Edgar Filing: DNP SELECT INCOME FUND INC

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)

200 S. Wacker Drive, Suite 500, Chicago, Illinois 60606

(Address of principal executive offices) (Zip code)

Alan M. Meder	Lawrence R. Hamilton
DNP Select Income Fund Inc.	Mayer Brown LLP
200 S. Wacker Drive, Suite 500	71 South Wacker Drive
Chicago, Illinois 60606	Chicago, Illinois 60606

(Name and address of agents for service)

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

Date of fiscal year end: October 31

Date of reporting period: October 31, 2013

ITEM 1.

REPORTS TO STOCKHOLDERS.

The Annual Report to Stockholders follows.

Fund Distributions and Managed Distribution Plan: DNP Select Income Fund Inc. (the Fund) has been paying a regular 6.5 cent per share monthly distribution on its common stock since July 1997. In February 2007, the Board of Directors adopted a Managed Distribution Plan, which provides for the Fund to continue to make a monthly distribution on its common stock of 6.5 cents per share. Under the Managed Distribution Plan, the Fund will distribute all available investment income to shareholders, consistent with the Fund’s primary investment objective. If and when sufficient investment income is not available on a monthly basis, the Fund will distribute long-term capital gains and/or return capital to its shareholders in order to maintain the 6.5 cent per share distribution level.

To the extent that the Fund uses capital gains and/or return of capital to supplement its investment income, you should not draw any conclusions about the Fund’s investment performance from the amount of the Fund’s distributions or from the terms of the Fund’s Managed Distribution Plan.

A return of capital may occur, for example, when some or all of the money that you invested in the Fund is paid back to you. A return of capital distribution does not necessarily reflect the Fund’s investment performance and should not be confused with “yield” or “income.”

The amounts and sources of distributions reported to you in monthly statements from the Fund are only estimates and are not provided for tax reporting purposes. The actual amounts and sources of the amounts for tax reporting purposes depend upon the Fund’s investment experience during its fiscal year and may be subject to changes based on tax regulations. In early 2014, you will receive a Form 1099-DIV for the calendar year 2013 that tells you how to report these distributions for federal income tax purposes.

The Board may amend, suspend or terminate the Managed Distribution Plan without prior notice to shareholders if it deems such action to be in the best interests of the Fund and its shareholders. For example, the Board might take such action if the Managed Distribution Plan had the effect of shrinking the Fund’s assets to a level that was determined to be detrimental to Fund shareholders. The suspension or termination of the Managed Distribution Plan could have the effect of creating a trading discount (if the Fund’s stock is trading at or above net asset value), widening an existing trading discount, or decreasing an existing premium.

The Managed Distribution Plan is described in a Question and Answer format on your Fund’s website, www.dnpselectincome.com, and discussed in the section of management’s letter captioned “About Your Fund”. The tax characterization of the Fund’s distributions for the last 5 years can also be found on the website under the Tax Information tab.

December 16, 2013

Dear Fellow Shareholders:

The change in the Fund’s fiscal year end to October 31 from December 31 is reflected within this annual report: Due to the change in fiscal year, this 2013 annual report covers the first 10 months of calendar year 2013. Funds that invest in master limited partnerships (MLPs) typically have a fiscal year end other than December to minimize the chances of having to restate shareholder 1099 tax forms. MLPs often report the tax character of their distributions after the deadline for funds to process tax information on a timely basis. Shareholders will receive their 1099 tax forms for calendar year 2013 in early 2014.

Performance Review: Consistent with its primary objective of current income and long-term growth of income, and its Managed Distribution Plan, the Fund declared and paid monthly distributions of 6.5 cents per share of common stock during fiscal year 2013. The 6.5 cent per share monthly rate, without compounding, would be 78 cents annualized, which is equal to 8.0% of the October 31, 2013, closing price of $9.70 per share. Please refer to the inside front cover of this report and the portion of this letter captioned “About Your Fund” for important information about the Fund and its Managed Distribution Plan.

Your Fund had a total return (income plus change in market price) of 9.7% for the 10 months ended October 31, 2013, which was less than the 11.0% total return of the composite of the S&P 500 Utilities Index and the Barclays U.S. Utility Bond Index, weighted to reflect the stock and bond ratio of the Fund. In comparison, the S&P 500 Utilities Index — a stock-only index — had a total return of 14.4%, and the Barclays U.S. Utility Bond Index had a total return of –2.4%.

On a longer-term basis, as of October 31, 2013, your Fund had a five-year annualized total return of 13.6%, which is higher than the 11.5% return of the composite of the S&P 500 Utilities Index and the Barclays U.S. Utility Bond Index, weighted to reflect the stock and bond ratio of the Fund. In comparison, the S&P 500 Utilities Index had an annualized total return during that period of 10.6%.

The table below compares the performance of your Fund to various market benchmarks.


