Edgar Filing: DNP SELECT INCOME FUND INC

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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 811-4915

DNP Select Income Fund Inc.
(Exact name of registrant as specified in charter)

55 East Monroe Street, Chicago, Illinois 60603
(Address of principal executive offices) (Zip code)

Nathan I. Partain John R. Sagan
DNP Select Income Fund Inc. Mayer, Brown, Rowe & Maw LLP
55 East Monroe Street 190 South LaSalle Street
Chicago, Illinois 60603 Chicago, Illinois 60603

(Name and address of agents for service)

Registrant's telephone number, including area code: (312) 368-5510

Date of fiscal year end: December 31

Date of reporting period: December 31, 2004

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.(S) 3507.

ITEM 1. REPORTS TO STOCKHOLDERS.

The Annual Report to Stockholders follows.

Dear Fellow Shareholders:

Performance Review: We are pleased to report that your Fund had a total
return (market price change plus income) of 17.4% for the year ended December
31, 2004. In comparison, the S&P Utilities Index had a total return of 24.3%. A
composite of the S&P Utilities Index and the Lehman Utility Bond Index,
reflecting the stock and bond ratio of the Fund, had a total return of 19.4%.

On a longer-term basis, as of December 31, 2004, your Fund had a three-year
cumulative total return of 36.3%. In comparison, the S&P Utilities Index had a
total return during that period of 10.0%, while a composite of the S&P
Utilities Index and the Lehman Utility Bond Index, reflecting the stock and
bond ratio of the Fund, had a total return of 12.1%. For the three-year period,
your Fund also outperformed the S&P 500 Index return of 11.3% and the Dow Jones
Industrial Average return of 14.9%.

Consistent with its primary objective of current income, the Fund declared
twelve monthly 6.5 cent per share dividends during 2004. The Fund also declared
an extra one and one-half cents per share in the final dividend of the year
(paid in January 2005). This "extra" amount was declared because the Fund's
2004 operating earnings and investment gains exceeded 78 cents per share. This
was the thirteenth "extra" dividend in the last seventeen years.

The 6.5 cent per share monthly rate, without compounding, would be 78 cents
annualized, or a 6.54% common stock dividend yield based on the December 31,
2004 closing price of $11.92 per share. That yield compares favorably with the
quarter-end yields of 3.19% on the Dow Jones Utility Index and 3.44% on the S&P
Utilities Index.

Is Fed Policy Still Relevant for Investors? Common sense and economic
theory suggest to investors that the Federal Reserve's (Fed's) monetary policy
does matter. After all, the Fed's policy decisions affect the availability and
cost of money and credit, which in turn affect a wide range of economic
variables including employment, output, and the prices of goods and services.
The capital markets, both stock and bond, have their valuations set in part by
the cost and availability of credit, and the outlook for the demand for goods
and services. Moreover, investor intuition says that certain stock market
sectors and companies are more sensitive than others to changes in monetary
policy.

A study by Conover, Jensen, Johnson, and Mercer published in the
January/February issue of the Financial Analysts Journal quantifies the impact
of monetary policy on the aggregate stock markets, their economic sectors, and
individual companies. The study covered long-term stock returns from 1963 to
2001. Sensitivity to monetary policy was measured relative to several criteria
including company size and industry. The study had several conclusions that
would not surprise investors and several that could be characterized as
surprising.

Not surprising is the conclusion that monetary conditions have a strong
relationship with security returns. In periods of monetary accommodation (when
the Fed is lowering interest rates), investors tend to enjoy above average
stock returns. Likewise, in periods of monetary restraint (when the Fed is

raising interest rates), investors tend to experience below average stock
returns. This relationship of Fed policy and equity returns is very consistent.
Also not surprising, is the higher sensitivity of small company stocks to
monetary conditions. Small companies typically are more financially sensitive
to the cost of capital and consumer demand.

The study findings also indicate that the returns on cyclical industry
stocks, those with the most sensitivity to general business conditions, are the
most closely tied to monetary policy. Defensive sectors performed best during
periods of restrictive monetary policy. Perhaps partly surprising to investor
intuition is that utilities ranked second of the best performing sectors during
periods of restrictive monetary policy. We will see if the conclusions of this
study in regard to utilities hold true in the current cycle.

It seems clear that current monetary policy is becoming more restrictive.
In January 2004, the Federal Reserve changed its commitment to hold rates
steady for "a considerable period" in favor of saying that it would be
"patient." In June 2004, the Fed raised the federal funds rate for the first
time in more than four years, the first of five rate hikes in 2004, and began
speaking about "measured" increases in short-term rates. The recently released
minutes of the December 14, 2004 Fed policy meeting cites robust consumer
spending, gradually improving employment conditions, increasing single-family
home and condo prices, and the role of prolonged monetary accommodation in
potential excessive risk-taking in financial markets as reasons it would
continue to move in the direction of monetary restraint.

Less clear is how the economy and capital markets will respond to the Fed's
current steps toward a more restrictive monetary policy. Favorable business
fundamentals are expected to remain intact through 2005, though the rate of
increase in aggregate corporate revenue and profits is widely forecasted to
decline somewhat. Interest rates remain historically low and corporations have
access to low cost capital and many have generated sizable cash pools from
internal operations.

Your Fund managers spend more time focused on utility and REIT fundamentals
and valuations than divining macro-economic conditions, and we believe that
there are many and varied reasons for investing in utilities and REITs. When we
speak to shareholders and potential shareholders, we often refer to the
diversification benefits of utilities--that utility stock prices can move
differently from the stocks of other economic sectors and, therefore, may
enhance long-term portfolio returns and reduce portfolio volatility. We also
refer to the importance of higher yield in long-term total return. More
recently, however, we have also discussed improving utility company
fundamentals--the continuing emphasis on stable and predictable earnings,
strong cash flow, financial strength, and efficient operation of core
businesses.

At the February Board meeting each year, the Fund's analysts present
utility and REIT industry trends and outlooks. A more through review of
specific issues based on those presentations will appear in our next quarterly
letter to you.

Board of Directors Meeting: At the regular December 2004 Board of
Directors' meeting, the Board declared the following monthly dividends:

Cents Per Share Record Date Payable Date
--------------- ----------- ------------

8.0 December 31 January 10
6.5 January 31 February 10
6.5 February 28 March 10

At the regular February 2005 Board of Directors' meeting, the Board
declared the following monthly dividends:

Cents Per Share Record Date Payable Date
--------------- ----------- ------------

6.5 March 31 April 11
6.5 April 29 May 10
6.5 May 31 June 10

The determination of the character of all Fund distributions (specifying
which portion is ordinary income, qualifying dividend income, short or long
term capital gains, or return of capital) is made each year-end and is reported
to shareholders on Form 1099-DIV, which is mailed every year in late January.

At the February 2005 meeting, the Board reviewed the Fund's dividend policy
and reaffirmed the current 6.5 cents per share per month distribution rate.
Interest rates remain near 40-year lows despite recent Federal Reserve actions
and utility common stock dividends are well below their long-term average. In
2004, the Fund made increased use of realized gains to supplement its
investment income and reduced its use of short-term trading strategies designed
to capture dividend income. Until the Fund utilizes all of its tax loss
carryforwards, distributions to shareholders derived from realized gains will
be treated as ordinary income for tax purposes. In addition, the reduced use of
short-term trading strategies by the Fund has lowered the Fund's portfolio
turnover rate and transaction costs. In the future, after the Fund utilizes all
of its tax loss carryforwards and, in the absence of an increase in the yields
available on Fund investments and/or realizable gains on Fund investments, the
Fund's dividend distributions may include a portion of non-taxable return of
capital in order to maintain the dividend rate.

Automatic Dividend Reinvestment Plan and Direct Deposit Service--The Fund
has a dividend reinvestment plan available as a benefit to all registered
shareholders and also offers direct deposit service through electronic funds
transfer to all registered shareholders currently receiving a monthly

dividend check. These services are offered through The Bank of New York. For
more information and/or an authorization form on automatic dividend
reinvestment or direct deposit, please contact The Bank of New York
(1-877-381-2537 or http://stock.bankofny.com). Information on these services is
also available on the Fund's web site at the address noted below.

Visit us on the Web--You can obtain the most recent shareholder financial
reports and dividend information at our web site,
http://www.dnpselectincome.com.

We appreciate your interest in DNP Select Income Fund Inc., and we will
continue to do our best to be of service to you.

/s/ Claire V. Hansen /s/ Nathan I. Partain
Claire V. Hansen, CFA Nathan I. Partain, CFA
Chairman President and Chief
Executive Officer

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of
DNP Select Income Fund Inc.:

We have audited the accompanying statement of assets and liabilities of DNP
Select Income Fund Inc., including the schedule of investments, as of December
31, 2004, and the related statements of operations and cash flows for the year
then ended, the statement of changes in net assets for each of the two years in
the period then ended, and the financial highlights for each of the three years
in the period then ended. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits. The financial highlights for the two years in the period ended
December 31, 2001 were audited by other auditors who have ceased operations.
Those auditors expressed an unqualified opinion on those financial highlights
in their report dated February 5, 2002.

We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements and financial highlights are free of material
misstatement. An audit includes consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating
the overall financial statement presentation. Our procedures included
confirmation of securities owned as of December 31, 2004, by correspondence
with the custodian and brokers or by other appropriate auditing procedures
where replies from brokers were not received. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of
DNP Select Income Fund Inc. at December 31, 2004, the results of its operations
and its cash flows for the year then ended, the changes in its net assets for
each of the two years in the period then ended, and the financial highlights
for each of the three years in the period then ended, in conformity with U.S.
generally accepted accounting principles.

