Bond Index and S&P National  Municipal
Bond Index was the Funds'  use of  financial  leverage.  While  leverage  offers
opportunities  to  generate  additional  income  and total  returns  for  common
shareholders,  the benefits  provided by leveraging  are influenced by the price
movements of the bonds in each Fund's  portfolio.  During this period, as yields
on  longer-term  bonds rose and their  prices  correspondingly  fell,  declining
valuations had a negative effect on performance that was magnified by the use of
leverage. In addition, at various points during the six-month period, the Funds'
borrowing costs were relatively high, negatively impacting their total returns.

RECENT MARKET DEVELOPMENTS

Beginning  in  October,  the  nation's  financial   institutions  and  financial
markets--including the municipal bond  market--experienced  significant turmoil.
Reductions in demand  decreased  valuations of municipal bonds across all credit
ratings,  especially those with lower credit ratings, and this generally reduced
the Funds' common share net asset values.  The municipal  market is one in which
dealer firms make markets in bonds on a principal basis using their  proprietary
capital,  and during the recent market turmoil these firms' capital was severely
constrained.  As a result,  some firms were

                                                                               7



unwilling  to commit  their  capital  to  purchase  and to serve as a dealer for
municipal  bonds.  This  reduction  in  dealer  involvement  in the  market  was
accompanied by significant net selling pressure by investors,  particularly with
respect to lowerrated  municipal  bonds, as  institutional  investors  generally
removed money from the municipal bond market,  at least in part because of their
need to reduce the leveraging of their municipal investments.  This deleveraging
was in part driven by the overall reduction in the amount of financing available
for such leverage, the increased costs of such leverage financing,  and the need
to reduce  leverage  levels that had  recently  increased  due to the decline in
municipal bond prices.

Municipal bond prices were further negatively impacted by concerns that the need
for further  deleveraging  and a supply  overhang (a large amount of new issues
that were  postponed)  would cause  selling  pressure to persist for a period of
time. In addition to falling prices, the following market conditions resulted in
greater price volatility of municipal bonds - wider credit spreads (i.e.,  lower
quality  bonds  fell in price more than  higher  quality  bonds);  significantly
reduced  liquidity  (i.e.,  the  ability to sell bonds at a price close to their
carrying  value),  particularly  for lower  quality  bonds;  and a lack of price
transparency  (i.e.,  the ability to  accurately  determine the price at which a
bond would likely trade).  Reduced liquidity was most pronounced in mid-October,
although it improved considerably after that period.

RECENT DEVELOPMENTS REGARDING BOND INSURANCE COMPANIES

As mentioned  earlier,  another factor that had an impact on the  performance of
these Funds was their  position in bonds backed by municipal  bond insurers that
experienced  downgrades in their credit  ratings.  During the period  covered by
this  report,  AMBAC,  CIFG,  FGIC,  MBIA,  RAAI  and  SYNCORA  (formerly  XLCA)
experienced  one or more  rating  reductions  by at  least  one or  more  rating
agencies  while AGC and FSA received  their first rating  reductions by at least
one rating  agency.  At the time this report was  prepared,  at least one rating
agency has placed each of these  insurers  except AGC on  "negative  outlook" or
"negative  credit  watch," which may presage one or more rating  reductions  for
such insurer or insurers in the future.  As concern  increased about the balance
sheets  of  these  insurers,  prices  on bonds  insured  by  these  companies  -
especially  those bonds with weaker  underlying  credits - declined,  detracting
from the Funds' performance.  By the end of this period, most insured bonds were
being valued according to their  fundamentals as if they were uninsured.  On the
whole,  the holdings of all of our Funds  continued to be well  diversified  not
only  between  insured and  uninsured  bonds,  but also within the insured  bond
category.  It is important to note that municipal bonds  historically have had a
very low rate of default.

8



RECENT DEVELOPMENTS IN THE AUCTION RATE PREFERRED SECURITIES MARKETS

Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled  auctions for the auction rate preferred  shares issued by these Funds
than there were offers to buy. This meant that these auctions  "failed to clear"
and that many or all  auction  rate  preferred  shareholders  who wanted to sell
their shares in these  auctions  were unable to do so. This decline in liquidity
in auction  rate  preferred  shares  did not lower the  credit  quality of these
shares,  and auction  rate  preferred  shareholder  unable to sell their  shares
received  distributions  at the "maximum rate"  applicable to failed auctions as
calculated  in  accordance  with the  pre-established  terms of the auction rate
preferred  shares.  At the time this report was  prepared,  the Funds'  managers
could not predict when future  auctions  might succeed in attracting  sufficient
buyers  for the  shares  offered,  if ever.  The  Funds'  managers  are  working
diligently  to refund the auction  preferred  shares,  and have made progress in
these efforts, (at least for certain funds) but at present there is no assurance
that these efforts will succeed.  These developments have generally not affected
the portfolio  management or investment  policies of these Funds.  However,  one
implication of these auction failures for common shareholders is that the Funds'
cost of leverage will likely be higher, at least temporarily,  than it otherwise
would have been had the auctions  continued to be successful.  As a result,  the
Funds' future common share earnings may be lower than they otherwise  would have
been.

On June 11, 2008,  Nuveen  announced  the Fund Board's  approval of plans to use
tender option bonds (TOBs), also known as floating rate securities, to refinance
a portion of the municipal Funds' outstanding auction rate preferred shares, for
which  auctions  have been  failing for several  months.  This plan  included an
initial phase of approximately $1 billion in forty-one Funds. As of November 30,
2008,  none of the Funds  included  in this  shareholder  report  had issued par
redemption notices for their auction rate preferred shares.

On August 7, 2008,  four Nuveen  municipal  Funds (none of which are included in
this  shareholder  report)  issued par  redemption  notices for all  outstanding
shares of their auction rate preferred  shares totaling  $569.9  million.  These
redemptions were achieved through the issuance of variable rate demand preferred
shares (VRDP) in conjunction with the proceeds from the creation of TOBs.

On January  8,  2009,  subsequent  to the  reporting  period,  NKG  noticed  for
redemption  $1.3  million   outstanding   auction  rate  preferred   shares,  at
liquidation  value,  using the proceeds  from the issuance of TOBs and portfolio
sales.

For current,  up-to-date  information,  please visit the Nuveen CEF Auction Rate
Preferred  Resource Center at:  http://www.nuveen.com/ResourceCenter/AuctionRate
Preferred.aspx.

                                                                               9



Common Share
Dividend and Share Price
                    INFORMATION

During the  six-month  period ended  November  30, 2008,  there was one dividend
increase in each of these seven Funds.

All of the Funds in this  report  seek to pay  stable  dividends  at rates  that
reflect  each  Fund's past  results and  projected  future  performance.  During
certain periods,  each Fund may pay dividends at a rate that may be more or less
than the amount of net investment  income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as  undistributed  net  investment  income (UNII) as
part of the Fund's common share NAV. Conversely, if a Fund has cumulatively paid
dividends in excess of its earnings,  the excess constitutes  negative UNII that
is likewise reflected in the Fund's common share NAV. Each Fund will, over time,
pay all of its  net  investment  income  as  dividends  to  shareholders.  As of
November 30, 2008,  all of the Funds in this report had positive UNII  balances,
based upon our best  estimate,  for tax purposes and negative  UNII balances for
financial statement purposes.

The Funds' Board of Trustees approved an open-market share repurchase program on
July 30,  2008,  under  which each Fund may  repurchase  up to 10% of its common
shares.  As of November 30,  2008,  the Funds had not  repurchased  any of their
outstanding common shares.

As of  November  30,  2008,  the Funds'  common  share  prices  were  trading at
discounts to their common share NAVs as shown in the accompanying chart:

               11/30/08    Six-Month Average
               Discount     Premium/Discount

NPG              -19.34%              -13.16%
NZX              -12.87%              -12.08%
NKG               -0.52%               -7.23%
NNC              -11.84%               -7.13%
NRB              -10.70%               +3.60%
NNO               -4.13%               -7.44%
NII              -11.68%               -1.91%

10



NPG Performance  OVERVIEW | Nuveen Georgia  Premium Income  Municipal Fund as of
                            November 30, 2008

                                  [PIE CHART]

Credit Quality (as a % of total investments)(1)

AAA/U.S.
Guaranteed                                                                   38%
AA                                                                           36%
A                                                                            16%
BBB                                                                           8%
BB or Lower                                                                   1%
N/R                                                                           1%

                                  [BAR CHART]

2007-2008 Monthly Tax-Free Dividends Per Common Share(3)

Dec                                                                         0.05
Jan                                                                         0.05
Feb                                                                         0.05
Mar                                                                         0.05
Apr                                                                         0.05
May                                                                         0.05
Jun                                                                         0.05
Jul                                                                         0.05
Aug                                                                         0.05
Sep                                                                       0.0515
Oct                                                                       0.0515
Nov                                                                       0.0515

                                  [LINE CHART]

Common Share Price Performance -- Weekly Closing Price

12/01/07                                                                   12.85
                                                                            12.9
                                                                            12.8
                                                                           12.75
                                                                            12.8
                                                                           13.32
                                                                           13.45
                                                                           13.12
                                                                           13.38
                                                                           13.48
                                                                           13.56
                                                                           12.87
                                                                           12.78
                                                                           12.35
                                                                           12.69
                                                                           12.55
                                                                           12.41
                                                                            12.7
                                                                           12.78
                                                                           12.88
                                                                           13.09
                                                                              13
                                                                              13
                                                                           12.95
                                                                           12.99
                                                                            13.1
                                                                           13.15
                                                                           13.13
                                                                           12.82
                                                                           12.91
                                                                           12.52
                                                                           12.56
                                                                           12.85
                                                                            12.2
                                                                           12.16
                                                                           12.31
                                                                            12.3
                                                                            12.2
                                                                          12.343
                                                                           12.16
                                                                            12.3
                                                                           12.26
                                                                           11.52
                                                                          11.144
                                                                           10.71
                                                                           8.494
                                                                             9.8
                                                                            10.2
                                                                           10.45
                                                                           10.52
                                                                            10.3
                                                                             9.7
11/30/08                                                                    9.72

FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price                                                     $   9.72
--------------------------------------------------------------------------------
Common Share Net Asset Value                                           $  12.05
--------------------------------------------------------------------------------
Premium/(Discount) to NAV                                                -19.34%
--------------------------------------------------------------------------------
Market Yield                                                               6.36%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(2)                                                9.39%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000)                          $ 45,871
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years)                          15.21
--------------------------------------------------------------------------------
Leverage-Adjusted Duration                                                13.52
--------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURN
(Inception 5/20/93)
--------------------------------------------------------------------------------
                                                        ON SHARE PRICE   ON NAV
--------------------------------------------------------------------------------
6-Month (Cumulative)                                            -24.06%  -13.08%
--------------------------------------------------------------------------------
1-Year                                                          -19.60%  -13.46%
--------------------------------------------------------------------------------
5-Year                                                           -4.78%    0.92%
--------------------------------------------------------------------------------
10-Year                                                           0.17%    3.51%
--------------------------------------------------------------------------------

INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed                                                            16.6%
--------------------------------------------------------------------------------
Water and Sewer                                                            15.2%
--------------------------------------------------------------------------------
Tax Obligation/Limited                                                     14.2%
--------------------------------------------------------------------------------
Health Care                                                                13.5%
--------------------------------------------------------------------------------
Tax Obligation/General                                                     12.1%
--------------------------------------------------------------------------------
Education and Civic Organizations                                          12.1%
--------------------------------------------------------------------------------
Utilities                                                                   7.5%
--------------------------------------------------------------------------------
Other                                                                       8.8%
--------------------------------------------------------------------------------

(1)   The  percentages  shown in the foregoing  chart may reflect the ratings on
      certain bonds insured by AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and
      SYNCORA  as of  November  30,  2008.  Please see the  Portfolio  Manager's
      Commentary for an expanded discussion of the affect on the Fund of changes
      to the ratings of certain bonds in the portfolio resulting from changes to
      the ratings of the  underlying  insurers  both during the period and after
      period end.

(2)   Taxable-Equivalent  Yield  represents  the yield  that must be earned on a
      fully  taxable  investment  in order to equal  the yield of the Fund on an
      after-tax  basis.  It is based on a combined  federal and state income tax
      rate of 32.3%.  When  comparing  this Fund to  investments  that  generate
      qualified dividend income, the Taxable-Equivalent Yield is lower.

(3)   The Fund paid  shareholders a capital gains  distribution in December 2007
      of $0.0424 per share.

                                                                              11



NZX Performance  OVERVIEW | Nuveen Georgia Dividend Advantage  Municipal Fund as
                            of November 30, 2008

FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price                                                     $  10.90
--------------------------------------------------------------------------------
Common Share Net Asset Value                                           $  12.51
--------------------------------------------------------------------------------
Premium/(Discount) to NAV                                                -12.87%
--------------------------------------------------------------------------------
Market Yield                                                               6.06%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(2)                                                8.95%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000)                          $ 24,632
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years)                          12.92
--------------------------------------------------------------------------------
Leverage-Adjusted Duration                                                11.33
--------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
--------------------------------------------------------------------------------
                                                        ON SHARE PRICE   ON NAV
--------------------------------------------------------------------------------
6-Month (Cumulative)                                            -16.80%  -11.42%
--------------------------------------------------------------------------------
1-Year                                                          -15.25%  -11.43%
--------------------------------------------------------------------------------
5-Year                                                           -1.32%    1.61%
--------------------------------------------------------------------------------
Since Inception                                                   0.92%    3.63%
--------------------------------------------------------------------------------

INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
U.S. Guaranteed                                                            22.7%
--------------------------------------------------------------------------------
Education and Civic Organizations                                          15.0%
--------------------------------------------------------------------------------
Health Care                                                                14.9%
--------------------------------------------------------------------------------
Water and Sewer                                                            13.4%
--------------------------------------------------------------------------------
Housing/Single Family                                                       8.3%
--------------------------------------------------------------------------------
Tax Obligation/General                                                      7.9%
--------------------------------------------------------------------------------
Tax Obligation/Limited                                                      5.7%
--------------------------------------------------------------------------------
Other                                                                      12.1%
--------------------------------------------------------------------------------

                                   [PIE CHART]

Credit Quality (as a % of total investments)(1)

AAA/U.S.
Guaranteed                                                                   40%
AA                                                                           28%
A                                                                            20%
BBB                                                                           8%
BB or Lower                                                                   1%
N/R                                                                           3%

                                   [BAR CHART]

2007-2008 Monthly Tax-Free Dividends Per Common Share

Dec                                                                        0.054
Jan                                                                        0.054
Feb                                                                        0.054
Mar                                                                        0.054
Apr                                                                        0.054
May                                                                        0.054
Jun                                                                        0.054
Jul                                                                        0.054
Aug                                                                        0.054
Sep                                                                        0.055
Oct                                                                        0.055
Nov                                                                        0.055

                                  [LINE CHART]

Common Share Price Performance -- Weekly Closing Price

12/01/07                                                                   13.49
                                                                           13.77
                                                                           13.41
                                                                         13.4799
                                                                            13.6
                                                                           14.16
                                                                           14.14
                                                                           13.95
                                                                           13.97
                                                                           14.03
                                                                           14.02
                                                                           13.64
                                                                           13.95
                                                                              13
                                                                           13.25
                                                                           13.22
                                                                           13.13
                                                                           13.31
                                                                           13.61
                                                                           13.31
                                                                           13.39
                                                                           13.47
                                                                          13.427
                                                                           13.58
                                                                           13.55
                                                                           13.52
                                                                           13.47
                                                                            13.5
                                                                           13.35
                                                                           13.15
                                                                           13.08
                                                                           13.05
                                                                           12.85
                                                                           12.71
                                                                           12.64
                                                                           12.77
                                                                           12.99
                                                                           12.65
                                                                           12.86
                                                                         12.7499
                                                                            12.8
                                                                           12.74
                                                                           12.16
                                                                            11.2
                                                                           10.77
                                                                            9.59
                                                                         10.8999
                                                                           10.72
                                                                         10.8999
                                                                            10.9
                                                                           10.14
                                                                           10.17
11/30/08                                                                 10.8999

(1)   The  percentages  shown in the foregoing  chart may reflect the ratings on
      certain bonds insured by AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and
      SYNCORA  as of  November  30,  2008.  Please see the  Portfolio  Manager's
      Commentary for an expanded discussion of the affect on the Fund of changes
      to the ratings of certain bonds in the portfolio resulting from changes to
      the ratings of the  underlying  insurers  both during the period and after
      period end.

(2)   Taxable-Equivalent  Yield  represents  the yield  that must be earned on a
      fully  taxable  investment  in order to equal  the yield of the Fund on an
      after-tax  basis.  It is based on a combined  federal and state income tax
      rate of 32.3%.  When  comparing  this Fund to  investments  that  generate
      qualified dividend income, the Taxable-Equivalent Yield is lower.

12



NKG Performance OVERVIEW | Nuveen Georgia Dividend Advantage Municipal Fund 2 as
                           of November 30, 2008

                                   [PIE CHART]

Credit Quality (as a % of total investments)(1)

AAA/U.S.
Guaranteed                                                                   32%
AA                                                                           31%
A                                                                            18%
BBB                                                                          16%
N/R                                                                           3%

                                   [BAR CHART]

2007-2008 Monthly Tax-Free Dividends Per Common Share

Dec                                                                       0.0545
Jan                                                                       0.0545
Feb                                                                       0.0545
Mar                                                                       0.0515
Apr                                                                       0.0515
May                                                                       0.0515
Jun                                                                       0.0515
Jul                                                                       0.0515
Aug                                                                       0.0515
Sep                                                                        0.053
Oct                                                                        0.053
Nov                                                                        0.053

                                  [LINE CHART]

Common Share Price Performance -- Weekly Closing Price

12/01/07                                                                    13.1
                                                                           13.11
                                                                           12.95
                                                                           12.76
                                                                            12.8
                                                                           13.49
                                                                           14.22
                                                                           13.29
                                                                           13.52
                                                                           13.68
                                                                           13.72
                                                                            13.8
                                                                            13.6
                                                                           13.15
                                                                            13.1
                                                                           13.02
                                                                           13.18
                                                                          12.935
                                                                           13.19
                                                                           13.13
                                                                           13.13
                                                                           13.02
                                                                           12.95
                                                                           13.05
                                                                           13.05
                                                                           13.18
                                                                           13.18
                                                                           13.15
                                                                           12.98
                                                                           12.77
                                                                              13
                                                                           12.65
                                                                           12.85
                                                                           12.76
                                                                           12.77
                                                                           12.87
                                                                         12.7401
                                                                           12.41
                                                                           12.82
                                                                           12.85
                                                                           12.49
                                                                           12.37
                                                                          11.721
                                                                              11
                                                                            10.8
                                                                               9
                                                                           10.15
                                                                           11.25
                                                                            11.7
                                                                           11.37
                                                                         11.2116
                                                                           11.19
11/30/08                                                                   11.52

FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price                                                     $  11.52
--------------------------------------------------------------------------------
Common Share Net Asset Value                                           $  11.58
--------------------------------------------------------------------------------
Premium/(Discount) to NAV                                                 -0.52%
--------------------------------------------------------------------------------
Market Yield                                                               5.52%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(2)                                                8.15%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000)                          $ 52,747
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years)                          16.08
--------------------------------------------------------------------------------
Leverage-Adjusted Duration                                                14.21
--------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/02)
--------------------------------------------------------------------------------
                                                        ON SHARE PRICE   ON NAV
--------------------------------------------------------------------------------
6-Month (Cumulative)                                            -10.29%  -14.73%
--------------------------------------------------------------------------------
1-Year                                                           -7.91%  -15.14%
--------------------------------------------------------------------------------
5-Year                                                            1.70%    0.53%
--------------------------------------------------------------------------------
Since Inception                                                   0.86%    1.52%
--------------------------------------------------------------------------------

INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Water and Sewer                                                            21.2%
--------------------------------------------------------------------------------
Health Care                                                                14.9%
--------------------------------------------------------------------------------
Tax Obligation/General                                                     13.6%
--------------------------------------------------------------------------------
Tax Obligation/Limited                                                     13.6%
--------------------------------------------------------------------------------
U.S. Guaranteed                                                            10.4%
--------------------------------------------------------------------------------
Education and Civic Organizations                                           9.5%
--------------------------------------------------------------------------------
Transportation                                                              4.3%
--------------------------------------------------------------------------------
Other                                                                      12.5%
--------------------------------------------------------------------------------

(1)   The  percentages  shown in the foregoing  chart may reflect the ratings on
      certain bonds insured by AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and
      SYNCORA  as of  November  30,  2008.  Please see the  Portfolio  Manager's
      Commentary for an expanded discussion of the affect on the Fund of changes
      to the ratings of certain bonds in the portfolio resulting from changes to
      the ratings of the  underlying  insurers  both during the period and after
      period end.

(2)   Taxable-Equivalent  Yield  represents  the yield  that must be earned on a
      fully  taxable  investment  in order to equal  the yield of the Fund on an
      after-tax  basis.  It is based on a combined  federal and state income tax
      rate of 32.3%.  When  comparing  this Fund to  investments  that  generate
      qualified dividend income, the Taxable-Equivalent Yield is lower.

                                                                              13



NNC Performance  OVERVIEW | Nuveen North Carolina  Premium Income Municipal Fund
                            as of November 30, 2008

FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price                                                     $  10.80
--------------------------------------------------------------------------------
Common Share Net Asset Value                                           $  12.25
--------------------------------------------------------------------------------
Premium/(Discount) to NAV                                                -11.84%
--------------------------------------------------------------------------------
Market Yield                                                               5.61%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(2)                                                8.45%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000)                          $ 77,780
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years)                          14.58
--------------------------------------------------------------------------------
Leverage-Adjusted Duration                                                12.37
--------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURN
(Inception 5/20/93)
--------------------------------------------------------------------------------
                                                        ON SHARE PRICE   ON NAV
--------------------------------------------------------------------------------
6-Month (Cumulative)                                            -16.75%  -10.35%
--------------------------------------------------------------------------------
1-Year                                                          -10.26%  -10.39%
--------------------------------------------------------------------------------
5-Year                                                           -3.41%    1.18%
--------------------------------------------------------------------------------
10-Year                                                           0.89%    3.76%
--------------------------------------------------------------------------------

INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/Limited                                                     25.6%
--------------------------------------------------------------------------------
Education and Civic Organizations                                          15.0%
--------------------------------------------------------------------------------
Health Care                                                                13.6%
--------------------------------------------------------------------------------
U.S. Guaranteed                                                             9.9%
--------------------------------------------------------------------------------
Utilities                                                                   9.0%
--------------------------------------------------------------------------------
Tax Obligation/General                                                      7.0%
--------------------------------------------------------------------------------
Water and Sewer                                                             5.9%
--------------------------------------------------------------------------------
Other                                                                      14.0%
--------------------------------------------------------------------------------

                                   [PIE CHART]

Credit Quality (as a % of total investments)(1)

AAA/U.S.
Guaranteed                                                                   30%
AA                                                                           43%
A                                                                            18%
BBB                                                                           7%
N/R                                                                           2%

                                  [BAR CHART]

2007-2008 Monthly Tax-Free Dividends Per Common Share(3)

Dec                                                                        0.049
Jan                                                                        0.049
Feb                                                                        0.049
Mar                                                                        0.049
Apr                                                                        0.049
May                                                                        0.049
Jun                                                                        0.049
Jul                                                                        0.049
Aug                                                                        0.049
Sep                                                                       0.0505
Oct                                                                       0.0505
Nov                                                                       0.0505

                                  [LINE CHART]

Common Share Price Performance -- Weekly Closing Price

12/01/07                                                                    12.7
                                                                           12.81
                                                                           12.75
                                                                           12.57
                                                                           12.55
                                                                           13.14
                                                                          13.282
                                                                         13.3399
                                                                           13.25
                                                                           13.48
                                                                           13.63
                                                                            12.9
                                                                           12.84
                                                                           12.75
                                                                           12.87
                                                                         12.7499
                                                                           12.79
                                                                         12.9401
                                                                           12.86
                                                                           12.85
                                                                           12.98
                                                                            13.2
                                                                           13.05
                                                                           13.25
                                                                           12.99
                                                                           13.03
                                                                            13.3
                                                                           13.22
                                                                           12.93
                                                                         12.6499
                                                                           12.52
                                                                           13.02
                                                                           12.82
                                                                           12.86
                                                                           12.69
                                                                           12.92
                                                                           12.75
                                                                           12.61
                                                                           12.76
                                                                           13.24
                                                                           12.96
                                                                            12.8
                                                                           12.62
                                                                           12.01
                                                                            11.3
                                                                            9.87
                                                                           10.53
                                                                           11.78
                                                                            11.4
                                                                           11.81
                                                                              12
                                                                            10.6
11/30/08                                                                    10.8

(1)   The  percentages  shown in the foregoing  chart may reflect the ratings on
      certain bonds insured by AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and
      SYNCORA  as of  November  30,  2008.  Please see the  Portfolio  Manager's
      Commentary for an expanded discussion of the affect on the Fund of changes
      to the ratings of certain bonds in the portfolio resulting from changes to
      the ratings of the  underlying  insurers  both during the period and after
      period end.

(2)   Taxable-Equivalent  Yield  represents  the yield  that must be earned on a
      fully  taxable  investment  in order to equal  the yield of the Fund on an
      after-tax  basis.  It is based on a combined  federal and state income tax
      rate of 33.6%.  When  comparing  this Fund to  investments  that  generate
      qualified dividend income, the Taxable-Equivalent Yield is lower.

(3)   The Fund paid  shareholders a capital gains  distribution in December 2007
      of $0.0358 per share.

14



NRB Performance  OVERVIEW | Nuveen North Carolina Dividend  Advantage  Municipal
                            Fund as of November 30, 2008

                                   [PIE CHART]

Credit Quality (as a % of total investments)(1)

AAA/U.S.
Guaranteed                                                                   44%
AA                                                                           28%
A                                                                            17%
BBB                                                                           8%
N/R                                                                           3%

                                   [BAR CHART]

2007-2008 Monthly Tax-Free Dividends Per Common Share(3)

Dec                                                                        0.057
Jan                                                                        0.057
Feb                                                                        0.057
Mar                                                                        0.057
Apr                                                                        0.057
May                                                                        0.057
Jun                                                                        0.057
Jul                                                                        0.057
Aug                                                                        0.057
Sep                                                                        0.058
Oct                                                                        0.058
Nov                                                                        0.058

                                  [LINE CHART]

Common Share Price Performance -- Weekly Closing Price

12/01/07                                                                 14.1001
                                                                           13.67
                                                                            13.8
                                                                           13.54
                                                                           13.62
                                                                           14.65
                                                                            14.9
                                                                            14.8
                                                                           14.63
                                                                         14.2699
                                                                         14.5799
                                                                            14.5
                                                                            13.8
                                                                           13.22
                                                                           14.04
                                                                           14.55
                                                                            14.3
                                                                           14.35
                                                                           14.23
                                                                           14.65
                                                                            14.4
                                                                            14.4
                                                                           14.56
                                                                           15.07
                                                                            14.7
                                                                           14.72
                                                                           15.28
                                                                           15.44
                                                                           14.68
                                                                           14.39
                                                                            14.3
                                                                            14.2
                                                                           14.05
                                                                            14.2
                                                                           14.46
                                                                            14.8
                                                                           15.13
                                                                           15.16
                                                                           15.27
                                                                           15.28
                                                                            15.4
                                                                            14.6
                                                                           15.02
                                                                            14.6
                                                                           14.15
                                                                          11.352
                                                                            12.8
                                                                           14.79
                                                                           14.23
                                                                           14.05
                                                                           13.39
                                                                           12.23
11/30/08                                                                   11.68

FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price                                                     $  11.68
--------------------------------------------------------------------------------
Common Share Net Asset Value                                           $  13.08
--------------------------------------------------------------------------------
Premium/(Discount) to NAV                                                -10.70%
--------------------------------------------------------------------------------
Market Yield                                                               5.96%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(2)                                                8.98%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000)                          $ 29,628
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years)                          13.45
--------------------------------------------------------------------------------
Leverage-Adjusted Duration                                                12.64
--------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURN
(Inception 1/25/01)
--------------------------------------------------------------------------------
                                                        ON SHARE PRICE   ON NAV
--------------------------------------------------------------------------------
6-Month (Cumulative)                                            -21.63%   -7.62%
--------------------------------------------------------------------------------
1-Year                                                          -12.77%   -6.93%
--------------------------------------------------------------------------------
5-Year                                                           -1.40%    2.49%
--------------------------------------------------------------------------------
Since Inception                                                   2.27%    4.66%
--------------------------------------------------------------------------------

INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Water and Sewer                                                            25.1%
--------------------------------------------------------------------------------
Tax Obligation/Limited                                                     15.8%
--------------------------------------------------------------------------------
Utilities                                                                  13.5%
--------------------------------------------------------------------------------
U.S. Guaranteed                                                            11.2%
--------------------------------------------------------------------------------
Health Care                                                                10.4%
--------------------------------------------------------------------------------
Education and Civic Organizations                                           9.8%
--------------------------------------------------------------------------------
Tax Obligation/General                                                      6.0%
--------------------------------------------------------------------------------
Other                                                                       8.2%
--------------------------------------------------------------------------------

(1)   The  percentages  shown in the foregoing  chart may reflect the ratings on
      certain bonds insured by AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and
      SYNCORA  as of  November  30,  2008.  Please see the  Portfolio  Manager's
      Commentary for an expanded discussion of the affect on the Fund of changes
      to the ratings of certain bonds in the portfolio resulting from changes to
      the ratings of the  underlying  insurers  both during the period and after
      period end.

(2)   Taxable-Equivalent  Yield  represents  the yield  that must be earned on a
      fully  taxable  investment  in order to equal  the yield of the Fund on an
      after-tax  basis.  It is based on a combined  federal and state income tax
      rate of 33.6%.  When  comparing  this Fund to  investments  that  generate
      qualified dividend income, the Taxable-Equivalent Yield is lower.

(3)   The Fund paid  shareholders a capital gains  distribution in December 2007
      of $0.0338 per share.

                                                                              15



NNO Performance  OVERVIEW | Nuveen North Carolina Dividend  Advantage  Municipal
                            Fund 2 as of November 30, 2008

FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price                                                     $  12.30
--------------------------------------------------------------------------------
Common Share Net Asset Value                                           $  12.83
--------------------------------------------------------------------------------
Premium/(Discount) to NAV                                                 -4.13%
--------------------------------------------------------------------------------
Market Yield                                                               5.27%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(2)                                                7.94%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000)                          $ 48,120
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years)                          12.42
--------------------------------------------------------------------------------
Leverage-Adjusted Duration                                                11.44
--------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURN
(Inception 11/15/01)
--------------------------------------------------------------------------------
                                                        ON SHARE PRICE   ON NAV
--------------------------------------------------------------------------------
6-Month (Cumulative)                                             -7.69%   -9.25%
--------------------------------------------------------------------------------
1-Year                                                           -2.57%   -8.90%
--------------------------------------------------------------------------------
5-Year                                                            0.58%    1.84%
--------------------------------------------------------------------------------
Since Inception                                                   2.70%    4.03%
--------------------------------------------------------------------------------

INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/Limited                                                     22.8%
--------------------------------------------------------------------------------
Health Care                                                                15.1%
--------------------------------------------------------------------------------
Water and Sewer                                                            14.7%
--------------------------------------------------------------------------------
U.S. Guaranteed                                                            10.1%
--------------------------------------------------------------------------------
Transportation                                                             10.0%
--------------------------------------------------------------------------------
Education and Civic Organizations                                           9.5%
--------------------------------------------------------------------------------
Utilities                                                                   8.9%
--------------------------------------------------------------------------------
Other                                                                       8.9%
--------------------------------------------------------------------------------

                                   [PIE CHART]

Credit Quality (as a % of total investments)(1)

AAA/U.S.
Guaranteed                                                                   37%
AA                                                                           36%
A                                                                            20%
BBB                                                                           4%
N/R                                                                           3%

                                   [BAR CHART]

2007-2008 Monthly Tax-Free Dividends Per Common Share(3)

Dec                                                                       0.0515
Jan                                                                       0.0515
Feb                                                                       0.0515
Mar                                                                       0.0515
Apr                                                                       0.0515
May                                                                       0.0515
Jun                                                                       0.0515
Jul                                                                       0.0515
Aug                                                                       0.0515
Sep                                                                        0.054
Oct                                                                        0.054
Nov                                                                        0.054

                                   [LINE CHART]

Common Share Price Performance -- Weekly Closing Price

12/01/07                                                                   13.31
                                                                           13.36
                                                                              13
                                                                              13
                                                                           13.17
                                                                            13.8
                                                                           13.83
                                                                          13.696
                                                                           13.75
                                                                           13.72
                                                                           13.72
                                                                           13.36
                                                                           13.45
                                                                            13.1
                                                                            13.4
                                                                            13.2
                                                                           13.39
                                                                           13.51
                                                                           13.55
                                                                            13.4
                                                                           13.42
                                                                           13.55
                                                                           13.45
                                                                            13.6
                                                                           13.35
                                                                           13.53
                                                                           13.66
                                                                           13.86
                                                                           13.25
                                                                           13.12
                                                                           12.77
                                                                            13.1
                                                                           13.16
                                                                          13.057
                                                                            12.7
                                                                           13.05
                                                                         13.2199
                                                                           13.29
                                                                           13.05
                                                                           13.21
                                                                            13.5
                                                                           13.48
                                                                           13.45
                                                                           13.03
                                                                              13
                                                                             9.8
                                                                           10.61
                                                                           12.12
                                                                            11.9
                                                                         12.5852
                                                                           12.07
                                                                         11.6199
11/30/08                                                                    12.3

(1)   The  percentages  shown in the foregoing  chart may reflect the ratings on
      certain bonds insured by AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and
      SYNCORA  as of  November  30,  2008.  Please see the  Portfolio  Manager's
      Commentary for an expanded discussion of the affect on the Fund of changes
      to the ratings of certain bonds in the portfolio resulting from changes to
      the ratings of the  underlying  insurers  both during the period and after
      period end.

(2)   Taxable-Equivalent  Yield  represents  the yield  that must be earned on a
      fully  taxable  investment  in order to equal  the yield of the Fund on an
      after-tax  basis.  It is based on a combined  federal and state income tax
      rate of 33.6%.  When  comparing  this Fund to  investments  that  generate
      qualified dividend income, the Taxable-Equivalent Yield is lower.

(3)   The Fund paid  shareholders a capital gains  distribution in December 2007
      of $0.0638 per share.

