Unassociated Document



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
 
Investment Company Act file number 811-21153
 
Nuveen Maryland Dividend Advantage Municipal Fund 3
(Exact name of registrant as specified in charter)
 
Nuveen Investments
        333 West Wacker Drive, Chicago, Illinois 60606         
(Address of principal executive offices) (Zip code)
 

Kevin J. McCarthy
Vice President and Secretary
        333 West Wacker Drive, Chicago, Illinois 60606         
(Name and address of agent for service)
 
Registrant's telephone number, including area code:         312-917-7700        
 
Date of fiscal year end:            5/31          
 
Date of reporting period:         2/28/10         
 
Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
 
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 
 
 
 
Item 1. Schedule of Investments
 

  Portfolio of Investments (Unaudited)       
      Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI)       
      February 28, 2010       
Principal    Optional Call     
Amount (000)  Description (1)  Provisions (2)  Ratings (3)  Value 
  Consumer Discretionary – 3.5% (2.4% of Total Investments)       
$ 2,385  Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue Bonds, Series 2006A, 5.250%,  9/16 at 100.00  Baa3  $ 1,929,680 
  9/01/39 – SYNCORA GTY Insured       
380  Baltimore, Maryland, Subordinate Lien Convention Center Hotel Revenue Bonds, Series 2006B,  9/16 at 100.00  Ba1  306,656 
  5.875%, 9/01/39       
700  Maryland Economic Development Corporation, Revenue Bonds, Chesapeake Bay Hyatt Conference  12/16 at 100.00  N/R  507,150 
  Center, Series 2006A, 5.000%, 12/01/31       
3,465  Total Consumer Discretionary      2,743,486 
  Consumer Staples – 2.9% (2.0% of Total Investments)       
2,340  Puerto Rico, The Children’s Trust Fund, Tobacco Settlement Asset-Backed Refunding Bonds,  5/12 at 100.00  BBB  2,269,777 
  Series 2002, 5.375%, 5/15/33       
  Education and Civic Organizations – 12.8% (8.6% of Total Investments)       
225  Anne Arundel County, Maryland, Economic Development Revenue Bonds, Community College Project,  9/12 at 102.00  A3  232,169 
  Series 2002, 5.125%, 9/01/22       
625  Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount Saint Mary’s College,  9/16 at 100.00  BBB–  564,881 
  Series 2006, 5.625%, 9/01/38       
690  Hartford County, Maryland, Economic Development Revenue Bonds, Battelle Memorial Institute,  4/14 at 100.00  A+  691,221 
  Series 2004, 5.250%, 4/01/34       
625  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Goucher College,  7/14 at 100.00  A–  625,563 
  Series 2004, 5.125%, 7/01/34       
735  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Johns Hopkins  7/14 at 100.00  AA  816,276 
  Hospital, Series 2004, Inverse 1003, 13.615%, 7/01/33 (IF)       
1,000  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Johns Hopkins  7/12 at 100.00  AA  1,015,460 
  University, Series 2002A, 5.000%, 7/01/32       
925  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Maryland Institute  6/16 at 100.00  Baa1  886,270 
  College of Art, Series 2006, 5.000%, 6/01/30       
625  Maryland Industrial Development Financing Authority, Revenue Bonds, Our Lady of Good Counsel  5/15 at 100.00  N/R  584,263 
  High School, Series 2005A, 6.000%, 5/01/35       
710  Montgomery County Revenue Authority, Maryland, Lease Revenue Bonds, Montgomery College Arts  5/15 at 100.00  A1  768,667 
  Center Project, Series 2005A, 5.000%, 5/01/18       
1,000  Morgan State University, Maryland, Student Tuition and Fee Revenue Bonds, Academic Fees and  7/13 at 100.00  A+  1,010,980 
  Auxiliary Facilities, Series 2003A, 5.000%, 7/01/32 – FGIC Insured       
985  University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, Series 2001B,  4/11 at 100.00  AA+  1,032,024 
  4.625%, 4/01/21       
800  University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, Series 2006A,  10/16 at 100.00  AA+  889,536 
  5.000%, 10/01/22       
890  Westminster, Maryland, Educational Facilities Revenue Bonds, McDaniel College, Series 2006,  11/16 at 100.00  BBB+  859,099 
  5.000%, 11/01/31       