/s/ Ernst & Young
LLP
Chicago, Illinois
February 11, 2005

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS
December 31, 2004

COMMON STOCKS--89.8%

Market
Value
Shares Company (Note 1)
--------- ------- ---------------

[_] ELECTRIC--52.5%

1,201,000 Ameren Corp.................................... $ 60,218,140
800,000 Cinergy Corp................................... 33,304,000
1,163,650 Dominion Resources Inc......................... 78,825,651
1,000,000 DTE Energy Co.................................. 43,130,000
1,100,000 Energy East Corp............................... 29,348,000
2,000,000 Exelon Corp.................................... 88,140,000
1,700,000 FirstEnergy Corp............................... 67,167,000
579,400 FPL Group Inc.................................. 43,310,150
1,080,000 Iberdrola S.A. (Spain)......................... 27,451,407
215,000 National Grid Transco PLC ADR.................. 10,317,850
770,000 National Grid Transco PLC (United Kingdom)..... 7,332,488
1,200,000 NiSource Inc................................... 27,336,000
1,318,600 NSTAR.......................................... 71,573,608
701,800 Pinnacle West Capital Corp..................... 31,166,938
544,000 PPL Corp....................................... 28,984,320
1,375,000 Progress Energy Inc............................ 62,205,000
1,000,000 Public Service Enterprise Group Inc............ 51,770,000
1,000,000 Scottish & Southern Energy ADR................. 16,751,100
850,000 Scottish & Southern Energy PLC (United Kingdom) 14,238,471
368,700 Scottish Power PLC ADR......................... 11,488,692
2,300,000 Southern Co.................................... 77,096,000
179,600 TXU Corp....................................... 11,594,976
1,500,000 Vectren Corp................................... 40,200,000
581,000 WPS Resources Corp............................. 29,026,760
2,999,304 Xcel Energy Inc................................ 54,587,333
---------------
1,016,563,884

[_] GAS--8.9%

1,076,000 AGL Resources Inc.............................. 35,766,240
1,000,000 Atmos Energy Corp.............................. 27,350,000
1,000,000 Keyspan Corp................................... 39,450,000

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS--(Continued)
December 31, 2004

Market
Value
Shares Company (Note 1)
--------- ------- ---------------

900,000 Peoples Energy Corp................. $ 39,555,000
1,000,000 WGL Holdings Inc.................... 30,840,000
---------------
172,961,240

[_] TELECOMMUNICATION--15.8%

1,600,000 BCE Inc............................. 38,608,000
565,000 BT Group PLC ADR.................... 22,334,450
1,529,200 BellSouth Corp...................... 42,496,468
1,250,000 Chunghwa Telecom Co. Ltd............ 26,312,500
2,000,000 Citizens Communications Co.......... 27,580,000
1,392,230 SBC Communications, Inc............. 35,877,767
856,250 Telecom Corp of New Zealand Ltd. ADR 30,362,625
1,068,400 Telstra Corp. Ltd. ADR.............. 20,449,176
1,519,000 Verizon Communications Inc.......... 61,534,690
---------------
305,555,676

[_] NON-UTILITY--12.6%

51,194 Alexandria Real Estate Equities Inc. 3,809,857
64,478 AMB Property Corp................... 2,604,266
251,692 Archstone Smith Trust............... 9,639,804
66,534 Arden Realty Inc.................... 2,509,662
111 AvalonBay Communities Inc........... 8,358
218,408 Boston Properties Inc............... 14,124,445
43,000 BRE Properties Inc.................. 1,733,330
77,653 Camden Property Trust............... 3,960,303
78,453 CBL & Associates Properties Inc..... 5,989,887
327,320 CenterPoint Properties Trust........ 15,675,355
208,999 Corporate Office Properties Trust... 6,134,121
229,309 Developers Diversified Realty Corp.. 10,174,440
19,460 Duke Realty Corp.................... 664,364
72,914 Equity Office Properties Trust...... 2,123,256
248,610 Equity Residential.................. 8,994,710
53,774 Essex Property Trust Inc............ 4,506,261
45,000 Extra Space Storage Inc............. 599,850
304,292 General Growth Properties Inc....... 11,003,199
84,130 Health Care Property Investors Inc.. 2,329,560

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS--(Continued)
December 31, 2004

Market
Value
Shares Company (Note 1)
--------- ------- ---------------

63,800 Health Care REIT Inc...................... $ 2,433,970
53,526 Healthcare Realty Trust Inc............... 2,178,508
51,873 Home Properties Inc....................... 2,230,539
69,268 Hospitality Properties Trust.............. 3,186,328
86,279 iStar Financial Inc....................... 3,904,988
78,994 Kilroy Realty Corp........................ 3,376,994
92,968 Kimco Realty Corp......................... 5,391,214
72,720 LaSalle Hotel Properties.................. 2,314,678
160,226 The Macerich Co........................... 10,062,193
116,597 Pan Pacific Retail Properties Inc......... 7,310,632
265,662 ProLogis.................................. 11,511,134
78,538 Public Storage, Inc....................... 4,378,493
45,571 Realty Income Corp........................ 2,304,981
149,355 Reckson Associates Realty Corp............ 4,900,338
86,412 Regency Centers Corp...................... 4,787,225
55,140 Shurgard Storage Centers Inc. Class A..... 2,426,711
259,811 Simon Property Group Inc.................. 16,801,977
187,571 SL Green Realty Corp...................... 11,357,424
97,070 Starwood Hotels & Resorts Worldwide, Inc.. 5,668,888
130,270 Sunstone Hotel Investors Inc.............. 2,707,011
111,595 United Dominion Realty Trust Inc.......... 2,767,556
9,860 U-Store It Trust.......................... 171,071
229,679 Vornado Realty Trust...................... 17,485,462
183,350 Weingarten Realty Investors............... 7,352,335
---------------
243,595,678
---------------
Total Common Stocks (Cost--$1,450,893,007) 1,738,676,478
---------------

PREFERRED STOCKS--16.1%

[_] UTILITY--16.1%

200,000 Alltel Corp.
7 3/4% due 5/17/05........................ 10,578,000
750,000 Ameren Corp.
9 3/4% due 5/15/05........................ 21,570,000
1,200,000 Centurytel Inc.
6 7/8% due 5/15/05........................ 31,800,000

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS--(Continued)
December 31, 2004

Market
Value
Shares Company (Note 1)
--------- ------- ---------------

626,200 Cinergy Corp.
9 1/2% due 2/16/05......................... $ 39,701,080
986,700 DTE Energy Co.
8 3/4% due 8/16/05......................... 25,723,269
500,000 FPL Group Inc.
8 1/2% due 2/16/05......................... 30,755,000
1,200,000 Great Plains Energy Inc.
8% due 2/16/07............................. 32,220,000
412,000 Keyspan Corp.
8 3/4% due 5/16/05......................... 21,494,040
775,000 Oneok Inc.
8 1/2% due 2/16/06......................... 27,667,500
500,000 Sempra Energy
8 1/2% due 5/17/05......................... 15,560,000
172,700 Southern Union Co.
5 3/4% due 8/16/06......................... 12,589,830
400,000 TXU Corp.
8 3/4% due 11/16/05........................ 12,584,000
500,000 TXU Corp...................................
8 1/8% due 5/16/06......................... 28,575,000
---------------
Total Preferred Stocks (Cost--$268,306,718) 310,817,719
---------------

BONDS--34.2%

Ratings*
--------------------------
Standard
and
Par Value Fitch Moody's Poor's
------------ - --------- ------- --------

[_] ELECTRIC--11.2%

$ 18,050,000 Comed Financing II
8 1/2%, due 1/15/27............. Not Rated Baa2 BBB 19,775,454
7,500,000 Commonwealth Edison Co.
9 7/8%, due 6/15/20............. A- A3 A- 7,878,660
24,000,000 Dominion Resources Capital Trust
7.83%, due 12/01/27............. BBB Baa2 BBB- 26,112,624

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS--(Continued)
December 31, 2004

Ratings*
--------------------------
Standard Market
and Value
Par Value Company Fitch Moody's Poor's (Note 1)
------------ ------- --------- ------- -------- ---------------

$ 14,900,000 El Paso Electric Co.
8.90%, due 2/01/06............ NR Baa2 BBB $ 15,750,671
5,000,000 El Paso Electric Co., Series E
9.40%, due 5/01/11............ Not Rated Baa2 BBB 5,521,340
6,106,000 FPL Group Capital Inc.
7 5/8%, due 9/15/06........... A- A2 A- 6,524,859
15,825,000 Niagara Mohawk Power Corp.
8 7/8%, due 5/15/07........... Not Rated Baa1 A- 17,585,690
5,000,000 Progress Energy Inc.
7 3/4%, due 3/01/31........... BBB- Baa2 BBB- 6,019,240
9,000,000 PSEG Power LLC
8 5/8%, due 4/15/31........... BBB Baa1 BBB 11,986,578
22,750,000 Puget Capital Trust
8.231%, due 6/01/27........... Not Rated Ba1 BB 22,118,642
29,860,000 Southern California Edison Co.
8%, due 2/15/07............... BBB+ A3 BBB 32,532,888
13,000,000 Southern Co. Capital Trust II
8.14%, due 2/15/27............ Not Rated Baa1 BBB+ 14,189,292
11,750,000 Virginia Electric & Power Co.
8 5/8%, due 10/01/24.......... A- A2 A- 12,241,996
17,700,000 Virginia Electric & Power Co.
8 1/4%, due 3/01/25........... A- A2 A- 18,441,966
---------------
216,679,900

[_] GAS--4.1%

5,000,000 KN Energy Inc.
7 1/4%, due 3/01/28........... BBB Baa2 BBB 5,708,255
10,000,000 Northern Border Partners LP
8 7/8%, due 6/15/10........... BBB+ Baa2 BBB+ 12,056,170
15,000,000 Panhandle Eastern
8 5/8%, due 4/15/25........... BBB- Baa3 BBB- 15,747,570

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS--(Continued)
December 31, 2004

Ratings*
--------------------------
Standard Market
and Value
Par Value Company Fitch Moody's Poor's (Note 1)
------------ ------- --------- ------- -------- ---------------