16



NII Performance  OVERVIEW | Nuveen North Carolina Dividend  Advantage  Municipal
                            Fund 3 as of November 30, 2008

                                   [PIE CHART]

Credit Quality (as a % of total investments)(1)

AAA/U.S
Guaranteed                                                                   43%
AA                                                                           38%
A                                                                            10%
BBB                                                                           7%
N/R                                                                           2%

                                  [BAR CHART]

2007-2008 Monthly Tax-Free Dividends Per Common Share

Dec                                                                       0.0545
Jan                                                                       0.0545
Feb                                                                       0.0545
Mar                                                                       0.0545
Apr                                                                       0.0545
May                                                                       0.0545
Jun                                                                       0.0545
Jul                                                                       0.0545
Aug                                                                       0.0545
Sep                                                                       0.0555
Oct                                                                       0.0555
Nov                                                                       0.0555

                                  [LINE CHART]

Common Share Price Performance -- Weekly Closing Price

12/01/07                                                                   13.38
                                                                           13.37
                                                                           13.47
                                                                            13.2
                                                                         13.3799
                                                                           14.23
                                                                           13.94
                                                                           13.96
                                                                            13.5
                                                                           13.61
                                                                           14.05
                                                                         13.2901
                                                                           13.36
                                                                           13.16
                                                                           13.62
                                                                          13.568
                                                                            13.3
                                                                           13.46
                                                                           13.55
                                                                           13.59
                                                                           13.65
                                                                         13.8501
                                                                           13.94
                                                                           13.95
                                                                           13.76
                                                                              14
                                                                          14.124
                                                                           14.27
                                                                              14
                                                                           13.92
                                                                           13.25
                                                                           13.27
                                                                            14.1
                                                                            13.6
                                                                           13.98
                                                                           13.75
                                                                           13.82
                                                                            13.6
                                                                            13.7
                                                                           13.84
                                                                           13.79
                                                                          13.624
                                                                           13.61
                                                                           13.44
                                                                              13
                                                                             9.3
                                                                           10.75
                                                                           11.91
                                                                           12.78
                                                                              13
                                                                           12.02
                                                                           10.75
11/30/08                                                                   11.12

FUND SNAPSHOT
--------------------------------------------------------------------------------
Common Share Price                                                     $  11.12
--------------------------------------------------------------------------------
Common Share Net Asset Value                                           $  12.59
--------------------------------------------------------------------------------
Premium/(Discount) to NAV                                                -11.68%
--------------------------------------------------------------------------------
Market Yield                                                               5.99%
--------------------------------------------------------------------------------
Taxable-Equivalent Yield(2)                                                9.02%
--------------------------------------------------------------------------------
Net Assets Applicable to Common Shares ($000)                          $ 49,507
--------------------------------------------------------------------------------
Average Effective Maturity on Securities (Years)                          13.66
--------------------------------------------------------------------------------
Leverage-Adjusted Duration                                                12.96
--------------------------------------------------------------------------------

AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/02)
--------------------------------------------------------------------------------
                                                        ON SHARE PRICE   ON NAV
--------------------------------------------------------------------------------
6-Month (Cumulative)                                            -19.22%   -8.65%
--------------------------------------------------------------------------------
1-Year                                                          -11.56%   -8.07%
--------------------------------------------------------------------------------
5-Year                                                           -0.53%    2.24%
--------------------------------------------------------------------------------
Since Inception                                                   0.13%    2.96%
--------------------------------------------------------------------------------

INDUSTRIES
(as a % of total investments)
--------------------------------------------------------------------------------
Tax Obligation/Limited                                                     22.1%
--------------------------------------------------------------------------------
Water and Sewer                                                            21.3%
--------------------------------------------------------------------------------
Tax Obligation/General                                                     13.5%
--------------------------------------------------------------------------------
U.S. Guaranteed                                                            12.4%
--------------------------------------------------------------------------------
Utilities                                                                  10.3%
--------------------------------------------------------------------------------
Health Care                                                                 6.7%
--------------------------------------------------------------------------------
Transportation                                                              5.8%
--------------------------------------------------------------------------------
Other                                                                       7.9%
--------------------------------------------------------------------------------

(1)   The  percentages  shown in the foregoing  chart may reflect the ratings on
      certain bonds insured by AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and
      SYNCORA  as of  November  30,  2008.  Please see the  Portfolio  Manager's
      Commentary for an expanded discussion of the affect on the Fund of changes
      to the ratings of certain bonds in the portfolio resulting from changes to
      the ratings of the  underlying  insurers  both during the period and after
      period end.

(2)   Taxable-Equivalent  Yield  represents  the yield  that must be earned on a
      fully  taxable  investment  in order to equal  the yield of the Fund on an
      after-tax  basis.  It is based on a combined  federal and state income tax
      rate of 33.6%.  When  comparing  this Fund to  investments  that  generate
      qualified dividend income, the Taxable-Equivalent Yield is lower.

                                                                              17



NPG | Nuveen Georgia Premium Income Municipal Fund
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



      PRINCIPAL                                                                        OPTIONAL CALL
   AMOUNT (000)   DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
                  CONSUMER STAPLES - 1.5% (1.0% OF TOTAL INVESTMENTS)
$         1,000   Puerto Rico, The Children's Trust Fund, Tobacco Settlement          5/12 at 100.00             BBB  $     712,660
                     Asset-Backed Refunding Bonds, Series 2002, 5.500%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
                  EDUCATION AND CIVIC ORGANIZATIONS - 19.1% (12.1% OF TOTAL
                  INVESTMENTS)
          1,000   Athens-Clarke County Unified Government Development Authority,     12/12 at 100.00               A      1,016,110
                     Georgia, Educational Facilities Revenue Bonds, UGAREF CCRC
                     Building LLC Project, Series 2002, 5.000%, 12/15/16 - AMBAC
                     Insured
          2,000   Atlanta Development Authority, Georgia, Educational Facilities      7/17 at 100.00              A1      1,606,900
                     Revenue Bonds, Science Park LLC Project, Series 2007,
                     5.000%, 7/01/39
          1,550   Bulloch County Development Authority, Georgia, Student Housing      8/14 at 100.00              A1      1,486,032
                     and Athletic Facility Lease Revenue Bonds, Georgia Southern
                     University, Series 2004, 5.250%, 8/01/21 - SYNCORA GTY
                     Insured
            700   Carrollton Payroll Development Authority, Georgia, Student          9/14 at 100.00              A1        654,913
                     Housing Revenue Bonds, University of West Georgia, Series
                     2004A, 5.000%, 9/01/21 - SYNCORA GTY Insured
          1,535   Fulton County Development Authority, Georgia, Revenue Bonds,        5/14 at 100.00              AA      1,657,739
                     Georgia Tech Molecular Science Building, Series 2004,
                     5.250%, 5/01/15 - MBIA Insured
          1,180   Savannah Economic Development Authority, Georgia, Revenue           7/15 at 100.00              A2      1,069,694
                     Bonds, Armstrong Atlantic State University, Compass Point
                     LLC Project, Series 2005, 5.000%, 7/01/25 - SYNCORA GTY
                     Insured
          1,500   Savannah Economic Development Authority, Georgia, Revenue          12/15 at 100.00              A3      1,274,115
                     Bonds, Armstrong Center LLC, Series2005A, 5.000%, 12/01/34
                     - SYNCORA GTY Insured
------------------------------------------------------------------------------------------------------------------------------------
          9,465   Total Education and Civic Organizations                                                                 8,765,503
------------------------------------------------------------------------------------------------------------------------------------
                  HEALTH CARE - 21.4% (13.5% OF TOTAL INVESTMENTS)
            800   Chatham County Hospital Authority, Savannah, Georgia, Hospital      7/11 at 101.00             BBB        598,432
                     Revenue Improvement Bonds, Memorial Health University
                     Medical Center Inc., Series 2001A, 6.125%, 1/01/24
            500   Clark County Hospital Authority, Georgia, Hospital Revenue          1/17 at 100.00              AA        435,505
                     Bonds, Athens Regional Medical Center, Series 2007, 5.000%,
                     1/01/27 - MBIA Insured
          2,000   Clarke County Hospital Authority, Georgia, Hospital Revenue         1/12 at 101.00              AA      1,687,040
                     Certificates, Athens Regional Medical Center, Series 2002,
                     5.125%, 1/01/32 - MBIA Insured
            900   Coffee County Hospital Authority, Georgia, Revenue Bonds,          12/14 at 100.00             BBB        688,383
                     Coffee County Regional Medical Center, Series 2004, 5.250%,
                     12/01/22
          3,000   Floyd County Hospital Authority, Georgia, Revenue Anticipation      7/12 at 101.00             Aa3      2,343,540
                     Certificates, Floyd Medical Center Project, Series 2002,
                     5.200%, 7/01/32 - MBIA Insured
          1,090   Floyd County Hospital Authority, Georgia, Revenue Anticipation      7/13 at 101.00             Aa3        999,388
                     Certificates, Floyd Medical Center, Series 2003, 5.000%,
                     7/01/19 - MBIA Insured
          1,060   Henry County Hospital Authority, Georgia, Revenue                   7/14 at 101.00             Aa2        994,630
                     Certificates, Henry Medical Center, Series2004, 5.000%,
                     7/01/20 - MBIA Insured
            900   Houston County Hospital Authority, Georgia, Revenue Bonds,         10/17 at 100.00              A2        667,737
                     Houston Healthcare Project, Series2007, 5.250%, 10/01/35
          1,000   Savannah Hospital Authority, Georgia, Revenue Bonds, St.            1/14 at 100.00              A3        822,830
                     Joseph's/Candler Health System, Series 2003, 5.250%,
                     7/01/23 - RAAI Insured
            750   Valdosta and Lowndes County Hospital Authority, Georgia,           10/17 at 100.00              A+        569,070
                     Revenue Certificates, South Georgia Medical Center, Series
                     2007, 5.000%, 10/01/33
------------------------------------------------------------------------------------------------------------------------------------
         12,000   Total Health Care                                                                                       9,806,555
------------------------------------------------------------------------------------------------------------------------------------


18





      PRINCIPAL                                                                        OPTIONAL CALL
   AMOUNT (000)   DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)           VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
                  HOUSING/MULTIFAMILY - 1.8% (1.2% OF TOTAL INVESTMENTS)
$         1,000   Cobb County Development Authority, Georgia, Student Housing         7/17 at 100.00            Baa1  $      842,230
                     Revenue Bonds, KSU Village II Real Estate Foundation LLC
                     Project, Series 2007A, 5.250%, 7/15/38 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
                  HOUSING/SINGLE FAMILY - 1.8% (1.1% OF TOTAL INVESTMENTS)
            900   Georgia Housing and Finance Authority, Single Family Mortgage      12/11 at 100.00             AAA         819,792
                     Bonds, Series 2002B-2, 5.350%,12/01/22 (Alternative Minimum
                     Tax)
------------------------------------------------------------------------------------------------------------------------------------
                  INDUSTRIALS - 1.1% (0.7% OF TOTAL INVESTMENTS)
            500   Savannah Economic Development Authority, Georgia, Revenue Bonds,    7/12 at 100.00              AA         488,415
                     GTREP Project, Series 2002, 5.000%, 7/01/22 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
                  MATERIALS - 2.7% (1.7% OF TOTAL INVESTMENTS)
            750   Effingham County Industrial Development Authority, Georgia,         6/11 at 101.00              B2         530,100
                     Pollution Control Revenue Refunding Bonds, Georgia-Pacific
                     Project, Series 2001, 6.500%, 6/01/31
          1,000   Richmond County Development Authority, Georgia, Environmental       2/11 at 101.00             BBB         700,660
                     Improvement Revenue Bonds, International Paper Company,
                     Series 2001A, 6.250%, 2/01/25 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
          1,750   Total Materials                                                                                          1,230,760
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/GENERAL - 19.1% (12.1% OF TOTAL INVESTMENTS)
            540   Cherokee County Resource Recovery Development Authority,            7/17 at 100.00              AA         424,910
                     Georgia, Solid Waste Disposal Revenue Bonds, Ball Ground
                     Recycling LLC Project, Series 2007A, 5.000%, 7/01/37 - AMBAC
                     Insured(Alternative Minimum Tax)
          2,215   Decatur, Georgia, General Obligation Bonds, Series 2007, 5.000%,    1/17 at 100.00             AAA       2,148,616
                     1/01/31 - FSA Insured
            100   Georgia State, General Obligation Bonds, Series 2007, 5.000%,       8/17 at 100.00             AAA         101,186
                     8/01/24
          1,000   Georgia, General Obligation Bonds, Series 2002D, 5.000%, 8/01/16    8/12 at 100.00             AAA       1,055,110
          1,000   Georgia, General Obligation Bonds, Series 2005B, 5.000%, 7/01/15      No Opt. Call             AAA       1,101,810
            610   Gwinnett County School District, Georgia, General Obligation        2/18 at 100.00             AAA         532,634
                     Bonds, Series 2008, Trust 2868, 11.766%, 2/01/36 (IF)
          2,500   Paulding County School District, Georgia, General Obligation        2/17 at 100.00             AA+       2,296,225
                     Bonds, Series 2007, 5.000%, 2/01/33
            800   Puerto Rico, General Obligation Bonds, Series 2004A, 5.250%,        7/14 at 100.00            BBB-         698,800
                     7/01/22
            500   Wayne County Hospital Authority, Georgia, Hospital Revenue          3/16 at 100.00             N/R         419,615
                     Bonds, Series 2006, 5.000%,3/01/23 - SYNCORA GTY Insured
------------------------------------------------------------------------------------------------------------------------------------
          9,265   Total Tax Obligation/General                                                                             8,778,906
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/LIMITED - 22.5% (14.2% OF TOTAL INVESTMENTS)
            420   Atlanta, Georgia, Tax Allocation Bonds Atlanta Station Project,    12/17 at 100.00             AAA         391,448
                     Series 2007, 5.000%,12/01/23 - AGC Insured
            300   Atlanta, Georgia, Tax Allocation Bonds, Eastside Project, Series      No Opt. Call             N/R         265,542
                     2005A, 5.625%, 1/01/16(Alternative Minimum Tax)
          2,000   Cobb-Marietta Coliseum and Exhibit Hall Authority, Cobb County,     1/14 at 100.00             AAA       2,007,940
                     Georgia, Revenue Bonds, Performing Arts Center, Series 2004,
                     5.000%, 1/01/22
          3,475   Cobb-Marietta Coliseum and Exhibit Hall Authority, Georgia,        10/19 at 100.00              AA       3,420,547
                     Revenue Refunding Bonds, Series 1993, 5.625%,
                     10/01/26 - MBIA Insured
          2,600   Macon-Bibb County Urban Development Authority, Georgia, Revenue     8/12 at 101.00              AA       2,773,342
                     Refunding Bonds, Public Facilities Projects, Series 2002A,
                     5.375%, 8/01/17
          1,000   Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales Tax      No Opt. Call             Aa3       1,116,850
                     Revenue Refunding Bonds, Series 1992P, 6.250%, 7/01/20 -
                     AMBAC Insured
            500   Puerto Rico Infrastructure Financing Authority, Special Tax         7/15 at 100.00            BBB-         350,240
                     Revenue Bonds, Series 2005B, 5.000%, 7/01/41
------------------------------------------------------------------------------------------------------------------------------------
         10,295   Total Tax Obligation/Limited                                                                            10,325,909
------------------------------------------------------------------------------------------------------------------------------------


                                                                              19



NPG | Nuveen Georgia Premium Income Municipal Fund (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
                  TRANSPORTATION - 4.8% (3.1% OF TOTAL INVESTMENTS)
$        2,290    Atlanta, Georgia, Airport General Revenue Bonds, Series 2004G,
                     5.000%, 1/01/26 - FSA Insured                                    1/15 at 100.00             AAA  $   2,213,285
------------------------------------------------------------------------------------------------------------------------------------
                  U.S. GUARANTEED - 26.3% (16.6% OF TOTAL INVESTMENTS) (4)
           735    Coweta County Development Authority, Georgia, Revenue Bonds,        1/13 at 100.00         N/R (4)        810,573
                     Newnan Water and Sewer, and Light Commission Project, Series
                     2002, 5.250%, 1/01/18 (Pre-refunded 1/01/13) - FGIC Insured
         3,165    Coweta County Water and Sewer Authority, Georgia, Revenue Bonds,    6/11 at 102.00         Aa3 (4)      3,460,453
                     Series 2001, 5.250%, 6/01/26(Pre-refunded 6/01/11)
           500    DeKalb County, Georgia, Water and Sewerage Revenue Bonds, Series   10/10 at 101.00             AAA        534,950
                     2000, 5.125%, 10/01/31 (Pre-refunded 10/01/10) - MBIA Insured
         1,000    Fairburn, Georgia, Combined Utility Revenue Bonds, Series 2000,    10/10 at 101.00          A- (4)      1,080,600
                     5.750%, 10/01/20(Pre-refunded 10/01/10)
         1,750    Gainesville and Hall County Hospital Authority, Georgia, Revenue   5/11 at 100.00          A- (4)      1,880,323
                     Anticipation Certificates, Northeast Georgia Health
                     Services Inc., Series 2001, 5.500%, 5/15/31
                     (Pre-refunded 5/15/11)
                  Georgia Municipal Electric Authority, Project One Special
                  Obligation Bonds, Fifth Crossover Series 1998Y:
            85       6.400%, 1/01/09 (ETM)                                              No Opt. Call          A+ (4)         85,416
            10       6.400%, 1/01/09 (ETM)                                              No Opt. Call          A+ (4)         10,049
            25    Georgia Municipal Electric Authority, Senior Lien General Power     1/17 at 100.00          A+ (4)         27,694
                     Revenue Bonds, Series 1993Z, 5.500%, 1/01/20 (Pre-refunded
                     1/01/17) - FGIC Insured
         3,750    Gwinnett County Hospital Authority, Georgia, Revenue                2/12 at 102.00             Aaa      4,154,246
                     Anticipation Certificates, Gwinnett
                  Hospital System Inc. Project, Series 1997B, 5.300%, 9/01/27
                  (Pre-refunded 2/14/12) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
        11,020    Total U.S. Guaranteed                                                                                  12,044,304
------------------------------------------------------------------------------------------------------------------------------------
                  UTILITIES - 11.9% (7.5% OF TOTAL INVESTMENTS)
         1,000    Georgia Municipal Electric Authority, General Power Revenue         1/17 at 100.00              AA        902,430
                     Bonds, Project 1, Series 2007A, 5.000%, 1/01/25 - MBIA Insured
         1,655    Georgia Municipal Electric Authority, Project One Special             No Opt. Call              A+      1,661,140
                     Obligation Bonds, Fifth Crossover Series 1998Y, 6.400%,
                     1/01/09
           975    Georgia Municipal Electric Authority, Senior Lien General Power       No Opt. Call              A+        978,968
                     Revenue Bonds, Series 1993Z, 5.500%, 1/01/20 - FGIC Insured
         1,000    Municipal Electric Authority of Georgia, Project One                1/13 at 100.00              AA        977,420
                     Subordinated Lien Revenue Bonds, Series2003A, 5.000%, 1/01/22
                     - MBIA Insured
         1,200    Virgin Islands Water and Power Authority, Electric System           7/17 at 100.00            BBB-        954,144
                     Revenue Bonds, Series 2007B, 5.000%, 7/01/31
------------------------------------------------------------------------------------------------------------------------------------
         5,830    Total Utilities                                                                                         5,474,102
------------------------------------------------------------------------------------------------------------------------------------
                  WATER AND SEWER - 24.0% (15.2% OF TOTAL INVESTMENTS)
                  Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series
                  2004:
         1,225       5.000%, 11/01/24 - FSA Insured                                  11/14 at 100.00             AAA      1,151,855
           500       5.000%, 11/01/37 - FSA Insured                                  11/14 at 100.00             AAA        429,280
         2,490    Cherokee County Water and Sewerage Authority, Georgia, Revenue      8/18 at 100.00             AAA      2,261,792
                     Bonds, Series 2001, 5.000%,8/01/35 - FSA Insured
           335    Coweta County Water and Sewer Authority, Georgia, Revenue Bonds,    6/11 at 102.00             Aa3        335,131
                     Series 2001, 5.250%, 6/01/26
                  Coweta County Water and Sewer Authority, Georgia, Revenue Bonds,
                  Series 2007:
           500       5.000%, 6/01/32                                                  6/18 at 100.00             Aa3        461,665
           150       5.000%, 6/01/37                                                  6/18 at 100.00             Aa3        135,483
           890    Douglasville-Douglas County Water and Sewer Authority, Georgia,     6/17 at 100.00              AA        796,968
                     Water and Sewer Revenue Bonds, Series 2007, 5.000%, 6/01/37 -
                     MBIA Insured
           750    Forsyth County Water and Sewerage Authority, Georgia, Revenue       4/17 at 100.00             AAA        677,535
                     Bonds, Series 2007, 5.000%,4/01/37 - FSA Insured


20





     PRINCIPAL                                                                         OPTIONAL CALL
   AMOUNT(000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)           VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
                  WATER AND SEWER (continued)
$        1,950    Fulton County, Georgia, Water and Sewerage Revenue Bonds,           1/14 at 100.00              AA  $   1,905,969
                     Series 2004, 5.000%, 1/01/22 - FGIC Insured
         1,000    Midgeville, Georgia, Water and Sewerage Revenue Refunding             No Opt. Call             AAA      1,089,390
                     Bonds, Series 1996, 6.000%,12/01/21 - FSA Insured
         1,000    Unified Government of Athens-Clarke County, Georgia, Water and      1/19 at 100.00             AA-        944,630
                     Sewerage Revenue Bonds, Series2008, 5.500%, 1/01/38
           890    Walton County Water and Sewerage Authority, Georgia, Revenue        2/18 at 100.00             Aa3        803,003
                     Bonds, The Oconee-Hard Creek Resevoir Project, Series 2008,
                     5.000%, 2/01/38 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
        11,680    Total Water and Sewer                                                                                  10,992,701
------------------------------------------------------------------------------------------------------------------------------------
$       76,995    Total Investments (cost $78,037,457) - 158.0%                                                          72,495,122
==============----------------------------------------------------------------------------------------------------------------------
                  Other Assets Less Liabilities - 2.6%                                                                    1,176,248
                  ----------------------------------------------------------------------------------------------------------------
                  Preferred Shares, at Liquidation Value - (60.6)% (5)                                                  (27,800,000)
                  ----------------------------------------------------------------------------------------------------------------
                  Net Assets Applicable to Common Shares - 100%                                                       $  45,871,370
                  ==================================================================================================================


(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 AGC, AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and  SYNCORA as of
      November 30, 2008. Please see the Portfolio  Manager's  Commentary  for an
      expanded discussion of the affect on the Fund of changes to the ratings of
      certain bonds  in the  portfolio resulting  from changes to the ratings of
      the underlying insurers both during the period and after 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)   Preferred   Shares,   at  Liquidation  Value  as  a  percentage  of  Total
      Investments is 38.3%.

N/R   Not rated.

(ETM) Escrowed to maturity.

(IF)  Inverse floating rate investment.

                             See  accompanying   notes  to financial statements.

                                                                              21



NZX | Nuveen Georgia Dividend Advantage Municipal Fund
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  EDUCATION AND CIVIC ORGANIZATIONS - 23.8% (15.0% OF TOTAL
                  INVESTMENTS)
$        1,000    Athens Housing Authority, Georgia, Student Housing Lease Revenue   12/12 at 100.00            Aa2    $  1,010,960
                     Bonds, UGAREF East Campus Housing LLC Project, Series 2002,
                     5.250%, 12/01/21 - AMBAC Insured
         1,000    Atlanta Development Authority, Georgia, Educational Facilities      7/17 at 100.00             A1         803,450
                     Revenue Bonds, Science Park LLC Project, Series 2007, 5.000%,
                     7/01/39
         1,475    Bulloch County Development Authority, Georgia, Student Housing      8/14 at 100.00             A1       1,436,739
                     and Athletic Facility Lease Revenue Bonds, Georgia Southern
                     University, Series 2004, 5.250%, 8/01/20 - SYNCORA GTY Insured
         1,620    Bulloch County Development Authority, Georgia, Student Housing      8/12 at 100.00             A1       1,623,110
                     Lease Revenue Bonds, Georgia Southern University, Series
                     2002, 5.000%, 8/01/20 - AMBAC Insured
         1,000    Fulton County Development Authority, Georgia, Revenue Bonds,        4/12 at 100.00              A         992,000
                     Georgia Tech Athletic Association, Series 2001, 5.000%,
                     10/01/20 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
         6,095    Total Education and Civic Organizations                                                                 5,866,259
------------------------------------------------------------------------------------------------------------------------------------
                  ENERGY - 1.7% (1.0% OF TOTAL INVESTMENTS)
           650    Virgin Islands Public Finance Authority, Revenue Bonds, Refinery    1/15 at 100.00            BBB         410,612
                     Project Hovensa LLC, Series2007, 4.700%, 7/01/22 (Alternative
                     Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
                  HEALTH CARE - 23.8% (14.9% OF TOTAL INVESTMENTS)
           150    Baldwin County Hospital Authority, Georgia, Revenue Bonds,         12/09 at 100.00            BB+         137,336
                     Oconee Regional Medical Center, Series 1997, 5.250%, 12/01/12
           190    Baldwin County Hospital Authority, Georgia, Revenue Bonds,         12/08 at 102.00            BB+         128,611
                     Oconee Regional Medical Center, Series 1998, 5.375%, 12/01/28
           415    Chatham County Hospital Authority, Savannah, Georgia, Hospital      7/11 at 101.00            BBB         310,437
                     Revenue Improvement Bonds, Memorial Health University Medical
                     Center Inc., Series 2001A, 6.125%, 1/01/24
           500    Clark County Hospital Authority, Georgia, Hospital Revenue          1/17 at 100.00             AA         435,505
                     Bonds, Athens Regional Medical Center, Series 2007, 5.000%,
                     1/01/27 - MBIA Insured
         1,000    Clarke County Hospital Authority, Georgia, Hospital Revenue         1/12 at 101.00             AA         991,510
                     Certificates, Athens Regional Medical Center, Series 2002,
                     5.375%, 1/01/19 - MBIA Insured
           500    Coffee County Hospital Authority, Georgia, Revenue Bonds, Coffee   12/14 at 100.00            BBB         382,435
                     County Regional Medical Center, Series 2004, 5.250%, 12/01/22
           500    Henry County Hospital Authority, Georgia, Revenue Certificates,     7/14 at 101.00            Aa2         469,165
                     Henry Medical Center, Series2004, 5.000%, 7/01/20 - MBIA
                     Insured
           500    Houston County Hospital Authority, Georgia, Revenue Bonds,         10/17 at 100.00             A2         370,965
                     Houston Healthcare Project, Series2007, 5.250%, 10/01/35
           500    Savannah Hospital Authority, Georgia, Revenue Bonds, St.            1/14 at 100.00             A3         411,415
                     Joseph's/Candler Health System, Series 2003, 5.250%, 7/01/23
                     - RAAI Insured
         2,000    Valdosta and Lowndes County Hospital Authority, Georgia, Revenue   10/12 at 101.00             A+       1,655,679
                     Certificates, South Georgia Medical Center, Series 2002,
                     5.250%, 10/01/27 - AMBAC Insured
           750    Valdosta and Lowndes County Hospital Authority, Georgia, Revenue   10/17 at 100.00             A+         569,070
                     Certificates, South Georgia Medical Center, Series 2007,
                     5.000%, 10/01/33
------------------------------------------------------------------------------------------------------------------------------------
         7,005    Total Health Care                                                                                       5,862,128
------------------------------------------------------------------------------------------------------------------------------------


22





      PRINCIPAL                                                                        OPTIONAL CALL
   AMOUNT (000)   DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  HOUSING/MULTIFAMILY - 1.2% (0.7% OF TOTAL INVESTMENTS)
$           350   Cobb County Development Authority, Georgia, Student Housing         7/17 at 100.00            Baa1   $    294,781
                     Revenue Bonds, KSU Village II Real Estate Foundation LLC
                     Project, Series 2007A, 5.250%, 7/15/38 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
                  HOUSING/SINGLE FAMILY - 13.2% (8.3% OF TOTAL INVESTMENTS)
            650   Georgia Housing and Finance Authority, Single Family Mortgage      12/11 at 100.00             AAA        592,072
                     Bonds, Series 2002B-2, 5.350%, 12/01/22
                     (Alternative Minimum Tax)
          1,000   Georgia Housing and Finance Authority, Single Family Mortgage      12/15 at 100.00             AAA        735,200
                     Bonds, Series 2006C-2, 4.500%, 12/01/27
                     (Alternative Minimum Tax)
          2,000   Georgia Housing and Finance Authority, Single Family Mortgage      12/11 at 100.00             AAA      1,921,259
                     Resolution 1 Bonds, Series 2002A-2, 5.450%, 12/01/22
                     (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
          3,650   Total Housing/Single Family                                                                             3,248,531
------------------------------------------------------------------------------------------------------------------------------------
                  INDUSTRIALS - 6.3% (4.0% OF TOTAL INVESTMENTS)
          1,000   Cartersville Development Authority, Georgia, Waste and              2/12 at 100.00            BBB+        798,020
                     Wastewater Facilities Revenue Refunding Bonds, Anheuser Busch
                     Cos. Inc. Project, Series 2002, 5.950%, 2/01/32
                     (Alternative Minimum Tax)
            750   Savannah Economic Development Authority, Georgia, Revenue Bonds,    7/12 at 100.00              AA        759,548
                     GTREP Project, Series 2002, 5.000%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
          1,750   Total Industrials                                                                                       1,557,568
------------------------------------------------------------------------------------------------------------------------------------
                  LONG-TERM CARE - 2.2% (1.3% OF TOTAL INVESTMENTS)
            500   Fulton County Residential Care Facilities Authority, Georgia,       7/17 at 100.00             N/R        290,315
                     Revenue Bonds, Elderly Care, Lenbrook Square Project,
                     Series 2006A, 5.125%, 7/01/42
            250   Medical Center Hospital Authority, Georgia, Revenue Bonds,            No Opt. Call             N/R        238,460
                     Spring Harbor at Green Island, Series 2007, 5.000%, 7/01/11
------------------------------------------------------------------------------------------------------------------------------------
            750   Total Long-Term Care                                                                                      528,775
------------------------------------------------------------------------------------------------------------------------------------
                  MATERIALS - 1.7% (1.1% OF TOTAL INVESTMENTS)
             20   Richmond County Development Authority, Georgia, Environmental      11/13 at 100.00             BBB         12,689
                     Improvement Revenue Bonds, International Paper Company,
                     Series 2003A, 5.750%, 11/01/27 (Alternative Minimum Tax)
            600   Richmond County Development Authority, Georgia, Environmental       2/12 at 101.00             BBB        408,510
                     Improvement Revenue Refunding Bonds, International Paper
                     Company, Series 2002A, 6.000%, 2/01/25
                     (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
            620   Total Materials                                                                                           421,199
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/GENERAL - 12.6% (7.9% OF TOTAL INVESTMENTS)
            360   Cherokee County Resource Recovery Development Authority,            7/17 at 100.00              AA        283,273
                     Georgia, Solid Waste Disposal Revenue Bonds, Ball Ground
                     Recycling LLC Project, Series 2007A, 5.000%, 7/01/37 - AMBAC
                     Insured (Alternative Minimum Tax)
            200   Decatur, Georgia, General Obligation Bonds, Series 2007, 5.000%,    1/17 at 100.00             AAA        194,006
                     1/01/31 - FSA Insured
            700   Georgia State, General Obligation Bonds, Series 2007, 5.000%,       8/17 at 100.00             AAA        708,302
                     8/01/24
            500   Georgia, General Obligation Bonds, Series 2005B, 5.000%, 7/01/15      No Opt. Call             AAA        550,905
            340   Gwinnett County School District, Georgia, General Obligation        2/18 at 100.00             AAA        296,878
                     Bonds, Series 2008, Trust 2868, 11.766%, 2/01/36 (IF)
            600   Paulding County School District, Georgia, General Obligation        2/17 at 100.00             AA+        551,094
                     Bonds, Series 2007, 5.000%, 2/01/33
            595   Puerto Rico, General Obligation Bonds, Series 2004A, 5.250%,        7/14 at 100.00            BBB-        519,733
                     7/01/22
------------------------------------------------------------------------------------------------------------------------------------
          3,295   Total Tax Obligation/General                                                                            3,104,191
------------------------------------------------------------------------------------------------------------------------------------


                                                                              23



NZX | Nuveen Georgia Dividend Advantage Municipal Fund (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  TAX OBLIGATION/LIMITED - 9.1% (5.7% OF TOTAL INVESTMENTS)
$           40    Atlanta, Georgia, Tax Allocation Bonds Atlanta Station Project,    12/17 at 100.00             AAA   $     37,281
                     Series 2007, 5.000%, 12/01/23 - AGC Insured
           150    Atlanta, Georgia, Tax Allocation Bonds, Eastside Project,             No Opt. Call             N/R        132,771
                     Series 2005A, 5.625%, 1/01/16 (Alternative Minimum Tax)
                  Atlanta, Georgia, Tax Allocation Bonds, Eastside Project,
                  Series 2005B:
           250       5.400%, 1/01/20                                                  7/15 at 100.00             N/R        203,485
            75       5.600%, 1/01/30                                                  7/15 at 100.00             N/R         52,842
           250    Atlanta, Georgia, Tax Allocation Bonds, Princeton Lakes             1/16 at 100.00             N/R        172,128
                     Project, Series 2006, 5.500%, 1/01/31
         1,525    Macon-Bibb County Urban Development Authority, Georgia, Revenue     8/12 at 101.00              AA      1,638,581
                     Refunding Bonds, Public Facilities Projects, Series 2002A,
                     5.000%, 8/01/14
------------------------------------------------------------------------------------------------------------------------------------
         2,290    Total Tax Obligation/Limited                                                                            2,237,088
------------------------------------------------------------------------------------------------------------------------------------
                  TRANSPORTATION - 4.1% (2.6% OF TOTAL INVESTMENTS)
         1,000    Atlanta, Georgia, Airport General Revenue Refunding Bonds,          1/10 at 101.00              AA      1,021,110
                     Series 2000A, 5.400%, 1/01/15 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
                  U.S. GUARANTEED - 36.1% (22.7% OF TOTAL INVESTMENTS) (4)
           565    Augusta, Georgia, Water and Sewerage Revenue Bonds, Series         10/12 at 100.00             AAA        616,737
                     2002, 5.000%, 10/01/16 (Pre-refunded 10/01/12) - FSA Insured
         1,500    Coweta County Development Authority, Georgia, Revenue Bonds,        1/13 at 100.00         N/R (4)      1,654,229
                     Newnan Water and Sewer, and Light Commission Project, Series
                     2002, 5.250%, 1/01/18 (Pre-refunded 1/01/13) - FGIC Insured
         1,250    Gainesville and Hall County Hospital Authority, Georgia,            5/11 at 100.00          A- (4)      1,343,088
                     Revenue Anticipation Certificates, Northeast Georgia Health
                     Services Inc., Series 2001, 5.500%, 5/15/31 (Pre-refunded
                     5/15/11)
           730    Georgia, General Obligation Bonds, Series 2002D, 5.000%,            8/12 at 100.00             AAA        795,072
                     8/01/18 (Pre-refunded 8/01/12)  Hospital System Inc.
                     Project, Series 1997B, 5.300%, 9/01/27 (Pre-refunded
                     2/14/12) -
         1,900    Gwinnett County Hospital Authority, Georgia, Revenue                2/12 at 102.00             Aaa      2,104,819
                     Anticipation Certificates, Gwinnett MBIA Insured
         1,200    Private Colleges and Universities Authority, Georgia, Revenue      10/11 at 102.00        Baa2 (4)      1,338,360
                     Bonds, Mercer University, Series2001, 5.750%, 10/01/31
                     (Pre-refunded 10/01/11)
         1,000    Rockdale County Water and Sewerage Authority, Georgia, Revenue      1/10 at 101.00          AA (4)      1,049,330
                     Bonds, Series 1999A, 5.375%, 7/01/29 (Pre-refunded 1/01/10)
                     - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
         8,145    Total U.S. Guaranteed                                                                                   8,901,635
------------------------------------------------------------------------------------------------------------------------------------
                  UTILITIES - 2.2% (1.4% OF TOTAL INVESTMENTS)
           500    Municipal Electric Authority of Georgia, Combustion Turbine        11/13 at 100.00              AA        532,800
                     Revenue Bonds, Series 2003A, 5.250%, 11/01/15 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
                  WATER AND SEWER - 21.3% (13.4% OF TOTAL INVESTMENTS)
         1,200    Atlanta, Georgia, Water and Wastewater Revenue Bonds, Series       11/14 at 100.00             AAA      1,128,348
                     2004, 5.000%, 11/01/24 - FSA Insured
           625    Cherokee County Water and Sewerage Authority, Georgia, Revenue      8/18 at 100.00             AAA        567,719
                     Bonds, Series 2001, 5.000%, 8/01/35 - FSA Insured
           350    Coweta County Water and Sewer Authority, Georgia, Revenue           6/18 at 100.00             Aa3        316,127
                     Bonds, Series 2007, 5.000%, 6/01/37
           890    Douglasville-Douglas County Water and Sewer Authority, Georgia,     6/17 at 100.00              AA        796,968
                     Water and Sewer Revenue Bonds, Series 2007, 5.000%, 6/01/37
                     - MBIA Insured
           375    Forsyth County Water and Sewerage Authority, Georgia, Revenue       4/17 at 100.00             AAA        338,768
                     Bonds, Series 2007, 5.000%, 4/01/37 - FSA Insured


24





     PRINCIPAL                                                                        OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  WATER AND SEWER (continued)
$          500    Fulton County, Georgia, Water and Sewerage Revenue Bonds,           1/14 at 100.00              AA   $    488,710
                     Series 2004, 5.000%, 1/01/22 - FGIC Insured
         1,395    Macon Water Authority, Georgia, Water and Sewer Revenue Bonds,     10/11 at 101.00              AA      1,403,133
                     Series 2001B, 5.000%, 10/01/21
           230    Walton County Water and Sewerage Authority, Georgia, Revenue        2/18 at 100.00             Aa3        207,518
                     Bonds, The Oconee-Hard Creek Resevoir Project, Series 2008,
                     5.000%, 2/01/38 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
         5,565    Total Water and Sewer                                                                                   5,247,291
------------------------------------------------------------------------------------------------------------------------------------
$       41,665    Total Investments (cost $42,178,053) - 159.3%                                                          39,233,968
==============----------------------------------------------------------------------------------------------------------------------
                  Other Assets Less Liabilities - 1.6%                                                                      398,226
                  ------------------------------------------------------------------------------------------------------------------
                  Preferred Shares, at Liquidation Value - (60.9)% (5)                                                  (15,000,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Net Assets Applicable to Common Shares - 100%                                                        $ 24,632,194
                  ==================================================================================================================


(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 AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and SYNCORA as of
      November 30, 2008.  Please see the Portfolio  Manager's  Commentary for an
      expanded discussion of the affect on the Fund of changes to the ratings of
      certain  bonds in the portfolio  resulting  from changes to the ratings of
      the underlying insurers both during the period and after 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)   Preferred   Shares,   at  Liquidation  Value  as  a  percentage  of  Total
      Investments is 38.2%.