9,835  Total Education and Civic Organizations      9,976,409 
  Health Care – 27.3% (18.4% of Total Investments)       
445  Maryland Health and Higher Education Facilities Authority Revenue Bonds University of Maryland  7/19 at 100.00  A  443,963 
  Medical System Issue, Series 2010, 5.125%, 7/01/39       
700  Maryland Health and Higher Education Facilities Authority, Revenue Bonds, University of  7/16 at 100.00  A  700,329 
  Maryland Medical System, Series 2006, 5.000%, 7/01/31       
335  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Anne Arundel  7/19 at 100.00  A–  326,803 
  Health System, Series 2010, 5.000%, 7/01/40       
1,000  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Anne Arundel  7/10 at 100.00  AAA  1,002,020 
  Medical Center, Series 1998, 5.125%, 7/01/33 – AGM Insured       
775  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Calvert Memorial  7/14 at 100.00  A2  791,438 
  Hospital, Series 2004, 5.500%, 7/01/36       
1,250  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Carroll County  7/12 at 100.00  A3  1,270,138 
  General Hospital, Series 2002, 5.800%, 7/01/32       
1,750  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Carroll Hospital  7/16 at 100.00  A3  1,671,075 
  Center, Series 2006, 5.000%, 7/01/40       
1,070  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Civista Medical  7/14 at 100.00  N/R  836,547 
  Center, Series 2005, 5.000%, 7/01/37 – RAAI Insured       
885  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Doctors Community  7/17 at 100.00  Baa3  765,304 
  Hospital, Series 2007A, 5.000%, 7/01/29       
700  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Frederick Memorial  7/12 at 100.00  Baa1  674,471 
  Hospital, Series 2002, 5.125%, 7/01/35       
800  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Greater Baltimore  7/11 at 100.00  A+  786,672 
  Medical Center, Series 2001, 5.000%, 7/01/34       
1,000  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Johns Hopkins  5/11 at 100.00  A+  1,013,390 
  Hospital, Series 2001, 5.000%, 5/15/21       
1,000  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Kennedy Krieger  7/13 at 100.00  Baa3  931,610 
  Institute, Series 2003, 5.500%, 7/01/33       
595  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, LifeBridge Health  7/17 at 100.00  AAA  616,039 
  System, Series 2008, 5.000%, 7/01/28 – AGC Insured       
900  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, MedStar Health,  8/14 at 100.00  A2  925,677 
  Series 2004, 5.375%, 8/15/24       
1,690  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, MedStar Health,  5/16 at 100.00  AA+  1,702,962 
  Series 2007, 5.250%, 5/15/46 – BHAC Insured       
  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Mercy Medical       
  Center Project, Series 2007A:       
525  5.000%, 7/01/37  7/17 at 100.00  BBB  475,697 
340  5.500%, 7/01/42  7/17 at 100.00  BBB  329,491 
650  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Mercy Medical  7/11 at 100.00  BBB  650,904 
  Center, Series 2001, 5.625%, 7/01/31       
850  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Peninsula Regional  7/16 at 100.00  A  861,475 
  Medical Center, Series 2006, 5.000%, 7/01/36       
1,845  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Union Hospital of  7/12 at 100.00  A3  1,864,409 
  Cecil County, Series 2002, 5.625%, 7/01/32       
1,220  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Washington County  1/18 at 100.00  BBB–  1,185,279 
  Hospital, Series 2008, 5.750%, 1/01/38       
775  Maryland Health and Higher Educational Facilities Authority, Revenue Refunding Bonds,  1/13 at 101.00  Baa2  777,317 
  Adventist Healthcare, Series 2003A, 5.750%, 1/01/25       
900  Prince George’s County, Maryland, Revenue Bonds, Dimensions Health Corporation, Series 1994,  7/10 at 100.00  B3  611,334 
  5.300%, 7/01/24       
22,000  Total Health Care      21,214,344 
  Housing/Multifamily – 7.7% (5.2% of Total Investments)       
980  Maryland Community Development Administration, Housing Revenue Bonds, Series 2002B, 4.950%,  7/12 at 100.00  Aa2  970,131 