$ 6,488,000 Southern Union Co.
7.60%, due 2/01/24.................... BBB Baa3 BBB $ 7,536,221
8,850,000 Southern Union Co.
8 1/4%, due 11/15/29.................. BBB Baa3 BBB 11,201,879
10,000,000 TE Products Pipeline Co.
7.51%, due 1/15/28.................... Not Rated Baa3 BBB 10,775,450
15,500,000 Trans-Canada Pipeline
9 1/8%, due 4/20/06................... Not Rated A3 BBB+ 16,576,831
---------------
79,602,376

[_] TELECOMMUNICATION--11.9%

15,200,000 AT&T Wireless Services Inc.
7 1/2%, due 5/01/07................... A Baa2 A 16,518,478
22,000,000 British Telecom PLC
8 3/8%, due 12/15/10.................. A Baa1 A- 26,450,688
15,000,000 Centurytel Inc.
8 3/8%, due 10/15/10.................. BBB+ Baa2 BBB+ 17,747,595
5,000,000 Centurytel Inc.
6 7/8%, due 1/15/28................... BBB+ Baa2 BBB+ 5,315,885
5,645,000 Comcast Cable Communications Inc.
8 3/8%, due 5/01/07................... BBB Baa3 BBB 6,246,418
10,000,000 Deutsche Telecom International Finance
BV
7 3/4%, due 6/15/05................... A- Baa1 BBB+ 10,234,170
10,000,000 France Telecom SA
7.20%, due 3/01/06.................... A- Baa2 BBB+ 10,502,560
10,000,000 France Telecom SA
7 3/4%, due 3/01/11................... A- Baa2 BBB+ 11,943,720
17,625,000 GTE Corp.
7.90%, due 2/01/27.................... A+ A3 A+ 19,291,391
5,000,000 GTE North Inc., Series C
7 5/8%, due 5/15/26................... A+ A1 A+ 5,282,030
10,000,000 Koninklijke KPN NV
8.00%, due 10/01/10................... BBB+ Baa1 A- 11,817,290

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS--(Continued)
December 31, 2004

Ratings*
----------------------------
Standard Market
and Value
Par Value Company Fitch Moody's Poor's (Note 1)
------------ ------- --------- --------- -------- ---------------

$ 10,000,000 Sprint Capital Corp.
8 3/8%, due 3/05/12........... BBB Baa3 BBB- $ 12,198,470
10,000,000 TCI Communications Inc.
8 3/4%, due 8/01/15........... BBB Baa3 BBB 12,778,030
11,500,000 Telefonica Europe BV
7 3/4%, due 9/15/10........... A A3 A 13,501,782
6,724,000 360 Communications Co.
7 1/2% due 3/01/06............ A A2 A 7,048,319
10,500,000 Verizon Global Funding Corp.
7 3/4%, due 12/01/30.......... A+ A2 A+ 13,095,884
20,000,000 Vodaphone Group PLC
7 3/4%, due 2/15/10........... A A2 A 23,234,080
5,000,000 Vodaphone Group PLC
7 7/8%, due 2/15/30........... A A2 A 6,467,190
---------------
229,673,980

[_] NON-UTILITY--7.0%
#25,000,000 Belford U.S. Capital Co. LLC
2.33%, due 3/08/05............ AAA Not Rated AAA 25,003,400
7,361,000 Continental Cablevision Inc.
9.50%, due 8/01/13............ BBB Baa3 BBB 7,970,366
#20,000,000 Countrywide Home Loans Inc.
2.14%, Series L, due 1/18/05.. A A3 A 20,000,000
#25,000,000 Countrywide Home Loans Inc.
2.61%, Series M, due 6/23/05.. A A3 A 24,995,579
8,000,000 Dayton Hudson Corp.
9 7/8%, due 7/01/20........... A+ A2 A+ 11,867,416
10,000,000 EOP Operating LP
7 3/4%, due 11/15/07.......... BBB+ Baa2 BBB+ 11,043,800
#15,000,000 Sigma Finance Inc.
2.46%, due 1/28/05............ AAA Aaa AAA 15,000,000
#20,000,000 Stanfield Victoria Funding LLC
2.33%, due 6/01/05............ Not Rated Aaa AAA 20,004,620
---------------
135,885,181
---------------
Total Bonds (Amortized Cost--$641,710,047)................. 661,841,437
---------------

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS--(Continued)
December 31, 2004

Market
Par Value/ Value
Shares Company (Note 1)
------------ ------- ---------------

U.S. TREASURY OBLIGATION--0.1%

$ 2,000,000 U.S. Treasury Bond
10 3/4%, due 8/15/05....................................................... $ 2,099,688
---------------
Total U.S. Treasury Obligation (Amortized Cost--$2,052,999)................ 2,099,688
---------------

MONEY MARKET INSTRUMENTS--20.5%

#2,971,542 AIM STIC Liquid Assets Portfolio........................................... 2,971,542
#4,990,000 Chesham Finance LLC
2.31%, due 1/03/05......................................................... 4,989,360
#26,000,000 Credit Suisse First Boston LLC Repurchase Agreement 2.363%, dated
12/31/04, due 1/03/05, with a repurchase price of $26,005,120 and
collateralized by $26,522,624 Continental Airlines 9.56% ABS due 9/01/19... 26,000,000
#50,000,000 Dresdner Kleinwort Wasserstein Securities LLC Repurchase Agreement
2.363%, dated 12/31/04, due 1/03/05, with a repurchase price of $50,009,846
and collateralized by $51,003,866 American Express Credit 2.47% Medium
Term Note due 10/14/05..................................................... 50,000,000
25,000,000 General Electric Capital Corp.
2.00%, due 1/03/05......................................................... 24,997,222
#50,000,000 Goldman Sachs & Co. Repurchase Agreement, 2.373%, dated 12/31/04, due
01/03/05, with a repurchase price of $50,009,887 and collateralized by
$22,666,180 CWHL 2003-26 2A1 2.81% CMO due 8/25/33 and $28,333,820
CCMSC 1999-2 A2 7.20% CMO due 1/15/32...................................... 50,000,000
#50,000,000 Greenwich Capital Markets Inc. Repurchase Agreement, 2.393%, dated
12/31/04, due 1/03/05, with a repurchase price of $50,009,971 and
collateralized by $398,884 BCF 1997-R1 WAC 1.87% 144A CMO due 3/25/37;
$3,944,917 CWALT 2004-18CB 2A1 4.00% CMO due 9/25/34; $6,562,906
CSFB 2004-1 5A1 5.50% CMO due 2/25/19; $194,685 IMPAC 2002-1 AII
6.50% CMO due 4/25/32; $103,522 MSSTR 2003-1 2A1 6.00% CMO due
2/25/33; and $39,797,844 WAMU 2004-RP1 2A 4.246% 144A CMO due
1/25/34.................................................................... 50,000,000
#18,380,322 Janus Institutional Cash Reserves Fund..................................... 18,380,322

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS--(Continued)
December 31, 2004

Market
Par Value/ Value
Shares Company (Note 1)
------------- ------- -----------

#$ 50,000,000 Lehman Brothers Inc. Repurchase Agreement, 2.363%, dated 12/31/04, due
1/03/05, with a repurchase price of $50,009,846 and collateralized by $2,001,227
AABST 2003-6 B1 4.11% ABS due 3/25/35; $3,056,897 American Airlines
6.98% ABS due 4/01/11; $420,823 American Airlines 7.86% ABS due 10/01/11;
$5,789,530 ARNIM 2004-WN10 A 4.21% 144A ABS due 11/25/34; $4,271,638
ABFCN 2004-OPT4 N1 4.45% 144A ABS due 5/26/34; $523,612 HEAT 2003-
4N A 8.00% 144A ABS due 11/27/33; $2,321,730 CPLT 1987-A B 4.50% ABS
due 10/01/29; $585,407 CONAL 2000-2 A1 7.71% ABS due 10/02/22; $785,751
Continental Airlines 6.70% ABS due 6/15/21; $1,249,063 FFML 2004-FFH4 M6
3.57% ABS due 1/25/35; $1,250,816 FHLT 2004-3 M9 4.97% ABS due
11/25/34; $2,003,293 GT 1998-3 A5 6.22% ABS due 3/01/30; $5,033,849 MSAC
2004-HE2 B3 5.92% ABS due 3/25/34; $677,161 Northwest Airlines Corp.
7.58% ABS due 3/01/19; $1,048,653 PHMS 1993-23 A9 6.50% CMO due
7/25/08; $5,529,539 FFNT 2004-FF7A A 5.00% 144A ABS due 9/27/34;
$5,413,937 FRENT 2004-3 A 4.50% 144A ABS due 11/27/34; $3,332,079
SAILN 2004-AA A 4.50% 144A ABS due 10/27/34; $1,604,530 SAIL 2004-10
M6 4.77% ABS due 11/25/34; and $4,098,969 TMTS 2004-19HE M4 4.37%
144A ABS due 10/25/34........................................................... $50,000,000
#50,000,000 Merrill Lynch Government Securities Inc. Repurchase Agreement, 2.393%, dated
12/31/04, due 1/03/05, with a repurchase price of $50,009,971 and collateralized
by $2,007,613 BSCMS 2004-ESA J 5.82% 144A CMO due 5/14/16; $1,499,987
HEMT 2004-6 M5 6.71% CMO due 4/25/35; $194,330 FCLT 1997-CHL1 B
7.81% 144A CMO due 4/29/39; $11,883,937 FCLT 1997-CHL1 D 7.81% 144A
CMO due 4/29/39; $4,589,910 MLCC 2004-1 M2 4.75% CMO due 12/25/34;
$2,753,946 MLCC 2004-1 M3 4.75% CMO due 12/25/34; $1,205,060 MSC
1997-RR E 7.71% 144A CMO due 4/30/39; $6,861,435 SBM7 1997-HUD2 B2
7.00% CMO due 7/25/24; $10,785,208 WFMBS 2004-BB B1 4.59% CMO due
1/25/35; $6,598,353 WFMBS 2004-BB B2 4.59% CMO due 1/25/35; and
$4,123,742 WFMBS 2004-BB B3 4.59% CMO due 1/25/35............................... 50,000,000