N/R   Not rated.

(IF)  Inverse  floating rate  investment.

                               See  accompanying  notes to financial statements.

                                                                              25



NKG | Nuveen  Georgia  Dividend  Advantage  Municipal  Fund  2
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  CONSUMER STAPLES - 2.7% (1.7% OF TOTAL INVESTMENTS)
$        2,000    Puerto Rico, The Children's Trust Fund, Tobacco Settlement          5/12 at 100.00             BBB   $  1,425,320
                     Asset-Backed Refunding Bonds, Series 2002, 5.500%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
                  EDUCATION AND CIVIC ORGANIZATIONS - 15.3% (9.5% OF TOTAL
                  INVESTMENTS)
         2,500    Athens Housing Authority, Georgia, Student Housing Lease           12/12 at 100.00             Aa2      2,274,450
                     Revenue Bonds, UGAREF East Campus Housing LLC Project,
                     Series 2002, 5.000%, 12/01/33 - AMBAC Insured
         1,225    Athens-Clarke County Unified Government Development Authority,     12/12 at 100.00               A      1,236,123
                     Georgia, Educational Facilities Revenue Bonds, UGAREF CCRC
                     Building LLC Project, Series 2002, 5.000%, 12/15/18 - AMBAC
                     Insured
         2,000    Atlanta Development Authority, Georgia, Educational Facilities      7/17 at 100.00              A1      1,606,900
                     Revenue Bonds, Science Park LLC Project, Series 2007,
                     5.000%, 7/01/39
         2,000    Fulton County Development Authority, Georgia, Revenue Bonds,       11/13 at 100.00              AA      1,940,580
                     Georgia Tech - Klaus Parking and Family Housing, Series
                     2003, 5.000%, 11/01/23 - MBIA Insured
         1,050    Fulton County Development Authority, Georgia, Revenue Bonds,        2/12 at 100.00               A        898,685
                     TUFF Morehouse Project, Series 2002A, 5.000%, 2/01/34 -
                     AMBAC Insured
           200    Gainesville Redevelopment Authority, Georgia, Educational           3/17 at 100.00             N/R        104,044
                     Facilities Revenue Bonds, Riverside Military Academy
                     Project, Series 2007, 5.125%, 3/01/37
------------------------------------------------------------------------------------------------------------------------------------
         8,975    Total Education and Civic Organizations                                                                 8,060,782
------------------------------------------------------------------------------------------------------------------------------------
                  HEALTH CARE - 23.8% (14.9% OF TOTAL INVESTMENTS)
           150    Baldwin County Hospital Authority, Georgia, Revenue Bonds,         12/09 at 100.00             BB+        137,336
                     Oconee Regional Medical Center, Series 1997, 5.250%,
                     12/01/12
                  Baldwin County Hospital Authority, Georgia, Revenue Bonds,
                  Oconee Regional Medical Center, Series 1998:
            40       5.250%, 12/01/22                                                12/08 at 102.00             BB+         29,484
           315       5.375%, 12/01/28                                                12/08 at 102.00             BB+        213,224
         1,000    Chatham County Hospital Authority, Savannah, Georgia, Hospital      1/14 at 100.00             BBB        660,480
                     Revenue Bonds, Memorial Health University Medical Center
                     Inc., Series 2004A, 5.375%, 1/01/26
                  Coffee County Hospital Authority, Georgia, Revenue Bonds,
                  Coffee County Regional Medical Center, Series 2004:
           165       5.000%, 12/01/19                                                12/14 at 100.00             BBB        133,226
         1,000       5.250%, 12/01/22                                                12/14 at 100.00             BBB        764,870
         1,000    Floyd County Hospital Authority, Georgia, Revenue Anticipation      7/12 at 101.00             Aa3        781,180
                     Certificates, Floyd Medical Center Project, Series 2002,
                     5.200%, 7/01/32 - MBIA Insured
         1,100    Houston County Hospital Authority, Georgia, Revenue Bonds,         10/17 at 100.00              A2        816,123
                     Houston Healthcare Project, Series 2007, 5.250%, 10/01/35
                  Newnan Hospital Authority, Georgia, Revenue Anticipation
                  Certificates, Newnan Hospital Inc., Series 2002:
         2,260       5.500%, 1/01/19 - MBIA Insured                                   1/13 at 100.00              A2      2,181,036
         3,020       5.500%, 1/01/20 - MBIA Insured                                   1/13 at 100.00              A2      2,830,193
         2,000    Savannah Hospital Authority, Georgia, Revenue Bonds, St.            1/14 at 100.00              A3      1,645,660
                     Joseph's/Candler Health System, Series 2003, 5.250%, 7/01/23
                     - RAAI Insured
         1,945    Tift County Hospital Authority, Georgia, Revenue Anticipation      12/12 at 101.00              A2      1,810,153
                     Bonds, Tift Regional Medical Center, Series 2002, 5.250%,
                     12/01/19 - AMBAC Insured


26





      PRINCIPAL                                                                        OPTIONAL CALL
   AMOUNT (000)   DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  HEALTH CARE (continued)
$           750   Valdosta and Lowndes County Hospital Authority, Georgia,           10/17 at 100.00              A+   $    569,070
                     Revenue Certificates, South Georgia Medical Center, Series
                     2007, 5.000%, 10/01/33
------------------------------------------------------------------------------------------------------------------------------------
         14,745   Total Health Care                                                                                      12,572,035
------------------------------------------------------------------------------------------------------------------------------------
                  HOUSING/MULTIFAMILY - 4.7% (2.9% OF TOTAL INVESTMENTS)
             25   Cobb County Development Authority, Georgia, Student Housing         7/17 at 100.00            Baa1         21,056
                     Revenue Bonds, KSU Village II Real Estate Foundation LLC
                     Project, Series 2007A, 5.250%, 7/15/38 - AMBAC Insured
                  Savannah Economic Development Authority, Georgia, GNMA
                  Collateralized Multifamily Housing Revenue Bonds, Snap
                  I-II-III Apartments, Series 2002A:
            500      5.150%, 11/20/22 (Alternative Minimum Tax)                      11/12 at 102.00             AAA        446,860
            980      5.200%, 11/20/27 (Alternative Minimum Tax)                      11/12 at 102.00             AAA        826,179
          1,465      5.250%, 11/20/32 (Alternative Minimum Tax)                      11/12 at 102.00             AAA      1,184,980
------------------------------------------------------------------------------------------------------------------------------------
          2,970   Total Housing/Multifamily                                                                               2,479,075
------------------------------------------------------------------------------------------------------------------------------------
                  HOUSING/SINGLE FAMILY - 1.0% (0.6% OF TOTAL INVESTMENTS)
            170   Georgia Housing and Finance Authority, Single Family Mortgage      12/15 at 100.00             AAA        119,425
                     Bonds, Series 2006C-2, 4.550%, 12/01/31 (Alternative
                     Minimum Tax)
            390   Georgia Housing and Finance Authority, Single Family Mortgage       6/11 at 100.00             AAA        384,992
                     Resolution 1 Bonds, Series 2001B-2, 5.400%, 12/01/31
                     (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
            560   Total Housing/Single Family                                                                               504,417
------------------------------------------------------------------------------------------------------------------------------------
                  INDUSTRIALS - 2.5% (1.5% OF TOTAL INVESTMENTS)
          2,190   Cobb County Development Authority, Georgia, Solid Waste             4/16 at 101.00             BBB      1,302,612
                     Disposal Revenue Bonds, Georgia Waste Management Project,
                     Series 2004A, 5.000%, 4/01/33 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
                  LONG-TERM CARE - 1.6% (1.0% OF TOTAL INVESTMENTS)
          1,000   Fulton County Residential Care Facilities Authority, Georgia,       7/17 at 100.00             N/R        580,630
                     Revenue Bonds, Elderly Care, Lenbrook Square Project,
                     Series 2006A, 5.125%, 7/01/42
            250   Medical Center Hospital Authority, Georgia, Revenue Bonds,            No Opt. Call             N/R        238,460
                     Spring Harbor at Green Island, Series 2007, 5.000%, 7/01/11
------------------------------------------------------------------------------------------------------------------------------------
          1,250   Total Long-Term Care                                                                                      819,090
------------------------------------------------------------------------------------------------------------------------------------
                  MATERIALS - 2.3% (1.4% OF TOTAL INVESTMENTS)
          1,000   Richmond County Development Authority, Georgia, Environmental       2/11 at 101.00             BBB        700,660
                     Improvement Revenue Bonds, International Paper Company,
                     Series 2001A, 6.250%, 2/01/25 (Alternative Minimum Tax)
            250   Richmond County Development Authority, Georgia, Environmental       2/12 at 101.00             BBB        170,213
                     Improvement Revenue Refunding Bonds, International Paper
                     Company, Series 2002A, 6.000%, 2/01/25 (Alternative Minimum
                     Tax)
            370   Savannah Economic Development Authority, Georgia, Pollution           No Opt. Call            Baa3        321,127
                     Control Revenue Bonds, Union Camp Corporation, Series 1995,
                     6.150%, 3/01/17
------------------------------------------------------------------------------------------------------------------------------------
          1,620   Total Materials                                                                                         1,192,000
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/GENERAL - 21.7% (13.6% OF TOTAL INVESTMENTS)
            600   Cherokee County Resource Recovery Development Authority,            7/17 at 100.00              AA        472,122
                     Georgia, Solid Waste Disposal Revenue Bonds, Ball Ground
                     Recycling LLC Project, Series 2007A, 5.000%, 7/01/37 -
                     AMBAC Insured (Alternative Minimum Tax)
            900   Decatur, Georgia, General Obligation Bonds, Series 2007,            1/17 at 100.00             AAA        873,027
                     5.000%, 1/01/31 - FSA Insured
          1,000   Forsyth County, Georgia, General Obligation Bonds, Series           3/14 at 101.00             AA+      1,046,550
                     2004, 5.250%, 3/01/19
          1,700   Georgia State, General Obligation Bonds, Series 2007, 5.000%,       8/17 at 100.00             AAA      1,720,162
                     8/01/24
            750   Georgia, General Obligation Bonds, Series 1998D, 5.250%,              No Opt. Call             AAA        838,148
                     10/01/15
          1,000   Georgia, General Obligation Bonds, Series 2005B, 5.000%,              No Opt. Call             AAA      1,101,810
                     7/01/15
            705   Gwinnett County School District, Georgia, General Obligation        2/18 at 100.00             AAA        615,585
                     Bonds, Series 2008, Trust 2868, 11.766%, 2/01/36 (IF)


                                                                              27



NKG | Nuveen Georgia Dividend Advantage Municipal Fund 2 (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  TAX OBLIGATION/GENERAL (continued)
                  Oconee County, Georgia, General Obligation Bonds, Recreation
                  Project, Series 2003:
$        1,410       5.500%, 1/01/23 - AMBAC Insured                                  1/13 at 101.00             Aa3   $  1,436,198
         1,470       5.250%, 1/01/26 - AMBAC Insured                                  1/13 at 101.00             Aa3      1,426,370
         1,200    Paulding County School District, Georgia, General Obligation        2/17 at 100.00             AA+      1,102,188
                     Bonds, Series 2007, 5.000%, 2/01/33
         1,000    Wayne County Hospital Authority, Georgia, Hospital Revenue          3/16 at 100.00             N/R        839,230
                     Bonds, Series 2006, 5.000%, 3/01/23 - SYNCORA GTY Insured
------------------------------------------------------------------------------------------------------------------------------------
        11,735    Total Tax Obligation/General                                                                           11,471,390
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/LIMITED - 21.7% (13.6% OF TOTAL INVESTMENTS)
           120    Atlanta, Georgia, Tax Allocation Bonds Atlanta Station Project,    12/17 at 100.00             AAA        111,842
                     Series 2007, 5.000%, 12/01/23 - AGC Insured
           150    Atlanta, Georgia, Tax Allocation Bonds, Eastside Project,             No Opt. Call             N/R        132,771
                     Series 2005A, 5.625%, 1/01/16 (Alternative Minimum Tax)
                  Atlanta, Georgia, Tax Allocation Bonds, Eastside Project,
                  Series 2005B:
           250       5.400%, 1/01/20                                                  7/15 at 100.00             N/R        203,485
           350       5.600%, 1/01/30                                                  7/15 at 100.00             N/R        246,596
           395    Atlanta, Georgia, Tax Allocation Bonds, Princeton Lakes             1/16 at 100.00             N/R        271,961
                     Project, Series 2006, 5.500%, 1/01/31
           750    Georgia Municipal Association Inc., Certificates of                 6/12 at 101.00               A        698,753
                     Participation, Atlanta Court Project, Series 2002, 5.125%,
                     12/01/21 - AMBAC Insured
         2,500    Metropolitan Atlanta Rapid Transit Authority, Georgia, Sales          No Opt. Call             Aa3      2,792,125
                     Tax Revenue Refunding Bonds, Series 1992P, 6.250%, 7/01/20 -
                     AMBAC Insured
           500    Puerto Rico Infrastructure Financing Authority, Special Tax         7/15 at 100.00            BBB-        350,240
                     Revenue Bonds, Series 2005B, 5.000%, 7/01/41
         2,500    Puerto Rico Municipal Finance Agency, Series 2002A, 5.000%,         8/12 at 100.00             AAA      2,205,900
                     8/01/27 - FSA Insured
         5,000    Puerto Rico Public Buildings Authority, Guaranteed Government         No Opt. Call            BBB-      4,442,196
                     Facilities Revenue Refunding Bonds, Series 2002F, 5.250%,
                     7/01/21 - CIFG Insured
------------------------------------------------------------------------------------------------------------------------------------
        12,515    Total Tax Obligation/Limited                                                                           11,455,869
------------------------------------------------------------------------------------------------------------------------------------
                  TRANSPORTATION - 6.9% (4.3% OF TOTAL INVESTMENTS)
         3,650    Atlanta, Georgia, Airport General Revenue Refunding Bonds,          1/10 at 101.00              AA      3,653,906
                     Series 2000A, 5.500%, 1/01/21 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
                  U.S. GUARANTEED - 16.7% (10.4% OF TOTAL INVESTMENTS) (4)
         1,000    Augusta, Georgia, Water and Sewerage Revenue Bonds, Series         10/12 at 100.00             AAA      1,100,680
                     2002, 5.250%, 10/01/22 (Pre-refunded 10/01/12) - FSA Insured
         1,000    Cherokee County School System, Georgia, General Obligation          8/13 at 100.00         AA+ (4)      1,102,420
                     Bonds, Series 2003, 5.000%, 8/01/16 (Pre-refunded 8/01/13) -
                     MBIA Insured
                  DeKalb County, Georgia, Water and Sewerage Revenue Bonds,
                  Series 2000:
         1,000       5.125%, 10/01/31 (Pre-refunded 10/01/10) - MBIA Insured         10/10 at 101.00             AAA      1,069,900
         1,400       5.375%, 10/01/35 (Pre-refunded 10/01/10)                        10/10 at 101.00             AAA      1,504,174
         1,300    Fairburn, Georgia, Combined Utility Revenue Bonds, Series 2000,    10/10 at 101.00          A- (4)      1,404,780
                     5.750%, 10/01/20 (Pre-refunded 10/01/10)
         1,305    Gainesville and Hall County Hospital Authority, Georgia,            5/11 at 100.00          A- (4)      1,402,183
                     Revenue Anticipation Certificates, Northeast Georgia Health
                     Services Inc., Series 2001, 5.500%, 5/15/31 (Pre-refunded
                     5/15/11)
         1,100    Private Colleges and Universities Authority, Georgia, Revenue      10/11 at 102.00        Baa2 (4)      1,226,830
                     Bonds, Mercer University, Series 2001, 5.750%, 10/01/31
                     (Pre-refunded 10/01/11)
------------------------------------------------------------------------------------------------------------------------------------
         8,105    Total U.S. Guaranteed                                                                                   8,810,967
------------------------------------------------------------------------------------------------------------------------------------
                  UTILITIES - 5.4% (3.4% OF TOTAL INVESTMENTS)
         1,000    Elberton, Georgia, Combined Utility System Revenue Refunding        1/12 at 100.00              A3        995,210
                     and Improvement Bonds, Series 2001, 5.000%, 1/01/22 - AMBAC
                     Insured


28





      PRINCIPAL                                                                        OPTIONAL CALL
   AMOUNT (000)   DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          
                  UTILITIES (continued)
$         1,000   Georgia Municipal Electric Authority, General Power Revenue         1/17 at 100.00              AA   $    902,430
                     Bonds, Project 1, Series 2007A, 5.000%, 1/01/25 - MBIA
                     Insured
          1,000   Municipal Electric Authority of Georgia, Project One                1/13 at 100.00              AA        977,420
                     Subordinated Lien Revenue Bonds, Series 2003A, 5.000%,
                     1/01/22 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
          3,000   Total Utilities                                                                                         2,875,060
------------------------------------------------------------------------------------------------------------------------------------
                  WATER AND SEWER - 34.0% (21.2% OF TOTAL INVESTMENTS) Atlanta,
                  Georgia, Water and Wastewater Revenue Bonds, Series 2004:
            500      5.250%, 11/01/15 - FSA Insured                                  11/14 at 100.00             AAA        530,390
          1,700      5.000%, 11/01/37 - FSA Insured                                  11/14 at 100.00             AAA      1,459,552
          3,500   Augusta, Georgia, Water and Sewerage Revenue Bonds, Series         10/12 at 100.00             AAA      3,253,355
                     2002, 5.000%, 10/01/27 - FSA Insured
          1,990   Cherokee County Water and Sewerage Authority, Georgia, Revenue      8/18 at 100.00             AAA      1,807,617
                     Bonds, Series 2001, 5.000%, 8/01/35 - FSA Insured
                  Coweta County Water and Sewer Authority, Georgia, Revenue
                  Bonds, Series 2007:
            500      5.000%, 6/01/32                                                  6/18 at 100.00             Aa3        461,665
            500      5.000%, 6/01/37                                                  6/18 at 100.00             Aa3        451,610
          1,000   Douglasville-Douglas County Water and Sewer Authority, Georgia,    12/15 at 100.00              AA        935,460
                     Water and Sewer Revenue Bonds, Series 2005, 5.000%, 6/01/29
                     - MBIA Insured
            445   Douglasville-Douglas County Water and Sewer Authority, Georgia,     6/17 at 100.00              AA        398,484
                     Water and Sewer Revenue Bonds, Series 2007, 5.000%, 6/01/37
                     - MBIA Insured
          4,000   Forsyth County Water and Sewerage Authority, Georgia, Revenue       4/13 at 100.00             AA+      3,753,560
                     Bonds, Series 2002, 5.000%, 4/01/32
            375   Forsyth County Water and Sewerage Authority, Georgia, Revenue       4/17 at 100.00             AAA        338,768
                     Bonds, Series 2007, 5.000%, 4/01/37 - FSA Insured
            950   Fulton County, Georgia, Water and Sewerage Revenue Bonds,           1/09 at 101.00              AA        961,258
                     Series 1998, 5.000%, 1/01/16 - FGIC Insured
          3,100   Harris County, Georgia, Water System Revenue Bonds, Series         12/12 at 100.00            Baa1      2,967,475
                     2002, 5.000%, 12/01/22 - AMBAC Insured
            685   Walton County Water and Sewerage Authority, Georgia, Revenue        2/18 at 100.00             Aa3        618,041
                     Bonds, The Oconee-Hard Creek Resevoir Project, Series 2008,
                     5.000%, 2/01/38 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
         19,245   Total Water and Sewer                                                                                  17,937,235
------------------------------------------------------------------------------------------------------------------------------------
 $       92,560   Total Investments (cost $94,459,130) - 160.3%                                                          84,559,758
===============---------------------------------------------------------------------------------------------------------------------
                  Other Assets Less Liabilities - 2.3%                                                                    1,186,793
                  ------------------------------------------------------------------------------------------------------------------
                  Preferred Shares, at Liquidation Value - (62.6)% (5)                                                  (33,000,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Net Assets Applicable to Common Shares - 100%                                                        $ 52,746,551
                  ==================================================================================================================


(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 AGC, AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and  SYNCORA as of
      November 30, 2008. Please see the Portfolio  Manager's  Commentary  for an
      expanded discussion of the affect on the Fund of changes to the ratings of
      certain  bonds  in  the portfolio resulting from changes to the ratings of
      the underlying insurers both during the period and after 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)   Preferred   Shares,   at  Liquidation  Value  as  a  percentage  of  Total
      Investments is 39.0%.

N/R   Not rated.

(IF)  Inverse floating rate investment.

                                 See accompanying notes to financial statements.

                                                                              29



NNC | Nuveen North Carolina Premium Income Municipal Fund
    | Portfolio of INVESTMENTS
                                                   November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  EDUCATION AND CIVIC ORGANIZATIONS - 24.1% (15.0% OF TOTAL
                     INVESTMENTS)
$        2,500    North Carolina Capital Facilities Financing Agency, Revenue        10/15 at 100.00             AA+   $  2,339,550
                     Bonds, Duke University, Series 2005A, 5.000%, 10/01/41
           970    North Carolina Capital Facilities Financing Agency, Revenue         4/13 at 100.00             N/R        868,334
                     Bonds, Johnson and Wales University, Series 2003A, 5.250%,
                     4/01/23 - SYNCORA GTY Insured
         2,285    North Carolina State University at Raleigh, General Revenue        10/13 at 100.00              AA      2,415,474
                     Bonds, Series 2003A, 5.000%, 10/01/15
         1,530    University of North Carolina System, Pooled Revenue Bonds,            No Opt. Call              AA      1,616,629
                     Series 2005A, 5.000%, 4/01/15 - AMBAC Insured
           580    University of North Carolina System, Pooled Revenue Refunding      10/12 at 100.00              AA        581,850
                     Bonds, Series 2002A, 5.375%, 4/01/22 - AMBAC Insured
                  University of North Carolina Wilmington, Certificates of
                  Participation, Student Housing Project Revenue Bonds,
                  Series 2006:
         1,430       5.000%, 6/01/23 - FGIC Insured                                   6/16 at 100.00              AA      1,275,531
         1,505       5.000%, 6/01/24 - FGIC Insured                                   6/16 at 100.00              AA      1,326,025
                  University of North Carolina, Chapel Hill, System Net
                  Revenue Bonds, Series 2003:
         2,380       5.000%, 12/01/19                                                12/13 at 100.00             AA+      2,447,854
         2,725       5.000%, 12/01/21                                                12/13 at 100.00             AA+      2,735,764
         1,500       5.000%, 12/01/23                                                12/13 at 100.00             AA+      1,495,290
         1,675    University of North Carolina, Wilmington, General Revenue           1/12 at 101.00              A2      1,620,630
                     Bonds, Series 2002A, 5.000%, 1/01/23 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
        19,080    Total Education and Civic Organizations                                                                18,722,931
------------------------------------------------------------------------------------------------------------------------------------
                  ENERGY - 1.4% (0.9% OF TOTAL INVESTMENTS)
         1,500    Virgin Islands Public Finance Authority, Revenue Bonds,             1/14 at 100.00             BBB      1,117,410
                     Refinery Project - Hovensa LLC, Series 2003, 6.125%,
                     7/01/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
                  HEALTH CARE - 21.8% (13.6% OF TOTAL INVESTMENTS)
         1,145    Albemarle Hospital Authority, North Carolina, Health Care          10/17 at 100.00             N/R        851,353
                     Facilities Revenue Bonds, Series 2007, 5.250%, 10/01/27
         1,000    Johnston Memorial Hospital Authority, North Carolina, Mortgage      4/18 at 100.00             AAA        860,550
                     Revenue Bonds, Johnston
                  Memorial Hospital Project, Series 2008, 5.250%, 10/01/36 - FSA
                  Insured
         2,000    North Carolina Medical Care Commission, Healthcare Facilities      11/13 at 100.00             Aa3      1,923,840
                     Revenue Bonds, Novant Health Obligated Group, Series 2003A,
                     5.000%, 11/01/19
         2,000    North Carolina Medical Care Commission, Healthcare Facilities      10/09 at 101.00            BBB+      1,806,160
                     Revenue Bonds, Stanly Memorial Hospital, Series 1999,
                     6.375%, 10/01/29
                  North Carolina Medical Care Commission, Healthcare Facilities
                  Revenue Bonds, Union Regional Medical Center, Series 2002A:
         1,000       5.500%, 1/01/19                                                  1/12 at 100.00               A        970,210
           550       5.500%, 1/01/20                                                  1/12 at 100.00               A        521,312
         1,750       5.375%, 1/01/32                                                  1/12 at 100.00               A      1,425,725
         3,000    North Carolina Medical Care Commission, Hospital Revenue            6/12 at 101.00               A      2,345,760
                     Bonds, Southeastern Regional Medical Center, Series 2002,
                     5.375%, 6/01/32
         1,500    North Carolina Medical Care Commission, Hospital Revenue           11/17 at 100.00              A-      1,111,230
                     Bonds, Wilson Medical Center, Series 2007, 5.000%, 11/01/27


30





     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  HEALTH CARE (continued)
$        1,645    North Carolina Medical Care Commission, Revenue Bonds, Blue         1/15 at 100.00              AA   $  1,229,934
                     Ridge Healthcare System, Series 2005, 5.000%, 1/01/33 - FGIC
                     Insured
                  North Carolina Medical Care Commission, Revenue Bonds,
                  Cleveland County Healthcare System, Series 2004A:
           600       5.250%, 7/01/20 - AMBAC Insured                                  7/14 at 100.00               A        545,010
           500       5.250%, 7/01/22 - AMBAC Insured                                  7/14 at 100.00               A        439,395
           300    Northern Hospital District of Surry County, North Carolina,         4/18 at 100.00             BBB        246,570
                     Health Care Facilities Revenue Bonds, Series 2008, 6.250%,
                     10/01/38
           685    Onslow County Hospital Authority, North Carolina, FHA Insured      10/16 at 100.00              AA        486,042
                     Mortgage Revenue Bonds, Onslow Memorial Hospital Project,
                     Series 2006, 5.000%, 4/01/31 - MBIA Insured
         2,800    The Charlotte-Mecklenberg Hospital Authority (North Carolina),      1/18 at 100.00             AA-      2,193,296
                     Doing Business as Carolinas HealthCare System, Health
                     Care Refunding Revenue Bonds, Series 2008A, 5.000%, 1/15/47
------------------------------------------------------------------------------------------------------------------------------------
        20,475    Total Health Care                                                                                      16,956,387
------------------------------------------------------------------------------------------------------------------------------------
                  HOUSING/MULTIFAMILY - 4.6% (2.9% OF TOTAL INVESTMENTS)
         1,000    Asheville Housing Authority, North Carolina,                        5/09 at 101.00              A-        842,310
                     GNMA-Collateralized Multifamily Housing Revenue Bonds,
                     Woodridge Apartments, Series 1997, 5.800%, 11/20/39
                     (Alternative Minimum Tax)
         2,290    Mecklenburg County, North Carolina, FNMA Multifamily Housing        7/13 at 105.00             AAA      1,838,320
                     Revenue Bonds, Little Rock Apartments, Series 2003, 5.375%,
                     1/01/36 (Alternative Minimum Tax)
         1,000    North Carolina Capital Facilities Financing Agency, Housing         6/13 at 100.00               A        904,030
                     Revenue Bonds, Elizabeth City State University, Series
                     2003A, 5.000%, 6/01/28 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
         4,290    Total Housing/Multifamily                                                                               3,584,660
------------------------------------------------------------------------------------------------------------------------------------
                  HOUSING/SINGLE FAMILY - 7.7% (4.8% OF TOTAL INVESTMENTS)
         1,065    North Carolina Housing Finance Agency, Home Ownership Revenue       7/10 at 100.00              AA        883,354
                     Bonds, 1998 Trust Agreement, Series 10A, 5.400%, 7/01/32 -
                     AMBAC Insured (Alternative Minimum Tax)
         2,665    North Carolina Housing Finance Agency, Home Ownership Revenue       7/09 at 100.00              AA      2,491,002
                     Bonds, 1998 Trust Agreement, Series 6A, 6.200%, 1/01/29
                     (Alternative Minimum Tax)
         1,000    North Carolina Housing Finance Agency, Home Ownership Revenue       1/17 at 100.00              AA        729,860
                     Bonds, Series 2007-29A, 4.800%, 7/01/33 (Alternative Minimum
                     Tax)
           835    North Carolina Housing Finance Agency, Home Ownership Revenue       7/16 at 100.00              AA        602,494
                     Bonds, Series 25-A, 4.900%, 7/01/37 (Alternative Minimum Tax)
         1,265    North Carolina Housing Finance Agency, Single Family Revenue        3/09 at 100.00              AA      1,289,452
                     Bonds, Series 1996HH, 6.300%, 3/01/26 (Alternative Minimum
                     Tax)
------------------------------------------------------------------------------------------------------------------------------------
         6,830    Total Housing/Single Family                                                                             5,996,162
------------------------------------------------------------------------------------------------------------------------------------
                  LONG-TERM CARE - 0.3% (0.2% OF TOTAL INVESTMENTS)
           375    North Carolina Medical Care Commission, Revenue Bonds, Pines at     1/16 at 100.00             N/R        266,816
                     Davidson, Series 2006A, 5.000%, 1/01/36
------------------------------------------------------------------------------------------------------------------------------------
                  MATERIALS - 1.0% (0.6% OF TOTAL INVESTMENTS)
         1,425    Gaston County Industrial Facilities and Pollution Control           8/15 at 100.00             N/R        778,378
                     Financing Authority, North Carolina, National Gypsum Company
                     Project Exempt Facilities Revenue Bonds, Series 2005, 5.750%,
                     8/01/35 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/GENERAL - 11.3% (7.0% OF TOTAL INVESTMENTS)
         1,890    Craven County, North Carolina, General Obligation Bonds, Series     5/12 at 101.00              A1      1,870,968
                     2002, 5.000%, 5/01/21 - AMBAC Insured
         4,285    Durham County, North Carolina, General Obligation Bonds, Series     4/12 at 100.00             AAA      4,497,319
                     2002B, 5.000%, 4/01/16
         1,820    Durham, North Carolina, General Obligation Bonds, Series 2007,      4/17 at 100.00             AAA      1,877,494
                     5.000%, 4/01/21
           500    North Carolina, General Obligation Bonds, Series 2004A, 5.000%,     3/14 at 100.00             AAA        508,440
                     3/01/22
------------------------------------------------------------------------------------------------------------------------------------
         8,495    Total Tax Obligation/General                                                                            8,754,221
------------------------------------------------------------------------------------------------------------------------------------