  7/01/32 (Alternative Minimum Tax)       
1,250  Maryland Economic Development Corporation, Senior Lien Student Housing Revenue Bonds,  10/13 at 100.00  B3  963,413 
  University of Maryland – Baltimore, Series 2003A, 5.625%, 10/01/23       
  Maryland Economic Development Corporation, Student Housing Revenue Bonds, Sheppard Pratt       
  University Village, Series 2001:       
20  5.875%, 7/01/21 – ACA Insured  7/11 at 101.00  N/R  18,359 
150  6.000%, 7/01/33 – ACA Insured  7/11 at 101.00  N/R  127,539 
475  Maryland Economic Development Corporation, Student Housing Revenue Refunding Bonds, University  6/16 at 100.00  Baa2  423,985 
  of Maryland College Park Projects, Series 2006, 5.000%, 6/01/33 – CIFG Insured       
  Montgomery County Housing Opportunities Commission, Maryland, Multifamily Housing Development       
  Bonds, Series 2002B:       
515  5.100%, 7/01/33 (Alternative Minimum Tax)  7/12 at 100.00  Aaa  515,644 
3,000  5.200%, 7/01/44 (Alternative Minimum Tax)  7/12 at 100.00  Aaa  2,971,320 
6,390  Total Housing/Multifamily      5,990,391 
  Housing/Single Family – 7.8% (5.2% of Total Investments)       
1,280  Maryland Community Development Administration Department of Housing and Community  9/18 at 100.00  Aa2  1,337,306 
  Development, Residential Revenue Bonds, Series 2008C, 5.375%, 9/01/39       
  Maryland Community Development Administration, Department of Housing and Community       
  Development, Residential Revenue Bonds, Series 2006:       
595  4.900%, 9/01/26 (Alternative Minimum Tax) (UB)  9/15 at 100.00  Aa2  597,077 
1,200  4.875%, 9/01/26 (Alternative Minimum Tax) (UB)  3/16 at 100.00  Aa2  1,204,020 
815  4.900%, 9/01/31 (Alternative Minimum Tax) (UB)  9/16 at 100.00  Aa2  817,698 
  Maryland Community Development Administration, Department of Housing and Community       
  Development, Residential Revenue Bonds, Series 2007:       
350  5.000%, 9/01/27 (Alternative Minimum Tax) (UB)  3/17 at 100.00  Aa2  352,880 
620  4.850%, 9/01/37 (Alternative Minimum Tax) (UB)  3/17 at 100.00  Aa2  607,990 
1,160  Maryland Community Development Administration, Department of Housing and Community  9/14 at 100.00  Aa2  1,124,342 
  Development, Residential Revenue Bonds, Series 2005, 4.900%, 9/01/36 (Alternative       
  Minimum Tax) (UB)       
6,020  Total Housing/Single Family      6,041,313 
  Industrials – 3.4% (2.3% of Total Investments)       
510  Maryland Economic Development Corporation, Solid Waste Disposal Revenue Bonds, Waste  4/12 at 101.00  BBB  510,515 
  Management Inc., Series 2002, 4.600%, 4/01/16 (Alternative Minimum Tax)       
1,090  Maryland Economic Development Revenue Bonds, Transportation Facilities Project, Series A and B,  6/20 at 100.00  Baa3  1,114,481 
  5.750%, 6/01/35       
1,000  Northeast Maryland Waste Disposal Authority, Baltimore, Resource Recovery Revenue Bonds, RESCO  7/10 at 100.00  BBB  1,006,010 
  Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)       
2,600  Total Industrials      2,631,006 
  Long-Term Care – 3.7% (2.4% of Total Investments)       
1,050  Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, Series 2007A, 5.000%, 1/01/37  1/17 at 100.00  BBB+  924,651 
380  Gaithersburg, Maryland, Economic Development Revenue Bonds, Asbury Methodist Homes Inc.,  1/20 at 100.00  N/R  386,464 
  Series 2009B, 6.000%, 1/01/23       
400  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Edenwald, Series  7/16 at 100.00  N/R  362,372 
  2006A, 5.400%, 1/01/31       
  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, King Farm       
  Presbyterian Community, Series 2007A:       
280  5.000%, 1/01/17  No Opt. Call  N/R  258,079 
520  5.250%, 1/01/27  1/17 at 100.00  N/R  429,395 
540  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Mercy Ridge  7/17 at 100.00  A–  480,670 
  Retirement Community, Series 2007, 4.750%, 7/01/34       
3,170  Total Long-Term Care      2,841,631 
  Tax Obligation/General – 17.0% (11.4% of Total Investments)       
1,000  Annapolis, Maryland, General Obligation Public Improvement Refunding Bonds, Series 2002,  4/12 at 101.00  AA  1,052,770 
  4.375%, 4/01/17       