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS--(Continued)
December 31, 2004

Market
Par Value/ Value
Shares Company (Note 1)
------------ ------- -----------

#$50,000,000 Nomura Securities International Inc. Repurchase Agreement, 2.363%, dated
12/31/04, due 1/03/05, with a repurchase price of $50,009,846 and collateralized
by $307,745 AMAC 2002-9 A2 5.75% CMO due 12/25/32; $280,247 AHM
2004-3 5A 4.29% CMO due 10/25/34; $2,439,645 BOAA 2003-2 CB6 5.58%
CMO due 4/25/33; $764,870 BSCMS 2004-T14 A3 4.80% CMO due 1/12/41;
$58,941 CWHL 2002-16 1A14 6.50% CMO due 9/25/32; $2,643,298 CWHL
2003-J3 1A2 5.03% CMO due 5/25/33; $877,533 CWALT 2002-17 A6 5.63%
CMO due 1/25/33; $682,744 CWHL 2002-31 A11 6.00% CMO due 1/25/33;
$1,729,791 CWHL 2003-41 A2 5.25% CMO due 12/25/33; $36,599 CMAT
1999-C2 C 7.80% CMO due 11/17/32; $607,286 CSFB 2002-22 4X 7.50% CMO
due 7/25/32; $1,915,572 FHASI 2003-9 1A9 5.18% CMO due 11/25/33; $2,846
JPMCC 2004-FL1A XFL 0.01% 144A CMO due 4/16/19; $2,315,654 MASTR
2003-7 4A36 4.68% CMO due 9/25/33; $2,996,936 MASTR 2003-7 4A46 5.13%
CMO due 9/25/33; $2,108,564 MASTR 2003-2 2A7 5.68% CMO due 3/25/18;
$2,984,096 MSSTR 2003-1 3A3 5.68% CMO due 2/25/33; $137,521 NASC
1995-MD3 A1B 8.15% due 4/04/27; $1,284,400 PRIME 2003-1 A9 5.51% CMO
due 6/25/33; $3,598,199 RALI 2002-QS19 A3 5.58% CMO due 12/25/32;
$473,060 RALI 2002-QS12 A3 5.58% CMO due 9/25/32; $2,388,690 RALI
2003-QS15 A5 5.50% CMO due 8/25/33; $1,585,136 RFMSI 2003-S4 A11
5.13% CMO due 3/25/33; $3,060,016 SBM7 2001-C2 A3 6.50% CMO due
10/13/11; $1,209,755 SASC 2003-1 1A7 5.25% CMO due 2/25/18; $3,826,088
SASC 2003-8 2A13 5.08% due 4/25/33; $2,142,204 SAMI 2003-AR4 A2 3.84%
CMO due 1/19/34; $346,723 SAMI 2004-AR1 2A1 3.61% due 3/19/34;
$2,924,689 WAMU 2003-S4 2A4 5.50% CMO due 6/25/33; $323,524 WAMU
2002-S8 2A3 5.25% CMO due 1/25/18; $1,739,598 WAMMS 2003-MS5 1A5
5.08% CMO due 3/25/18; $167,385 WFMBS 2002-18 1A6 6.00% CMO due
12/25/32; $562,984 WFMBS 2002-18 2AIO 0.67% CMO due 12/25/32; and
$2,477,640 WFMBS 2004-4 A6 4.58% CMO due 5/25/34................................ $50,000,000

#18,970,000 Waterfront Funding Corp.
2.20%, due 1/03/05........................................... 18,967,681
--------------
Total Money Market Instruments (Amortized Cost--$396,306,127) 396,306,127
--------------
TOTAL INVESTMENTS (Cost--$2,759,268,898) (160.7%)............ $3,109,741,449
==============

--------
* Bond ratings are not covered by the report of independent registered public
accounting firm.

# This security was purchased with the cash proceeds from securities loans.

The percentage shown for each investment category is the total value of that
category as a percentage of the net assets applicable to common shares of the
Fund.

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
Sector Allocation*
December 31, 2004

[CHART]

Electric - 48%
Telecommunication - 10%
Gas - 19%
REITs - 9%
Other - 14%

* Sector allocation is based on total investments rather than total net assets
applicable to common shares and includes securities purchased with the cash
collateral for securities loaned.

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 2004

ASSETS:
Investments at market value:
Common stocks (cost $1,450,893,007)....................................................... $1,738,676,478
Preferred stocks (cost $268,306,718)...................................................... 310,817,719
Bonds (cost $641,710,047)................................................................. 661,841,437
U.S. Treasury obligations (cost $2,052,999)............................................... 2,099,688
Money market instruments (amortized cost $396,306,127).................................... 396,306,127
--------------
Total investments at value (cost $2,759,268,898) including $458,937,852 of securities
loaned................................................................................ 3,109,741,449
Cash....................................................................................... 10,822,845
Receivables:
Interest.................................................................................. 10,623,609
Dividends................................................................................. 3,891,173
Securities lending income................................................................. 74,042
Prepaid expenses........................................................................... 126,291
--------------
Total Assets............................................................................ $3,135,279,409
==============
LIABILITIES:
Payable for securities purchased........................................................... 737,861
Due to Adviser (Note 2).................................................................... 3,600,726
Due to Administrator (Note 2).............................................................. 908,670
Dividends payable on common stock.......................................................... 17,706,489
Interest payable on remarketed preferred stock............................................. 763,570
Accrued expenses........................................................................... 1,456,327
Commercial paper outstanding (Note 6)...................................................... 198,361,375
Payable upon return of securities on loan.................................................. 476,307,660
Remarketed preferred stock ($.001 par value; 100,000,000 shares authorized and 5,000 shares
issued and outstanding, liquidation preference $100,000 per share) (Note 5).............. 500,000,000
--------------
Total Liabilities....................................................................... $1,199,842,678
--------------
CAPITAL:
Common stock ($.001 par value; 250,000,000 shares authorized and 221,331,117 shares issued
and outstanding)......................................................................... 221,331
Paid-in surplus............................................................................ 1,912,206,510
Accumulated net realized loss on investments............................................... (294,532,172)
Distributions in excess of net investment income........................................... (32,930,964)
Net unrealized appreciation (depreciation) on investments and foreign currency translation. 350,472,026
--------------
Net assets applicable to common stock (equivalent to $8.75 per share based on
221,331,117 shares outstanding)....................................................... 1,935,436,731
--------------
Total Liabilities and Capital........................................................... $3,135,279,409
==============

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
STATEMENT OF OPERATIONS
For the year ended December 31, 2004

INVESTMENT INCOME:
Interest................................................................................ $ 31,346,970
Dividends (less withholding tax of $1,110,479).......................................... 100,912,204
Securities lending income, net.......................................................... 1,076,166
------------
Total investment income............................................................... 133,335,340

EXPENSES:
Management fees (Note 2)................................................................ 13,869,531
Remarketed preferred stock interest expense (Note 5).................................... 7,648,757
Commercial paper interest expense (Note 6).............................................. 3,054,415
Administrative fees (Note 2)............................................................ 3,523,906
Transfer agent fees..................................................................... 620,700
Custodian fees.......................................................................... 574,500
Remarketing agent fees.................................................................. 1,270,833
Shareholder reports..................................................................... 720,000
Professional fees....................................................................... 434,175
Directors' fees (Note 2)................................................................ 525,000
Other expenses.......................................................................... 783,886
------------
Total expenses........................................................................ 33,025,703
------------
Net investment income................................................................. 100,309,637
------------

REALIZED AND UNREALIZED GAIN:
Net realized gain on investments........................................................ 80,322,132
Net change in unrealized appreciation (depreciation) on investments and foreign currency
translation........................................................................... 165,202,888
------------
Net realized and unrealized gain........................................................ 245,525,020
------------
Net increase in net assets applicable to common stock resulting from operations....... $345,834,657
============

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
STATEMENTS OF CHANGES IN NET ASSETS

For the year For the year
ended ended
December 31, December 31,
2004 2003
-------------- --------------

FROM OPERATIONS:
Net investment income..................................................... $ 100,309,637 $ 159,624,172
Net realized gain (loss).................................................. 80,322,132 (26,744,282)
Net change in unrealized appreciation/(depreciation) on investments and
foreign currency translation............................................ 165,202,888 159,347,831
-------------- --------------
Net increase in net assets applicable to common stock resulting from
operations............................................................ 345,834,657 292,227,721

DISTRIBUTIONS TO COMMON STOCKHOLDERS:
From and in excess of net investment income............................... (175,074,595) (173,011,472)
-------------- --------------
Total distributions to common stockholders.............................. (175,074,595) (173,011,472)

FROM CAPITAL STOCK TRANSACTIONS:
Shares issued to common stockholders from dividend reinvestment of
2,536,362 shares and 2,625,240 shares, respectively..................... 26,390,530 26,099,457
-------------- --------------
Net increase in net assets derived from capital share transactions........ 26,390,530 26,099,457
-------------- --------------
Total increase.......................................................... 197,150,592 145,315,706

TOTAL NET ASSETS APPLICABLE TO COMMON STOCK:
Beginning of year......................................................... 1,738,286,139 1,592,970,433
-------------- --------------
End of year (including distributions in excess of net investment income of
$32,930,964 and $12,501,788, respectively).............................. $1,935,436,731 $1,738,286,139
============== ==============

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
STATEMENT OF CASH FLOWS
For the year ended December 31, 2004