                                                                              31



NNC | Nuveen North Carolina Premium Income Municipal Fund (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  TAX OBLIGATION/LIMITED - 40.9% (25.6% OF TOTAL INVESTMENTS)
$        1,330    Cabarrus County, North Carolina, Certificates of                    2/13 at 100.00              AA   $  1,368,770
                     Participation, Series 2002, 5.250%, 2/01/17
         1,800    Catawba County, North Carolina, Certificates of Participation,      6/14 at 100.00             Aa3      1,791,990
                     Series 2004, 5.250%, 6/01/21 - MBIA Insured
         1,700    Charlotte, North Carolina, Certificates of Participation,           6/13 at 100.00             AA+      1,708,415
                     Governmental Facilities Projects, Series 2003G, 5.375%,
                     6/01/26
           950    Charlotte, North Carolina, Certificates of Participation,           6/18 at 100.00             AA+        870,951
                     Transit Projects Phase 2, Series 2008A, 5.000%, 6/01/33
         1,500    Charlotte, North Carolina, Certificates of Participation,           6/13 at 100.00             AA+      1,375,185
                     Transit Projects, Series 2003A, 5.000%, 6/01/33
                  Charlotte, North Carolina, Storm Water Fee Revenue Bonds,
                  Series 2002:
         1,050       5.250%, 6/01/20                                                  6/12 at 101.00             AAA      1,080,513
         1,750       5.000%, 6/01/25                                                  6/12 at 101.00             AAA      1,738,328
         1,400    Craven County, North Carolina, Certificates of Participation,       6/17 at 100.00              AA      1,278,354
                     Series 2007, 5.000%, 6/01/27 - MBIA Insured
         1,000    Davidson County, North Carolina, Certificates of                      No Opt. Call              A1      1,046,850
                     Participation, Series 2004, 5.250%, 6/01/14 - AMBAC Insured
                  Lee County, North Carolina, Certificates of Participation,
                  Public Schools and Community College, Series 2004:
         1,715       5.250%, 4/01/18 - FSA Insured                                    4/14 at 100.00             AAA      1,791,918
           500       5.250%, 4/01/20 - FSA Insured                                    4/14 at 100.00             AAA        512,230
         1,000       5.250%, 4/01/22 - FSA Insured                                    4/14 at 100.00             AAA      1,011,290
         2,600    North Carolina Infrastructure Finance Corporation,
                     Certificates of Participation, Capital Improvements, Series      2/15 at 100.00             AA+      2,668,120
                     2005A, 5.000%, 2/01/19
         1,500    North Carolina Infrastructure Finance Corporation,
                     Certificates of Participation, Correctional Facilities,          2/14 at 100.00             AA+      1,489,215
                     Series 2004A, 5.000%, 2/01/23
         1,500    North Carolina, Certificates of Participation, Repair and           6/14 at 100.00             AA+      1,512,555
                     Renovation Project, Series 2004B, 5.000%, 6/01/20
                  North Carolina, Certificates of Participation, Series 2003:
         1,130       5.250%, 6/01/21                                                  6/13 at 100.00             AA+      1,142,407
         1,000       5.250%, 6/01/23                                                  6/13 at 100.00             AA+      1,003,410
         2,000    Puerto Rico Highway and Transportation Authority, Grant             3/14 at 100.00              AA      1,716,540
                     Anticipation Revenue Bonds, Series 2004, 5.000%, 9/15/21 -
                     MBIA Insured
         1,000    Puerto Rico Public Buildings Authority, Guaranteed Government         No Opt. Call            BBB-        972,560
                     Facilities Revenue Bonds, Series 2003H, 5.250%, 7/01/15 -
                     FGIC Insured
           285    Raleigh, North Carolina, Certificates of Participation, Series      2/17 at 100.00             AA+        274,438
                     2007, 5.000%, 2/01/27
         1,000    Randolph County, North Carolina, Certificates of                    6/14 at 102.00             AAA      1,010,910
                     Participation, Series 2004, 5.000%, 6/01/20 - FSA Insured
         1,000    Rutherford County, North Carolina, Certificates of                 12/17 at 100.00             AAA        942,620
                     Participation, Series 2007, 5.000%, 12/01/27 - FSA Insured
         1,950    Sampson County, North Carolina, Certificates of Participation,      6/17 at 100.00             AAA      1,742,208
                     Series 2006, 5.000%, 6/01/34 - FSA Insured (UB)
         1,200    Wilmington, North Carolina, Certificates of Participation,          6/18 at 100.00              AA      1,128,156
                     Series 2008A, 5.000%, 6/01/29
           700    Wilson County, North Carolina, Certificates of Participation,       4/17 at 100.00              AA        627,676
                     School Facilities Project, Series 2007, 5.000%, 4/01/25 -
                     AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
        32,560    Total Tax Obligation/Limited                                                                           31,805,609
------------------------------------------------------------------------------------------------------------------------------------


32





     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  TRANSPORTATION - 7.3% (4.6% OF TOTAL INVESTMENTS)
                  Charlotte, North Carolina, Airport Revenue Bonds, Series 2004A:
$          600       5.250%, 7/01/24 - MBIA Insured                                   7/14 at 100.00              AA   $    604,302
         2,710       5.000%, 7/01/29 - MBIA Insured                                   7/14 at 100.00              AA      2,314,882
           500    Piedmont Triad Airport Authority, North Carolina, Airport           7/15 at 100.00              A2        475,260
                     Revenue Bonds, Series 2005A, 5.000%, 7/01/20 - SYNCORA GTY
                     Insured
         2,250    Raleigh Durham Airport Authority, North Carolina, Airport           5/11 at 101.00             Aa3      2,279,475
                     Revenue Bonds, Series 2001A, 5.250%, 11/01/16 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
         6,060    Total Transportation                                                                                    5,673,919
------------------------------------------------------------------------------------------------------------------------------------
                  U.S. GUARANTEED - 15.8% (9.9% OF TOTAL INVESTMENTS) (4)
           750    Johnston County Finance Corporation, North Carolina,                8/09 at 101.00             AAA        778,545
                     Installment Payment Revenue Bonds, School and Museum
                     Projects, Series 1999, 5.250%, 8/01/21 (Pre-refunded
                     8/01/09) - FSA Insured
         1,530    North Carolina Medical Care Commission, Health System Revenue      10/11 at 101.00          AA (4)      1,673,759
                     Bonds, Mission St. Joseph's Health System, Series 2001,
                     5.250%, 10/01/31 (Pre-refunded 10/01/11)
           735    North Carolina Medical Care Commission, Revenue Bonds,             11/14 at 100.00          AA (4)        816,431
                     Northeast Medical Center, Series 2004, 5.000%, 11/01/24
                     (Pre-refunded 11/01/14)
           810    North Carolina Municipal Power Agency 1, Catawba Electric             No Opt. Call             AAA        852,841
                     Revenue Bonds, Series 1980, 10.500%, 1/01/10 (ETM)
         4,260    North Carolina Municipal Power Agency 1, Catawba Electric             No Opt. Call             AAA      4,465,843
                     Revenue Bonds, Series 1986, 5.000%, 1/01/20 (ETM)
         1,000    North Carolina, General Obligation Bonds, Series 2000A,             9/10 at 102.00             AAA      1,077,090
                     5.100%, 9/01/16 (Pre-refunded 9/01/10)
           420    University of North Carolina System, Pooled Revenue Refunding      10/12 at 100.00        Baa1 (4)        464,197
                     Bonds, Series 2002A, 5.375%, 4/01/22 (Pre-refunded
                     10/01/12) - AMBAC Insured
         2,000    Winston-Salem, North Carolina, Water and Sewerage System            6/12 at 100.00             AAA      2,171,920
                     Revenue Bonds, Series 2002A, 5.000%, 6/01/18 (Pre-refunded
                     6/01/12)
------------------------------------------------------------------------------------------------------------------------------------
        11,505    Total U.S. Guaranteed                                                                                  12,300,626
------------------------------------------------------------------------------------------------------------------------------------
                  UTILITIES - 14.4% (9.0% OF TOTAL INVESTMENTS)
         3,000    North Carolina Eastern Municipal Power Agency, Power System         1/13 at 100.00            BBB+      3,078,720
                     Revenue Bonds, Series 2003F, 5.500%, 1/01/15
         1,000    North Carolina Eastern Municipal Power Agency, Power System         1/16 at 100.00               A        960,540
                     Revenue Bonds, Series 2005, 5.250%, 1/01/20 - AMBAC Insured
         4,000    North Carolina Municipal Power Agency 1, Catawba Electric           1/10 at 101.00              A2      4,077,760
                     Revenue Bonds, Series 1999B, 6.500%, 1/01/20
         2,000    North Carolina Municipal Power Agency 1, Catawba Electric           1/13 at 100.00               A      2,062,940
                     Revenue Bonds, Series 2003A, 5.250%, 1/01/15 - AMBAC Insured
         1,000    Wake County Industrial Facilities and Pollution Control             2/12 at 101.00              A2      1,002,470
                     Financing Authority, North Carolina, Revenue Refunding
                     Bonds, Carolina Power and Light Company, Series 2002,
                     5.375%, 2/01/17
------------------------------------------------------------------------------------------------------------------------------------
        11,000    Total Utilities                                                                                        11,182,430
------------------------------------------------------------------------------------------------------------------------------------
                  WATER AND SEWER - 9.5% (5.9% OF TOTAL INVESTMENTS)
         1,605    Broad River Water Authority, North Carolina, Water System           6/15 at 100.00            Baa2      1,477,852
                     Revenue Bonds, Series 2005, 5.000%, 6/01/20 - SYNCORA GTY
                     Insured
           500    Brunswick County, North Carolina, Enterprise System Revenue         4/18 at 100.00             AAA        464,395
                     Bonds, Series 2008A, 5.000%, 4/01/31 - FSA Insured
            50    Charlotte, North Carolina, Water and Sewerage System Revenue        6/11 at 101.00             AAA         50,199
                     Bonds, Series 2001, 5.125%, 6/01/26


                                                                              33



NNC | Nuveen North Carolina Premium Income Municipal Fund (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



      PRINCIPAL                                                                        OPTIONAL CALL
   AMOUNT (000)   DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  WATER AND SEWER (continued)
$         1,295   Greensboro, North Carolina, Combined Enterprise System              6/15 at 100.00             AAA   $  1,294,987
                     Revenue Bonds, Series 2005A, 5.000%, 6/01/26
            500   Onslow County, North Carolina, Combined Enterprise System           6/14 at 100.00               A        463,900
                     Revenue Bonds, Series 2004B, 5.000%, 6/01/23 - SYNCORA GTY
                     Insured
          3,865   Winston-Salem, North Carolina, Water and Sewer System Revenue       6/17 at 100.00             AAA      3,630,781
                     Bonds, Series 2007A, 5.000%, 6/01/37 (UB)
------------------------------------------------------------------------------------------------------------------------------------
          7,815   Total Water and Sewer                                                                                   7,382,114
------------------------------------------------------------------------------------------------------------------------------------
$       131,410   Total Investments (cost $134,248,091) - 160.1%                                                        124,521,663
===============---------------------------------------------------------------------------------------------------------------------
                  Floating Rate Obligations - (4.6)%                                                                     (3,545,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Other Assets Less Liabilities - 4.7%                                                                    3,602,941
                  ------------------------------------------------------------------------------------------------------------------
                  Preferred Shares, at Liquidation Value - (60.2)% (5)                                                  (46,800,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Net Assets Applicable to Common Shares - 100%                                                        $ 77,779,604
                  ==================================================================================================================


(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 AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and SYNCORA as of
      November 30, 2008.  Please see the Portfolio  Manager's  Commentary for an
      expanded discussion of the affect on the Fund of changes to the ratings of
      certain  bonds in the portfolio  resulting  from changes to the ratings of
      the underlying insurers both during the period and after 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)   Preferred   Shares,   at  Liquidation  Value  as  a  percentage  of  Total
      Investments is 37.6%.

N/R   Not rated.

(ETM) Escrowed to maturity.

(UB)  Underlying bond of an inverse floating rate trust reflected as a financing
      transaction pursuant to the provisions of SFAS No. 140.

                                 See accompanying notes to financial statements.

34



NRB | Nuveen North Carolina Dividend Advantage Municipal Fund
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



      PRINCIPAL                                                                        OPTIONAL CALL
   AMOUNT (000)   DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)         VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  EDUCATION AND CIVIC ORGANIZATIONS - 17.3% (9.8% OF TOTAL
                     INVESTMENTS)
$           380   North Carolina Capital Facilities Financing Agency, Revenue        10/11 at 100.00            AA+    $   371,503
                     Bonds, Duke University, Series 2001A, 5.125%, 10/01/26
            500   North Carolina Capital Facilities Financing Agency, Revenue         9/11 at 101.00           Baa2        432,695
                     Bonds, High Point University, Series 2001, 5.125%, 9/01/18
          1,430   University of North Carolina System, Pooled Revenue Refunding      10/12 at 100.00             AA      1,512,339
                     Bonds, Series 2002A, 5.375%, 4/01/17 - AMBAC Insured
          1,750   University of North Carolina, Chapel Hill, System Net Revenue       6/11 at 100.00            AA+      1,724,379
                     Bonds, Series 2001A, 5.000%, 12/01/25 - MBIA Insured
          1,000   University of North Carolina, Chapel Hill, System Net Revenue         No Opt. Call            AA+      1,075,020
                     Bonds, Series 2002B, 5.000%, 12/01/11
------------------------------------------------------------------------------------------------------------------------------------
          5,060   Total Education and Civic Organizations                                                                5,115,936
------------------------------------------------------------------------------------------------------------------------------------
                  HEALTH CARE - 18.3% (10.4% OF TOTAL INVESTMENTS)
            555   Albemarle Hospital Authority, North Carolina, Health Care          10/17 at 100.00            N/R        376,790
                     Facilities Revenue Bonds, Series 2007, 5.250%, 10/01/38
            250   Johnston Memorial Hospital Authority, North Carolina,               4/18 at 100.00            AAA        215,138
                     Mortgage Revenue Bonds, Johnston Memorial Hospital
                     Project, Series 2008, 5.250%, 10/01/36 - FSA Insured
          1,110   North Carolina Medical Care Commission, Healthcare Facilities       1/12 at 100.00              A      1,107,947
                     Revenue Bonds, Union Regional Medical Center, Series
                     2002A, 5.250%, 1/01/15
            980   North Carolina Medical Care Commission, Healthcare Revenue          5/09 at 100.00            Aa3        895,740
                     Bonds, Carolina Medicorp, Series 1996, 5.250%, 5/01/26
          1,500   North Carolina Medical Care Commission, Hospital Revenue            6/12 at 101.00              A      1,303,215
                     Bonds, Southeastern Regional Medical Center, Series 2002,
                     5.250%, 6/01/22
            500   North Carolina Medical Care Commission, Hospital Revenue           11/17 at 100.00             A-        421,260
                     Bonds, Wilson Medical Center, Series
                  2007, 5.000%, 11/01/20
            250   North Carolina Medical Care Commission, Revenue Bonds, Blue         1/15 at 100.00             AA        186,920
                     Ridge Healthcare System, Series 2005, 5.000%, 1/01/33 -
                     FGIC Insured
            150   Northern Hospital District of Surry County, North Carolina,         4/18 at 100.00            BBB        123,285
                     Health Care Facilities Revenue Bonds, Series 2008, 6.250%,
                     10/01/38
          1,000   The Charlotte-Mecklenberg Hospital Authority (North                 1/18 at 100.00            AA-        783,320
                     Carolina), Doing Business as Carolinas HealthCare System,
                     Health Care Refunding Revenue Bonds, Series 2008A, 5.000%,
                     1/15/47
------------------------------------------------------------------------------------------------------------------------------------
          6,295   Total Health Care                                                                                      5,413,615
------------------------------------------------------------------------------------------------------------------------------------
                  HOUSING/SINGLE FAMILY - 5.0% (2.9% OF TOTAL INVESTMENTS)
            425   North Carolina Housing Finance Agency, Home Ownership Revenue       7/10 at 100.00             AA        352,512
                     Bonds, 1998 Trust Agreement, Series 10A, 5.400%, 7/01/32 -
                     AMBAC Insured (Alternative Minimum Tax)
            725   North Carolina Housing Finance Agency, Home Ownership Revenue       7/09 at 100.00             AA        721,999
                     Bonds, 1998 Trust Agreement, Series 5A, 5.625%, 7/01/30
                     (Alternative Minimum Tax)
            250   North Carolina Housing Finance Agency, Home Ownership Revenue       1/17 at 100.00             AA        182,465
                     Bonds, Series 2007-29A, 4.800%, 7/01/33 (Alternative
                     Minimum Tax)
            330   North Carolina Housing Finance Agency, Home Ownership Revenue       7/16 at 100.00             AA        238,112
                     Bonds, Series 25-A, 4.900%, 7/01/37 (Alternative Minimum
                     Tax)
------------------------------------------------------------------------------------------------------------------------------------
          1,730   Total Housing/Single Family                                                                            1,495,088
------------------------------------------------------------------------------------------------------------------------------------


                                                                              35



NRB | Nuveen North Carolina Dividend Advantage Municipal Fund (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
   AMOUNT(000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  LONG-TERM CARE - 2.3% (1.3% OF TOTAL INVESTMENTS)
$          300    North Carolina Medical Care Commission, Health Care                10/16 at 100.00             N/R   $    234,408
                     Facilities Revenue Bonds, Presbyterian Homes, Series
                     2006B, 5.200%, 10/01/21
           200    North Carolina Medical Care Commission, Healthcare                 10/16 at 100.00             N/R        141,782
                     Facilities Revenue Bonds, Presbyterian Homes, Series
                     2006, 5.400%, 10/01/27
           150    North Carolina Medical Care Commission, Revenue Bonds, Pines        1/16 at 100.00             N/R        106,727
                     at Davidson, Series 2006A, 5.000%, 1/01/36
           250    North Carolina Medical Care Commission, Revenue Bonds,              9/15 at 100.00             N/R        190,813
                     United Church Homes and Services, Series 2005A, 5.250%,
                     9/01/21
------------------------------------------------------------------------------------------------------------------------------------
           900    Total Long-Term Care                                                                                      673,730
------------------------------------------------------------------------------------------------------------------------------------
                  MATERIALS - 0.9% (0.5% OF TOTAL INVESTMENTS)
           515    Gaston County Industrial Facilities and Pollution Control           8/15 at 100.00             N/R        281,308
                     Financing Authority, North Carolina, National Gypsum
                     Company Project Exempt Facilities Revenue Bonds, Series
                     2005, 5.750%, 8/01/35 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/GENERAL - 10.4% (6.0% OF TOTAL INVESTMENTS)
         1,000    Durham, North Carolina, General Obligation Bonds, Series            4/17 at 100.00             AAA      1,031,590
                     2007, 5.000%, 4/01/21
                  North Carolina, General Obligation Bonds, Series 2004A:
         1,000       5.000%, 3/01/18                                                  3/14 at 100.00             AAA      1,051,150
         1,000       5.000%, 3/01/22                                                  3/14 at 100.00             AAA      1,016,880
------------------------------------------------------------------------------------------------------------------------------------
         3,000    Total Tax Obligation/General                                                                            3,099,620
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/LIMITED - 27.7% (15.8% OF TOTAL INVESTMENTS)
         1,400    Charlotte, North Carolina, Certificates of Participation,           6/13 at 100.00             AA+      1,406,930
                     Governmental Facilities Projects, Series 2003G, 5.375%,
                     6/01/26
           305    Charlotte, North Carolina, Certificates of Participation,           6/18 at 100.00             AA+        279,621
                     Transit Projects Phase 2, Series 2008A, 5.000%, 6/01/33
           160    Craven County, North Carolina, Certificates of                      6/17 at 100.00              AA        151,461
                     Participation, Series 2007, 5.000%, 6/01/23 - MBIA Insured
         1,870    Dare County, North Carolina, Certificates of Participation,        12/12 at 100.00              A1      1,976,047
                     Series 2002, 5.250%, 6/01/15 - AMBAC Insured
         1,250    Davidson County, North Carolina, Certificates of                    6/14 at 100.00              A1      1,204,600
                     Participation, Series 2004, 5.250%, 6/01/21 - AMBAC
                     Insured
         1,390    Durham, North Carolina, Certificates of Participation,              6/15 at 100.00             AA+      1,329,757
                     Series 2005B, 5.000%, 6/01/25
           470    Raleigh, North Carolina, Certificates of Participation,             6/14 at 100.00             AA+        475,748
                     Downtown Improvement Project, Series 2004B, 5.000%,
                     6/01/20
           170    Raleigh, North Carolina, Certificates of Participation,             2/17 at 100.00             AA+        163,700
                     Series 2007, 5.000%, 2/01/27
           150    Rutherford County, North Carolina, Certificates of                 12/17 at 100.00             AAA        141,393
                     Participation, Series 2007, 5.000%, 12/01/27 - FSA Insured
           700    Sampson County, North Carolina, Certificates of                     6/17 at 100.00             AAA        625,408
                     Participation, Series 2006, 5.000%, 6/01/34 - FSA Insured
                     (UB)
           250    Wilmington, North Carolina, Certificates of Participation,          6/18 at 100.00              AA        235,033
                     Series 2008A, 5.000%, 6/01/29
           250    Wilson County, North Carolina, Certificates of                      4/17 at 100.00              AA        224,170
                     Participation, School Facilities Project, Series 2007,
                     5.000%, 4/01/25 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
         8,365    Total Tax Obligation/Limited                                                                            8,213,868
------------------------------------------------------------------------------------------------------------------------------------


36





     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  TRANSPORTATION - 6.2% (3.5% OF TOTAL INVESTMENTS)
$          300    Piedmont Triad Airport Authority, North Carolina, Airport           7/15 at 100.00              A2   $    285,156
                     Revenue Bonds, Series 2005A, 5.000%, 7/01/20 - SYNCORA
                     GTY Insured
         1,530    Raleigh Durham Airport Authority, North Carolina, Airport           5/11 at 101.00             Aa3      1,553,868
                     Revenue Bonds, Series 2001A, 5.250%, 11/01/18 - FGIC
                     Insured
------------------------------------------------------------------------------------------------------------------------------------
         1,830    Total Transportation                                                                                    1,839,024
------------------------------------------------------------------------------------------------------------------------------------
                  U.S. GUARANTEED - 19.6% (11.2% OF TOTAL INVESTMENTS) (4)
         1,000    Broad River Water Authority, North Carolina, Water System           6/10 at 101.00        Baa1 (4)      1,061,070
                     Revenue Bonds, Series 2000, 5.375%, 6/01/26 (Pre-refunded
                     6/01/10) - MBIA Insured
           100    Charlotte-Mecklenburg Hospital Authority, North Carolina,           1/15 at 100.00         AA- (4)        110,648
                     Healthcare System Revenue Bonds, DBA Carolinas Healthcare
                     System, Series 2005A, 5.000%, 1/15/45 (Pre-refunded
                     1/15/15)
           500    Greensboro, North Carolina, Combined Enterprise System              6/11 at 101.00             AAA        541,575
                     Revenue Bonds, Series 2001A, 5.125%, 6/01/21
                     (Pre-refunded 6/01/11)
         1,620    North Carolina Capital Facilities Financing Agency, Revenue        10/11 at 100.00             AAA      1,752,823
                     Bonds, Duke University, Series 2001A, 5.125%, 10/01/26
                     (Pre-refunded 10/01/11)
           800    North Carolina Medical Care Commission, Health System              10/11 at 101.00          AA (4)        875,168
                     Revenue Bonds, Mission St. Joseph's Health System, Series
                     2001, 5.250%, 10/01/31 (Pre-refunded 10/01/11)
           300    North Carolina Medical Care Commission, Revenue Bonds,             11/14 at 100.00          AA (4)        333,237
                     Northeast Medical Center, Series 2004, 5.000%, 11/01/24
                     (Pre-refunded 11/01/14)
         1,020    University of North Carolina System, Pooled Revenue                10/12 at 100.00        Baa1 (4)      1,127,335
                     Refunding Bonds, Series 2002A, 5.375%, 4/01/17
                     (Pre-refunded 10/01/12) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
         5,340    Total U.S. Guaranteed                                                                                   5,801,856
------------------------------------------------------------------------------------------------------------------------------------
                  UTILITIES - 23.7% (13.5% OF TOTAL INVESTMENTS)
                  Greenville, North Carolina, Combined Enterprise System
                  Revenue Bonds, Series 2001:
         1,000       5.250%, 9/01/20 - FSA Insured                                    9/11 at 101.00             AAA      1,016,950
           500       5.250%, 9/01/21 - FSA Insured                                    9/11 at 101.00             AAA        501,310
           500    North Carolina Eastern Municipal Power Agency, Power System         1/16 at 100.00               A        480,270
                     Revenue Bonds, Series 2005, 5.250%, 1/01/20 - AMBAC
                     Insured
         2,500    North Carolina Eastern Municipal Power Agency, Power System         1/09 at 100.00            Baa1      2,500,524
                     Revenue Refunding Bonds, Series 1993B, 5.500%, 1/01/17 -
                     FGIC Insured
         1,000    North Carolina Eastern Municipal Power Agency, Power System         1/09 at 102.00            BBB+      1,013,600
                     Revenue Refunding Bonds, Series 1999B, 5.650%, 1/01/16
         1,500    Wake County Industrial Facilities and Pollution Control             2/12 at 101.00              A2      1,503,705
                     Financing Authority, North Carolina, Revenue Refunding
                     Bonds, Carolina Power and Light Company, Series 2002,
                     5.375%, 2/01/17
------------------------------------------------------------------------------------------------------------------------------------
         7,000    Total Utilities                                                                                         7,016,359
------------------------------------------------------------------------------------------------------------------------------------
                  WATER AND SEWER - 44.1% (25.1% OF TOTAL INVESTMENTS)
           100    Brunswick County, North Carolina, Enterprise System Revenue         4/18 at 100.00             AAA         92,879
                     Bonds, Series 2008A, 5.000%, 4/01/31 - FSA Insured
           505    Cape Fear Public Utility Authority, North Carolina, Water &         8/18 at 100.00              AA        463,908
                     Sewer System Revenue Bonds, Series 2008, 5.000%, 8/01/35
         2,250    Charlotte, North Carolina, Water and Sewerage System Revenue        6/11 at 101.00             AAA      2,258,932
                     Bonds, Series 2001, 5.125%, 6/01/26
         1,000    Charlotte, North Carolina, Water and Sewerage System Revenue        7/18 at 100.00             AAA        942,590
                     Bonds, Series 2008, 5.000%, 7/01/38
           500    Greensboro, North Carolina, Combined Enterprise System              6/15 at 100.00             AAA        501,650
                     Revenue Bonds, Series 2005A, 5.000%, 6/01/25


                                                                              37



NRB | Nuveen North Carolina Dividend Advantage Municipal Fund (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  WATER AND SEWER (continued)
$          400    Onslow County, North Carolina, Combined Enterprise System
                     Revenue Bonds, Series 2004B, 5.000%, 6/01/23 - SYNCORA           6/14 at 100.00               A   $    371,120
                     GTY Insured
                  Raleigh, North Carolina, Combined Enterprise System Revenue
                  Bonds, Series 2006A:
         4,440       5.000%, 3/01/31 (UB)                                             3/16 at 100.00             AAA      4,289,351
         3,000       5.000%, 3/01/36 (UB)                                             3/16 at 100.00             AAA      2,829,600
             5    Raleigh, North Carolina, Combined Enterprise System Revenue         3/16 at 100.00             AAA          4,148
                     Bonds, Series 2006A, Residuals Series II-R-645-2,
                     12.261%, 3/01/36 (IF)
         1,385    Winston-Salem, North Carolina, Water and Sewer System               6/17 at 100.00             AAA      1,301,069
                     Revenue Bonds, Series 2007A, 5.000%, 6/01/37 (UB)
------------------------------------------------------------------------------------------------------------------------------------
        13,585    Total Water and Sewer                                                                                  13,055,247
------------------------------------------------------------------------------------------------------------------------------------
  $     53,620    Total Investments (cost $54,415,511) - 175.5%                                                          52,005,651
==============----------------------------------------------------------------------------------------------------------------------
                  Floating Rate Obligations - (21.0)%                                                                    (6,235,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Other Assets Less Liabilities - 2.9%                                                                      857,465
                  ------------------------------------------------------------------------------------------------------------------
                  Preferred Shares, at Liquidation Value - (57.4)% (5)                                                  (17,000,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Net Assets Applicable to Common Shares - 100%                                                        $ 29,628,116
                  ==================================================================================================================


(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 AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and  SYNCORA as of
     November 30, 2008.  Please see the Portfolio  Manager's  Commentary  for an
     expanded  discussion of the affect on the Fund of changes to the ratings of
     certain bonds in the portfolio resulting from changes to the ratings of the
     underlying insurers both during the period and after 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)  Preferred Shares, at Liquidation Value as a percentage of Total Investments
     is 32.7%.

N/R  Not rated.

(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.

                                 See accompanying notes to financial statements.

38



NNO | Nuveen North Carolina Dividend Advantage Municipal Fund 2
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  EDUCATION AND CIVIC ORGANIZATIONS - 15.7% (9.5% OF TOTAL
                     INVESTMENTS)
                  Appalachian State University, North Carolina, Housing and
                  Student Center System Revenue Refunding Bonds, Series
                  2002:
$        1,040       5.000%, 7/15/14 - MBIA Insured                                   7/12 at 100.00              A1   $  1,088,516
         1,000       5.000%, 7/15/15 - MBIA Insured                                   7/12 at 100.00              A1      1,044,300
                  North Carolina Capital Facilities Financing Agency, Revenue
                  Bonds, Duke University, Series 2001A:
           715       5.125%, 10/01/26                                                10/11 at 100.00             AA+        699,013
           380       5.125%, 10/01/41                                                10/11 at 100.00             AA+        361,186
         1,000    University of North Carolina System, Pooled Revenue Bonds,          4/15 at 100.00              AA        990,340
                     Series 2005A, 5.000%, 4/01/22 - AMBAC Insured
           635    University of North Carolina System, Pooled Revenue                10/12 at 100.00              AA        648,297
                     Refunding Bonds, Series 2002A, 5.375%, 4/01/19 - AMBAC
                     Insured
           500    University of North Carolina Wilmington, Certificates of            6/16 at 100.00              AA        458,340
                     Participation, Student Housing Project Revenue Bonds,
                     Series 2006, 5.000%, 6/01/21 - FGIC Insured
         1,500    University of North Carolina, Chapel Hill, System Net                 No Opt. Call             AA+      1,612,530
                     Revenue Bonds, Series 2002B, 5.000%, 12/01/11
           250    University of North Carolina, Charlotte, Certificates of            3/15 at 100.00              AA        245,468
                     Participation, Student Housing Project, Series 2005,
                     5.000%, 3/01/21 - AMBAC Insured
           400    University of North Carolina, Greensboro, General Revenue           4/11 at 101.00             AAA        420,824
                     Refunding Bonds, Series 2002B, 5.375%, 4/01/17 - FSA
                     Insured
------------------------------------------------------------------------------------------------------------------------------------
         7,420    Total Education and Civic Organizations                                                                 7,568,814
------------------------------------------------------------------------------------------------------------------------------------
                  HEALTH CARE - 25.1% (15.1% OF TOTAL INVESTMENTS)
           945    Albemarle Hospital Authority, North Carolina, Health Care          10/17 at 100.00             N/R        641,561
                     Facilities Revenue Bonds, Series 2007, 5.250%, 10/01/38
         1,640    Charlotte-Mecklenburg Hospital Authority, North Carolina,           1/11 at 101.00             AA-      1,395,017
                     Healthcare System Revenue Bonds, Carolinas Healthcare
                     System, Series 2001A, 5.000%, 1/15/31
           500    Johnston Memorial Hospital Authority, North Carolina,               4/18 at 100.00             AAA        430,275
                     Mortgage Revenue Bonds, Johnston
                  Memorial Hospital Project, Series 2008, 5.250%, 10/01/36 -
                     FSA Insured
         2,000    North Carolina Medical Care Commission, Healthcare                 11/13 at 100.00             Aa3      1,881,280
                     Facilities Revenue Bonds, Novant Health Obligated Group,
                     Series 2003A, 5.000%, 11/01/20
         1,005    North Carolina Medical Care Commission, Healthcare                  1/12 at 100.00               A      1,014,216
                     Facilities Revenue Bonds, Union Regional Medical Center,
                     Series 2002A, 5.250%, 1/01/13
                  North Carolina Medical Care Commission, Hospital Revenue
                  Bonds, Southeastern Regional Medical Center, Series 2002:
         1,000       5.500%, 6/01/15                                                  6/12 at 101.00               A        992,880
         2,100       5.250%, 6/01/22                                                  6/12 at 101.00               A      1,824,501
           925    North Carolina Medical Care Commission, Hospital Revenue           11/17 at 100.00              A-        685,259
                     Bonds, Wilson Medical Center, Series 2007, 5.000%,
                     11/01/27
         1,250    North Carolina Medical Care Commission, Revenue Bonds, Blue         1/15 at 100.00              AA        934,600
                     Ridge Healthcare System, Series 2005, 5.000%, 1/01/33 -
                     FGIC Insured


                                                                              39



NNO | Nuveen North Carolina Dividend Advantage Municipal Fund 2 (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  HEALTH CARE (continued)
                  North Carolina Medical Care Commission, Revenue Bonds,
                  Cleveland County Healthcare System, Series 2004A:
$          595       5.250%, 7/01/20 - AMBAC Insured                                  7/14 at 100.00               A   $    540,468
           500       5.250%, 7/01/22 - AMBAC Insured                                  7/14 at 100.00               A        439,395
           150    Northern Hospital District of Surry County, North Carolina,         4/18 at 100.00             BBB        123,285
                     Health Care Facilities Revenue Bonds, Series 2008,
                     6.250%, 10/01/38
         1,500    The Charlotte-Mecklenberg Hospital Authority (North                 1/18 at 100.00             AA-      1,174,980
                     Carolina), Doing Business as Carolinas HealthCare
                     System, Health Care Refunding Revenue Bonds, Series
                     2008A, 5.000%, 1/15/47
------------------------------------------------------------------------------------------------------------------------------------
        14,110    Total Health Care                                                                                      12,077,717
------------------------------------------------------------------------------------------------------------------------------------
                  HOUSING/SINGLE FAMILY - 4.5% (2.7% OF TOTAL INVESTMENTS)
           365    North Carolina Housing Finance Agency, Home Ownership               7/10 at 100.00              AA        302,746
                     Revenue Bonds, 1998 Trust Agreement, Series 10A, 5.400%,
                     7/01/32 - AMBAC Insured (Alternative Minimum Tax)
                  North Carolina Housing Finance Agency, Home Ownership
                  Revenue Bonds, Series 13A:
           735       4.700%, 7/01/12 (Alternative Minimum Tax)                        7/11 at 100.00              AA        739,836
           740       4.850%, 7/01/13 (Alternative Minimum Tax)                        7/11 at 100.00              AA        740,844
           510    North Carolina Housing Finance Agency, Home Ownership               7/16 at 100.00              AA        367,991
                     Revenue Bonds, Series 25-A, 4.900%, 7/01/37 (Alternative
                     Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
         2,350    Total Housing/Single Family                                                                             2,151,417
------------------------------------------------------------------------------------------------------------------------------------
                  LONG-TERM CARE - 2.0% (1.2% OF TOTAL INVESTMENTS)
           600    North Carolina Medical Care Commission, Health Care                10/16 at 100.00             N/R        468,816
                     Facilities Revenue Bonds, Presbyterian Homes, Series
                     2006B, 5.200%, 10/01/21
           250    North Carolina Medical Care Commission, Healthcare                 10/16 at 100.00             N/R        177,228
                     Facilities Revenue Bonds, Presbyterian Homes, Series
                     2006, 5.400%, 10/01/27
           185    North Carolina Medical Care Commission, Revenue Bonds,              1/16 at 100.00             N/R        131,629
                     Pines at Davidson, Series 2006A, 5.000%, 1/01/36
           250    North Carolina Medical Care Commission, Revenue Bonds,              9/15 at 100.00             N/R        190,813
                     United Church Homes and Services, Series 2005A, 5.250%,
                     9/01/21
------------------------------------------------------------------------------------------------------------------------------------
         1,285    Total Long-Term Care                                                                                      968,486
------------------------------------------------------------------------------------------------------------------------------------
                  MATERIALS - 2.6% (1.5% OF TOTAL INVESTMENTS)
           865    Gaston County Industrial Facilities and Pollution Control           8/15 at 100.00             N/R        472,489
                     Financing Authority, North Carolina, National Gypsum
                     Company Project Exempt Facilities Revenue Bonds, Series
                     2005, 5.750%, 8/01/35 (Alternative Minimum Tax)
         1,100    Northampton County Industrial Facilities and Pollution              2/11 at 101.00             BBB        766,370
                     Control Financing Authority, North Carolina,
                     Environmental Improvement Revenue Bonds, International
                     Paper Company, Series 2001A, 6.200%, 2/01/25
                     (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
         1,965    Total Materials                                                                                         1,238,859
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/GENERAL - 5.8% (3.5% OF TOTAL INVESTMENTS)
           250    Durham County, North Carolina, General Obligation Bonds,            5/10 at 102.00             AAA        264,978
                     Series 2000, 5.600%, 5/01/15
         1,475    Durham, North Carolina, General Obligation Bonds, Series            4/17 at 100.00             AAA      1,511,801
                     2007, 5.000%, 4/01/22
         1,000    North Carolina, General Obligation Bonds, Series 2004A,             3/14 at 100.00             AAA      1,016,880
                     5.000%, 3/01/22
------------------------------------------------------------------------------------------------------------------------------------
         2,725    Total Tax Obligation/General                                                                            2,793,659
------------------------------------------------------------------------------------------------------------------------------------