380  Carroll County, Maryland, Consolidated Public Improvement Bonds, Series 2005A, 5.000%, 12/01/16  12/15 at 100.00  AA+  441,446 
1,260  Charles County, Maryland, Consolidated General Obligation Public Improvement Bonds, Series  1/12 at 101.00  AA  1,330,371 
  2002, 4.400%, 1/15/16       
710  Frederick, Maryland, General Obligation Bonds, Series 2005, 5.000%, 8/01/16 – NPFG Insured  8/15 at 100.00  AA  819,127 
1,000  Maryland National Capital Park Planning Commission, Prince George’s County, General Obligation  1/14 at 100.00  AAA  1,120,890 
  Bonds, Park Acquisition and Development, Series 2004EE-2, 5.000%, 1/15/17       
1,850  Montgomery County, Maryland, Consolidated General Obligation Public Improvement Bonds, Series  No Opt. Call  AAA  2,174,712 
  2005A, 5.000%, 7/01/15       
1,440  Montgomery County, Maryland, Consolidated General Obligation Public Improvement Bonds, Series  No Opt. Call  AAA  1,697,458 
  2006, 5.000%, 5/01/16       
1,000  Prince George’s County, Maryland, General Obligation Consolidated Public Improvement Bonds,  No Opt. Call  AAA  1,080,250 
  Series 2004C, 5.000%, 12/01/11       
1,000  St. Mary’s County, Maryland, General Obligation Hospital Bonds, Series 2002, 5.000%, 10/01/12  No Opt. Call  AA  1,112,260 
1,000  Washington Suburban Sanitary District, Montgomery and Prince George’s Counties, Maryland,  6/15 at 100.00  AAA  1,174,720 
  Sewerage Disposal Bonds, Series 2005, 5.000%, 6/01/16       
1,000  Washington Suburban Sanitary District, Montgomery and Prince George’s Counties, Maryland,  6/15 at 100.00  AAA  1,174,720 
  Water Supply Bonds, Series 2005, 5.000%, 6/01/16       
11,640  Total Tax Obligation/General      13,178,724 
  Tax Obligation/Limited – 30.7% (20.7% of Total Investments)       
1,000  Baltimore Board of School Commissioners, Maryland, Revenue Bonds, City Public School System,  5/13 at 100.00  AA+  1,127,650 
  Series 2003A, 5.000%, 5/01/15       
135  Frederick County, Maryland, Lake Linganore Village Community Development Special Obligation  7/10 at 102.00  N/R  133,632 
  Bonds, Series 2001A, 5.600%, 7/01/20 – RAAI Insured       
450  Hyattsville, Maryland, Special Obligation Bonds, University Town Center Project, Series 2004,  7/14 at 102.00  N/R  393,147 
  5.750%, 7/01/34       
5,000  Maryland Department of Transportation, Consolidated Transportation Revenue Bonds, Series 2002,  No Opt. Call  AAA  5,984,800 
  5.500%, 2/01/16       
2,200  Maryland Economic Development Corporation, Lease Revenue Bonds, Department of Transportation  6/12 at 100.50  AA+  2,268,530 
  Headquarters Building, Series 2002, 4.750%, 6/01/22       
450  Maryland Economic Development Corporation, Lease Revenue Bonds, Montgomery County Town Square  9/12 at 100.00  AA+  495,950 
  Parking Garage, Series 2002A, 5.000%, 9/15/13       
2,935  Maryland Economic Development Corporation, Lease Revenue Bonds, Montgomery County Wayne Avenue  9/12 at 100.00  AA+  3,209,158 
  Parking Project, Series 2002A, 5.250%, 9/15/16       
  Maryland Stadium Authority, Lease Revenue Bonds, Montgomery County Conference Center       
  Facilities, Series 2003:       
1,465  5.000%, 6/15/21  6/13 at 100.00  AA+  1,594,360 
1,620  5.000%, 6/15/23  6/13 at 100.00  AA+  1,757,862 
1,210  Prince George’s County, Maryland, Special Obligation Bonds, National Harbor Project, Series  7/15 at 100.00  N/R  1,035,663 
  2005, 5.200%, 7/01/34       
575  Prince George’s County, Maryland, Special Tax District Bonds, Victoria Falls Project, Series  7/13 at 100.00  N/R  459,189 
  2005, 5.250%, 7/01/35       
1,200  Puerto Rico Highway and Transportation Authority, Highway Revenue Bonds, Series 2007N, 5.250%,  No Opt. Call  BBB  1,165,428 
  7/01/31 – AMBAC Insured       
  Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Bonds,       
  Series 2002G:       
1,000  5.250%, 7/01/17  7/12 at 100.00  BBB–  1,016,130 
1,205  5.250%, 7/01/20  7/12 at 100.00  BBB–  1,209,398 
1,275  5.250%, 7/01/21  7/12 at 100.00  BBB–  1,278,251 
700  Puerto Rico, Highway Revenue Bonds, Highway and Transportation Authority, Series 2003AA,  No Opt. Call  A  749,028 
  5.500%, 7/01/19 – NPFG Insured       