INCREASE (DECREASE) IN CASH

Cash flows provided by (used for) operating activities:
Interest received........................................................... $ 30,633,240
Income dividends received................................................... 100,628,635
Return of capital on investments............................................ 1,585,315
Long-term capital gains dividends received.................................. 1,412,790
Securities lending income, net.............................................. 1,077,458
Expenses paid (excluding interest).......................................... (29,145,648)
Interest paid on commercial paper........................................... (2,721,313)
Purchase of investment securities........................................... (1,270,931,850)
Proceeds from sale/redemption of investment securities...................... 1,304,937,139
Amortization of premiums and discounts on debt securities................... 13,035,975
---------------
Net cash provided by operating activities............................................... 150,511,741

Cash Flows provided by (used for) financing activities
Dividends paid.............................................................. (174,871,686)
Proceeds from issuance of common stock under dividend reinvestment
plan...................................................................... 26,390,530
Net cash used for commercial paper issuance ................................ (613,565)
---------------
Net cash used in financing activities................................................... (149,094,721)
-------------
Net increase in cash.......................................................................... 1,417,020
Cash--beginning of year....................................................................... 9,405,825
-------------
Cash--end of year............................................................................. $ 10,822,845
=============

Reconciliation of net increase in net assets resulting from operations to net
cash provided by operating activities:
Net increase in net assets resulting from operations........................................ $ 345,834,657
Change in investments..................................................... 34,005,288
Net realized gain on investments ......................................... (80,322,132)
Net change in unrealized appreciation (depreciation) on investments....... (165,202,888)
Return of capital on investments.......................................... 1,585,315
Long-term capital gains dividends received................................ 1,412,790
Amortization of premiums and discounts on debt securities................. 13,035,975
Increase in interest receivable........................................... (713,729)
Increase in dividends receivable.......................................... (283,568)
Increase in accrued expenses.............................................. 1,158,741
Decrease in other receivable.............................................. 1,292
---------------
Total adjustments................................................................... (195,322,916)
-------------
Net cash provided by operating activities..................................................... $ 150,511,741
=============

The accompanying notes are an integral part of the financial statements.

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS
December 31, 2004

(1) SIGNIFICANT ACCOUNTING POLICIES:

DNP SELECT INCOME FUND INC. (the "Fund") was incorporated under the laws of
the State of Maryland on November 26, 1986. The Fund commenced operations on
January 21, 1987, as a closed-end diversified management investment company
registered under the Investment Company Act of 1940. The primary investment
objectives of the Fund are current income and long-term growth of income.
Capital appreciation is a secondary objective.

The following are the significant accounting policies of the Fund:

(a) The market values for securities are determined as follows: Equity
securities traded on a national securities exchange or traded
over-the-counter and quoted on the NASDAQ System are valued at last sales
prices. Fixed income securities and any other securities for which it is
determined that market prices are unavailable or inappropriate are valued at
a fair value using a procedure determined in good faith by the Board of
Directors which includes the use of a pricing service. Each money market
instrument having a maturity of 60 days or less is valued on an amortized
cost basis, which approximates market value.

(b) Repurchase agreements are fully collateralized by U.S. Treasury, U.S.
Government Agency and other investment grade securities. All collateral is
held by an independent third-party custodian bank on behalf of the Fund
until maturity of the repurchase agreement. Provisions of the agreement
provide that the market value of the collateral plus accrued interest on the
collateral is greater than or equal to the repurchase price plus accrued
interest at all times. In the event of a default or bankruptcy by the other
party to the agreements, the Fund maintains the right to sell the underlying
collateral securities at market value; however realization and/or retention
of the collateral may be subject to legal proceedings.

(c) It is the Fund's policy to comply with requirements of Subchapter M
of the Internal Revenue Code applicable to regulated investment companies
and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
The Fund intends to utilize provisions of Federal income tax laws which
allow a realized capital loss to be carried forward for eight years
following the year of loss. At December 31, 2004, the Fund had tax capital
loss carryforwards of $288,053,758 of which $924,278 will expire in 2007:
$76,055,964 will expire in 2010 and $211,073,516 will expire in 2011. These
capital loss carryforwards will be reduced by future realized gains, whether
or not distributed (see Note 4). The Fund incurred losses in November and
December of $3,868,218, which will be deferred for tax purposes and treated
as if they were incurred on January 1, 2005.

At December 31, 2004, on a tax basis, the Fund had undistributed net
investment income of $0 and based on a $2,776,340,015 tax cost of
investments, gross unrealized appreciation of $365,962,302 and unrealized
depreciation of $32,560,868. The difference between the book basis and tax
basis of distributable earnings and cost of investments are primarily a
result of tax deferral of wash sale losses, the accretion of market discount
and amortization of premiums and alternative tax treatment of certain
securities.

Due to inherent differences in the recognition and distribution of income
and realized gains/losses under U.S. generally accepted accounting
principles and for federal income tax purposes, permanent

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENT--(Continued)
December 31, 2004

differences between book and tax basis reporting have been identified and
appropriately reclassified on the Statement of Assets and Liabilities. The
reclassifications primarily relate to premium amortization and capital loss
carryforwards utilized for current year distributions. These
reclassifications have no impact on the net asset value of the Fund. At
December 31, 2004, the following reclassifications were recorded:

Accumulated net realized Distributions in excess of
Paid-in surplus loss on investments net investment income
--------------- ------------------------ --------------------------

$(75,993,903) $21,658,121 $54,335,782

(d) Security transactions are recorded on the trade date. Realized gains
or losses from sales of securities are determined on the specific identified
cost basis. Dividend income is recognized on the ex-dividend date. Interest
income and expense are recognized on the accrual basis. Discounts and
premiums on securities are amortized over the lives of the respective
securities for financial reporting purposes. Discounts and premiums are not
amortized for tax purposes.

(e) 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 and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results could differ from those estimates.

(2) MANAGEMENT ARRANGEMENTS:

The Fund has engaged Duff & Phelps Investment Management Co. (the "Adviser")
to provide professional investment management services for the Fund and has
engaged J. J. B. Hilliard, W. L. Lyons, Inc. (the "Administrator") to provide
administrative and management services for the Fund. The Adviser receives a
quarterly fee at an annual rate of .60% of the average weekly net assets of the
Fund up to $1.5 billion and .50% of average weekly net assets in excess
thereof. The Administrator receives a quarterly fee at annual rates of .25% of
average weekly net assets up to $100 million, .20% of average weekly net assets
from $100 million to $1 billion, and .10% of average weekly net assets over $1
billion. For purposes of the foregoing calculations, "average weekly net
assets" is defined as the sum of (i) the aggregate net asset value of the
Fund's common stock (ii) the aggregate liquidation preference of the Fund's
preferred stock and (iii) the aggregate proceeds to the Fund of commercial
paper issued by the Fund. Directors of the Fund not affiliated with the Adviser
receive a fee of $25,000 per year plus $2,000 per board meeting, plus $1,500
per committee meeting attended. Committee Chairmen receive an additional fee of
$5,000 per year. Total fees paid to directors for the year ended December 31,
2004 were $371,727.

(3) INDEMNIFICATIONS:

Under the Fund's organizational documents, its Officers and Directors are
indemnified against certain liabilities arising out of the performance of their
duties to the Fund. In addition, in the normal course of business, the Fund
enters into contracts that provide general indemnifications to other parties.
The Fund's maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENT--(Continued)
December 31, 2004

Fund that have not yet occurred. However, the Fund has not had prior claims or
losses pursuant to these contracts and believes the risk of loss to be remote.

(4) DIVIDENDS:

The Board of Directors has authorized the following distributions to common
stockholders from investment income in 2004:

Record Payable Dividend Record Payable Dividend
Date Date Per Share Date Date Per Share
-------- -------- --------- -------- -------- ---------

01-30-04 02-10-04 $.065 07-30-04 08-10-04 $.065
02-27-04 03-10-04 .065 08-31-04 09-10-04 .065
03-31-04 04-12-04 .065 09-30-04 10-12-04 .065
04-30-04 05-10-04 .065 10-29-04 11-10-04 .065
05-28-04 06-10-04 .065 11-30-04 12-10-04 .065
06-30-04 07-12-04 .065 12-31-04 01-10-05 .080

The Fund declares and pays dividends monthly. 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. The tax
basis of all Fund distributions in 2003 and 2004 was ordinary income. Until the
Fund utilizes all of its tax loss carryforwards, distributions to shareholders
derived from realized gains will be treated as ordinary income for tax purposes.

(5) REMARKETED PREFERRED STOCK:

In 1988, the Fund issued 5,000 shares of Remarketed Preferred Stock ("RP")
in five series of 1,000 shares each at a public offering price of $100,000 per
share. The underwriting discount and other expenses incurred in connection with
the issuance of the RP were recorded as a reduction of paid-in surplus on
common stock. Dividends on the RP are cumulative at a rate which was initially
established for each series at its offering. Since the initial offering of each
series, the dividend rate on each series has been reset every 49 days by a
remarketing process. Dividend rates ranged from 1.040% to 2.249% during the
year ended December 31, 2004.

The RP is redeemable at the option of the Fund on any dividend payment date
at a redemption price equal to $100,000 per share, plus accumulated and unpaid
dividends. The Fund is required to maintain certain asset coverage with respect
to the RP, and the RP is subject to mandatory redemption if that asset coverage
is not maintained. Each series of RP is also subject to mandatory redemption on
a date certain as follows: Series A--November 28, 2012; Series B--November 18,
2015; Series C--November 7, 2018; Series D--December 22, 2021; and Series
E--December 11, 2024.

In general, the holders of the RP and of the Common Stock have equal voting
rights of one vote per share, except that the holders of the RP, as a class,
vote to elect two members of the Board of Directors, and separate class votes
are required on certain matters that affect the respective interests of the RP
and the Common Stock. The RP has a liquidation preference of $100,000 per share
plus accumulated and unpaid dividends.