40





     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  TAX OBLIGATION/LIMITED - 38.0% (22.8% OF TOTAL INVESTMENTS)
$           30    Cabarrus County, North Carolina, Certificates of                    2/13 at 100.00              AA   $     31,113
                     Participation, Series 2002, 5.250%, 2/01/16
         1,750    Charlotte, North Carolina, Certificates of Participation,           6/13 at 100.00             AA+      1,668,223
                     Governmental Facilities Projects, Series 2003G, 5.000%,
                     6/01/28
           575    Charlotte, North Carolina, Certificates of Participation,           6/18 at 100.00             AA+        527,154
                     Transit Projects Phase 2, Series 2008A, 5.000%, 6/01/33
         1,850    Charlotte, North Carolina, Storm Water Fee Revenue Bonds,           6/12 at 101.00             AAA      1,937,801
                     Series 2002, 5.250%, 6/01/18
           800    Craven County, North Carolina, Certificates of                      6/17 at 100.00              AA        730,488
                     Participation, Series 2007, 5.000%, 6/01/27 - MBIA Insured
                  Hartnett County, North Carolina, Certificates of
                  Participation, Series 2002:
         1,000       5.250%, 12/01/15 - FSA Insured                                  12/12 at 101.00             AAA      1,061,500
         2,025       5.375%, 12/01/16 - FSA Insured                                  12/12 at 101.00             AAA      2,154,519
           715    Lee County, North Carolina, Certificates of Participation,          4/14 at 100.00             AAA        732,489
                     Public Schools and Community College, Series 2004,
                     5.250%, 4/01/20 - FSA Insured
         1,380    Pasquotank County, North Carolina, Certificates of                  6/14 at 100.00              AA      1,209,722
                     Participation, Series 2004, 5.000%, 6/01/25 - MBIA Insured
         2,070    Pitt County, North Carolina, Certificates of Participation,         4/14 at 100.00              A1      1,780,614
                     School Facilities Project, Series 2004B, 5.000%, 4/01/29
                     - AMBAC Insured
         1,270    Puerto Rico Infrastructure Financing Authority, Special Tax           No Opt. Call               A      1,235,418
                     Revenue Bonds, Series 2005C, 5.500%, 7/01/16 - AMBAC
                     Insured
                  Raleigh, North Carolina, Certificates of Participation,
                  Downtown Improvement Project, Series 2004B:
           805       5.000%, 6/01/20                                                  6/14 at 100.00             AA+        814,845
         1,310       5.000%, 6/01/21                                                  6/14 at 100.00             AA+      1,315,934
           115    Raleigh, North Carolina, Certificates of Participation,             2/17 at 100.00             AA+        110,738
                     Series 2007, 5.000%, 2/01/27
         1,000    Randolph County, North Carolina, Certificates of                    6/14 at 102.00             AAA      1,010,910
                     Participation, Series 2004, 5.000%, 6/01/20 - FSA Insured
           100    Rutherford County, North Carolina, Certificates of                 12/17 at 100.00             AAA         94,262
                     Participation, Series 2007, 5.000%, 12/01/27 - FSA Insured
         1,150    Sampson County, North Carolina, Certificates of
                     Participation, Series 2006, 5.000%, 6/01/34 - FSA Insured        6/17 at 100.00             AAA      1,027,456
                     (UB)
           500    Wilmington, North Carolina, Certificates of Participation,          6/18 at 100.00              AA        470,065
                     Series 2008A, 5.000%, 6/01/29
           400    Wilson County, North Carolina, Certificates of                      4/17 at 100.00              AA        358,672
                     Participation, School Facilities Project, Series 2007,
                     5.000%, 4/01/25 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
        18,845    Total Tax Obligation/Limited                                                                           18,271,923
------------------------------------------------------------------------------------------------------------------------------------
                  TRANSPORTATION - 16.6% (10.0% OF TOTAL INVESTMENTS)
         2,035    Charlotte, North Carolina, Airport Revenue Bonds, Series            7/14 at 100.00              AA      1,676,311
                     2004A, 5.000%, 7/01/34 - MBIA Insured
           435    Piedmont Triad Airport Authority, North Carolina, Airport           7/15 at 100.00              A2        413,476
                     Revenue Bonds, Series 2005A, 5.000%, 7/01/20 - SYNCORA
                     GTY Insured
                  Raleigh Durham Airport Authority, North Carolina, Airport
                  Revenue Bonds, Series 2001A:
         1,000       5.250%, 11/01/15 - FGIC Insured                                  5/11 at 101.00             Aa3      1,020,660
         2,320       5.250%, 11/01/16 - FGIC Insured                                  5/11 at 101.00             Aa3      2,350,392
         2,230       5.250%, 11/01/17 - FGIC Insured                                  5/11 at 101.00             Aa3      2,243,157
           270    University of North Carolina, Charlotte, Parking System             1/12 at 101.00              A2        271,374
                     Revenue Bonds, Series 2002, 5.000%, 1/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
         8,290    Total Transportation                                                                                    7,975,370
------------------------------------------------------------------------------------------------------------------------------------


                                                                              41



NNO | Nuveen North Carolina Dividend Advantage Municipal Fund 2 (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  U.S. GUARANTEED - 16.8% (10.1% OF TOTAL INVESTMENTS) (4)
$          490    Charlotte-Mecklenburg Hospital Authority, North Carolina,           1/11 at 101.00         Aa3 (4)   $    524,197
                     Healthcare System Revenue Bonds, Carolinas Healthcare
                     System, Series 2001A, 5.000%, 1/15/31 (Pre-refunded
                     1/15/11)
           200    Charlotte-Mecklenburg Hospital Authority, North Carolina,           1/15 at 100.00         AA- (4)        221,296
                     Healthcare System Revenue Bonds, DBA Carolinas
                     Healthcare System, Series 2005A, 5.000%, 1/15/45
                     (Pre-refunded 1/15/15)
           500    North Carolina Capital Facilities Financing Agency,                10/11 at 100.00             AAA        540,995
                     Revenue Bonds, Duke University, Series 2001A, 5.125%,
                     10/01/26 (Pre-refunded 10/01/11)
           370    North Carolina Medical Care Commission, Health System              10/11 at 101.00          AA (4)        404,765
                     Revenue Bonds, Mission St. Joseph's Health System,
                     Series 2001, 5.250%, 10/01/31 (Pre-refunded 10/01/11)
           500    North Carolina Medical Care Commission, Revenue Bonds,             11/14 at 100.00          AA (4)        555,395
                     Northeast Medical Center, Series 2004, 5.000%, 11/01/24
                     (Pre-refunded 11/01/14)
                  Raleigh, North Carolina, Combined Enterprise System
                  Revenue Bonds, Series 2004:
         1,000       5.000%, 3/01/21 (Pre-refunded 3/01/14)                           3/14 at 100.00             AAA      1,102,100
         1,250       5.000%, 3/01/22 (Pre-refunded 3/01/14)                           3/14 at 100.00             AAA      1,377,625
         3,200    Wake County, North Carolina, General Obligation School              2/10 at 101.50             AAA      3,386,333
                     Bonds, Series 2000, 5.400%, 2/01/13 (Pre-refunded
                     2/01/10)
------------------------------------------------------------------------------------------------------------------------------------
         7,510    Total U.S. Guaranteed                                                                                   8,112,706
------------------------------------------------------------------------------------------------------------------------------------
                  UTILITIES - 14.8% (8.9% OF TOTAL INVESTMENTS)
           500    North Carolina Eastern Municipal Power Agency, Power                1/16 at 100.00               A        480,270
                     System Revenue Bonds, Series 2005, 5.250%, 1/01/20 -
                     AMBAC Insured
         2,500    North Carolina Eastern Municipal Power Agency, Power                1/09 at 100.00            Baa1      2,500,525
                     System Revenue Refunding Bonds, Series 1993B, 5.500%,
                     1/01/17 - FGIC Insured
         1,500    North Carolina Municipal Power Agency 1, Catawba Electric           1/10 at 101.00              A2      1,529,160
                     Revenue Bonds, Series 1999B, 6.500%, 1/01/20
         2,600    Wake County Industrial Facilities and Pollution Control             2/12 at 101.00              A2      2,606,422
                     Financing Authority, North Carolina, Revenue Refunding
                     Bonds, Carolina Power and Light Company, Series 2002,
                     5.375%, 2/01/17
------------------------------------------------------------------------------------------------------------------------------------
         7,100    Total Utilities                                                                                         7,116,377
------------------------------------------------------------------------------------------------------------------------------------
                  WATER AND SEWER - 24.4% (14.7% OF TOTAL INVESTMENTS)
           500    Brunswick County, North Carolina, Enterprise System                 4/18 at 100.00             AAA        464,395
                     Revenue Bonds, Series 2008A, 5.000%, 4/01/31 - FSA
                     Insured
           500    Cape Fear Public Utility Authority, North Carolina, Water           8/18 at 100.00              AA        459,315
                     & Sewer System Revenue Bonds, Series 2008, 5.000%, 8/01/35
         2,520    Charlotte, North Carolina, Water and Sewerage System                  No Opt. Call             AAA      2,768,270
                     Revenue Bonds, Series 2002A, 5.250%,7/01/13
         1,000    Durham County, North Carolina, Enterprise System Revenue            6/13 at 100.00              AA        970,880
                     Bonds, Series 2002, 5.000%, 6/01/23 - MBIA Insured
                  Raleigh, North Carolina, Combined Enterprise System
                  Revenue Bonds, Series 2006A:
         3,095       5.000%, 3/01/31 (UB)                                             3/16 at 100.00             AAA      2,989,987
           975       5.000%, 3/01/36 (UB)                                             3/16 at 100.00             AAA        919,620
            40    Raleigh, North Carolina, Combined Enterprise System                 3/16 at 100.00             AAA         35,928
                     Revenue Bonds, Series 2006A, Residuals Series
                     II-R-645-1, 11.964%, 3/01/31 (IF)


42





     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  WATER AND SEWER (continued)
$        1,000    Wilmington, North Carolina, Water and Sewer Revenue Bonds,          6/15 at 100.00             AAA   $    999,990
                     Series 2005, 5.000%, 6/01/25 - FSA Insured
         2,275    Winston-Salem, North Carolina, Water and Sewer System               6/17 at 100.00             AAA      2,137,135
                     Revenue Bonds, Series 2007A, 5.000%, 6/01/37 (UB)
------------------------------------------------------------------------------------------------------------------------------------
        11,905    Total Water and Sewer                                                                                  11,745,520
------------------------------------------------------------------------------------------------------------------------------------
$       83,505    Total Investments (cost $85,065,521) - 166.3%                                                          80,020,848
==============----------------------------------------------------------------------------------------------------------------------
                  Floating Rate Obligations - (10.0)%                                                                    (4,805,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Other Assets Less Liabilities - 1.9%                                                                      904,328
                  ------------------------------------------------------------------------------------------------------------------
                  Preferred Shares, at Liquidation Value - (58.2)% (5)                                                  (28,000,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Net Assets Applicable to Common Shares - 100%                                                        $ 48,120,176
                  ==================================================================================================================


(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 AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and  SYNCORA as of
     November 30, 2008.  Please see the Portfolio  Manager's  Commentary  for an
     expanded  discussion of the affect on the Fund of changes to the ratings of
     certain bonds in the portfolio resulting from changes to the ratings of the
     underlying insurers both during the period and after 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)  Preferred Shares, at Liquidation Value as a percentage of Total Investments
     is 35.0%.

N/R  Not rated.

(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.

                                 See accompanying notes to financial statements.

                                                                              43



NII | Nuveen North Carolina Dividend Advantage Municipal Fund 3
    | Portfolio of INVESTMENTS
                                                   November 30, 2008 (Unaudited)



     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)         VALUE
 ----------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  CONSUMER STAPLES - 2.9% (1.7% OF TOTAL INVESTMENTS)
$        2,000    Puerto Rico, The Children's Trust Fund, Tobacco Settlement          5/12 at 100.00             BBB   $ 1,425,320
                     Asset-Backed Refunding Bonds, Series 2002, 5.500%,
                     5/15/39
 ----------------------------------------------------------------------------------------------------------------------------------
                  EDUCATION AND CIVIC ORGANIZATIONS - 4.2% (2.5% OF TOTAL
                     INVESTMENTS)
                  North Carolina Capital Facilities Financing Agency, Revenue
                  Bonds, Duke University, Series 2001A:
           330       5.125%, 10/01/26                                                10/11 at 100.00             AA+       322,621
            95       5.125%, 10/01/41                                                10/11 at 100.00             AA+        90,297
         1,290    University of North Carolina System, Pooled Revenue                10/12 at 100.00              AA     1,194,901
                     Refunding Bonds, Series 2002A, 5.000%, 4/01/27 - AMBAC
                     Insured
           500    University of North Carolina Wilmington, Certificates of            6/16 at 100.00              AA       458,340
                     Participation, Student Housing Project Revenue Bonds,
                     Series 2006, 5.000%, 6/01/21 - FGIC Insured
 ----------------------------------------------------------------------------------------------------------------------------------
         2,215    Total Education and Civic Organizations                                                                2,066,159
 ----------------------------------------------------------------------------------------------------------------------------------
                  HEALTH CARE - 11.5% (6.7% OF TOTAL INVESTMENTS)
           695    Albemarle Hospital Authority, North Carolina, Health Care          10/17 at 100.00             N/R       516,761
                     Facilities Revenue Bonds, Series 2007, 5.250%, 10/01/27
           580    Charlotte-Mecklenburg Hospital Authority, North Carolina,           1/11 at 101.00             AA-       493,360
                     Healthcare System Revenue Bonds, Carolinas Healthcare
                     System, Series 2001A, 5.000%, 1/15/31
           500    Johnston Memorial Hospital Authority, North Carolina,               4/18 at 100.00             AAA       430,275
                     Mortgage Revenue Bonds, Johnston Memorial Hospital
                     Project, Series 2008, 5.250%, 10/01/36 - FSA Insured
         2,000    North Carolina Medical Care Commission, Healthcare                 11/13 at 100.00             Aa3     1,973,020
                     Facilities Revenue Bonds, Novant Health Obligated Group,
                     Series 2003A, 5.000%, 11/01/18
         1,000    North Carolina Medical Care Commission, Hospital Revenue           11/17 at 100.00              A-       740,820
                     Bonds, Wilson Medical Center, Series 2007, 5.000%, 11/01/27
           300    North Carolina Medical Care Commission, Revenue Bonds, Blue         1/15 at 100.00              AA       224,304
                     Ridge Healthcare System, Series 2005, 5.000%, 1/01/33 -
                     FGIC Insured
           150    Northern Hospital District of Surry County, North Carolina,         4/18 at 100.00             BBB       123,285
                     Health Care Facilities Revenue Bonds, Series 2008,
                     6.250%, 10/01/38
         1,500    The Charlotte-Mecklenberg Hospital Authority (North                 1/18 at 100.00             AA-     1,174,979
                     Carolina), Doing Business as Carolinas HealthCare
                     System, Health Care Refunding Revenue Bonds, Series
                     2008A, 5.000%, 1/15/47
 ----------------------------------------------------------------------------------------------------------------------------------
         6,725    Total Health Care                                                                                      5,676,804
 ----------------------------------------------------------------------------------------------------------------------------------
                  HOUSING/MULTIFAMILY - 1.8% (1.1% OF TOTAL INVESTMENTS)
         1,000    Mecklenburg County, North Carolina, FNMA Multifamily                7/13 at 105.00             AAA       893,920
                     Housing Revenue Bonds, Little Rock Apartments, Series
                     2003, 5.150%, 1/01/22 (Alternative Minimum Tax)
 ----------------------------------------------------------------------------------------------------------------------------------


44





     PRINCIPAL                                                                         OPTIONAL CALL
  AMOUNT (000)    DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  HOUSING/SINGLE FAMILY - 2.9% (1.7% OF TOTAL INVESTMENTS)
$          725    North Carolina Housing Finance Agency, Home Ownership               7/09 at 100.00              AA   $    721,999
                     Revenue Bonds, 1998 Trust Agreement, Series 5A, 5.625%,
                     7/01/30 (Alternative Minimum Tax)
           500    North Carolina Housing Finance Agency, Home Ownership               1/17 at 100.00              AA        364,930
                     Revenue Bonds, Series 2007-29A, 4.800%, 7/01/33
                     (Alternative Minimum Tax)
           510    North Carolina Housing Finance Agency, Home Ownership               7/16 at 100.00              AA        367,990
                     Revenue Bonds, Series 25-A, 4.900%, 7/01/37 (Alternative
                     Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
         1,735    Total Housing/Single Family                                                                             1,454,919
------------------------------------------------------------------------------------------------------------------------------------
                  LONG-TERM CARE - 1.6% (0.9% OF TOTAL INVESTMENTS)
           600    North Carolina Medical Care Commission, Health Care                10/16 at 100.00             N/R        468,816
                     Facilities Revenue Bonds, Presbyterian Homes, Series
                     2006B, 5.200%, 10/01/21
           250    North Carolina Medical Care Commission, Healthcare                 10/16 at 100.00             N/R        177,228
                     Facilities Revenue Bonds, Presbyterian Homes, Series
                     2006, 5.400%, 10/01/27
           190    North Carolina Medical Care Commission, Revenue Bonds,              1/16 at 100.00             N/R        135,187
                     Pines at Davidson, Series 2006A, 5.000%, 1/01/36
------------------------------------------------------------------------------------------------------------------------------------
         1,040    Total Long-Term Care                                                                                      781,231
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/GENERAL - 22.9% (13.5% OF TOTAL INVESTMENTS)
         3,900    Cary, North Carolina, General Obligation Water and Sewer            3/11 at 102.00             AAA      4,022,538
                     Bonds, Series 2001, 5.000%, 3/01/20
         1,500    Durham, North Carolina, General Obligation Bonds, Series            4/17 at 100.00             AAA      1,537,425
                     2007, 5.000%, 4/01/22
                  Lincoln County, North Carolina, General Obligation Bonds,
                  Series 2002A:
           850       5.000%, 6/01/19 - FGIC Insured                                   6/12 at 101.00              AA        857,157
           900       5.000%, 6/01/20 - FGIC Insured                                   6/12 at 101.00              AA        901,431
         1,050       5.000%, 6/01/21 - FGIC Insured                                   6/12 at 101.00              AA      1,044,204
           500    North Carolina, General Obligation Bonds, Series 2004A,             3/14 at 100.00             AAA        508,440
                     5.000%, 3/01/22
         2,000    Puerto Rico, General Obligation and Public Improvement                No Opt. Call              AA      2,072,880
                     Refunding Bonds, Series 1997, 6.500%, 7/01/15 - MBIA
                     Insured
           400    Raleigh, North Carolina, General Obligation Bonds, Series           6/12 at 100.00             AAA        405,812
                     2002, 5.000%, 6/01/21
------------------------------------------------------------------------------------------------------------------------------------
        11,100    Total Tax Obligation/General                                                                           11,349,887
------------------------------------------------------------------------------------------------------------------------------------
                  TAX OBLIGATION/LIMITED - 37.6% (22.1% OF TOTAL INVESTMENTS)
         1,800    Catawba County, North Carolina, Certificates of                     6/14 at 100.00             Aa3      1,772,640
                     Participation, Series 2004, 5.250%, 6/01/22 - MBIA
                     Insured
         1,500    Centennial Authority, North Carolina, Hotel Tax Revenue             3/09 at 101.00             AAA      1,503,915
                     Bonds, Arena Project, Series 1997, 5.125%, 9/01/19 - FSA
                     Insured
         2,750    Charlotte, North Carolina, Certificates of Participation,           6/13 at 100.00             AA+      2,521,173
                     Governmental Facilities Projects, Series 2003G, 5.000%,
                     6/01/33
           575    Charlotte, North Carolina, Certificates of Participation,           6/18 at 100.00             AA+        527,155
                     Transit Projects Phase 2, Series 2008A, 5.000%, 6/01/33
           800    Craven County, North Carolina, Certificates of                      6/17 at 100.00              AA        730,488
                     Participation, Series 2007, 5.000%, 6/01/27 - MBIA
                     Insured
         3,000    Dare County, North Carolina, Certificates of Participation,        12/12 at 100.00              A1      2,900,820
                     Series 2002, 5.000%, 6/01/23 - AMBAC Insured
           500    Lee County, North Carolina, Certificates of Participation,          4/14 at 100.00             AAA        512,230
                     Public Schools and Community College, Series 2004,
                     5.250%, 4/01/20 - FSA Insured


                                                                              45



NII | Nuveen North Carolina Dividend Advantage Municipal Fund 3 (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)



  PRINCIPAL                                                                            OPTIONAL CALL
AMOUNT (000)      DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  TAX OBLIGATION/LIMITED (continued)
$         1,000   North Carolina, Certificates of Participation, Repair and           6/14 at 100.00             AA+   $  1,008,370
                     Renovation Project, Series 2004B, 5.000%, 6/01/20
            565   Raleigh, North Carolina, Certificates of Participation,             2/17 at 100.00             AA+        544,061
                     Series 2007, 5.000%, 2/01/27
          2,000   Rutherford County, North Carolina, Certificates of                  9/12 at 101.00             Aa3      1,970,200
                     Participation, Series 2002, 5.000%, 9/01/21 - AMBAC
                     Insured
          1,000   Rutherford County, North Carolina, Certificates of                 12/17 at 100.00             AAA        942,620
                     Participation, Series 2007, 5.000%, 12/01/27 - FSA
                     Insured
          1,200   Sampson County, North Carolina, Certificates of                     6/17 at 100.00             AAA      1,072,128
                     Participation, Series 2006, 5.000%, 6/01/34 - FSA
                     Insured (UB)
          1,785   Union County, North Carolina, Certificates of                       6/13 at 101.00             AA-      1,798,798
                     Participation, Series 2003, 5.000%, 6/01/20 - AMBAC
                     Insured
            500   Wilmington, North Carolina, Certificates of Participation,          6/18 at 100.00              AA        470,065
                     Series 2008A, 5.000%, 6/01/29
            400   Wilson County, North Carolina, Certificates of                      4/17 at 100.00              AA        358,671
                     Participation, School Facilities Project, Series 2007,
                     5.000%, 4/01/25 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
         19,375   Total Tax Obligation/Limited                                                                           18,633,334
------------------------------------------------------------------------------------------------------------------------------------
                  TRANSPORTATION - 9.9% (5.8% OF TOTAL INVESTMENTS)
                  Raleigh Durham Airport Authority, North Carolina, Airport
                  Revenue Bonds, Series 2001A:
          1,780      5.250%, 11/01/15 - FGIC Insured                                  5/11 at 101.00             Aa3      1,816,775
          3,100      5.000%, 11/01/20 - FGIC Insured                                  5/11 at 101.00             Aa3      3,075,169
------------------------------------------------------------------------------------------------------------------------------------
          4,880   Total Transportation                                                                                    4,891,944
------------------------------------------------------------------------------------------------------------------------------------
                  U.S. GUARANTEED - 21.1% (12.4% OF TOTAL INVESTMENTS) (4)
            500   Broad River Water Authority, North Carolina, Water System           6/10 at 101.00        Baa1 (4)        530,535
                     Revenue Bonds, Series 2000, 5.375%, 6/01/26
                     (Pre-refunded 6/01/10) - MBIA Insured
            170   Charlotte-Mecklenburg Hospital Authority, North Carolina,           1/11 at 101.00         Aa3 (4)        181,865
                     Healthcare System Revenue Bonds, Carolinas Healthcare
                     System, Series 2001A, 5.000%, 1/15/31 (Pre-refunded 1/15/11)
            200   Charlotte-Mecklenburg Hospital Authority, North Carolina,           1/15 at 100.00         AA- (4)        221,296
                     Healthcare System Revenue Bonds, DBA Carolinas Healthcare
                     System, Series 2005A, 5.000%, 1/15/45 (Pre-refunded 1/15/15)
             50   Cumberland County, North Carolina, Hospital Facility               10/09 at 101.00          A3 (4)         52,157
                     Revenue Bonds, Cumberland County Hospital System Inc.,
                     Cape Fear Valley Health System, Series 1999, 5.250%,
                     10/01/29 (Pre-refunded 10/01/09)
                  Forsyth County, North Carolina, Certificates of
                  Participation, Public Facilities and Equipment Project,
                  Series 2002:
          1,325      5.125%, 1/01/16 (Pre-refunded 1/01/13)                           1/13 at 101.00         AA+ (4)      1,466,775
            770      5.250%, 1/01/19 (Pre-refunded 1/01/13)                           1/13 at 101.00         AA+ (4)        856,102
                  North Carolina Capital Facilities Financing Agency, Revenue
                  Bonds, Duke University, Series 2001A:
          1,420      5.125%, 10/01/26 (Pre-refunded 10/01/11)                        10/11 at 100.00             AAA      1,536,426
            405      5.125%, 10/01/41 (Pre-refunded 10/01/11)                        10/11 at 100.00             AAA        438,206
          1,600   North Carolina Capital Facilities Financing Agency, Revenue        10/12 at 100.00             AAA      1,751,952
                     Bonds, Duke University, Series 2002A, 5.125%, 7/01/42
                     (Pre-refunded 10/01/12)
            500   North Carolina Medical Care Commission, Health System              10/11 at 101.00          AA (4)        546,980
                     Revenue Bonds, Mission St. Joseph's Health System,
                     Series 2001, 5.250%, 10/01/31 (Pre-refunded 10/01/11)
            500   North Carolina Medical Care Commission, Revenue Bonds,             11/14 at 100.00          AA (4)        555,395
                     Northeast Medical Center, Series 2004, 5.000%, 11/01/24
                     (Pre-refunded 11/01/14)


46





      PRINCIPAL                                                                        OPTIONAL CALL
   AMOUNT (000)   DESCRIPTION (1)                                                     PROVISIONS (2)     RATINGS (3)          VALUE
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                           
                  U.S. GUARANTEED (4) (continued)
$           610   University of North Carolina System, Pooled Revenue                10/12 at 100.00        Baa1 (4)   $    665,857
                     Refunding Bonds, Series 2002A, 5.000%, 4/01/27
                     (Pre-refunded 10/01/12) - AMBAC Insured
          1,500   Winston-Salem, North Carolina, Water and Sewerage System            6/12 at 100.00             AAA      1,628,939
                     Revenue Bonds, Series 2002A, 5.000%, 6/01/19
                     (Pre-refunded 6/01/12)
------------------------------------------------------------------------------------------------------------------------------------
          9,550   Total U.S. Guaranteed                                                                                  10,432,485
------------------------------------------------------------------------------------------------------------------------------------
                  UTILITIES - 17.4% (10.3% OF TOTAL INVESTMENTS)
            500   North Carolina Eastern Municipal Power Agency, Power System         1/16 at 100.00               A        480,270
                     Revenue Bonds, Series 2005, 5.250%, 1/01/20 - AMBAC
                     Insured
          4,000   North Carolina Eastern Municipal Power Agency, Power System         1/09 at 100.00            Baa1      4,000,840
                     Revenue Refunding Bonds, Series 1993B, 5.500%, 1/01/17 -
                     FGIC Insured
          2,665   North Carolina Municipal Power Agency 1, Catawba Electric           1/13 at 100.00               A      2,748,868
                     Revenue Bonds, Series 2003A, 5.250%, 1/01/15 - AMBAC
                     Insured
          1,400   Wake County Industrial Facilities and Pollution Control             2/12 at 101.00              A2      1,403,458
                     Financing Authority, North Carolina, Revenue Refunding
                     Bonds, Carolina Power and Light Company, Series 2002,
                     5.375%, 2/01/17
------------------------------------------------------------------------------------------------------------------------------------
          8,565   Total Utilities                                                                                         8,633,436
------------------------------------------------------------------------------------------------------------------------------------
                  WATER AND SEWER - 36.2% (21.3% OF TOTAL INVESTMENTS)
          2,000   Brunswick County, North Carolina, Enterprise System Revenue         4/18 at 100.00             AAA      1,857,580
                     Bonds, Series 2008A, 5.000%, 4/01/31 - FSA Insured
                  Charlotte, North Carolina, Water and Sewerage System Revenue
                  Bonds, Series 2001:
            750      5.125%, 6/01/26                                                  6/11 at 101.00             AAA        752,978
          1,780      5.125%, 6/01/26 - FGIC Insured                                   6/11 at 101.00             Aa1      1,690,217
            300   Durham County, North Carolina, Enterprise System Revenue            6/13 at 100.00              AA        306,795
                     Bonds, Series 2002, 5.000%, 6/01/18 - MBIA Insured
          2,500   Kannapolis, North Carolina, Water and Sewerage System               2/12 at 101.00             AAA      2,035,249
                     Revenue Bonds, Series 2001B, 5.250%, 2/01/26 - FSA
                     Insured (Alternative Minimum Tax)
            500   Onslow County, North Carolina, Combined Enterprise System           6/14 at 100.00               A        463,899
                     Revenue Bonds, Series 2004B, 5.000%, 6/01/23 - SYNCORA
                     GTY Insured
          1,000   Orange Water and Sewerage Authority, North Carolina, Water          7/11 at 101.00             AA+        981,599
                     and Sewerage System Revenue Bonds, Series 2001, 5.000%,
                     7/01/26 - MBIA Insured Raleigh, North Carolina, Combined
                     Enterprise System Revenue Bonds, Series 2006A:
          4,950      5.000%, 3/01/31 (UB)                                             3/16 at 100.00             AAA      4,782,047
          3,000      5.000%, 3/01/36 (UB)                                             3/16 at 100.00             AAA      2,829,600
              5   Raleigh, North Carolina, Combined Enterprise System Revenue         3/16 at 100.00             AAA          4,148
                     Bonds, Series 2006A, Residuals Series II-R-645-2,
                     12.261%, 3/01/36 (IF)
          2,375   Winston-Salem, North Carolina, Water and Sewer System               6/17 at 100.00             AAA      2,231,075
                     Revenue Bonds, Series 2007A, 5.000%, 6/01/37 (UB)
------------------------------------------------------------------------------------------------------------------------------------
         19,160   Total Water and Sewer                                                                                  17,935,187
------------------------------------------------------------------------------------------------------------------------------------
$        87,345   Total Investments (cost $89,231,176) - 170.0%                                                          84,174,626
===============---------------------------------------------------------------------------------------------------------------------
                  Floating Rate Obligations - (15.1)%                                                                    (7,480,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Other Assets Less Liabilities - 1.7%                                                                      812,324
                  ------------------------------------------------------------------------------------------------------------------
                  Preferred Shares, at Liquidation Value - (56.6)% (5)                                                  (28,000,000)
                  ------------------------------------------------------------------------------------------------------------------
                  Net Assets Applicable to Common Shares - 100%                                                        $ 49,506,950
                  ==================================================================================================================


                                                                              47



NII | Nuveen North Carolina Dividend Advantage Municipal Fund 3 (continued)
    | Portfolio of INVESTMENTS November 30, 2008 (Unaudited)

(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 AGC,  AMBAC,  CIFG,  FGIC,  FSA,  MBIA,  RAAI and  SYNCORA as of
     November 30, 2008.  Please see the Portfolio  Manager's  Commentary  for an
     expanded  discussion of the affect on the Fund of changes to the ratings of
     certain bonds in the portfolio resulting from changes to the ratings of the
     underlying insurers both during the period and after 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)  Preferred Shares, at Liquidation Value as a percentage of Total Investments
     is 33.3%.

N/R  Not rated.

(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.

                                 See accompanying notes to financial statements.

48



| Statement of
| ASSETS & LIABILITIES
                                                   November 30, 2008 (Unaudited)



                                                             GEORGIA          GEORGIA            GEORGIA
                                                             PREMIUM         DIVIDEND           DIVIDEND
                                                              INCOME        ADVANTAGE        ADVANTAGE 2
                                                                (NPG)            (NZX)              (NKG)
---------------------------------------------------------------------------------------------------------
                                                                              
ASSETS

Investments, at value (cost $78,037,457,
   $42,178,053 and $94,459,130, respectively)        $    72,495,122  $    39,233,968  $      84,559,758
Cash                                                           4,536               --                 --
Receivables:
   Interest                                                1,412,265          722,309          1,570,564
   Investments sold                                          353,438          188,500            400,563
Other assets                                                   8,187              517                689
---------------------------------------------------------------------------------------------------------
   Total assets                                           74,273,548       40,145,294         86,531,574
---------------------------------------------------------------------------------------------------------

LIABILITIES

Cash overdraft                                                    --          183,453             75,438
Floating rate obligations                                         --               --                 --
Payables:
   Investments purchased                                     351,645          187,544            398,531
   Common share dividends                                    180,481          103,429            234,206
   Preferred share dividends                                   3,651            3,965              9,927
Accrued expenses:
   Management fees                                            39,861           16,414             34,991
   Other                                                      26,540           18,295             31,930
---------------------------------------------------------------------------------------------------------
   Total liabilities                                         602,178          513,100            785,023
---------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value                    27,800,000       15,000,000         33,000,000
---------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares               $    45,871,370  $    24,632,194  $      52,746,551
=========================================================================================================
Common shares outstanding                                  3,805,652        1,969,350          4,554,375
=========================================================================================================
Net asset value per Common share outstanding (net
   assets applicable to Common shares, divided by
   Common shares outstanding)                        $         12.05  $         12.51  $           11.58
=========================================================================================================

NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
---------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share              $        38,057  $        19,694  $          45,544
Paid-in surplus                                           52,378,183       27,902,247         64,267,727
Undistributed (Over-distribution of) net
   investment income                                        (101,036)         (90,100)          (193,072)
Accumulated net realized gain (loss) from
   investments and derivative transactions                  (901,499)        (255,562)        (1,474,276)
Net unrealized appreciation (depreciation) of
   investments and derivative transactions                (5,542,335)      (2,944,085)        (9,899,372)
---------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares               $    45,871,370  $    24,632,194  $      52,746,551
=========================================================================================================
Authorized shares:
   Common                                                  Unlimited        Unlimited          Unlimited
   Preferred                                               Unlimited        Unlimited          Unlimited
=========================================================================================================


                                 See accompanying notes to financial statements.