22,420  Total Tax Obligation/Limited      23,878,176 
  Transportation – 3.1% (2.0% of Total Investments)       
2,210  Maryland Transportation Authority, Revenue Bonds, Transportation Facilities Projects, Series  7/17 at 100.00  AAA  2,366,070 
  2007, 5.000%, 7/01/30 – AGM Insured (UB)       
  U.S. Guaranteed – 21.8% (14.7% of Total Investments) (4)       
255  Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 2006C, 5.000%, 7/01/31  7/16 at 100.00  AA (4)  299,135 
  (Pre-refunded 7/01/16) – AMBAC Insured       
110  Frederick County, Maryland, Lake Linganore Village Community Development Special Obligation  7/10 at 102.00  N/R (4)  114,297 
  Bonds, Series 2001A, 5.600%, 7/01/20 (Pre-refunded 7/01/10) – RAAI Insured       
280  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Collington  4/11 at 101.00  N/R (4)  302,120 
  Episcopal Life Care Community Inc., Series 2001A, 6.750%, 4/01/23 (Pre-refunded 4/01/11)       
285  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Helix Health,  No Opt. Call  N/R (4)  323,652 
  Series 1997, 5.000%, 7/01/17 – AMBAC Insured (ETM)       
725  Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, LifeBridge Health  7/14 at 100.00  A2 (4)  838,666 
  System, Series 2004A, 5.125%, 7/01/34 (Pre-refunded 7/01/14)       
770  Maryland Transportation Authority, Revenue Refunding Bonds, Transportation Facilities  No Opt. Call  AAA  904,835 
  Projects, First Series 1978, 6.800%, 7/01/16 (ETM)       
4,860  Prince George’s County Housing Authority, Maryland, GNMA Collateralized Mortgage Revenue  11/12 at 100.00  AAA  5,327,386 
  Bonds, Fairview and Hillside Projects, Series 2002A, 4.700%, 11/20/22 (Pre-refunded 11/20/12)       
1,525  Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 2000HH, 5.250%, 7/01/29  7/10 at 101.00  AAA  1,567,151 
  (Pre-refunded 7/01/10) – AGM Insured       
3,500  Puerto Rico Infrastructure Financing Authority, Special Obligation Bonds, Series 2000A,  10/10 at 101.00  AAA  3,646,825 
  5.500%, 10/01/40       
1,000  Puerto Rico Public Finance Corporation, Commonwealth Appropriation Bonds, Series 1998A,  No Opt. Call  AAA  1,134,400 
  5.125%, 6/01/24 – AMBAC Insured       
235  Puerto Rico Public Finance Corporation, Commonwealth Appropriation Bonds, Series 2002E,  2/12 at 100.00  AAA  256,044 
  5.500%, 8/01/29 (Pre-refunded 2/01/12)       
2,000  University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, Series 2002A, 5.125%,  4/12 at 100.00  AA+ (4)  2,188,980 
  4/01/22 (Pre-refunded 4/01/12)       
25  Washington Suburban Sanitary District, Montgomery and Prince George’s Counties, Maryland,  6/11 at 101.00  AAA  26,726 
  General Obligation Construction Bonds, Second Series 2001, 5.000%, 6/01/17       
  (Pre-refunded 6/01/11)       
15,570  Total U.S. Guaranteed      16,930,217 
  Utilities – 1.6% (1.1% of Total Investments)       
1,250  Maryland Energy Financing Administration, Revenue Bonds, AES Warrior Run Project, Series 1995,  3/10 at 100.00  N/R  1,250,388 
  7.400%, 9/01/19 (Alternative Minimum Tax)       
  Water and Sewer – 5.3% (3.6% of Total Investments)       
2,570  Baltimore, Maryland, Revenue Refunding Bonds, Wastewater Projects, Series 2002A, 5.125%,  7/12 at 100.00  AA  2,592,153 
  7/01/42 – FGIC Insured       
345  Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 2006C, 5.000%, 7/01/31 –  7/16 at 100.00  AA  364,648 
  AMBAC Insured       
660  Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 2007D, 5.000%, 7/01/32 –  7/17 at 100.00  AA  679,165 
  AMBAC Insured       
430  Maryland Water Quality Financing Administration, Revolving Loan Fund Revenue Bonds, Series  No Opt. Call  AAA  506,638 
  2005A, 5.000%, 9/01/15       
4,005  Total Water and Sewer      4,142,604 
$     112,915  Total Investments (cost $113,394,734) – 148.6%      115,454,536 
  Floating Rate Obligations – (5.5)%      (4,255,000)
  MuniFund Term Preferred Shares, at Liqudation Value – (23.2)% (5)      (18,000,000)
  Other Assets Less Liabilities – 25.1%      19,513,243 
  Auction Rate Preferred Shares, at Liquidation Value – (45.0)% (5)      (35,000,000)
  Net Assets Applicable to Common Shares – 100%      $ 77,712,779 