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENT--(Continued)
December 31, 2004

(6) COMMERCIAL PAPER:

The Board of Directors has authorized the Fund to issue up to $200,000,000
of Commercial Paper Notes (the "Notes") in minimum denominations of $100,000
with maturities up to 270 days. The Notes generally will be sold on a discount
basis, but may be sold on an interest-bearing basis. The Notes are not
redeemable by the Fund nor are they subject to voluntary prepayment prior to
maturity. The aggregate amount of Notes outstanding changes from time to time.
The Notes are unsecured, general obligations of the Fund. The Fund has entered
into a credit agreement to provide liquidity. The Fund is able to request loans
under the credit agreement of up to $100,000,000 at any one time, subject to
certain restrictions. Interest rates on the Notes ranged from 1.21% to 2.71%
during the year ended December 31, 2004. At December 31, 2004, the Fund had
Notes outstanding of $198,361,375.

(7) INVESTMENT TRANSACTIONS:

For the year ended December 31, 2004, purchases and sales of investment
securities (excluding short-term securities) were $1,110,681,065 and
$1,069,959,485, respectively.

The Fund may lend portfolio securities to a broker/dealer. Loans are
required to be secured at all times by collateral at least equal to the market
value of securities loaned. The Fund receives a portion of the income earned on
the securities held as collateral and continues to earn income on the loaned
securities. Security loans are subject to the risk of failure by the borrower
to return the loaned securities in which case the Fund could incur a loss. At
December 31, 2004, the Fund had loaned portfolio securities with a market value
of $458,937,852 to a broker/dealer and received $476,307,660 of cash
collateral. This cash was invested in securities as shown in the Schedule of
Investments.

DNP SELECT INCOME FUND INC.

FINANCIAL HIGHLIGHTS--SELECTED PER SHARE DATA AND RATIOS

The table below provides information about income and capital changes for a
share of common stock outstanding throughout the years indicated:

For the year ended December 31
-----------------------------------------------------------
2004 2003 2002 2001 2000
---------- ---------- ---------- ---------- ----------

Net asset value:
Beginning of year......................... $ 7.94 $ 7.37 $ 9.18 $ 10.51 $ 8.77
---------- ---------- ---------- ---------- ----------
Net investment income (1)(2)............... 0.54 0.75 0.79 0.77 0.88
Net realized gain (loss) and change in
unrealized appreciation/(depreciation) on
investments.............................. 1.06 0.62 (1.78) (1.23) 1.76
Dividends on preferred stock from net
investment income (1).................... -- -- (0.04) (0.08) (0.11)
---------- ---------- ---------- ---------- ----------
Total from investment operations applicable
to common shares......................... 1.60 1.37 (1.03) (0.54) 2.53
Dividends on common stock from and in
excess of net investment income.......... (0.79) (0.80) (0.78) (0.79) (0.79)
---------- ---------- ---------- ---------- ----------
Net asset value:
End of year............................... $ 8.75 $ 7.94 $ 7.37 $ 9.18 $ 10.51
========== ========== ========== ========== ==========
Per share market value:
End of year............................... $ 11.92 $ 10.96 $ 9.90 $ 11.06 $ 10.50
Ratio of expenses to average net assets
applicable to common stock (1)........... 1.86% 1.89% 1.44% 1.57% 1.79%
Ratio of net investment income to average
net assets applicable to common
stock (1)(2)............................. 5.63% 9.88% 9.63% 8.63% 9.73%
Total investment return on market value.... 17.35% 19.82% (3.04%) 13.67% 37.37%
Portfolio turnover rate (2)................ 43.71% 242.69% 197.27% 213.48% 229.70%
Net assets applicable to common stock, end
of year (000s omitted)................... $1,935,437 $1,738,286 $1,592,970 $1,959,697 $2,216,014

--------
(1)Since the adoption of FAS 150 in 2003, dividends on preferred stock are
included in interest expense and are part of net investment income. Absent
this change in accounting, per share net investment income and dividends on
preferred stock would have been $.58 and $.03, respectively in 2004 and $.78
and $.03, respectively in 2003.
(2)In 2004, the Fund reduced its use of short-term trading strategies designed
to capture dividend income and made increased use of realized gains to
supplement its investment income. Until the Fund utilizes all of its tax
loss carryforwards, distributions to shareholders derived from such realized
gains will be treated as ordinary income for tax purposes. In addition, the
reduced use of short-term trading strategies reduced the Fund's portfolio
turnover rate during 2004.

Information about Directors and Officers of the Fund

Set forth below are the names and certain biographical information about the
directors and officers of the Fund. Directors are divided into three classes
and are elected to serve staggered three-year terms. Except as indicated in the
table, directors are elected by the holders of the Fund's common stock. The
officers are elected at the annual meeting of the board of directors of the
Fund.

Name, Position with the Fund,
Address Length of Time Served Principal Occupation During Past 5 Years
and Age and Term of Office and Other Affiliations
------- ----------------------- ----------------------------------------

Interested Director of the Fund

Claire V. Hansen*...... Chairman and Director Senior Advisor to the Board of Directors, Phoenix
55 East Monroe Street since January 1987 Investment Partners, Ltd. since November 1995;
Chicago, Illinois 60603 Current term expires 2005 President and Chief Executive Officer, DNP Select
Age 79 Income Fund Inc. January 2000-February 2001;
Senior Advisor to the Board of Directors, Duff &
Phelps Corporation, 1988-November 1995
(Chairman of the Board, 1987-1988; Chairman of the
Board and Chief Executive Officer prior thereto);
Chairman of the Board, Duff & Phelps Investment
Management Co., 1985-1987

Independent Directors of the Fund

Stewart E. Conner ..... Director since April 2004 Attorney, Wyatt Tarrant & Combs, LLP since 1966
500 West Jefferson St. Current term expires 2007 (Chairman, Executive Committee 2000-2004,
Louisville, Kentucky Managing Partner 1988-2000); Director, Louisville
40202 Water Company
Age 63

Connie K. Duckworth ... Director since April 2002 Partner, Eight Wings Enterprises (investor in early-
77 Stone Gate Lane Current term expires 2005 stage businesses) since December 2001; Advisory
Lake Forest, Illinois Director, Goldman, Sachs & Company, December
60045 2000-December 2001 (Managing Director, December
Age 50 1996-December 2000, Partner 1990-1996, Chief
Operating Officer of Firmwide Diversity Committee
1990-1995); Director, Smurfit-Stone Container
Corporation (packaging manufacturer); Trustee,
Northwestern Mutual Life Insurance Company;
Director and Vice Chairman, Evanston Northwestern
Health Care Corporation; Member, Board of
Overseers, Wharton School of the University of
Pennsylvania; Founder and President, Arzu, Inc.
(nonprofit corporation created to raise awareness of
Afghan women through sale of homemade rugs)

Robert J. Genetski**... Director since April 2001 President, Robert Genetski & Associates, Inc.
107 Park Street Current term expires 2007 (economic and financial consulting firm) since 1991;
Saugatuck, MI 49451 Senior Managing Director, Chicago Capital, Inc.
Age 62 (financial services firm) 1995-2001; former Senior
Vice President and Chief Economist, Harris Trust &
Savings Bank; Director, Midwest Bank and Trust
Company; author of several books; regular
contributor to the Nikkei Financial Daily

Francis E. Jeffries***. Director since January 1987 Chairman of the Board, DTF Tax Free Income Inc.
8477 Bay Colony Drive Vice Chairman since April and Duff & Phelps Utility and Corporate Bond Trust
Naples, Florida 34108 2004 Inc. (the "DTF and DUC Funds") since September
Age 74 Current term expires 2007 1991 and November 1992, respectively (President,
January 2000-February 2004), Chairman, Phoenix
Investment Partners, Ltd. November 1995-May
1997; Chairman and Chief Executive Officer, Duff &
Phelps Corporation, June 1993-November 1995
(President and Chief Executive Officer, January
1992-June 1993); Chairman of the Board, Duff &
Phelps Investment Management Co. 1988-1993

Nancy Lampton** ....... Director since October 1994 Chairman and Chief Executive Officer, Hardscuffle
3 Riverfront Plaza Current term expires 2006 Inc. (insurance holding company) since January 2000;
471 West Main Street Chairman and Chief Executive Officer, American Life
Louisville, Kentucky and Accident Insurance Company of Kentucky since
40202 1971; Director, Constellation Energy Group, Inc.
Age 62 (public utility holding company), Advisory Board
Member, Thorium Power, Inc. (designer of non-
proliferative fuel for nuclear energy needs)

Christian H. Poindexter Director since May 2003 Retired Chairman and Chief Executive Officer,
1997 Annapolis Current term expires 2006 Constellation Energy Group, Inc. (public utility holding
Exchange Pkwy. company) (Executive Committee Chairman, July 2002-
Annapolis, Maryland March 2003; Chairman of the Board, April 1999-July
21401 2002; Chief Executive Officer, April 1999-October
Age 66 2001; President, April 1999-October 2000); Chairman,
Baltimore Gas and Electric Company, January 1993-
July 2002 (Chief Executive Officer, January 1993-July
2000; President, March 1998-October 2000; Director,
1988-2003); Director, Mercantile Bankshares
Corporation (bank holding company); Director, The
Baltimore Life Insurance Company; Member, Finance
and Investment Committee, National Executive Board,
Boy Scouts of America

Carl F. Pollard........ Director since April 2002 Owner, Hermitage Farm L.L.C. (Thoroughbred
10500 W. U.S. Hwy 42 Current term expires 2005 breeding) since January 1995; Chairman, Columbia
Goshen, Kentucky 40026 Healthcare Corporation 1993-1994; Chairman and
Age 66 Chief Executive Officer, Galen Health Care, Inc.
March-August 1993; President and Chief Operating
Officer, Humana Inc. 1991-1993 (previously Senior
Executive Vice President, Executive Vice President
and Chief Financial Officer); Chairman and Director,
Churchill Downs Incorporated

David J. Vitale ....... Director since April 2000 Chief Administrative Officer, Chicago Public Schools
125 South Clark Street Current term expires 2006 since April 2003; Private investor November 2002-
16th Floor April 2003; President and Chief Executive Officer,
Chicago, Illinois 60603 Board of Trade of the City of Chicago, Inc., March
Age 58 2001-November 2002; Retired executive 1999-2001;
Vice Chairman and Director, Bank One Corporation,
1998-1999; Vice Chairman and Director, First
Chicago NBD Corporation, and President, The First
National Bank of Chicago, 1995-1998; Vice
Chairman, First Chicago Corporation and The First
National Bank of Chicago, 1993-1998 (Director,
1992-1998; Executive Vice President, 1986-1993);
Director, ISO New England Inc. (not for profit
independent system operator of New England's
electricity supply), Ariel Capital Management, Inc.,
Ark Investment Management and Wheels, Inc.