                                                                              49



| Statement of
| ASSETS & LIABILITIES (continued)
                                                   November 30, 2008 (Unaudited)



                                                 NORTH            NORTH            NORTH           NORTH
                                              CAROLINA         CAROLINA         CAROLINA        CAROLINA
                                               PREMIUM         DIVIDEND         DIVIDEND        DIVIDEND
                                                INCOME        ADVANTAGE      ADVANTAGE 2     ADVANTAGE 3
                                                  (NNC)            (NRB)            (NNO)           (NII)
---------------------------------------------------------------------------------------------------------
                                                                              
ASSETS
Investments, at value (cost
   $134,248,091, $54,415,511,
   $85,065,521 and $89,231,176,
   respectively)                       $   124,521,663  $    52,005,651  $    80,020,848  $   84,174,626
Cash                                                --          126,100               --              --
Receivables:
   Interest                                  2,450,241          895,823        1,440,837       1,413,572
   Investments sold                          1,649,902               --               --              --
Other assets                                     9,028            3,057            1,526             681
---------------------------------------------------------------------------------------------------------
   Total assets                            128,630,834       53,030,631       81,463,211      85,588,879
---------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft                                  91,401               --          275,723         317,961
Floating rate obligations                    3,545,000        6,235,000        4,805,000       7,480,000
Payables:
   Investments purchased                            --               --               --              --
   Common share dividends                      292,526          126,009          196,504         214,352
   Preferred share dividends                     6,145            3,686            8,422           6,076
Accrued expenses:
   Management fees                              67,129           19,289           28,394          31,410
   Other                                        49,029           18,531           28,992          32,130
---------------------------------------------------------------------------------------------------------
   Total liabilities                         4,051,230        6,402,515        5,343,035       8,081,929
---------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation
   value                                    46,800,000       17,000,000       28,000,000      28,000,000
---------------------------------------------------------------------------------------------------------
Net assets applicable to Common
   shares                              $    77,779,604  $    29,628,116  $    48,120,176  $   49,506,950
=========================================================================================================
Common shares outstanding                    6,351,838        2,265,345        3,749,642       3,933,190
=========================================================================================================
(Net asset value per Common share
   outstanding net assets applicable
   to Common shares, divided by
   Common shares outstanding)          $         12.25  $         13.08  $         12.83  $        12.59
=========================================================================================================

NET ASSETS APPLICABLE TO COMMON
   SHARES CONSIST OF:
---------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per
   share                               $        63,518  $        22,653  $        37,496  $       39,332
Paid-in surplus                             87,829,648       32,124,934       53,194,711      55,500,016
Undistributed (Over-distribution of)
   net investment income                      (144,532)         (67,004)         (78,397)       (188,349)
Accumulated net realized gain (loss)
   from investments and derivative
   transactions                               (242,602)         (42,607)          11,039        (787,499)
Net unrealized appreciation
   (depreciation) of investments and
   derivative transactions                  (9,726,428)      (2,409,860)      (5,044,673)     (5,056,550)
---------------------------------------------------------------------------------------------------------
Net assets applicable to Common
   shares                              $    77,779,604  $    29,628,116  $    48,120,176  $   49,506,950
=========================================================================================================
Authorized shares:
   Common                                    Unlimited        Unlimited        Unlimited       Unlimited
   Preferred                                 Unlimited        Unlimited        Unlimited       Unlimited
=========================================================================================================


                                 See accompanying notes to financial statements.

50



| Statement of
| OPERATIONS
                                  Six Months Ended November 30, 2008 (Unaudited)



                                                                GEORGIA          GEORGIA         GEORGIA
                                                                PREMIUM         DIVIDEND        DIVIDEND
                                                                 INCOME        ADVANTAGE     ADVANTAGE 2
                                                                   (NPG)            (NZX)           (NKG)
---------------------------------------------------------------------------------------------------------
                                                                                  
INVESTMENT INCOME                                        $    1,993,031   $    1,071,779   $   2,345,162
---------------------------------------------------------------------------------------------------------
EXPENSES
Management fees                                                 252,195          134,762         296,101
Preferred shares - auction fees                                  34,812           18,784          41,324
Preferred shares - dividend disbursing agent fees                 5,000            5,000           5,000
Shareholders' servicing agent fees and expenses                   2,069              251             295
Interest expense on floating rate obligations                    30,122           16,282          35,006
Custodian's fees and expenses                                     7,918            8,977          11,779
Trustees' fees and expenses                                         836              411             990
Professional fees                                                 6,659            5,844           7,481
Shareholders' reports - printing and mailing expenses            10,366            6,341          10,515
Stock exchange listing fees                                         269              139             322
Investor relations expense                                        5,408            2,857           5,995
Other expenses                                                    6,915            7,426           8,075
---------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
   expense reimbursement                                        362,569          207,074         422,883
   Custodian fee credit                                          (3,984)            (237)           (734)
   Expense reimbursement                                             --          (38,726)        (99,311)
---------------------------------------------------------------------------------------------------------
Net expenses                                                    358,585          168,111         322,838
---------------------------------------------------------------------------------------------------------
Net investment income                                         1,634,446          903,668       2,022,324
---------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
   Investments                                                 (829,687)        (417,109)       (881,907)
   Forward swaps                                                     --          153,554              --
   Futures                                                           --           53,752              --
Change in net unrealized appreciation (depreciation) of:
   Investments                                               (7,278,265)      (3,503,008)     (9,766,343)
   Forward swaps                                                     --         (139,708)             --
   Futures                                                           --               --              --
---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss)                      (8,107,952)      (3,852,519)    (10,648,250)
---------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income                                     (506,909)        (272,985)       (601,317)
---------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
   from distributions to Preferred shareholders                (506,909)        (272,985)       (601,317)
---------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to
   Common shares from operations                         $   (6,980,415)  $   (3,221,836)  $  (9,227,243)
=========================================================================================================


                                 See accompanying notes to financial statements.

                                                                              51



| Statement of
| OPERATIONS (continued)
                                  Six Months Ended November 30, 2008 (Unaudited)



                                                 NORTH            NORTH            NORTH           NORTH
                                              CAROLINA         CAROLINA         CAROLINA        CAROLINA
                                               PREMIUM         DIVIDEND         DIVIDEND        DIVIDEND
                                                INCOME        ADVANTAGE      ADVANTAGE 2     ADVANTAGE 3
                                                  (NNC)            (NRB)            (NNO)           (NII)
---------------------------------------------------------------------------------------------------------
                                                                               
INVESTMENT INCOME                       $    3,284,384   $    1,312,697   $    2,030,378   $   2,101,998
---------------------------------------------------------------------------------------------------------
EXPENSES
Management fees                                420,155          155,485          256,114         259,360
Preferred shares - auction fees                 58,604           21,288           35,062          35,062
Preferred shares - dividend
   disbursing agent fees                         5,000            5,000            5,000           5,000
Shareholders' servicing agent fees
   and expenses                                  3,881              229              331             368
Interest expense on floating rate
   obligations                                  47,785           79,774           62,425          96,306
Custodian's fees and expenses                   16,514            8,062           11,762          12,734
Trustees' fees and expenses                      1,476              519              878             922
Professional fees                                8,289            6,110            7,172           7,202
Shareholders' reports - printing and
   mailing expenses                             17,521            7,333           10,474          11,697
Stock exchange listing fees                      4,610              160              265             278
Investor relations expense                       9,218            3,390            5,487           5,691
Other expenses                                   7,561            7,572            7,963           7,875
---------------------------------------------------------------------------------------------------------
Total expenses before custodian fee
   credit and expense reimbursement            600,614          294,922          402,933         442,495
   Custodian fee credit                           (210)          (2,017)          (1,736)           (158)
   Expense reimbursement                            --          (36,392)         (79,926)        (86,804)
---------------------------------------------------------------------------------------------------------
Net expenses                                   600,404          256,513          321,271         355,533
---------------------------------------------------------------------------------------------------------
Net investment income                        2,683,980        1,056,184        1,709,107       1,746,465
---------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
   Investments                                  18,649           52,774           44,016         109,318
   Forward swaps                                    --               --               --              --
   Futures                                     115,239               --          117,502              --
Change in net unrealized appreciation (depreciation) of:
   Investments                             (11,120,670)      (3,288,249)      (6,298,548)     (6,107,054)
   Forward swaps                                    --               --               --              --
   Futures                                       5,056               --            5,332              --
---------------------------------------------------------------------------------------------------------
Net realized and unrealized gain
   (loss)                                  (10,981,726)      (3,235,475)      (6,131,698)     (5,997,736)
---------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED
   SHAREHOLDERS
From net investment income                    (853,356)        (306,150)        (510,209)       (510,402)
---------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
   Common shares from distributions
   to Preferred shareholders                  (853,356)        (306,150)        (510,209)       (510,402)
---------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
   assets applicable to Common
   shares from operations               $   (9,151,102)  $   (2,485,441)  $   (4,932,800)  $  (4,761,673)
=========================================================================================================


                                 See accompanying notes to financial statements.

52



| Statement of
| CHANGES in NET ASSETS (Unaudited)



                                                           GEORGIA                            GEORGIA
                                                     PREMIUM INCOME (NPG)             DIVIDEND ADVANTAGE (NZX)
                                               --------------------------------   ---------------------------------
                                                   SIX MONTHS              YEAR        SIX MONTHS              YEAR
                                                        ENDED             ENDED             ENDED             ENDED
                                                     11/30/08           5/31/08          11/30/08           5/31/08
--------------------------------------------------------------------------------------------------------------------
                                                                                        
OPERATIONS
Net investment income                          $    1,634,446   $     3,214,441   $       903,668   $     1,781,307
Net realized gain (loss) from:
   Investments                                       (829,687)          107,414          (417,109)          193,600
   Forward swaps                                           --            23,130           153,554            26,220
   Futures                                                 --                --            53,752                --
Change in net unrealized appreciation
   (depreciation) of:
   Investments                                     (7,278,265)       (1,242,529)       (3,503,008)         (709,956)
   Forward swaps                                           --                --          (139,708)          169,293
   Futures                                                 --                --                --                --
Distributions to Preferred Shareholders:
From net investment income                           (506,909)         (916,555)         (272,985)         (512,754)
From accumulated net realized gains                        --           (55,745)               --                --
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
   applicable to Common shares from
   operations                                      (6,980,415)        1,130,156        (3,221,836)          947,710
--------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
   From net investment income                      (1,158,821)       (2,317,641)         (643,977)       (1,293,795)
   From accumulated net realized gains                     --          (161,360)               --                --
--------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
   Common shares from distributions to Common
   shareholders                                    (1,158,821)       (2,479,001)         (643,977)       (1,293,795)
--------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to
   shareholders due to reinvestment of
   distributions                                           --                --                --            12,932
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
   applicable to Common shares from capital
   share transactions                                      --                --                --            12,932
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
   applicable to Common shares                     (8,139,236)       (1,348,845)       (3,865,813)         (333,153)
Net assets applicable to Common shares at
   the beginning of period                         54,010,606        55,359,451        28,498,007        28,831,160
--------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at
   the end of period                           $   45,871,370   $    54,010,606   $    24,632,194   $    28,498,007
====================================================================================================================
Undistributed (Over-distribution of)net
   investment income at the end of period      $     (101,036)  $       (69,752)  $       (90,100)  $       (76,806)
====================================================================================================================


                                                                GEORGIA
                                                        DIVIDEND ADVANTAGE 2 (NKG)
                                                     --------------------------------
                                                         SIX MONTHS              YEAR
                                                              ENDED             ENDED
                                                           11/30/08           5/31/08
--------------------------------------------------------------------------------------
                                                                
OPERATIONS
Net investment income                                $    2,022,324   $     4,014,670
Net realized gain (loss) from:
   Investments                                             (881,907)           63,300
   Forward swaps                                                 --                --
   Futures                                                       --                --
Change in net unrealized appreciation
   (depreciation) of:
   Investments                                           (9,766,343)       (2,367,070)
   Forward swaps                                                 --                --
   Futures                                                       --                --
Distributions to Preferred Shareholders:
   From net investment income                              (601,317)       (1,165,015)
   From accumulated net realized gains                           --                --
--------------------------------------------------------------------------------------
Net increase (decrease) in net assets
   applicable to Common shares from
   operations                                            (9,227,243)          545,885
--------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
   From net investment income                            (1,427,797)       (2,923,728)
   From accumulated net realized gains                           --                --
--------------------------------------------------------------------------------------
Decrease in net assets applicable to
   Common shares from distributions to Common
   shareholders                                          (1,427,797)       (2,923,728)
--------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to
   shareholders due to reinvestment of
   distributions                                                 --             9,872
--------------------------------------------------------------------------------------
Net increase (decrease) in net assets
   applicable to Common shares from capital
   share transactions                                            --             9,872
--------------------------------------------------------------------------------------
Net increase (decrease) in net assets
   applicable to Common shares                          (10,655,040)       (2,367,971)
Net assets applicable to Common shares at
   the beginning of period                               63,401,591        65,769,562
--------------------------------------------------------------------------------------
Net assets applicable to Common shares at
   the end of period                                 $   52,746,551   $    63,401,591
======================================================================================
Undistributed (Over-distribution of)net
   investment income at the end of period            $     (193,072)  $      (186,282)
======================================================================================


                                 See accompanying notes to financial statements.

                                                                              53



| Statement of
| CHANGES in NET ASSETS (continued) (Unaudited)



                                                            NORTH CAROLINA                    NORTH CAROLINA
                                                          PREMIUM INCOME (NNC)            DIVIDEND ADVANTAGE (NRB)
                                                     -------------------------------   ------------------------------
                                                         SIX MONTHS             YEAR       SIX MONTHS            YEAR
                                                              ENDED            ENDED            ENDED           ENDED
                                                           11/30/08          5/31/08         11/30/08         5/31/08
----------------------------------------------------------------------------------------------------------------------
                                                                                            
OPERATIONS
Net investment income                                $    2,683,980   $    5,350,912   $    1,056,184   $   2,103,835
Net realized gain (loss) from:
   Investments                                               18,649         (291,586)          52,774         (66,369)
   Forward swaps                                                 --               --               --         (24,224)
   Futures                                                  115,239          (13,472)              --              --
Change in net unrealized appreciation
   (depreciation) of:
   Investments                                          (11,120,670)      (1,880,556)      (3,288,249)       (402,449)
   Forward swaps                                                 --               --               --          17,297
   Futures                                                    5,056           (5,056)              --              --
Distributions to Preferred Shareholders:
   From net investment income                              (853,356)      (1,480,115)        (306,150)       (541,052)
   From accumulated net realized gains                           --          (82,405)              --         (22,406)
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
   to Common shares from operations                      (9,151,102)       1,597,722       (2,485,441)      1,064,632
----------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income                               (1,896,024)      (3,734,882)        (781,271)     (1,567,958)
From accumulated net realized gains                              --         (227,396)              --         (76,483)
----------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
   Common shares from distributions to Common
   shareholders                                          (1,896,024)      (3,962,278)        (781,271)     (1,644,441)
----------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to
   shareholders due to reinvestment of
   distributions                                                 --               --           27,287          38,805
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
   to Common shares from capital share
   transactions                                                  --               --           27,287          38,805
----------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
   to Common shares                                     (11,047,126)      (2,364,556)      (3,239,425)       (541,004)
Net assets applicable to Common shares at the
   beginning of period                                   88,826,730       91,191,286       32,867,541      33,408,545
----------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the end
   of period                                         $   77,779,604   $   88,826,730   $   29,628,116   $  32,867,541
======================================================================================================================
Undistributed (Over-distribution of) net
   investment income at the end of period            $     (144,532)  $      (79,132)  $      (67,004)  $     (35,767)
======================================================================================================================


                                 See accompanying notes to financial statements.

54





                                                            NORTH CAROLINA                   NORTH CAROLINA
                                                      DIVIDEND ADVANTAGE 2 (NNO)       DIVIDEND ADVANTAGE 3 (NII)
                                                    -----------------------------   -------------------------------
                                                       SIX MONTHS            YEAR       SIX MONTHS             YEAR
                                                            ENDED           ENDED            ENDED            ENDED
                                                         11/30/08         5/31/08         11/30/08          5/31/08
--------------------------------------------------------------------------------------------------------------------
                                                                                         
OPERATIONS
Net investment income                               $   1,709,107   $   3,401,693   $    1,746,465   $    3,466,161
Net realized gain (loss) from:
   Investments                                             44,016         (69,239)         109,318         (212,152)
   Forward swaps                                               --              --               --               --
   Futures                                                117,502         (12,248)              --               --
Change in net unrealized appreciation
   (depreciation) of:
   Investments                                         (6,298,548)       (822,034)      (6,107,054)        (750,196)
   Forward swaps                                               --              --               --               --
   Futures                                                  5,332          (5,332)              --               --
Distributions to Preferred Shareholders:
   From net investment income                            (510,209)       (922,943)        (510,402)        (907,982)
   From accumulated net realized gains                         --         (79,654)              --               --
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
   to Common shares from operations                    (4,932,800)      1,490,243       (4,761,673)       1,595,831
--------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income                             (1,186,762)     (2,369,741)      (1,297,816)      (2,571,479)
From accumulated net realized gains                            --        (239,227)              --               --
--------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
   Common shares from distributions to Common
   shareholders                                        (1,186,762)     (2,608,968)      (1,297,816)      (2,571,479)
--------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to
   shareholders due to reinvestment of
   distributions                                               --           9,816           11,874           18,864
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
   to Common shares from capital share
   transactions                                                --           9,816           11,874           18,864
--------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable
   to Common shares                                    (6,119,562)     (1,108,909)      (6,047,615)        (956,784)
Net assets applicable to Common shares at the
   beginning of period                                 54,239,738      55,348,647       55,554,565       56,511,349
--------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares at the
   end of period                                    $  48,120,176   $  54,239,738   $   49,506,950   $   55,554,565
===================================================================================================================
Undistributed (Over-distribution of)net
   investment income at the end of period           $     (78,397)  $     (90,533)  $     (188,349)  $     (126,596)
===================================================================================================================


                                 See accompanying notes to financial statements.

                                                                              55



| Statement of
| CASH FLOWS Six Months Ended November 30, 2008 (Unaudited)



                                                                                   NORTH           NORTH
                                                                                CAROLINA        CAROLINA
                                                                                DIVIDEND        DIVIDEND
                                                                               ADVANTAGE     ADVANTAGE 3
                                                                                    (NRB)           (NII)
---------------------------------------------------------------------------------------------------------
                                                                                     
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
  OPERATIONS                                                              $   (2,485,441)  $  (4,761,673)
Adjustments to reconcile the net increase (decrease) in net assets
   applicable to Common shares from operations to net cash provided by
   (used in) operating activities:
   Purchases of investments                                                   (2,442,912)     (1,445,400)
   Proceeds from sales and maturities of investments                           2,835,350       1,526,320
   Proceeds from (Purchase of) short-term investments, net                       325,000         850,000
   Amortization (Accretion) of premiums and discounts, net                        70,650         140,629
   (Increase) Decrease in receivable for interest                                 (8,755)        (44,415)
   (Increase) Decrease in other assets                                             4,712           3,950
   Increase (Decrease) in payable for investments purchased                     (571,069)     (1,106,139)
   Increase (Decrease) in payable for Preferred share dividends                   (1,135)            186
   Increase (Decrease) in accrued management fees                                 (1,222)          3,405
   Increase (Decrease) in accrued other liabilities                                  374           7,267
   Net realized (gain) loss from investments                                     (52,774)       (109,318)
   Change in net unrealized (appreciation) depreciation of investments         3,288,249       6,107,054
---------------------------------------------------------------------------------------------------------
   Net cash provided by (used in) operating activities                           961,027       1,171,866
---------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase (Decrease) in cash overdraft balance                                          --         309,705
Increase (Decrease) in floating rate obligations                                (115,000)       (200,000)
Cash distributions paid to Common shareholders                                  (751,781)     (1,281,571)
---------------------------------------------------------------------------------------------------------
   Net cash provided by (used in) financing activities                          (866,781)     (1,171,866)
---------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH                                                   94,246              --
Cash at the beginning of period                                                   31,854              --
---------------------------------------------------------------------------------------------------------
CASH AT THE END OF PERIOD                                                 $      126,100   $          --
=========================================================================================================


SUPPLEMENTAL  DISCLOSURE  OF CASH FLOW  INFORMATION
Cash paid for interest on floating rate  obligations was $79,774 and $96,306 for
North Carolina Dividend  Advantage (NRB) and North Carolina Dividend Advantage 3
(NII), respectively Non-cash financing activities not included herein consist of
reinvestments  of Common  share  distributions  of $27,287 and $11,874 for North
Carolina Dividend Advantage (NRB) and North Carolina Dividend Advantage 3 (NII),
respectively.

                                 See accompanying notes to financial statements.

56



| Notes to
| FINANCIAL STATEMENTS (Unaudited)

1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES

The funds  covered in this  report and their  corresponding  Common  share stock
exchange symbols are Nuveen Georgia Premium Income Municipal Fund (NPG),  Nuveen
Georgia  Dividend  Advantage  Municipal  Fund  (NZX),  Nuveen  Georgia  Dividend
Advantage Municipal Fund 2 (NKG), Nuveen North Carolina Premium Income Municipal
Fund (NNC),  Nuveen North  Carolina  Dividend  Advantage  Municipal  Fund (NRB),
Nuveen North Carolina Dividend Advantage Municipal Fund 2 (NNO) and Nuveen North
Carolina Dividend Advantage Municipal Fund 3 (NII) (collectively,  the "Funds").
Common shares of Georgia Premium Income (NPG), Georgia Dividend Advantage (NZX),
Georgia Dividend  Advantage 2 (NKG),  North Carolina  Dividend  Advantage (NRB),
North Carolina Dividend  Advantage 2 (NNO) and North Carolina Dividend Advantage
3 (NII) are traded on the American  Stock  Exchange while Common shares of North
Carolina  Premium  Income (NNC) are traded on the New York Stock  Exchange.  The
Funds are registered  under the Investment  Company Act of 1940, as amended,  as
closed-end management investment companies.

Each Fund seeks to provide  current income exempt from both regular  federal and
designated state income taxes by investing primarily in a diversified  portfolio
of municipal obligations issued by state and local government authorities within
a single state or certain U.S. territories.

The following is a summary of significant  accounting  policies  followed by the
Funds in the preparation of their  financial  statements in accordance with U.S.
generally accepted accounting principles.

Investment Valuation
The prices of municipal bonds in each Fund's  investment  portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When market price
quotes  are not  readily  available  (which is  usually  the case for  municipal
securities),  the pricing  service may  establish  fair value based on yields or
prices of municipal bonds of comparable quality, type of issue, coupon, maturity
and  rating,  indications  of value  from  securities  dealers,  evaluations  of
anticipated  cash flows or collateral and general market  conditions.  Prices of
forward swap  contracts  are also  provided by an  independent  pricing  service
approved by each Fund's Board of Trustees.  Futures  contracts  are valued using
the closing settlement price, or, in the absence of such a price, at the mean of
the bid and asked prices. If the pricing service is unable to supply a price for
an investment or derivative instrument, each Fund may use market quotes provided
by major broker/dealers in such investments. If it is determined that the market
price  for  an   investment  or  derivative   instrument   is   unavailable   or
inappropriate,  the  Board  of  Trustees  of the  Funds,  or its  designee,  may
establish fair value in accordance with procedures  established in good faith by
the Board of Trustees.  Temporary  investments in securities  that have variable
rate and demand features qualifying them as short-term investments are valued at
amortized cost, which approximates value.

Investment Transactions
Investment  transactions are recorded on a trade date basis.  Realized gains and
losses from transactions are determined on the specific  identification  method.
Investments purchased on a when-issued/delayed  delivery basis may have extended
settlement  periods.   Any  investments  so  purchased  are  subject  to  market
fluctuation  during this  period.  The Funds have  instructed  the  custodian to
segregate  assets  with a  current  value at least  equal to the  amount  of the
when-issued/delayed  delivery purchase commitments.  At November 30, 2008, there
were no such outstanding purchase commitments in any of the Funds.

Investment Income
Interest  income,  which includes the  amortization of premiums and accretion of
discounts for financial  reporting  purposes,  is recorded on an accrual  basis.
Investment income also includes paydown gains and losses, if any.

                                                                              57



| Notes to
| FINANCIAL STATEMENTS (continued) (Unaudited)

Income Taxes
Each Fund is a separate  taxpayer  for federal  income tax  purposes.  Each Fund
intends to distribute  substantially  all of its net  investment  income and net
capital gains to shareholders  and to otherwise  comply with the requirements of
Subchapter M of the Internal  Revenue Code  applicable  to regulated  investment
companies.  Therefore, no federal income tax provision is required. Furthermore,
each Fund  intends  to  satisfy  conditions  which  will  enable  interest  from
municipal securities,  which is exempt from regular federal and designated state
income taxes, to retain such tax-exempt  status when distributed to shareholders
of the Funds. Net realized capital gains and ordinary income  distributions paid
by the Funds are subject to federal taxation.

Effective  November 30, 2007, the Funds adopted Financial  Accounting  Standards
Board (FASB)  Interpretation No. 48 "Accounting for Uncertainty in Income Taxes"
(FIN 48). FIN 48 provides  guidance for how uncertain  tax  positions  should be
recognized,  measured,  presented and disclosed in the financial statements. FIN
48 requires the affirmative  evaluation of tax positions taken or expected to be
taken in the course of preparing the Funds' tax returns to determine  whether it
is "more-likely-than-not"  (i.e., a greater than 50-percent likelihood) of being
sustained by the applicable tax authority.  Tax positions not deemed to meet the
more-likely-than-not threshold may result in a tax expense in the current year.

Implementation  of FIN 48 required  management  of the Funds to analyze all open
tax  years,   as  defined  by  the  statute  of   limitations,   for  all  major
jurisdictions,  which includes  federal and certain  states.  Open tax years are
those that are open for examination by taxing authorities  (i.e.,  generally the
last four tax year ends and the interim tax period since  then).  The Funds have
no examinations in progress.

For all open tax years and all major taxing jurisdictions through the end of the
reporting  period,  management of the Funds has reviewed all tax positions taken
or  expected  to be taken in the  preparation  of the  Funds'  tax  returns  and
concluded  the adoption of FIN 48 resulted in no impact to the Funds' net assets
or results of  operations  as of and during the six months  ended  November  30,
2008.

The  Funds are also not aware of any tax  positions  for which it is  reasonably
possible that the total amounts of unrecognized tax benefits will  significantly
change in the next twelve months.

Dividends and Distributions to Common Shareholders
Dividends  from  tax-exempt  net  investment  income are declared  monthly.  Net
realized capital gains and/or market discount from investment  transactions,  if
any, are distributed to shareholders  at least  annually.  Furthermore,  capital
gains are  distributed  only to the extent they exceed  available  capital  loss
carryforwards.

Distributions to Common  shareholders of tax-exempt net investment  income,  net
realized  capital  gains  and/or  market  discount,  if any, are recorded on the
ex-dividend  date.  The amount and timing of  distributions  are  determined  in
accordance  with  federal  income tax  regulations,  which may differ  from U.S.
generally accepted accounting principles.

58



Preferred Shares
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage.  Each Fund's Preferred shares
are issued in one Series.  The dividend rate paid by the Funds on each Series is
determined every seven days, pursuant to a dutch auction process overseen by the
auction agent, and is payable at the end of each rate period. As of November 30,
2008, the number of Preferred shares outstanding for each Fund is as follows:



                                                               NORTH       NORTH         NORTH         NORTH
                        GEORGIA     GEORGIA       GEORGIA   CAROLINA    CAROLINA      CAROLINA      CAROLINA
                        PREMIUM    DIVIDEND      DIVIDEND    PREMIUM    DIVIDEND      DIVIDEND      DIVIDEND
                         INCOME   ADVANTAGE   ADVANTAGE 2     INCOME   ADVANTAGE   ADVANTAGE 2   ADVANTAGE 3
                           (NPG)       (NZX)         (NKG)      (NNC)       (NRB)         (NNO)         (NII)
------------------------------------------------------------------------------------------------------------
                                                                                  
Number of shares:
   Series M                  --         600            --         --          --            --            --
   Series T                  --          --            --         --         680            --            --
   Series W                  --          --            --         --          --            --         1,120
   Series TH              1,112          --            --      1,872          --            --            --
   Series F                  --          --         1,320         --          --         1,120            --
============================================================================================================


Beginning in February 2008, more shares for sale were submitted in the regularly
scheduled  auctions for the Preferred shares issued by the Funds than there were
offers to buy. This meant that these  auctions  "failed to clear," and that many
Preferred  shareholders  who wanted to sell their shares in these  auctions were
unable to do so.  Preferred  shareholders  unable to sell their shares  received
distributions  at the "maximum rate" applicable to failed auctions as calculated
in accordance with the pre-established terms of the Preferred shares.

These  developments  have  generally  not affected the  portfolio  management or
investment  policies of these Funds.  However,  one implication of these auction
failures for Common shareholders is that the Funds' cost of leverage will likely
be  higher,  at least  temporarily,  than it  otherwise  would have been had the
auctions continued to be successful. As a result, the Funds' future Common share
earnings may be lower than they otherwise would have been.

On June 11, 2008, Nuveen Investments, Inc. ("Nuveen") announced the Fund Board's
approval of plans to use tender option bonds (TOBs), also known as "floaters" or
floating  rate  obligations,  to  refinance  a portion of the  municipal  funds'
outstanding  Preferred  shares,  whose  auctions  have been  failing for several
months.  The plan  included  an  initial  phase of  approximately  $1 billion in
forty-one funds. These Funds did not redeem any of their Preferred shares during
the six months ended November, 2008.

Inverse Floating Rate Securities
Each Fund is  authorized  to invest in  inverse  floating  rate  securities.  An
inverse  floating  rate  security is created by  depositing  a  municipal  bond,
typically with a fixed interest rate,  into a special purpose trust created by a
broker-dealer.  In turn,  this trust (a) issues floating rate  certificates,  in
face amounts equal to some fraction of the deposited bond's par amount or market
value, that typically pay short-term tax-exempt interest rates to third parties,
and (b)  issues to a  long-term  investor  (such as one of the Funds) an inverse
floating rate certificate  (sometimes  referred to as an "inverse floater") that
represents all remaining or residual  interest in the trust. The income received
by the inverse floater holder varies  inversely with the short-term rate paid to
the floating rate certificates'  holders,  and in most circumstances the inverse
floater  holder  bears  substantially  all of  the  underlying  bond's  downside
investment  risk  and  also  benefits   disproportionately  from  any  potential
appreciation of the underlying  bond's value.  The price of an inverse  floating
rate security will be more volatile than that of the underlying bond because the
interest  rate is dependent on not only the fixed coupon rate of the  underlying
bond but also on the short-term interest paid on the floating rate certificates,
and because the inverse  floating  rate security  essentially  bears the risk of
loss of the greater face value of the underlying bond.

                                                                              59



| Notes to
| FINANCIAL STATEMENTS (continued) (Unaudited)

A Fund may  purchase an inverse  floating  rate  security in a secondary  market
transaction  without  first  owning  the  underlying  bond  (referred  to  as an
"externally-deposited   inverse  floater"),   or  instead  by  first  selling  a
fixed-rate  bond to a  broker-dealer  for deposit into the special purpose trust
and  receiving  in turn the  residual  interest in the trust  (referred  to as a
"self-deposited inverse floater").  The inverse floater held by a Fund gives the
Fund the right (a) to cause the holders of the  floating  rate  certificates  to
tender  their notes at par, and (b) to have the broker  transfer the  fixed-rate
bond held by the trust to the Fund,  thereby collapsing the trust. An investment
in an  externally-deposited  inverse  floater is  identified in the Portfolio of
Investments  as an  "Inverse  floating  rate  investment".  An  investment  in a
self-deposited  inverse  floater is accounted for as a financing  transaction in
accordance  with Statement of Financial  Accounting  Standards No. 140 (SFAS No.
140)   "Accounting   for  Transfers  and  Servicing  of  Financial   Assets  and
Extinguishment of Liabilities".  In such instances,  a fixed-rate bond deposited
into a special purpose trust is identified in the Portfolio of Investments as an
"Underlying  bond of an inverse  floating rate trust",  with the Fund accounting
for the short-term  floating rate certificates  issued by the trust as "Floating
rate obligations" on the Statement of Assets and Liabilities.  In addition,  the
Fund reflects in Investment  Income the entire  earnings of the underlying  bond
and the related  interest  paid to the holders of the  short-term  floating rate
certificates is included as "Interest  expense on floating rate  obligations" on
the Statement of Operations.

During  the  six  months  ended  November  30,  2008,   each  Fund  invested  in
externally-deposited inverse floaters and/or self-deposited inverse floaters.

Each Fund may also enter into shortfall and  forbearance  agreements  (sometimes
referred to as a "recourse  trust" or "credit  recovery swap") (such  agreements
referred to herein as "Recourse  Trusts") with a  broker-dealer  by which a Fund
agrees  to  reimburse  the  broker-dealer,  in  certain  circumstances,  for the
difference  between the  liquidation  value of the  fixed-rate  bond held by the
trust and the liquidation value of the floating rate certificates  issued by the
trust plus any  shortfalls in interest  cash flows.  Under these  agreements,  a
Fund's  potential  exposure  to losses  related  to or on inverse  floaters  may
increase beyond the value of a Fund's inverse floater  investments as a Fund may
potentially  be liable to fulfill  all amounts  owed to holders of the  floating
rate certificates.  At period end, any such shortfall is included as "Unrealized
depreciation on Recourse Trusts" on the Statement of Assets and Liabilities.

At November  30, 2008,  the Funds were not invested in any  externally-deposited
Recourse Trusts.



                                                                       NORTH        NORTH         NORTH        NORTH
                             GEORGIA      GEORGIA       GEORGIA     CAROLINA     CAROLINA      CAROLINA     CAROLINA
                             PREMIUM     DIVIDEND      DIVIDEND      PREMIUM     DIVIDEND      DIVIDEND     DIVIDEND
                              INCOME    ADVANTAGE   ADVANTAGE 2       INCOME    ADVANTAGE   ADVANTAGE 2  ADVANTAGE 3
                                (NPG)        (NZX)         (NKG)        (NNC)        (NRB)         (NNO)        (NII)
--------------------------------------------------------------------------------------------------------------------
                                                                                    
Maximum exposure         $        --  $      --    $         --  $        --  $        --  $         --  $        --
====================================================================================================================


The average  floating rate  obligations  outstanding and average annual interest
rate and fees related to  self-deposited  inverse floaters during the six months
ended November 30, 2008, were as follows:



                                                                       NORTH        NORTH         NORTH        NORTH
                             GEORGIA      GEORGIA       GEORGIA     CAROLINA     CAROLINA      CAROLINA     CAROLINA
                             PREMIUM     DIVIDEND      DIVIDEND      PREMIUM     DIVIDEND      DIVIDEND     DIVIDEND
                              INCOME    ADVANTAGE   ADVANTAGE 2       INCOME    ADVANTAGE   ADVANTAGE 2  ADVANTAGE 3
                                (NPG)        (NZX)         (NKG)        (NNC)        (NRB)         (NNO)        (NII)
---------------------------------------------------------------------------------------------------------------------
                                                                                    
Average floating rate
   obligations           $ 1,925,820  $ 1,040,984  $  2,238,115  $ 3,797,186  $ 6,324,235  $  4,952,432  $ 7,637,377
Average annual interest
   rate and fees                3.12%        3.12%         3.12%        2.51%        2.52%         2.51%        2.52%
=====================================================================================================================


60



Forward Swap Transactions Each
Fund is authorized to invest in forward  interest rate swap  transactions.  Each
Fund's use of forward  interest rate swap  transactions  is intended to help the
Fund manage its overall  interest rate  sensitivity,  either  shorter or longer,
generally to more closely align the Fund's interest rate  sensitivity  with that
of the broader municipal market. Forward interest rate swap transactions involve
each Fund's  agreement  with a  counterparty  to pay, in the future,  a fixed or
variable  rate  payment  in  exchange  for the  counterparty  paying  the Fund a
variable  or fixed  rate  payment,  the  accruals  for  which  would  begin at a
specified date in the future (the "effective  date").  The amount of the payment
obligation is based on the notional  amount of the forward swap contract and the
termination date of the swap (which is akin to a bond's maturity).  The value of
the Fund's swap  commitment  would increase or decrease  based  primarily on the
extent to which  long-term  interest  rates for bonds  having a maturity  of the
swap's  termination date increases or decreases.  The Funds may terminate a swap
contract prior to the effective  date, at which point a realized gain or loss is
recognized.  When a forward swap is terminated,  it ordinarily  does not involve
the delivery of securities or other underlying  assets or principal,  but rather
is settled in cash on a net basis. Each Fund intends,  but is not obligated,  to
terminate its forward swaps before the effective date. Accordingly,  the risk of
loss with respect to the swap  counterparty  on such  transactions is limited to
the credit risk associated  with a counterparty  failing to honor its commitment
to pay any  realized  gain to the Fund upon  termination.  To reduce such credit
risk, all  counterparties  are required to pledge collateral daily (based on the
daily valuation of each swap) on behalf of each Fund with a value  approximately
equal to the amount of any  unrealized  gain above a  pre-determined  threshold.
Reciprocally,  when any of the Funds have an unrealized loss on a swap contract,
the  Funds  have  instructed  the  custodian  to  pledge  assets of the Funds as
collateral with a value approximately equal to the amount of the unrealized loss
above  a  pre-determined   threshold.   Collateral  pledges  are  monitored  and
subsequently  adjusted if and when the swap valuations  fluctuate,  either up or
down, by at least the predetermined threshold amount. Georgia Dividend Advantage
(NZX) invested in forward interest rate swap transactions  during the six months
ended November 30, 2008.