 
 
 
 

Fair Value Measurements

In determining the value of the 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 the Fund’s fair value measurements as of February 28, 2010:

  Level 1  Level 2  Level 3  Total 
Investments:         
Municipal Bonds  $ —  $115,454,536  $ —  $115,454,536 

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 securities reflected as financing transactions, if any. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.

At February 28, 2010, the cost of investments was $109,473,084.

Gross unrealized appreciation and gross unrealized depreciation of investments at February 28, 2010, were as follows:

Gross unrealized:   
  Appreciation  $ 4,795,569 
  Depreciation  (3,069,077)
Net unrealized appreciation (depreciation) of investments  $ 1,726,492 

(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. 
(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)  MuniFund Term Preferred Shares and Auction Rate Preferred Shares, at Liquidation Value as a percentage 
  of Total Investments are 15.6% and 30.3%, respectively. 
N/R  Not rated. 
(ETM)  Escrowed to maturity. 
(IF)  Inverse floating rate investment. 
(UB)  Underlying bond of an inverse floating rate trust reflected as a financing transaction. 

 
 
 
 
Item 2. 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 Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).
 
 
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 registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
 
Item 3. Exhibits.

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

 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
(Registrant)  Nuveen Maryland Dividend Advantage Municipal Fund 3 
 
By (Signature and Title)     /s/ Kevin J. McCarthy                    
                                                   Kevin J. McCarthy
                                                   Vice President and Secretary
 
Date         April 29, 2010        
 
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         April 29, 2010        
 
By (Signature and Title)     /s/ Stephen D. Foy                              
                                                   Stephen D. Foy
                                                  Vice President and Controller (principal financial officer) 
 
Date        April 29, 2010