Additional information about the Fund's directors is contained in the
Statement of Additional Information ("SAI") constituting Part B of the Fund's
Registration Statement on Form N-2 filed with the Securities and Exchange
Commission ("SEC"). The most recent post-effective amendment to that
Registration Statement is available electronically at the SEC's Internet web
site, http://www.sec.gov. The Fund will also furnish a copy of the SAI portion
of the Registration Statement, without charge, to any shareholder who so
requests by calling the Administrator at (888) 878-7845 (toll-free).
--------
*Mr. Hansen is deemed to be an "interested person" of the Fund under the
Investment Company Act of 1940 because of his positions with the Fund and
with Phoenix Investment Partners, Ltd., parent company of the Fund's
investment adviser.
**Elected by the holders of the Fund's preferred stock.
***Mr. Jeffries oversees 28 portfolios in the fund complex to which the Fund
belongs. Although the Fund does not hold itself out as a member of a fund
complex, applicable SEC rules define the fund complex to which the Fund
belongs to include all registered investment companies that have an
investment adviser that is an "affiliated person" (as defined in the
Investment Company Act of 1940) of the Fund's investment adviser.

Officers of the Fund
Name, Position with the Fund,
Address Length of Time Served Principal Occupation During Past 5 Years
and Age and Term of Office and Other Affiliations
------- ----------------------- ----------------------------------------

Nathan I. Partain ..... President and Chief President, Duff & Phelps Utility and Corporate Bond
55 East Monroe Street Executive Officer, since Trust Inc. and DTF Tax Free Income Inc. since
Chicago, Illinois 60603 February 2001; (Chief February 2004; Executive Vice President, Duff &
Age 48 Investment Officer since Phelps Investment Management Co. since January
January 1998; Executive 1997; Director of Utility Research, Phoenix
Vice President, April 1998- Investment Partners, Ltd., 1989-1996 (Director of
February 2001; Senior Vice Equity Research, 1993-1996 and Director of Fixed
President, January 1997- Income Research, 1993); Director, Otter Tail
April 1998) Corporation

T. Brooks Beittel ..... Secretary and Senior Vice Senior Vice President, Duff & Phelps Investment
55 East Monroe Street President, since January Management Co. since 1993 (Vice President
Chicago, Illinois 60603 1995; Treasurer, January 1987-1993)
Age 54 1995-September 2002

Michael Schatt ........ Senior Vice President since Senior Vice President, Duff & Phelps Investment
55 East Monroe Street April 1998 (Vice President, Management Co. since January 1997; Managing
Chicago, Illinois 60603 January 1997-April 1998) Director, Phoenix Investment Partners, Ltd., 1994-
Age 57 1996

Joseph C. Curry, Jr. .. Treasurer since September Senior Vice President, J.J.B. Hilliard, W.L. Lyons,
Hilliard Lyons Center 2002; Vice President since Inc. since 1994 (Vice President 1982-1994); Vice
Louisville, Kentucky April 1988 President Hilliard Lyons Trust Company; President,
40202 Hilliard-Lyons Government Fund, Inc.; Vice
Age 60 President and Assistant Treasurer, Senbanc Fund

Joyce B. Riegel ....... Chief Compliance Officer Chief Compliance Officer, Duff & Phelps Utility and
55 East Monroe Street since February 2004. Corporate Bond Trust Inc. and DTF Tax Free Income
Chicago, Illinois 60603 Inc. since August 2004; Chief Compliance Officer,
Age: 50 Duff & Phelps Investment Management Co. since
August 2002; Vice President and Chief Compliance
Officer, Stein Roe Investment Counsel LLC January
2001-August 2002; Vice President and Compliance
Officer, Stein Roe & Farnham Incorporated July
1996-December 2000

Dianna P. Wengler ..... Assistant Vice President Vice President, J.J.B. Hilliard, W.L. Lyons, Inc. since
Hilliard Lyons Center since April 2004; Assistant 1990; Vice President, Hilliard-Lyons Government
Louisville, Kentucky Secretary since April 1988 Fund, Inc.
40202
Age 44

Information about Proxy Voting by the Fund

A description of the policies and procedures that the Fund uses to determine
how to vote proxies relating to portfolio securities is available without
charge, upon request, by calling the Administrator toll-free at (888) 878-7845
or is available on the Fund's web site at http://www.dnpselectincome.com or on
the SEC's web site at http://www.sec.gov.

Information regarding how the Fund voted proxies relating to portfolio
securities during the most recent 12 month period ended June 30 is available
without charge, upon request, by calling the Administrator toll-free at (888)
878-7845 or is available on the Fund's website at
http://www.dnpselectincome.com or the SEC's website at http://www.sec.gov.

Information about the Fund's Portfolio Holdings

The Fund files its complete schedule of portfolio holdings with the SEC for
the first and third fiscal quarters of each fiscal year (quarters ended March
31 and September 30) on Form N-Q. The Fund's Form N-Q is available on the SEC's
website at http://www.sec.gov and may be reviewed and copied at the SEC's
Public Reference Room in Washington D.C. Information on the operation of the
SEC's Public Reference Room may be obtained by calling 1-800-SEC-0330. In
addition, the Fund's Form N-Q is available on the Fund's website at
http://www.dnpselectincome.com.

CEO and CFO Certifications

In 2004, the Fund's chief executive officer ("CEO") provided to the New York
Stock Exchange the annual CEO certification regarding the Fund's compliance
with the New York Stock Exchange's corporate governance listing standards. In
addition, the Fund's CEO and the Fund's chief financial officer filed with the
SEC all required certifications regarding the quality of the Fund's public
disclosures in its reports filed with the SEC during 2004.

Board of Directors

STEWART E. CONNER

CONNIE K. DUCKWORTH

ROBERT J. GENETSKI

CLAIRE V. HANSEN, CFA

FRANCIS E. JEFFRIES, CFA

NANCY LAMPTON

CHRISTIAN H. POINDEXTER

CARL F. POLLARD

DAVID J. VITALE

Officers

CLAIRE V. HANSEN, CFA
Chairman

FRANCIS E. JEFFRIES, CFA
Vice Chairman

NATHAN I. PARTAIN, CFA
President, Chief Executive Officer and Chief Investment Officer

JOYCE B. RIEGEL
Chief Compliance Officer

T. BROOKS BEITTEL, CFA
Senior Vice President
and Secretary

MICHAEL SCHATT
Senior Vice President

JOSEPH C. CURRY, JR.
Vice President and Treasurer

DIANNA P. WENGLER
Assistant Vice President and Assistant Secretary
DNP Select
Income Fund Inc.

Common stock listed on the New York Stock Exchange under the symbol DNP

55 East Monroe Street
Chicago, Illinois 60603
(312) 368-5510

Shareholder inquiries please contact

Transfer Agent
Dividend Disbursing
Agent and Custodian

The Bank of New York
Shareholder Relations
Church Street Station
P.O. Box 11258
New York, New York 10286-1258
(877) 381-2537

Investment Adviser

Duff & Phelps
Investment Management Co.
55 East Monroe Street
Chicago, Illinois 60603

Administrator

J.J.B. Hilliard, W.L. Lyons, Inc.
Hilliard Lyons Center
Louisville, Kentucky 40202
(888) 878-7845

Legal Counsel

Mayer, Brown, Rowe & Maw LLP
190 South LaSalle Street
Chicago, Illinois 60603

Independent Registered Public Accounting Firm

Ernst & Young LLP
233 South Wacker Drive
Chicago, Illinois 60606

DNP Select
Income Fund Inc.

Annual
Report

December
31, 2004

[GRAPHIC]

4th

ITEM 2. CODE OF ETHICS.

As of the end of the period covered by this report, the registrant has
adopted a Code of Business Conduct and Ethics that applies to the
registrant's principal executive officer and principal financial officer.
The registrant's principal financial officer also performs the functions of
principal accounting officer.

The text of the registrant's Code of Business Conduct and Ethics is
posted on the registrant's web site at http://www.dnpselectincome.com. In
the event that the registrant makes any amendment to or grants any waiver
from the provisions of its Code of Business Conduct and Ethics, the
registrant intends to disclose such amendment or waiver on its web site
within five business days.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The registrant's board of directors has determined that two members of
its audit committee, Christian H. Poindexter and Carl F. Pollard, are audit
committee financial experts and that each of them is "independent" for
purposes of this Item.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

The information required by this Item is incorporated by reference
from the section captioned "Audit and Non-Audit Fees" in the registrant's
definitive proxy statement filed within 120 days after the end of the
fiscal year covered by this report.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

The registrant has a separately-designated standing audit committee
established in accordance with Section 3(a)(58)(A) of the Securities
Exchange Act of 1934 (the "Exchange Act"). The members of the committee are
Connie K. Duckworth, Robert J. Genetski, Christian H. Poindexter and Carl
F. Pollard.

ITEM 6. SCHEDULE OF INVESTMENTS

Included as part of the report to shareholders filed under Item 1 of
this Form.