Futures Contracts
Each Fund is  authorized  to invest in futures  contracts.  Upon entering into a
futures  contract,  a Fund is required  to deposit  with the broker an amount of
cash or  liquid  securities  equal to a  specified  percentage  of the  contract
amount. This is known as the "initial margin."  Subsequent payments  ("variation
margin")  are made or  received  by a Fund  each  day,  depending  on the  daily
fluctuation of the value of the contract.

During the  period the  futures  contract  is open,  changes in the value of the
contract are recognized as an unrealized gain or loss by  "marking-to-market" on
a daily basis to reflect the changes in market value of the  contract.  When the
contract is closed or expired,  a Fund records a realized  gain or loss equal to
the  difference  between the value of the contract on the closing date and value
of the contract when  originally  entered into. Cash held by the broker to cover
initial margin requirements on open futures contracts,  if any, is recognized on
the Statement of Assets and Liabilities.  Additionally,  the Statement of Assets
and Liabilities  reflects a receivable or payable for the variation margin, when
applicable.  Georgia  Dividend  Advantage  (NZX),  North Carolina Premium Income
(NNC)  and  North  Carolina  Dividend  Advantage  2 (NNO)  invested  in  futures
contracts during the six months ended November 30, 2008.

Risks of investments in futures contracts include the possible adverse movement
of the securities or indices underlying the contracts, the possibility that
there may not be a liquid secondary market for the contracts and/or that a
change in the value of the contract may not correlate with a change in the value
of the underlying securities or indices.

Zero Coupon Securities
Each Fund is  authorized  to 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 Portfolios of Investments
with a 0.000% 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.

Custodian Fee Credit
Each Fund has an arrangement  with the custodian bank whereby certain  custodian
fees and  expenses  are  reduced by net  credits  earned on each  Fund's cash on
deposit with the bank. Such deposit arrangements are an alternative to overnight
investments.  Credits for cash balances may be offset by charges for any days on
which a Fund overdraws its account at the custodian bank.

                                                                              61



| Notes to
| FINANCIAL STATEMENTS (continued) (Unaudited)

Indemnifications
Under the Funds'  organizational  documents,  their  Officers  and  Trustees are
indemnified  against certain liabilities arising out of the performance of their
duties to the Funds.  In addition,  in the normal course of business,  the Funds
enter into contracts that provide general indemnifications to other parties. The
Funds'  maximum  exposure  under  these  arrangements  is  unknown as this would
involve  future  claims  that may be made  against  the Funds  that have not yet
occurred.  However,  the Funds have not had prior  claims or losses  pursuant to
these contracts and expect the risk of loss to be remote.

Use of Estimates
The  preparation  of financial  statements  in  conformity  with U.S.  generally
accepted  accounting  principles  requires  management  to  make  estimates  and
assumptions  that affect the reported  amounts of assets and  liabilities at the
date of the  financial  statements  and the reported  amounts of  increases  and
decreases in net assets  applicable to Common shares from operations  during the
reporting period. Actual results may differ from those estimates.

2. FAIR VALUE MEASUREMENTS

During the current fiscal period,  the Funds adopted the provisions of Statement
of  Financial   Accounting   Standards  No.  157  (SFAS  No.  157)  "Fair  Value
Measurements."  SFAS No. 157 defines  fair value,  establishes  a framework  for
measuring fair value in generally accepted  accounting  principles,  and expands
disclosure  about  fair value  measurements.  In  determining  the value of each
Fund's  investments  various inputs are used. These inputs are summarized in the
three broad levels listed below:

      Level 1 - Quoted prices in active markets for identical securities.

      Level 2 - Other significant observable inputs (including quoted prices for
                similar securities,  interest rates,  prepayment speeds,  credit
                risk, etc.).

      Level 3 - Significant    unobservable   inputs   (including   management's
                assumptions in determining the fair value of investments).

The inputs or methodology  used for valuing  securities are not an indication of
the risk associated with investing in those securities.

The following is a summary of each Fund's fair value measurements as of November
30, 2008:



GEORGIA PREMIUM INCOME (NPG)                LEVEL 1         LEVEL 2   LEVEL 3           TOTAL
---------------------------------------------------------------------------------------------
                                                                    
Investments                                 $    --   $  72,495,122   $    --   $  72,495,122
=============================================================================================
GEORGIA DIVIDEND ADVANTAGE (NZX)            LEVEL 1         LEVEL 2   LEVEL 3           TOTAL
---------------------------------------------------------------------------------------------
Investments                                 $    --   $  39,233,968   $    --   $  39,233,968
=============================================================================================
GEORGIA DIVIDEND ADVANTAGE 2 (NKG)          LEVEL 1         LEVEL 2   LEVEL 3           TOTAL
---------------------------------------------------------------------------------------------
Investments                                 $    --   $  84,559,758   $    --   $  84,559,758
=============================================================================================
NORTH CAROLINA PREMIUM INCOME (NNC)         LEVEL 1         LEVEL 2   LEVEL 3           TOTAL
---------------------------------------------------------------------------------------------
Investments                                 $    --   $ 124,521,663   $    --   $ 124,521,663
=============================================================================================
NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)     LEVEL 1         LEVEL 2   LEVEL 3           TOTAL
---------------------------------------------------------------------------------------------
Investments                                 $    --   $  52,005,651   $    --   $  52,005,651
=============================================================================================
NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)   LEVEL 1         LEVEL 2   LEVEL 3           TOTAL
---------------------------------------------------------------------------------------------
Investments                                 $    --   $  80,020,848   $    --   $  80,020,848
=============================================================================================
NORTH CAROLINA DIVIDEND ADVANTAGE 3 (NII)   LEVEL 1         LEVEL 2   LEVEL 3           TOTAL
---------------------------------------------------------------------------------------------
Investments                                 $    --   $  84,174,626   $    --   $  84,174,626
=============================================================================================


62



3. FUND SHARES
Common Shares
On July 30, 2008,  the Funds' Board of Trustees  approved an  open-market  share
repurchase  program  under which each Fund may  repurchase an aggregate of up to
approximately 10% of its outstanding Common shares. The Funds did not repurchase
any of their Common shares during the six months ended November 30, 2008.

Transactions in Common shares were as follows:



                                                       GEORGIA             GEORGIA DIVIDEND        GEORGIA DIVIDEND
                                                 PREMIUM INCOME (NPG)       ADVANTAGE (NZX)        ADVANTAGE 2 (NKG)
                                                ---------------------  ------------------------  ------------------------
                                                SIX MONTHS       YEAR   SIX MONTHS         YEAR   SIX MONTHS         YEAR
                                                     ENDED      ENDED        ENDED        ENDED        ENDED        ENDED
                                                  11/30/08    5/31/08     11/30/08      5/31/08     11/30/08      5/31/08
-------------------------------------------------------------------------------------------------------------------------
                                                                                                    
Common shares issued to shareholders due to
  reinvestment of distributions                         --         --           --          888           --          715
=========================================================================================================================




                                                                            NORTH CAROLINA            NORTH CAROLINA
                                                                         PREMIUM INCOME (NNC)    DIVIDEND ADVANTAGE (NRB)
                                                                       ------------------------  ------------------------
                                                                          SIX MONTHS       YEAR   SIX MONTHS         YEAR
                                                                               ENDED      ENDED        ENDED        ENDED
                                                                            11/30/08    5/31/08     11/30/08      5/31/08
-------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Common shares issued to shareholders  due to
  reinvestment of distributions                                                   --         --        1,891        2,628
=========================================================================================================================




                                                                            NORTH CAROLINA           NORTH CAROLINA
                                                                               DIVIDEND                  DIVIDEND
                                                                           ADVANTAGE 2 (NNO)         ADVANTAGE 3 (NII)
                                                                       ----------------------    ------------------------
                                                                        SIX MONTHS         YEAR   SIX MONTHS         YEAR
                                                                             ENDED        ENDED        ENDED        ENDED
                                                                          11/30/08      5/31/08     11/30/08      5/31/08
-------------------------------------------------------------------------------------------------------------------------
                                                                                                        
Common shares issued to shareholders due to
   reinvestment of distributions                                                --          667          892        1,326
=========================================================================================================================


4. INVESTMENT TRANSACTIONS

Purchases and sales (including  maturities but excluding short-term  investments
and derivative transactions) during the six months ended November 30, 2008, were
as follows:



                                                                                        GEORGIA      GEORGIA      GEORGIA
                                                                                        PREMIUM     DIVIDEND     DIVIDEND
                                                                                         INCOME    ADVANTAGE  ADVANTAGE 2
                                                                                           (NPG)        (NZX)        (NKG)
-------------------------------------------------------------------------------------------------------------------------
                                                                                                     
Purchases                                                                           $ 5,513,901  $ 2,511,328  $ 5,372,524
Sales and maturities                                                                  4,950,100    2,234,909    5,340,880
=========================================================================================================================




                                                                             NORTH        NORTH        NORTH        NORTH
                                                                          CAROLINA     CAROLINA     CAROLINA     CAROLINA
                                                                           PREMIUM     DIVIDEND     DIVIDEND     DIVIDEND
                                                                            INCOME    ADVANTAGE  ADVANTAGE 2  ADVANTAGE 3
                                                                              (NNC)        (NRB)        (NNO)        (NII)
-------------------------------------------------------------------------------------------------------------------------
                                                                                                  
Purchases                                                              $ 2,698,080  $ 2,442,912  $ 1,938,095  $ 1,445,400
Sales and maturities                                                     3,047,953    2,835,350    1,766,651    1,526,320
=========================================================================================================================


5. 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 values of the Funds.

                                                                              63



| Notes to
| FINANCIAL STATEMENTS (continued) (Unaudited)

At November 30, 2008, the cost of investments was as follows:



                                                                                      GEORGIA       GEORGIA       GEORGIA
                                                                                      PREMIUM      DIVIDEND      DIVIDEND
                                                                                       INCOME     ADVANTAGE   ADVANTAGE 2
                                                                                         (NPG)         (NZX)         (NKG)
-------------------------------------------------------------------------------------------------------------------------
                                                                                                    
Cost of investments                                                              $ 78,023,834  $ 42,177,672  $ 94,456,898
=========================================================================================================================




                                                                          NORTH         NORTH         NORTH         NORTH
                                                                       CAROLINA      CAROLINA      CAROLINA      CAROLINA
                                                                        PREMIUM      DIVIDEND      DIVIDEND      DIVIDEND
                                                                         INCOME     ADVANTAGE   ADVANTAGE 2   ADVANTAGE 3
                                                                           (NNC)         (NRB)         (NNO)         (NII)
-------------------------------------------------------------------------------------------------------------------------
                                                                                                 
Cost of investments                                               $ 130,699,169  $ 48,178,053  $ 80,257,017  $ 81,750,447
=========================================================================================================================


Gross unrealized  appreciation and gross unrealized  depreciation of investments
at November 30, 2008, were as follows:



                                                                                      GEORGIA       GEORGIA       GEORGIA
                                                                                      PREMIUM      DIVIDEND      DIVIDEND
                                                                                       INCOME     ADVANTAGE   ADVANTAGE 2
                                                                                         (NPG)         (NZX)         (NKG)
--------------------------------------------------------------------------------------------------------------------------
                                                                                                    
Gross unrealized:
   Appreciation                                                                  $  1,402,191  $    822,995  $    586,556
   Depreciation                                                                    (6,930,903)   (3,766,699)  (10,483,696)
--------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments                        $ (5,528,712) $ (2,943,704) $ (9,897,140)
==========================================================================================================================




                                                                          NORTH         NORTH         NORTH         NORTH
                                                                       CAROLINA      CAROLINA      CAROLINA      CAROLINA
                                                                        PREMIUM      DIVIDEND      DIVIDEND      DIVIDEND
                                                                         INCOME     ADVANTAGE   ADVANTAGE 2   ADVANTAGE 3
                                                                           (NNC)         (NRB)         (NNO)         (NII)
--------------------------------------------------------------------------------------------------------------------------
                                                                                                 
Gross unrealized:
   Appreciation                                                   $   1,000,888  $    753,328  $  1,066,726  $    879,963
   Depreciation                                                     (10,724,629)   (3,160,435)   (6,108,042)   (5,936,404)
--------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) of investments         $  (9,723,741) $ (2,407,107) $ (5,041,316) $ (5,056,441)
==========================================================================================================================


64



The tax components of undistributed net tax-exempt  income,  net ordinary income
and net long-term  capital gains at May 31, 2008,  the Funds' last tax year end,
were as follows:



                                                                                      GEORGIA       GEORGIA       GEORGIA
                                                                                      PREMIUM      DIVIDEND      DIVIDEND
                                                                                       INCOME     ADVANTAGE   ADVANTAGE 2
                                                                                         (NPG)         (NZX)         (NKG)
-------------------------------------------------------------------------------------------------------------------------
                                                                                                    
Undistributed net tax-exempt income *                                            $    112,057  $     34,694  $     58,395
Undistributed net ordinary income **                                                       --            --            --
Undistributed net long-term capital gains                                                  --            --            --
=========================================================================================================================




                                                                          NORTH         NORTH         NORTH         NORTH
                                                                       CAROLINA      CAROLINA      CAROLINA      CAROLINA
                                                                        PREMIUM      DIVIDEND      DIVIDEND      DIVIDEND
                                                                         INCOME     ADVANTAGE   ADVANTAGE 2   ADVANTAGE 3
                                                                           (NNC)         (NRB)         (NNO)         (NII)
-------------------------------------------------------------------------------------------------------------------------
                                                                                                 
Undistributed net tax-exempt income *                             $     227,772  $     95,621  $    109,793  $     93,533
Undistributed net ordinary income **                                         --            --            --            --
Undistributed net long-term capital gains                                    --            --            --            --
=========================================================================================================================


*     Undistributed  net tax-exempt income (on a tax basis) has not been reduced
      for the dividend declared on May 1, 2008, paid on June 2, 2008.

**    Net ordinary  income  consists of taxable market  discount  income and net
      short-term capital gains, if any.

The tax  character of  distributions  paid during the Funds' last tax year ended
May 31, 2008,  was  designated  for purposes of the dividends  paid deduction as
follows:



                                                                                      GEORGIA       GEORGIA       GEORGIA
                                                                                      PREMIUM      DIVIDEND      DIVIDEND
                                                                                       INCOME     ADVANTAGE   ADVANTAGE 2
                                                                                         (NPG)         (NZX)         (NKG)
-------------------------------------------------------------------------------------------------------------------------
                                                                                                    
Distributions from net tax-exempt income                                         $  3,261,414  $  1,816,938  $  4,091,700
Distributions from net ordinary income **                                                  --            --            --
Distributions from net long-term capital gains                                        216,827            --            --
=========================================================================================================================




                                                                          NORTH         NORTH         NORTH         NORTH
                                                                       CAROLINA      CAROLINA      CAROLINA      CAROLINA
                                                                        PREMIUM      DIVIDEND      DIVIDEND      DIVIDEND
                                                                         INCOME     ADVANTAGE   ADVANTAGE 2   ADVANTAGE 3
                                                                           (NNC)         (NRB)         (NNO)         (NII)
-------------------------------------------------------------------------------------------------------------------------
                                                                                                 
Distributions from net tax-exempt income                          $   5,252,559  $  2,121,763  $  3,313,278  $  3,475,571
Distributions from net ordinary income **                                    --            --            --            --
Distributions from net long-term capital gains                          309,603        98,768       318,627            --
=========================================================================================================================


**    Net ordinary  income  consists of taxable market  discount  income and net
      short-term capital gains, if any.

At May 31, 2008,  the Funds' last tax year end, the  following  Funds had unused
capital  loss  carryforwards  available  for federal  income tax  purposes to be
applied against future capital gains, if any. If not applied,  the carryforwards
will expire as follows:



                                                                                                      NORTH         NORTH
                                                                        GEORGIA       GEORGIA      CAROLINA      CAROLINA
                                                                       DIVIDEND      DIVIDEND      DIVIDEND      DIVIDEND
                                                                      ADVANTAGE   ADVANTAGE 2     ADVANTAGE   ADVANTAGE 3
                                                                           (NZX)         (NKG)         (NRB)         (NII)
-------------------------------------------------------------------------------------------------------------------------
                                                                                                 
Expiration:
   May 31, 2012                                                   $          --  $         --  $         --  $    119,458
   May 31, 2013                                                              --       102,004            --        36,008
   May 31, 2014                                                          28,172       287,093            --       474,910
   May 31, 2015                                                          17,587            --            --            --
   May 31, 2016                                                              --            --        38,847       115,010
-------------------------------------------------------------------------------------------------------------------------
Total                                                             $      45,759  $    389,097  $     38,847  $    745,386
=========================================================================================================================


                                                                              65



| Notes to
| FINANCIAL STATEMENTS (continued) (Unaudited)

The following Funds have elected to defer net realized  losses from  investments
incurred  from  November 1, 2007 through May 31, 2008,  the Funds' last tax year
end,  ("post-October losses") in accordance with federal income tax regulations.
Post-October losses are treated as having arisen on the first day of the current
fiscal year:



                                                                          NORTH         NORTH         NORTH         NORTH
                                            GEORGIA      GEORGIA       CAROLINA      CAROLINA      CAROLINA      CAROLINA
                                            PREMIUM     DIVIDEND        PREMIUM      DIVIDEND      DIVIDEND      DIVIDEND
                                             INCOME  ADVANTAGE 2         INCOME     ADVANTAGE   ADVANTAGE 2   ADVANTAGE 3
                                               (NPG)        (NKG)          (NNC)         (NRB)         (NNO)         (NII)
-------------------------------------------------------------------------------------------------------------------------
                                                                                           
Post-October capital losses          $       71,737  $   203,274  $     381,548  $     56,537  $    155,810  $    151,433
=========================================================================================================================


6. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES

Each Fund's  management fee is separated  into two components - a  complex-level
component,  based on the aggregate  amount of all fund assets  managed by Nuveen
Asset  Management (the "Adviser"),  a wholly owned  subsidiary of Nuveen,  and a
specific  fund-level  component,  based only on the amount of assets within each
individual  Fund.  This pricing  structure  enables Nuveen fund  shareholders to
benefit from growth in the assets  within each  individual  fund as well as from
growth in the amount of complex-wide assets managed by the Adviser.

The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Preferred shares)
of each Fund as follows:



                                                                                                GEORGIA PREMIUM INCOME (NPG)
                                                                                         NORTH CAROLINA PREMIUM INCOME (NNC)
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES)                        FUND-LEVEL FEE RATE
----------------------------------------------------------------------------------------------------------------------------
                                                                                                                   
For the first $125 million            .                                                                               .4500%
For the next $125 million                                                                                             .4375
For the next $250 million                                                                                             .4250
For the next $500 million                                                                                             .4125
For the next $1 billion                                                                                               .4000
For the next $3 billion                                                                                               .3875
For net assets over $5 billion                                                                                        .3750
============================================================================================================================




                                                                                            GEORGIA DIVIDEND ADVANTAGE (NZX)
                                                                                          GEORGIA DIVIDEND ADVANTAGE 2 (NKG)
                                                                                     NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)
                                                                                   NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)
                                                                                   NORTH CAROLINA DIVIDEND ADVANTAGE 3 (NII)
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES)                        FUND-LEVEL FEE RATE
----------------------------------------------------------------------------------------------------------------------------
                                                                                                                   
For the first $125 million                                                                                            .4500%
For the next $125 million                                                                                             .4375
For the next $250 million                                                                                             .4250
For the next $500 million                                                                                             .4125
For the next $1 billion                                                                                               .4000
For net assets over $2 billion                                                                                        .3750
============================================================================================================================


66



The  annual  complex-level  fee,  payable  monthly,  which  is  additive  to the
fund-level  fee,  for all Nuveen  sponsored  funds in the U.S.,  is based on the
aggregate  amount of total fund assets managed as stated in the following table.
As of November 30, 2008, the complex-level fee rate was .2000%.

The complex-level fee schedule is as follows:

COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1)     EFFECTIVE RATE AT BREAKPOINT LEVEL
--------------------------------------------------------------------------------
$55 billion                                                               .2000%
$56 billion                                                               .1996
$57 billion                                                               .1989
$60 billion                                                               .1961
$63 billion                                                               .1931
$66 billion                                                               .1900
$71 billion                                                               .1851
$76 billion                                                               .1806
$80 billion                                                               .1773
$91 billion                                                               .1691
$125 billion                                                              .1599
$200 billion                                                              .1505
$250 billion                                                              .1469
$300 billion                                                              .1445
================================================================================

(1)   The  complex-level  fee component of the  management  fee for the funds is
      calculated  based upon the aggregate daily net assets of all Nuveen funds,
      with such daily net assets to include  assets  attributable  to  preferred
      stock  issued  by or  borrowings  by  such  funds  but to  exclude  assets
      attributable to investments in other Nuveen funds.

The management fee compensates the Adviser for overall  investment  advisory and
administrative  services  and  general  office  facilities.  The  Funds  pay  no
compensation  directly  to those of its  Trustees  who are  affiliated  with the
Adviser or to its Officers,  all of whom receive remuneration for their services
to the Funds  from the  Adviser or its  affiliates.  The Board of  Trustees  has
adopted a deferred  compensation  plan for  independent  Trustees  that  enables
Trustees  to  elect  to  defer  receipt  of  all  or a  portion  of  the  annual
compensation  they are entitled to receive from certain  Nuveen  advised  funds.
Under the plan,  deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised funds.

For the first ten years of Georgia Dividend Advantage's (NZX) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:

YEAR ENDING                                      YEAR ENDING
SEPTEMBER 30,                                    SEPTEMBER 30,
--------------------------------------------------------------------------------
2001*                        .30%                2007                       .25%
2002                         .30                 2008                       .20
2003                         .30                 2009                       .15
2004                         .30                 2010                       .10
2005                         .30                 2011                       .05
2006                         .30
================================================================================

*     From the commencement of operations.

The Adviser has not agreed to reimburse Georgia Dividend Advantage (NZX) for any
portion of its fees and expenses beyond September 30, 2011.

                                                                              67



| Notes to
| FINANCIAL STATEMENTS (continued) (Unaudited)

For the first  eight  years of Georgia  Dividend  Advantage  2's (NKG) and North
Carolina  Dividend  Advantage  3's (NII)  operations,  the Adviser has agreed to
reimburse the Funds, as a percentage of average daily net assets  (including net
assets  attributable to Preferred shares),  for fees and expenses in the amounts
and for the time periods set forth below:

YEAR ENDING                                      YEAR ENDING
SEPTEMBER 30,                                    SEPTEMBER 30,
--------------------------------------------------------------------------------
2002*                        .32%                2007                       .32%
2003                         .32                 2008                       .24
2004                         .32                 2009                       .16
2005                         .32                 2010                       .08
2006                         .32
================================================================================

 *  From the commencement of operations.

The Adviser has not agreed to reimburse Georgia Dividend Advantage 2 (NKG) and
North Carolina Dividend Advantage 3 (NII) for any portion of their fees and
expenses beyond September 30, 2010.

For the first ten years of North Carolina Dividend Advantage's (NRB) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:

YEAR ENDING                                      YEAR ENDING
JANUARY 31,                                      JANUARY 31,
--------------------------------------------------------------------------------
2001*                        .30%                2007                       .25%
2002                         .30                 2008                       .20
2003                         .30                 2009                       .15
2004                         .30                 2010                       .10
2005                         .30                 2011                       .05
2006                         .30
================================================================================

*     From the commencement of operations.

The Adviser has not agreed to reimburse North Carolina Dividend Advantage (NRB)
for any portion of its fees and expenses beyond January 31, 2011.

For the first ten years of North Carolina Dividend Advantage 2's (NNO)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily net assets (including net assets attributable to Preferred
shares), for fees and expenses in the amounts and for the time periods set forth
below:

YEAR ENDING                                      YEAR ENDING
NOVEMBER 30,                                     NOVEMBER 30,
--------------------------------------------------------------------------------
2001*                        .30%                2007                       .25%
2002                         .30                 2008                       .20
2003                         .30                 2009                       .15
2004                         .30                 2010                       .10
2005                         .30                 2011                       .05
2006                         .30
================================================================================

*     From the commencement of operations.

The Adviser has not agreed to  reimburse  North  Carolina  Dividend  Advantage 2
(NNO) for any portion of its fees and expenses beyond November 30, 2011.

68



7. NEW ACCOUNTING  PRONOUNCEMENT

Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 161 (SFAS No. 161) In March 2008, the FASB issued SFAS No. 161, "Disclosures
about Derivative  Instruments and Hedging Activities." This standard is intended
to enhance  financial  statement  disclosures  for  derivative  instruments  and
hedging  activities and enable  investors to  understand:  a) how and why a fund
uses  derivative  instruments,  b) how derivative  instruments and related hedge
items are accounted  for, and c) how  derivative  instruments  and related hedge
items affect a fund's financial position,  results of operations and cash flows.
SFAS No. 161 is effective for financial  statements  issued for fiscal years and
interim  periods  beginning  after  November 15, 2008.  As of November 30, 2008,
management  does not  believe  the  adoption  of SFAS No.  161 will  impact  the
financial statement amounts;  however,  additional  footnote  disclosures may be
required about the use of derivative instruments and hedging items.

8. SUBSEQUENT EVENTS

Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment  income  which were paid on December  31, 2008,  to  shareholders  of
record on December 15, 2008, as follows:



                                                                          NORTH         NORTH         NORTH         NORTH
                            GEORGIA         GEORGIA      GEORGIA       CAROLINA      CAROLINA      CAROLINA      CAROLINA
                            PREMIUM        DIVIDEND     DIVIDEND        PREMIUM      DIVIDEND      DIVIDEND      DIVIDEND
                             INCOME       ADVANTAGE  ADVANTAGE 2         INCOME     ADVANTAGE   ADVANTAGE 2   ADVANTAGE 3
                               (NPG)           (NZX)        (NKG)          (NNC)         (NRB)         (NNO)         (NII)
-------------------------------------------------------------------------------------------------------------------------
                                                                                        
Dividend per share      $     .0515  $        .0550  $     .0530  $       .0505  $      .0580  $      .0540  $      .0555
=========================================================================================================================


Preferred Shares
On January 8, 2009,  Georgia  Dividend  Advantage 2 (NKG) noticed for redemption
$1.3 million of its outstanding  Preferred shares, at liquidation  value,  using
the proceeds from the issuance of TOBs and portfolio sales.

                                                                              69



| Financial
| HIGHLIGHTS(Unaudited)

      Selected data for a Common share outstanding throughout each period:



                                                     Investment Operations
                                 --------------------------------------------------------------
                                                          Distributions  Distributions
                      Beginning                                from Net           from
                         Common                      Net     Investment        Capital
                          Share         Net    Realized/      Income to       Gains to
                      Net Asset  Investment   Unrealized      Preferred      Preferred
                          Value      Income  Gain (Loss)   Shareholders+  Shareholders+   Total
------------------------------------------------------------------------------------------------
                                                                      
GEORGIA PREMIUM INCOME (NPG)
------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)               $   14.19  $      .43  $     (2.14) $        (.13) $          --  $ (1.84)
2008                      14.55         .84         (.30)          (.24)          (.01)     .29
2007                      14.55         .86          .04           (.23)            --      .67
2006                      15.19         .87         (.48)          (.17)          (.01)     .21
2005                      14.42         .92          .84           (.09)            --     1.67
2004                      15.36         .97         (.96)          (.05)            --     (.04)

GEORGIA DIVIDEND ADVANTAGE (NZX)
------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                   14.47         .46        (1.95)          (.14)            --    (1.63)
2008                      14.65         .90         (.16)          (.26)            --      .48
2007                      14.71         .92          .02           (.25)            --      .69
2006                      15.30         .94         (.47)          (.19)            --      .28
2005                      14.47         .96          .85           (.10)            --     1.71
2004                      15.62         .97        (1.18)          (.06)            --     (.27)
================================================================================================


                                                Less Distributions
                                        ----------------------------------       Offering
                                                 Net                            Costs and     Ending
                                          Investment       Capital              Preferred     Common
                                           Income to      Gains to                  Share      Share  Ending
                                              Common        Common           Underwriting  Net Asset  Market
                                        Shareholders  Shareholders   Total      Discounts      Value  Value
------------------------------------------------------------------------------------------------------------
                                                                                    
GEORGIA PREMIUM INCOME (NPG)
------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                 $       (.30) $         --  $ (.30)  $         --  $   12.05  $ 9.72
2008                                            (.61)         (.04)   (.65)            --      14.19   13.15
2007                                            (.67)           --    (.67)            --      14.55   14.12
2006                                            (.78)         (.07)   (.85)            --      14.55   15.16
2005                                            (.90)           --    (.90)            --      15.19   16.70
2004                                            (.90)           --    (.90)            --      14.42   15.30

GEORGIA DIVIDEND ADVANTAGE (NZX)
------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                         (.33)           --    (.33)            --      12.51   10.90
2008                                            (.66)           --    (.66)            --      14.47   13.47
2007                                            (.75)           --    (.75)            --      14.65   16.00
2006                                            (.87)           --    (.87)            --      14.71   15.50
2005                                            (.88)         (.01)   (.89)           .01      15.30   15.89
2004                                            (.87)         (.01)   (.88)            --      14.47   13.95
============================================================================================================




                                                          Preferred Shares at End of Period
                                                          -----------------------------------
                                                            Aggregate  Liquidation
                                                               Amount   and Market      Asset
                                                          Outstanding        Value   Coverage
                                                                (000)    Per Share  Per Share
---------------------------------------------------------------------------------------------
                                                                           
GEORGIA PREMIUM INCOME (NPG)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                   $    27,800  $    25,000  $  66,251
2008                                                           27,800       25,000     73,571
2007                                                           27,800       25,000     74,784
2006                                                           27,800       25,000     74,747
2005                                                           27,800       25,000     76,877
2004                                                           27,800       25,000     74,107

GEORGIA DIVIDEND ADVANTAGE (NZX)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                        15,000       25,000     66,054
2008                                                           15,000       25,000     72,497
2007                                                           15,000       25,000     73,052
2006                                                           15,000       25,000     73,187
2005                                                           15,000       25,000     75,012
2004                                                           15,000       25,000     72,247
=============================================================================================


70





                                                                   Ratios/Supplemental Data
                                                        ---------------------------------------------------------------
                                                                                 Ratios to Average Net Assets
                                                                                 Applicable to Common Shares
                                         Total Returns                           Before Credit/Reimbursement
                                      ------------------                  ---------------------------------------------
                                                Based on     Ending Net
                                       Based      Common         Assets
                                          on   Share Net     Applicable    Expenses       Expenses              Net
                                      Market       Asset      to Common   Including       Excluding      Investment
                                       Value*      Value*  Shares (000)    Interest++(a)   Interest++(a)     Income++
-----------------------------------------------------------------------------------------------------------------------
                                                                                             
GEORGIA PREMIUM INCOME (NPG)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                24.06)%    (13.08)% $     45,871        1.43%***       1.31%***         6.42%***
2008                                   (2.17)       2.06         54,011        1.25           1.25             5.86
2007                                   (2.55)       4.62         55,359        1.25           1.25             5.84
2006                                   (4.12)       1.42         55,318        1.25           1.25             5.87
2005                                   15.46       11.88         57,687        1.25           1.25             6.15
2004                                   (4.56)       (.23)        54,607        1.23           1.23             6.54

GEORGIA DIVIDEND ADVANTAGE (NZX)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                               (16.80)     (11.42)        24,632        1.53***        1.41***          6.41***
2008                                  (11.73)       3.33         28,498        1.32           1.32             5.86
2007                                    8.10        4.75         28,831        1.35           1.35             5.74
2006                                    2.91        1.87         28,912        1.31           1.31             5.82
2005                                   20.74       12.10         30,007        1.27           1.27             5.93
2004                                   (5.15)      (1.73)        28,348        1.27           1.27             6.03
=======================================================================================================================


                                                                      Ratios/Supplemental Data
                                                     ----------------------------------------------------------
                                                            Ratios to Average Net Assets
                                                            Applicable to Common  Shares
                                                            After Credit/Reimbursement**
                                                     --------------------------------------------
                                                      Expenses        Expenses              Net      Portfolio
                                                     Including       Excluding       Investment       Turnover
                                                      Interest++(a)   Interest++(a)      Income++         Rate
---------------------------------------------------------------------------------------------------------------
                                                                                                
GEORGIA PREMIUM INCOME (NPG)
---------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                   1.41%***        1.29%***         6.44%***          6%
2008                                                      1.23            1.23             5.88             31
2007                                                      1.23            1.23             5.86              4
2006                                                      1.22            1.22             5.90             15
2005                                                      1.23            1.23             6.17             18
2004                                                      1.22            1.22             6.55             12

GEORGIA DIVIDEND ADVANTAGE (NZX)
---------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                   1.25***         1.13***          6.70***          5
2008                                                       .97             .97             6.21             22
2007                                                       .92             .92             6.16             11
2006                                                       .85             .85             6.28              5
2005                                                       .80             .80             6.39             12
2004                                                       .81             .81             6.49              5
===============================================================================================================


*    Total  Return Based on Market  Value is the  combination  of changes in the
     market  price per share and the effect of  reinvested  dividend  income and
     reinvested capital gains  distributions,  if any, at the average price paid
     per share at the time of  reinvestment.  The last dividend  declared in the
     period,  which is typically paid on the first business day of the following
     month,  is assumed to be reinvested at the ending market price.  The actual
     reinvestment  for the last  dividend  declared in the period may take place
     over several  days,  and in some  instances  may not be based on the market
     price,  so the actual  reinvestment  price may be different  from the price
     used in the calculation. Total returns are not annualized.

     Total Return Based on Common  Share Net Asset Value is the  combination  of
     changes in Common share net asset value,  reinvested dividend income at net
     asset value and reinvested capital gains  distributions at net asset value,
     if any. The last dividend  declared in the period,  which is typically paid
     on the  first  business  day of  the  following  month,  is  assumed  to be
     reinvested at the ending net asset value. The actual reinvest price for the
     last  dividend  declared  in the  period  may often be based on the  Fund's
     market price (and not its net asset value),  and therefore may be different
     from the price used in the calculation. Total returns are not annualized.

**   After custodian fee credit and expense reimbursement, where applicable.

***  Annualized.

+    The amounts shown are based on Common share equivalents.

++   Ratios  do not  reflect  the  effect  of  dividend  payments  to  Preferred
     shareholders; income ratios reflect income earned on assets attributable to
     Preferred shares.