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

PROXY VOTING POLICIES AND PROCEDURES
Adopted May 13, 2003

I. Definitions. As used in these Policies and Procedures, the following terms
shall have the meanings ascribed below:

A. "Adviser" refers to Duff & Phelps Investment Management Co. ("DPIM").

B. "corporate governance matters" refers to changes involving the
corporate ownership or structure of an issuer whose securities are
within a portfolio holding, including changes in the state of
incorporation, changes in capital structure, including increases and
decreases of capital and preferred stock issuance, mergers and other
corporate restructurings, and

anti-takeover provisions such as staggered boards, poison pills, and
supermajority voting provisions.

C. "Delegate" refers to the Adviser, any proxy committee to which the
Adviser delegates its responsibilities hereunder and any qualified,
independent organization engaged by the Adviser to vote proxies on
behalf of the Fund.

D. "executive compensation matters" refers to stock option plans and
other executive compensation issues.

E. "Fund" refers to DNP Select Income Fund Inc.

F. "portfolio holding" refers to any company or entity whose securities
are held within the investment portfolio of the Fund as of the date a
proxy is solicited.

G. "proxy contests" refer to any meeting of shareholders of an issuer for
which there are at least two sets of proxy statements and proxy cards,
one solicited by management and the others by a dissident or group of
dissidents.

H. "social issues" refers to social, political and environmental issues.

I. "takeover" refers to "hostile" or "friendly" efforts to effect radical
change in the voting control of the board of directors of a company.

II. General policy. It is the intention of the Fund to exercise stock ownership
rights in portfolio holdings in a manner that is reasonably anticipated to
further the best economic interests of shareholders of the Fund.
Accordingly, the Fund or its Delegate(s) shall endeavor to analyze and vote
all proxies that are considered likely to have financial implications, and,
where appropriate, to participate in corporate governance, shareholder
proposals, management communications and legal proceedings. The Fund and
its Delegate(s) must also identify potential or actual conflicts of
interests in voting proxies and address any such conflict of interest in
accordance with these Policies and Procedures.

III. Factors to consider when voting.

A. The Delegate may abstain from voting when it concludes that the effect
on shareholders' economic interests or the value of the portfolio
holding is indeterminable or insignificant.

B. In analyzing anti-takeover measures, the Delegate shall vote on a
case-by-case basis taking into consideration such factors as overall
long-term financial performance of the target company relative to its
industry competition. Key measures which shall be considered include,
without limitation, five-year annual compound growth rates for sales,
operating income, net income, and total shareholder returns (share
price appreciation plus dividends). Other financial indicators that
will be considered include margin analysis, cash flow, and debt
levels.

C. In analyzing proxy contests for control, the Delegate shall vote on a
case-by-case basis taking into consideration such factors as long-term
financial performance of the target company relative to its industry;
management's track record; background to the proxy contest;
qualifications of director nominees (both slates); evaluation of what
each side is offering shareholders as well as the likelihood that the
proposed objectives and goals can be met; and stock ownership
positions.

D. In analyzing contested elections for director, the Delegate shall vote
on a case-by-case basis taking into consideration such factors as the
qualifications of all director nominees. The Delegate shall also
consider the independence and attendance record of board and

key committee members. A review of the corporate governance profile
shall be completed highlighting entrenchment devices that may reduce
accountability.

E. In analyzing corporate governance matters, the Delegate shall vote on
a case-by-case basis taking into consideration such factors as tax and
economic benefits associated with amending an issuer's state of
incorporation, dilution or improved accountability associated with
changes in capital structure, management proposals to require a
supermajority shareholder vote to amend charters and bylaws and
bundled or "conditioned" proxy proposals.

F. In analyzing executive compensation matters, the Delegate shall vote
on a case-by-case basis taking into consideration such factors as
executive pay and spending on perquisites, particularly in conjunction
with sub-par performance and employee layoffs.

G. The Delegate shall generally vote against shareholder proposals on
social issues, except where the Delegate determines that a different
position would be in the clear economic interests of the Fund and its
shareholders.

IV. Responsibilities of Delegates.

A. In voting proxies on behalf of the Fund, each Delegate shall have a
duty of care to safeguard the best interests of the Fund and its
shareholders and to act in accordance with these Policies and
Procedures.

B. The Adviser may delegate its responsibilities hereunder to a proxy
committee established from time to time by the Adviser and may engage
one or more qualified, independent organizations to vote proxies on
behalf of the Fund. The Adviser shall be responsible for the ensuring
that any such Delegate is informed of and complies with these Policies
and Procedures.

C. No Delegate shall accept direction or inappropriate influence from any
other client or third party, or from any director, officer or employee
of any affiliated company, and shall not cast any vote inconsistent
with these Policies and Procedures without obtaining the prior
approval of the Board of Directors of the Fund or its duly authorized
representative.

V. Conflicts of interest

A. The Fund and its Delegate(s) seek to avoid actual or perceived
conflicts of interest in the voting of proxies for portfolio holdings
between the interests of Fund shareholders, on the one hand, and those
of the Adviser or any affiliated person of the Fund or the Adviser, on
the other hand. The Board of Directors may take into account a wide
array of factors in determining whether such a conflict exists,
whether such conflict is material in nature, and how to properly
address or resolve the same.

B. While each conflict situation varies based on the particular facts
presented and the requirements of governing law, the Board of
Directors or its duly authorized representative may take the following
actions, among others, or otherwise give weight to the following
factors, in addressing material conflicts of interest in voting (or
directing Delegates to vote) proxies pertaining to portfolio holdings:
(i) vote pursuant to the recommendation of the proposing Delegate;
(ii) abstain from voting; or (iii) rely on the recommendations of an
established, independent third party with qualifications to vote
proxies, such as Institutional Shareholder Services.

C. The Adviser shall promptly notify the Board of Directors of the Fund
promptly after becoming aware that any actual or potential conflict of
interest exists and shall seek the Board of Directors' recommendations
for protecting the best interests of Fund's

shareholders. The Adviser shall not waive any conflict of interest or
vote any conflicted proxies without the prior written approval of the
Board of Directors or its duly authorized representative.

VI. Miscellaneous.

A. A copy of the current Proxy Voting Policies and Procedures and the
voting records for the Fund, reconciling proxies with portfolio
holdings and recording proxy voting guideline compliance and
justification, shall be kept in an easily accessible place and
available for inspection either physically or through electronic
posting on an approved website.

B. In the event that a determination, authorization or waiver under these
Policies and Procedures is requested at a time other than a regularly
scheduled meeting of the Board of Directors, the Chairman of the Audit
Committee shall be the duly authorized representative of the Board of
Directors with the authority and responsibility to interpret and apply
these Policies and Procedures and shall provide a report of his or her
determinations at the next following meeting of the Board of
Directors.

C. The Adviser shall present a report of any material deviations from
this Statement of Policy at every regularly scheduled meeting of the
Board of Directors and shall provide such other reports as the Board
of Directors may request from time to time. The Adviser shall provide
to the Fund or any shareholder a record of its effectuation of proxy
voting pursuant to this Statement of Policy at such times and in such
format or medium as the Fund shall reasonably request. The Adviser
shall be solely responsible for complying with the disclosure and
reporting requirements under applicable laws and regulations,
including, without limitation, Rule 206(4)-6 under the Investment
Advisers Act of 1940. The Adviser shall gather, collate and present
information relating to the its proxy voting activities of those of
each Delegate in such format and medium as the Fund shall determine
from time to time in order for the Fund to discharge its disclosure
and reporting obligations pursuant to Rule 30b1-4 under the Investment
Company Act of 1940, as amended.

D. The Adviser shall pay all costs associated with proxy voting for
portfolio holdings pursuant to these Policies and Procedures and
assisting the Fund in providing public notice of the manner in which
such proxies were voted.

E. In performing its duties hereunder, any Delegate may engage the
services of a research and/or voting adviser, the cost of which shall
be borne by such Delegate.

F. These Policies and Procedures shall be presented to the Board of
Directors annually for their amendment and/or approval.

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

Not applicable to annual reports for the period ended December 31,
2004.

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

During the period covered by this report, no purchases were made by or
on behalf of the registrant or any "affiliated purchaser" (as defined in
Rule 10b-18(a)(3) under the Exchange Act)

of shares or other units of any class of the registrant's equity securities
that is registered by the registrant pursuant to Section 12 of the Exchange
Act.

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

No changes to the procedures by which shareholders may recommend
nominees to the registrant's board of directors have been implemented after
the registrant last provided disclosure in response to the requirements of
Item 7(d)(2)(ii)(G) of Schedule 14A (i.e., in the registrant's Proxy
Statement dated March 1, 2004) or this Item.

ITEM 11. CONTROLS AND PROCEDURES.

(a) The registrant's principal executive officer and principal
financial officer have concluded that the registrant's disclosure controls
and procedures (as defined in Rule 30a-3(c) under the Investment Company
Act of 1940 (the "1940 Act")) are effective, based on an evaluation of
those controls and procedures made as of a date within 90 days of the
filing date of this report as required by Rule 30a-3(b) under the 1940 Act
and Rule 13a-15(b) under the Exchange Act.

(b) There has been no change in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act) that
occurred during the second fiscal quarter of the fiscal half-year 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.

(a) Exhibit 99.CERT Certifications pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002

(b) Exhibit 99.906CERT Certifications pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002

SIGNATURES

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

(Registrant) DNP SELECT INCOME FUND INC.

By (Signature and Title)* /s/ Nathan I. Partain
--------------------------------------------
Nathan I. Partain
President and Chief Executive Officer

Date March 2, 2005

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/ Nathan I. Partain
--------------------------------------------
Nathan I. Partain
President and Chief Executive Officer

Date March 2, 2005

By (Signature and Title)* /s/ Joseph C. Curry, Jr.
--------------------------------------------
Joseph C. Curry
Vice President and Treasurer
(principal financial officer)

Date March 2, 2005

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