(a)  Interest  expense  arises from the  application  of SFAS No. 140 to certain
     inverse floating rate  transactions  entered into by the Fund as more fully
     described in Footnote 1 - Inverse Floating Rate Securities.

(b)  For the six months ended November 30, 2008.

                                 See accompanying notes to financial statements.

                                                                              71



| Financial
| HIGHLIGHTS (continued) (Unaudited)

Selected data for a Common share outstanding throughout each period:



                                                                        Investment Operations
                                                 ---------------------------------------------------------------
                                                                          Distributions  Distributions
                                      Beginning                                from Net           from
                                         Common                      Net     Investment        Capital
                                          Share         Net    Realized/      Income to       Gains to
                                      Net Asset  Investment   Unrealized      Preferred      Preferred
                                          Value      Income  Gain (Loss)   Shareholders+  Shareholders+   Total
----------------------------------------------------------------------------------------------------------------
                                                                                      
GEORGIA DIVIDEND ADVANTAGE 2 (NKG)
----------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                               $   13.92  $      .44  $     (2.34) $        (.13) $          --  $ (2.03)
2008                                      14.44         .88         (.50)          (.26)            --      .12
2007                                      14.25         .89          .17           (.24)            --      .82
2006                                      14.71         .88         (.45)          (.19)            --      .24
2005                                      13.79         .87          .94           (.11)            --     1.70
2004                                      15.01         .88        (1.23)          (.05)            --     (.40)
================================================================================================================


                                               Less Distributions
                                      ----------------------------------
                                                                              Offering
                                               Net                           Costs and     Ending
                                        Investment       Capital             Preferred     Common
                                         Income to      Gains to                 Share      Share    Ending
                                            Common        Common          Underwriting  Net Asset    Market
                                      Shareholders  Shareholders   Total     Discounts      Value     Value
-----------------------------------------------------------------------------------------------------------
                                                                                 
GEORGIA DIVIDEND ADVANTAGE 2 (NKG)
-----------------------------------------------------------------------------------------------------------
Year Ended 5/3
2009(b)                               $       (.31) $         --  $ (.31) $         --  $   11.58  $  11.52
2008                                          (.64)           --    (.64)           --      13.92     13.18
2007                                          (.63)           --    (.63)           --      14.44     14.50
2006                                          (.70)           --    (.70)           --      14.25     13.26
2005                                          (.78)           --    (.78)           --      14.71     14.18
2004                                          (.80)         (.02)   (.82)           --      13.79     13.20
===========================================================================================================




                                                                      Preferred Shares at End of Period
                                                                     -----------------------------------
                                                                       Aggregate  Liquidation
                                                                          Amount   and Market      Asset
                                                                     Outstanding        Value   Coverage
                                                                           (000)    Per Share  Per Share
--------------------------------------------------------------------------------------------------------
                                                                                      
GEORGIA DIVIDEND ADVANTAGE 2 (NKG)
--------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                              $    33,000  $    25,000  $  64,960
2008                                                                      33,000       25,000     73,032
2007                                                                      33,000       25,000     74,825
2006                                                                      33,000       25,000     74,168
2005                                                                      33,000       25,000     75,738
2004                                                                      33,000       25,000     72,583
========================================================================================================


72





                                                                                    Ratios/Supplemental Data
                                                                 -------------------------------------------------------------
                                                                                          Ratios to Average Net Assets
                                                                                          Applicable to Common Shares
                                            Total Returns                                 Before Credit/Reimbursement
                                          -------------------                   ----------------------------------------------
                                                        Based          Ending
                                                           on             Net
                                           Based       Common          Assets
                                              on    Share Net      Applicable    Expenses        Expenses              Net
                                          Market        Asset       to Common   Including       Excluding       Investment
                                           Value*       Value*   Shares (000)    Interest++(a)   Interest++(a)      Income++
------------------------------------------------------------------------------------------------------------------------------
                                                                                                    
GEORGIA DIVIDEND ADVANTAGE 2 (NKG)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                   (10.29)%     (14.73)%  $     52,747        1.43%***        1.31%***         6.49%***
2008                                       (4.64)         .89          63,402        1.23            1.23             5.82
2007                                       14.40         5.79          65,770        1.24            1.24             5.63
2006                                       (1.61)        1.68          64,901        1.24            1.24             5.63
2005                                       13.61        12.61          66,974        1.23            1.23             5.58
2004                                       (6.57)       (2.67)         62,810        1.22            1.22             5.63
==============================================================================================================================


                                                                     Ratios/Supplemental Data
                                                    ----------------------------------------------------------
                                                         Ratios to Average Net Assets
                                                         Applicable to Common Shares
                                                         After Credit/Reimbursement**
                                                    ----------------------------------------------
                                                     Expenses        Expenses              Net      Portfolio
                                                    Including       Excluding       Investment       Turnover
                                                     Interest++(a)   Interest++(a)      Income++         Rate
--------------------------------------------------------------------------------------------------------------
                                                                                               
GEORGIA DIVIDEND ADVANTAGE 2 (NKG)
--------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                  1.09%***         .97%***         6.83%***          6%
2008                                                      .81             .81             6.24             23
2007                                                      .74             .74             6.12              7
2006                                                      .75             .75             6.12              7
2005                                                      .74             .74             6.07              5
2004                                                      .73             .73             6.12             12
==============================================================================================================


*    Total  Return Based on Market  Value is the  combination  of changes in the
     market  price per share and the effect of  reinvested  dividend  income and
     reinvested capital gains  distributions,  if any, at the average price paid
     per share at the time of  reinvestment.  The last dividend  declared in the
     period,  which is typically paid on the first business day of the following
     month,  is assumed to be reinvested at the ending market price.  The actual
     reinvestment  for the last  dividend  declared in the period may take place
     over several  days,  and in some  instances  may not be based on the market
     price,  so the actual  reinvestment  price may be different  from the price
     used in the calculation. Total returns are not annualized.

     Total Return Based on Common  Share Net Asset Value is the  combination  of
     changes in Common share net asset value,  reinvested dividend income at net
     asset value and reinvested capital gains  distributions at net asset value,
     if any. The last dividend  declared in the period,  which is typically paid
     on the  first  business  day of  the  following  month,  is  assumed  to be
     reinvested at the ending net asset value. The actual reinvest price for the
     last  dividend  declared  in the  period  may often be based on the  Fund's
     market price (and not its net asset value),  and therefore may be different
     from the price used in the calculation. Total returns are not annualized.

**   After custodian fee credit and expense reimbursement, where applicable.

***  Annualized.

+    The amounts shown are based on Common share equivalents.

++   Ratios  do not  reflect  the  effect  of  dividend  payments  to  Preferred
     shareholders; income ratios reflect income earned on assets attributable to
     Preferred shares.

(a)  Interest  expense  arises from the  application  of SFAS No. 140 to certain
     inverse floating rate  transactions  entered into by the Fund as more fully
     described in Footnote 1 - Inverse Floating Rate Securities.

(b)  For the six months ended November 30, 2008.

                                 See accompanying notes to financial statements.

                                                                              73



| Financial
| HIGHLIGHTS (continued) (Unaudited)

Selected data for a Common share outstanding throughout each period:



                                                                           Investment Operations
                                                     -----------------------------------------------------------------
                                                                              Distributions  Distributions
                                          Beginning                                from Net           from
                                             Common                      Net     Investment        Capital
                                              Share         Net    Realized/      Income to       Gains to
                                          Net Asset  Investment   Unrealized      Preferred      Preferred
                                              Value      Income  Gain (Loss)   Shareholders+  Shareholders+      Total
-----------------------------------------------------------------------------------------------------------------------
                                                                                             
NORTH CAROLINA PREMIUM INCOME (NNC)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                   $   13.98  $      .42  $     (1.72) $        (.13) $          --     $ (1.43)
2008                                          14.36         .84         (.35)          (.23)          (.01)        .25
2007                                          14.34         .85          .07           (.23)            --***      .69
2006                                          15.16         .88         (.57)          (.16)          (.02)        .13
2005                                          14.55         .91          .70           (.11)            --        1.50
2004                                          15.50         .95         (.95)          (.06)            --        (.06)

NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                       14.52         .47        (1.42)          (.14)            --       (1.09)
2008                                          14.78         .93         (.22)          (.24)          (.01)        .46
2007                                          14.87         .93          .03           (.22)          (.01)        .73
2006                                          15.46         .94         (.48)          (.17)            --         .29
2005                                          14.72         .97          .78           (.09)            --        1.66
2004                                          15.87         .98        (1.10)          (.05)            --        (.17)
=======================================================================================================================


                                                         Less Distributions
                                                 -----------------------------------      Offering
                                                          Net                            Costs and     Ending
                                                   Investment       Capital              Preferred     Common
                                                    Income to      Gains to                  Share      Share   Ending
                                                       Common        Common           Underwriting  Net Asset   Market
                                                 Shareholders  Shareholders    Total     Discounts      Value    Value
----------------------------------------------------------------------------------------------------------------------
                                                                                             
NORTH CAROLINA PREMIUM INCOME (NNC)
----------------------------------------------------------------------------------------------------------------------
Year Ended 5/3
2009(b)                                          $       (.30) $         --  $  (.30) $         --  $   12.25  $ 10.80
2008                                                     (.59)         (.04)    (.63)           --      13.98    13.30
2007                                                     (.66)         (.01)    (.67)           --      14.36    14.30
2006                                                     (.79)         (.16)    (.95)           --      14.34    15.09
2005                                                     (.89)           --     (.89)           --      15.16    17.20
2004                                                     (.89)           --     (.89)           --      14.55    15.40

NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)
----------------------------------------------------------------------------------------------------------------------
Year Ended 5/3
2009(b)                                                  (.35)           --     (.35)           --      13.08    11.68
2008                                                     (.69)         (.03)    (.72)           --      14.52    15.28
2007                                                     (.77)         (.05)    (.82)           --      14.78    16.44
2006                                                     (.88)           --     (.88)           --      14.87    17.70
2005                                                     (.92)           --     (.92)           --      15.46    17.25
2004                                                     (.91)         (.07)    (.98)           --      14.72    15.05
======================================================================================================================




                                                       Preferred Shares at End of Period
                                                     ------------------------------------
                                                       Aggregate  Liquidation
                                                          Amount   and Market       Asset
                                                     Outstanding        Value    Coverage
                                                           (000)    Per Share   Per Share
-----------------------------------------------------------------------------------------
                                                                      
NORTH CAROLINA PREMIUM INCOME (NNC)
-----------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                              $    46,800  $    25,000  $   66,549
2008                                                      46,800       25,000      72,450
2007                                                      46,800       25,000      73,713
2006                                                      46,800       25,000      73,629
2005                                                      46,800       25,000      76,286
2004                                                      46,800       25,000      74,114

NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)
-----------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                   17,000       25,000      68,571
2008                                                      17,000       25,000      73,335
2007                                                      17,000       25,000      74,130
2006                                                      17,000       25,000      74,319
2005                                                      17,000       25,000      76,205
2004                                                      17,000       25,000      73,692
=========================================================================================


74





                                                                                      Ratios/Supplemental Data
                                                              -------------------------------------------------------------------
                                                                                        Ratios to Average Net Assets
                                                                                        Applicable to Common Shares
                                            Total Returns                               Before Credit/Reimbursement
                                         ------------------                  ----------------------------------------------------
                                                      Based         Ending
                                                         on            Net
                                          Based      Common         Assets
                                             on   Share Net     Applicable    Expenses          Expenses                Net
                                         Market       Asset      to Common   Including         Excluding         Investment
                                          Value*      Value*  Shares (000)    Interest++(a)     Interest++(a)        Income++
---------------------------------------------------------------------------------------------------------------------------------
                                                                                                     
NORTH CAROLINA PREMIUM INCOME (NNC)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                  (16.75)%    (10.35)% $     77,780        1.43%*****        1.31%*****         6.37%*****
2008                                      (2.52)       1.76         88,827        1.39              1.25               5.94
2007                                       (.78)       4.84         91,191        1.27              1.24               5.82
2006                                      (6.84)        .87         91,033        1.25              1.25               5.98
2005                                      17.79       10.52         96,008        1.23              1.23               6.09
2004                                      (4.08)       (.40)        91,941        1.23              1.23               6.35

NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)
---------------------------------------------------------------------------------------------------------------------------------
Year Ended  5/31:
2009(b)                                  (21.63)      (7.62)        29,628        1.88*****         1.37*****          6.47*****
2008                                      (2.28)       3.26         32,868        1.91              1.29               6.07
2007                                      (2.26)       4.98         33,409        1.68              1.29               5.82
2006                                       8.03        1.93         33,537        1.29              1.29               5.79
2005                                      21.19       11.53         34,820        1.27              1.27               5.90
2004                                      (2.76)      (1.08)        33,110        1.24              1.24               5.96
=================================================================================================================================


                                                                      Ratios/Supplemental Data
                                                          ------------------------------------------------
                                                                    Ratios to Average Net Assets
                                                                    Applicable to Common Shares
                                                                    After Credit/Reimbursement**
                                                          ------------------------------------------------
                                                           Expenses             Expenses               Net        Portfolio
                                                          Including            Excluding        Investment         Turnover
                                                           Interest++(a)        Interest++(a)       Income++           Rate
---------------------------------------------------------------------------------------------------------------------------
                                                                                                             
NORTH CAROLINA PREMIUM INCOME (NNC)
---------------------------------------------------------------------------------------------------------------------------
Year Ended 5/3
2009(b)                                                        1.43%*****           1.31%*****        6.37%*****          2%
2008                                                           1.36                 1.23              5.97               12
2007                                                           1.25                 1.22              5.84               13
2006                                                           1.24                 1.24              5.99               16
2005                                                           1.22                 1.22              6.10               19
2004                                                           1.22                 1.22              6.36               20

NORTH CAROLINA DIVIDEND ADVANTAGE (NRB)
---------------------------------------------------------------------------------------------------------------------------
Year Ended 5/3
2009(b)                                                        1.63*****            1.12*****         6.72*****           5
2008                                                           1.61                  .99              6.37                6
2007                                                           1.31                  .92              6.20               15
2006                                                            .84                  .84              6.24                4
2005                                                            .81                  .81              6.35               11
2004                                                            .78                  .78              6.42               15
===========================================================================================================================


*     Total Return Based on Market  Value is the  combination  of changes in the
      market price per share and the effect of  reinvested  dividend  income and
      reinvested capital gains distributions,  if any, at the average price paid
      per share at the time of reinvestment.  The last dividend  declared in the
      period, which is typically paid on the first business day of the following
      month, is assumed to be reinvested at the ending market price.  The actual
      reinvestment  for the last dividend  declared in the period may take place
      over several  days,  and in some  instances may not be based on the market
      price,  so the actual  reinvestment  price may be different from the price
      used in the calculation. Total returns are not annualized.

      Total Return Based on Common Share Net Asset Value is the combination of
      changes in Common share net asset value, reinvested dividend income at net
      asset value and reinvested capital gains distributions at net asset value,
      if any. The last dividend declared in the period, which is typically paid
      on the first business day of the following month, is assumed to be
      reinvested at the ending net asset value. The actual reinvest price for
      the last dividend declared in the period may often be based on the Fund's
      market price (and not its net asset value), and therefore may be different
      from the price used in the calculation. Total returns are not annualized.

**    After custodian fee credit and expense reimbursement, where applicable.

***   Rounds to less than $.01 per share.

***** Annualized.

+     The amounts shown are based on Common share equivalents.

++    Ratios do not reflect the effect of dividend payments to Preferred
      shareholders; income ratios reflect income earned on assets attributable
      to Preferred shares.

(a)   Interest expense arises from the application of SFAS No. 140 to certain
      inverse floating rate transactions entered into by the Fund as more fully
      described in Footnote 1 - Inverse Floating Rate Securities.

(b)   For the six months ended November 30, 2008.

                                 See accompanying notes to financial statements.

                                                                              75



| Financial
| HIGHLIGHTS (continued) (Unaudited)

Selected data for a Common share outstanding throughout each period:



                                                                                       Investment Operations
                                                                 --------------------------------------------------------------
                                                                                          Distributions  Distributions
                                                      Beginning                                from Net          from
                                                         Common                      Net     Investment        Capital
                                                          Share         Net    Realized/      Income to       Gains to
                                                      Net Asset  Investment   Unrealized      Preferred      Preferred
                                                          Value      Income  Gain (Loss)   Shareholders+  Shareholders+   Total
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                               $   14.47  $      .46  $     (1.64) $        (.14) $         --   $ (1.32)
2008                                                      14.76         .91         (.24)          (.25)         (.02)      .40
2007                                                      14.75         .91          .10           (.23)         (.01)      .77
2006                                                      15.55         .92         (.60)          (.17)         (.01)      .14
2005                                                      14.81         .94          .83           (.10)           --     1.67
2004                                                      15.98         .94        (1.17)          (.06)           --     (.29)

NORTH CAROLINA DIVIDEND ADVANTAGE 3 (NII)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                   14.13         .44        (1.52)          (.13)           --    (1.21)
2008                                                      14.38         .88         (.25)          (.23)           --      .40
2007                                                      14.26         .89           .11          (.23)           --      .77
2006                                                      14.78         .88         (.50)          (.18)           --      .20
2005                                                      13.89         .89           .91          (.11)           --     1.69
2004                                                      14.96         .90        (1.09)          (.07)           --     (.26)
================================================================================================================================


                                                                   Less Distributions
                                                          -----------------------------------      Offering
                                                                    Net                           Costs and     Ending
                                                             Investment       Capital             Preferred     Common
                                                              Income to      Gains to                 Share      Share   Ending
                                                                 Common        Common          Underwriting  Net Asset   Market
                                                           Shareholders+ Shareholders   Total     Discounts      Value    Value
-------------------------------------------------------------------------------------------------------------------------------
                                                                                                      
NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                   $        (.32) $         --  $ (.32) $         --  $   12.83  $ 12.30
2008                                                               (.63)         (.06)   (.69)           --      14.47    13.66
2007                                                               (.71)         (.05)   (.76)           --      14.76    15.50
2006                                                               (.82)         (.12)   (.94)           --      14.75    15.28
2005                                                               (.86)         (.07)   (.93)           --      15.55    16.25
2004                                                               (.85)         (.03)   (.88)           --      14.81    14.80

NORTH CAROLINA DIVIDEND ADVANTAGE 3 (NII)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                            (.33)           --    (.33)           --      12.59    11.12
2008                                                               (.65)           --    (.65)           --      14.13    14.12
2007                                                               (.65)           --    (.65)           --      14.38    14.64
2006                                                               (.72)           --    (.72)           --      14.26    14.42
2005                                                               (.80)           --    (.80)           --      14.78    15.40
2004                                                               (.80)         (.01)   (.81)           --      13.89    13.68
===============================================================================================================================




                                                       Preferred Shares at End of Period
                                                     -----------------------------------
                                                       Aggregate  Liquidation
                                                          Amount   and Market      Asset
                                                     Outstanding        Value   Coverage
                                                           (000)    Per Share  Per Share
-----------------------------------------------------------------------------------------
                                                                      
NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)
-----------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                              $    28,000  $    25,000  $   67,964
2008                                                      28,000       25,000      73,428
2007                                                      28,000       25,000      74,418
2006                                                      28,000       25,000      74,332
2005                                                      28,000       25,000      76,924
2004                                                      28,000       25,000      74,385

NORTH CAROLINA DIVIDEND ADVANTAGE 3 (NII)
-----------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                                   28,000       25,000      69,203
2008                                                      28,000       25,000      74,602
2007                                                      28,000       25,000      75,457
2006                                                      28,000       25,000      75,044
2005                                                      28,000       25,000      76,817
2004                                                      28,000       25,000      73,644
=========================================================================================


76





                                                                                    Ratios/Supplemental Data
                                                                  ------------------------------------------------------------
                                                                                        Ratios to Average Net Assets
                                                                                         Applicable to Common Shares
                                               Total Returns                             Before Credit/Reimbursement
                                            -------------------                 ----------------------------------------------
                                                          Based         Ending
                                                             on            Net
                                             Based       Common         Assets
                                                on    Share Net     Applicable   Expenses        Expenses              Net
                                            Market        Asset      to Common  Including       Excluding       Investment
                                             Value*       Value*  Shares (000)   Interest++(a)   Interest++(a)      Income++
------------------------------------------------------------------------------------------------------------------------------
                                                                                                    
NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                      (7.69)%      (9.25)% $     48,120       1.56%***        1.31%***         6.28%***
2008                                         (7.33)        2.83         54,240       1.54            1.25             5.87
2007                                          6.64         5.24         55,349       1.39            1.24             5.68
2006                                          (.18)         .97         55,251       1.24            1.24             5.62
2005                                         16.46        11.56         58,155       1.23            1.23             5.64
2004                                         (1.94)       (1.83)        55,311       1.22            1.22             5.71

NORTH CAROLINA DIVIDEND ADVANTAGE 3 (NII)
------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                     (19.22)       (8.65)        49,507       1.68***         1.31***          6.28***
2008                                          1.12         2.90         55,555       1.68            1.24             5.79
2007                                          6.23         5.48         56,511       1.49            1.23             5.62
2006                                         (1.59)        1.41         56,049       1.23            1.23             5.58
2005                                         18.78        12.39         58,035       1.24            1.24             5.65
2004                                         (4.93)       (1.75)        54,482       1.22            1.22             5.75
==============================================================================================================================


                                                               Ratios/Supplemental Data
                                                ----------------------------------------------------
                                                     Ratios to Average Net Assets
                                                      Applicable to Common Shares
                                                      After Credit/Reimbursement**
                                                ----------------------------------------
                                                 Expenses       Expenses            Net   Portfolio
                                                Including      Excluding     Investment    Turnover
                                                 Interest++(a)  Interest++(a)    Income++      Rate
----------------------------------------------------------------------------------------------------
                                                                                     
NORTH CAROLINA DIVIDEND ADVANTAGE 2 (NNO)
----------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                              1.24%***       1.00%***       6.60%***       2%
2008                                                 1.19            .89           6.22           8
2007                                                  .96            .82           6.10           9
2006                                                  .77            .77           6.09           9
2005                                                  .77            .77           6.10          26
2004                                                  .77            .77           6.16          13

NORTH CAROLINA DIVIDEND ADVANTAGE 3 (NII)
----------------------------------------------------------------------------------------------------
Year Ended 5/31:
2009(b)                                              1.35***         .98***        6.61***        2
2008                                                 1.26            .82           6.21          15
2007                                                 1.00            .74           6.11          12
2006                                                  .75            .75           6.07           2
2005                                                  .76            .76           6.14           8
2004                                                  .73            .73           6.23          14
====================================================================================================


*    Total  Return Based on Market  Value is the  combination  of changes in the
     market  price per share and the effect of  reinvested  dividend  income and
     reinvested capital gains  distributions,  if any, at the average price paid
     per share at the time of  reinvestment.  The last dividend  declared in the
     period,  which is typically paid on the first business day of the following
     month,  is assumed to be reinvested at the ending market price.  The actual
     reinvestment  for the last  dividend  declared in the period may take place
     over several  days,  and in some  instances  may not be based on the market
     price,  so the actual  reinvestment  price may be different  from the price
     used in the calculation. Total returns are not annualized.

     Total Return Based on Common  Share Net Asset Value is the  combination  of
     changes in Common share net asset value,  reinvested dividend income at net
     asset value and reinvested capital gains  distributions at net asset value,
     if any. The last dividend  declared in the period,  which is typically paid
     on the  first  business  day of  the  following  month,  is  assumed  to be
     reinvested at the ending net asset value. The actual reinvest price for the
     last  dividend  declared  in the  period  may often be based on the  Fund's
     market price (and not its net asset value),  and therefore may be different
     from the price used in the calculation. Total returns are not annualized.

**   After custodian fee credit and expense reimbursement, where applicable.

***  Annualized.

+    The amounts shown are based on Common share equivalents.

++   Ratios  do not  reflect  the  effect  of  dividend  payments  to  Preferred
     shareholders; income ratios reflect income earned on assets attributable to
     Preferred shares.

(a)  Interest  expense  arises from the  application  of SFAS No. 140 to certain
     inverse floating rate  transactions  entered into by the Fund as more fully
     described in Footnote 1 - Inverse Floating Rate Securities.

(b)  For the six months ended November 30, 2008.

                                 See accompanying notes to financial statements.

                                                                              77



Reinvest Automatically
EASILY and CONVENIENTLY

NUVEEN  MAKES  REINVESTING  EASY.  A PHONE  CALL IS ALL IT  TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.

NUVEEN CLOSED-END FUNDS DIVIDEND REINVESTMENT PLAN

Your Nuveen Closed-End Fund allows you to conveniently reinvest dividends and/or
capital gains distributions in additional Fund shares.

By  choosing  to  reinvest,  you'll  be  able  to  invest  money  regularly  and
automatically,  and watch your  investment  grow  through  the power of tax-free
compounding.  Just like dividends or  distributions  in cash, there may be times
when income or capital gains taxes may be payable on dividends or  distributions
that are reinvested.

It is important to note that an  automatic  reinvestment  plan does not ensure a
profit, nor does it protect you against loss in a declining market.

EASY AND CONVENIENT

To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total  dividends and  distributions,  the date of  investment,  the
shares acquired and the price per share, and the total number of shares you own.

HOW SHARES ARE PURCHASED

The shares you  acquire by  reinvesting  will  either be  purchased  on the open
market or newly  issued by the Fund.  If the shares are  trading at or above net
asset  value at the time of  valuation,  the Fund will  issue new  shares at the
greater of the net asset value or 95% of the  then-current  market price. If the
shares are trading at less than net asset value, shares for your account will be
purchased on the open market. If the Plan Agent begins purchasing Fund shares on
the open market while shares are trading  below net asset value,  but the Fund's
shares  subsequently  trade at or above  their net asset  value  before the Plan
Agent is able to complete its  purchases,  the Plan Agent may cease  open-market
purchases  and  may  invest  the  uninvested  portion  of  the  distribution  in
newly-issued  Fund  shares at a price  equal to the  greater of the  shares' net
asset  value  or 95% of the  shares'  market  value  on the  last  business  day
immediately prior to the purchase date. Dividends and distributions  received to
purchase  shares in the open market will normally be invested  shortly after the
dividend  payment date. No interest will be paid on dividends and  distributions
awaiting  reinvestment.  Because  the market  price of the  shares may  increase
before purchases are completed,  the average purchase price per share may exceed
the market price at the time of valuation, resulting in the acquisition of fewer
shares than if the dividend or  distribution  had been paid in shares  issued by
the Fund. A pro rata portion of any  applicable  brokerage  commissions  on open
market purchases will be paid by Plan  participants.  These commissions  usually
will be lower than those charged on individual transactions.

78



FLEXIBLE

You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.

You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.

The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.

CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS

For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.

                                                                              79



NOTES

80



NOTES

                                                                              81



Glossary of
TERMS USED in this REPORT

o    AUCTION  RATE BOND:  An  auction  rate bond is a  security  whose  interest
     payments  are  adjusted  periodically  through  an auction  process,  which
     process  typically  also serves as a means for buying and selling the bond.
     Auctions that fail to attract  enough buyers for all the shares offered for
     sale  are  deemed  to have  "failed",  with  current  holders  receiving  a
     formula-based interest rate until the next scheduled auction.

o    AVERAGE  ANNUAL TOTAL RETURN:  This is a commonly used method to express an
     investment's performance over a particular, usually multi-year time period.
     It expresses the return that would have been  necessary  each year to equal
     the investment's actual cumulative  performance (including change in NAV or
     market price and reinvested dividends and capital gains  distributions,  if
     any) over the time period being considered.

o    AVERAGE EFFECTIVE MATURITY:  The average of the number of years to maturity
     of the bonds in a Fund's portfolio,  computed by weighting each bond's time
     to maturity  (the date the  security  comes due) by the market value of the
     security. This figure does not account for the likelihood of prepayments or
     the  exercise  of  call  provisions  unless  an  escrow  account  has  been
     established to redeem the bond before maturity.  The market value weighting
     for an investment in an inverse  floating rate security is the value of the
     portfolio's  residual interest in the inverse floating rate trust, and does
     not include the value of the floating rate securities issued by the trust.

o    INVERSE   FLOATERS:   Inverse  floating  rate  securities  are  created  by
     depositing a municipal  bond,  typically with a fixed interest rate, into a
     special purpose trust created by a broker-dealer.  This trust, in turn, (a)
     issues floating rate certificates  typically paying  short-term  tax-exempt
     interest  rates to third  parties in amounts  equal to some fraction of the
     deposited  bond's  par  amount or market  value,  and (b) issues an inverse
     floating rate certificate  (sometimes  referred to as an "inverse floater")
     to an investor (such as a Fund) interested in gaining  investment  exposure
     to a long-term  municipal  bond.  The income  received by the holder of the
     inverse  floater  varies  inversely  with the  short-term  rate paid to the
     floating rate certificates'  holders,  and in most circumstances the holder
     of the inverse  floater bears  substantially  all of the underlying  bond's
     downside  investment risk. The holder of the inverse floater typically also
     benefits   disproportionately   from  any  potential  appreciation  of  the
     underlying bond's value. Hence, an inverse floater  essentially  represents
     an investment in the underlying bond on a leveraged basis.

o    LEVERAGE-ADJUSTED  DURATION:  Duration is a measure of the expected  period
     over which a bond's  principal and interest will be paid, and  consequently
     is a measure of the sensitivity of a bond's or bond Fund's value to changes
     when market interest rates change. Generally, the longer a bond's or Fund's
     duration,  the more the price of the bond or Fund will  change as  interest
     rates change.  Leverage-adjusted duration takes into account the leveraging
     process for a Fund and  therefore is longer than the duration of the Fund's
     portfolio of bonds.

o    MARKET  YIELD  (ALSO  KNOWN  AS  DIVIDEND  YIELD  OR  CURRENT  YIELD):   An
     investment's  current  annualized  dividend  divided by its current  market
     price.

o    NET ASSET  VALUE  (NAV):  A Fund's NAV per common  share is  calculated  by
     subtracting  the  liabilities of the Fund  (including any Preferred  shares
     issued in order to  leverage  the  Fund)  from its  total  assets  and then
     dividing the  remainder by the number of common  shares  outstanding.  Fund
     NAVs are calculated at the end of each business day.

o    TAXABLE-EQUIVALENT   YIELD:  The  yield  necessary  from  a  fully  taxable
     investment to equal, on an after-tax  basis,  the yield of a municipal bond
     investment.

o    ZERO COUPON BOND: A zero coupon bond does not pay a regular interest coupon
     to its holders during the life of the bond. Tax-exempt income to the holder
     of the bond comes from  accretion  of the  difference  between the original
     purchase  price of the bond at  issuance  and the par  value of the bond at
     maturity and is  effectively  paid at maturity.  The market  prices of zero
     coupon bonds  generally  are more  volatile than the market prices of bonds
     that pay interest periodically.

82



| Other Useful INFORMATION

QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION

You may  obtain  (i)  each  Fund's  quarterly  portfolio  of  investments,  (ii)
information  regarding  how  the  Funds  voted  proxies  relating  to  portfolio
securities held during the twelve-month  period ended June 30, 2008, and (iii) a
description of the policies and procedures  that the Funds used to determine how
to vote proxies relating to portfolio  securities without charge,  upon request,
by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website
at www.nuveen.com.

You may also obtain this and other Fund information directly from the Securities
and  Exchange  Commission  ("SEC").  The SEC may  charge a copying  fee for this
information.  Visit the SEC  on-line at  http://www.sec.gov  or in person at the
SEC's Public  Reference Room in Washington,  D.C. Call the SEC at (202) 942-8090
for room hours and operation.  You may also request Fund  information by sending
an e-mail  request  to  publicinfo@sec.gov  or by  writing  to the SEC's  Public
References Section at 100 F Street NE, Washington, D.C. 20549.

CEO CERTIFICATION DISCLOSURE

Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
(NYSE) the annual CEO certification as required by Section 303A.12(a) of the
NYSE Listed Company Manual.

Each  Fund  has  filed  with  the   Securities   and  Exchange   Commission  the
certification  of its  Chief  Executive  Officer  and  Chief  Financial  Officer
required by Section 302 of the Sarbanes-Oxley Act.

BOARD OF TRUSTEES
John P. Amboian
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Judith M. Stockdale
Carole E. Stone
Terence J. Toth

FUND MANAGER
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606

CUSTODIAN
State Street Bank & Trust Company
Boston, MA

TRANSFER AGENT AND SHAREHOLDER SERVICES
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787

LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL

Each Fund  intends  to  repurchase  and/or  redeem  shares of its own  common or
auction rate preferred  stock in the future at such times and in such amounts as
is deemed  advisable.  No shares were  repurchased or redeemed during the period
covered  by this  report.  Any future  repurchases  and/or  redemptions  will be
reported to shareholders in the next annual or semi-annual report.

                                                                              83



Nuveen Investments:
SERVING INVESTORS FOR GENERATIONS

Since  1898,  financial  advisors  and  their  clients  have  relied  on  Nuveen
Investments to provide dependable  investment  solutions.  For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this  tradition,  we today offer a range of high quality  equity and
fixed-income  solutions that are integral to a well-diversified  core portfolio.
Our clients have come to  appreciate  this  diversity,  as well as our continued
adherence to proven, long-term investing principles.

WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS.
Nuveen  Investments is a global  investment  management  firm that seeks to help
secure the long-term goals of institutions  and high net worth investors as well
as the consultants  and financial  advisors who serve them.  Nuveen  Investments
markets  its  growing  range  of  specialized  investment  solutions  under  the
high-quality  brands of  HydePark,  NWQ,  Nuveen,  Rittenhouse,  Santa  Barbara,
Symphony and Tradewinds. In total, the Company managed $134 billion of assets on
September 30, 2008.

FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your  financial  advisor,  or  call  us  at  (800)  257-8787.  Please  read  the
information   provided  carefully  before  you  invest.  Be  sure  to  obtain  a
prospectus, where applicable. Investors should consider the investment objective
and policies,  risk  considerations,  charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment  in the Fund.  For a prospectus,  please  contact your  securities
representative  or Nuveen  Investments,  333 W. Wacker Dr.,  Chicago,  IL 60606.
Please read the prospectus carefully before you invest or send money.

Learn more about Nuveen Funds at:     www.nuveen.com/etf

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ESA-C-1108D



ITEM 2. CODE OF ETHICS.

Not applicable to this filing.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

Not applicable to this filing.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable to this filing.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

Not applicable to this filing.

ITEM 6. SCHEDULE OF INVESTMENTS.

See Portfolio of Investments in Item 1.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.

Not applicable to this filing.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

Not applicable to this filing.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this Item.

ITEM 11. CONTROLS AND PROCEDURES.

     (a)  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 Rules 13a-15(b) or 15d-15(b) under the Securities
          Exchange Act of 1934, as amended (the "Exchange Act")(17 CFR
          240.13a-15(b) or 240.15d-15(b)).

     (b)  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 second fiscal quarter
          of the period covered by this report that has materially affected, or
          is reasonably likely to materially affect, the registrant's internal
          control over financial reporting.

ITEM 12. EXHIBITS.

File the exhibits listed below as part of this Form.

(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable to
this filing.

(a)(2) 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)) in the exact form set forth below: See
Ex-99.CERT attached hereto.

(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons: Not applicable.

(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference: See Ex-99.906 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 Georgia Dividend Advantage Municipal Fund 2
            -----------------------------------------------------------

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

Date: February 6, 2009
    -------------------------------------------------------------------

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: February 6, 2009
    -------------------------------------------------------------------

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

Date: February 6, 2009
    -------------------------------------------------------------------