Total Return¹
For Periods Ending October 31, 2013
	2013 10 months	One Year	Three Years Annualized	Five Years Annualized
DNP Select Income Fund Inc.²
Market Value	9.7%	5.2%	7.6%	13.6%
Net Asset Value	17.4%	14.3%	16.1%	18.7%
Composite Index³	11.0%	7.2%	10.3%	11.5%
S&P 500 Utilities Index³	14.4%	9.5%	11.6%	10.6%
Barclays U.S. Utility Bond Index³	–2.4%	–3.3%	5.2%	12.0%

Past performance is not indicative of future results. Current performance may be lower or higher than performance in historical periods.

Total return on market value assumes a purchase of common stock at the opening market price on the first business day and a sale at the closing market price on the last business day of the period shown in the table and assumes reinvestment of dividends at the actual reinvestment prices obtained under the terms of the Fund’s dividend reinvestment plan. Total return on NAV uses the same methodology, but with use of NAV for beginning, ending and reinvestment values. For the fiscal period ended October 31, 2013, the annualized operating expenses (which are already reflected in the Fund’s NAV) were 1.55%. The Fund’s market price per share may be higher or lower than the NAV. Source: Administrator of the Fund

The Composite Index is a composite of the returns of the S&P 500 Utilities Index and the Barclays U.S. Utility Bond Index, weighted to reflect the stock and bond ratio of the Fund. The indices are calculated on a total return basis with dividends reinvested. Indices are unmanaged; their returns do not reflect any fees, expenses, or sales charges; and they are not available for direct investment. Performance returns for the S&P 500 Utilities Index and Barclays U.S. Utility Bond Index were obtained from Bloomberg LLP.

Board of Directors Meeting: At the November 2013 Board of Directors’ meeting, the Board declared the following monthly dividends:


Cents Per Share	Record Date	Payable Date
6.5	December 31	January 10
6.5	January 31	February 10
6.5	February 28	March 10

Many Happy Returns: Compounding the annual returns on a cumulative basis for the last 5 years, your Fund’s total return on market value was over 88%, and the stock and bond indexes shown in the table had a total return of over 65% and 76%, respectively. Those total returns are reflective of what the broad capital markets have been achieving during this 5-year period. For example, the S&P 500 hit record highs in 2013 and, as of this writing, is up over 28% for the year alone. Looking ahead, however, what investment returns can we expect and what are some of the factors likely to affect returns?

The returns that the market has experienced recently are above the historic norm partly because the financial crisis that began in 2007 created an investment environment of depressed valuations. From October 2007 to January 2009 the S&P 500 declined about 48% in price. As the crisis passed and valuations returned to more normal levels, investors earned uncharacteristically high returns from a very low base. Although investors suffered major wealth declines during the financial crisis, in hindsight the crisis set the stage for outsized investment returns during the subsequent period of market recovery — returns that are not likely to be repeated.

The crisis may affect future investment returns in a more subtle way. In 2009 Congress created the Financial Crisis Inquiry Commission to investigate the causes of the crisis. In its 2011 report, the Commission concluded that the crisis was caused by excessive risk taking by the private sector and the failure of government to regulate the risk. As a result of the crisis, and even before the release of the Commission’s findings, Congress passed the Dodd Frank Act (DFA). The DFA set in motion a process of developing regulations that among other things: increases capital requirements for banks, changes the regulation of certain aspects of the capital markets, creates a new governmental agency responsible for implementing and enforcing compliance with consumer financial laws, and changes corporate governance practices.

Your Fund managers have strong opinions about regulation. In the case of the utility sectors in which your Fund invests, we prefer companies that are regulated. The economies of scale are so compelling in the utility industry, and the essential service nature of the businesses so important that we believe regulation is beneficial. We believe that regulatory oversight generally results in lower company business risk and better visibility of earnings and dividends, even though the supportiveness of federal and state regulatory measures can vary and the wisdom of particular measures can sometimes be subject to question. For that reason, our understanding of the quality of regulation in different jurisdictions is an important factor in portfolio stock and bond selection and subsequent investment returns.

Moving outside of the utility sector, however, we are concerned that the impact of regulation is not always salutary. In fact, we believe that one of the primary causes of the financial crisis was the result of two decades of government policies designed to increase home ownership by reducing mortgage underwriting standards. In our view, regulators did not understand the implications of their policies for the housing and financial markets, and the result was crisis. Whether or not you believe that the new sweeping DFA regulatory changes will be successful in preventing future crises, it is widely believed by investors and academics that increased regulatory oversight, its

unintended consequences, and its related monitoring and reporting requirements will have the effect of reducing economic growth, productivity, and profits. And because stock prices reflect expected profitability, increased regulation may also have a moderating effect on broader stock values going forward.

Of more immediate concern to the capital markets is Federal Reserve (Fed) policy. Leadership at the Fed is about to change. The transition from Chairman Ben Bernanke to Janet Yellen appears to be going smoothly. Ms. Yellen had been President of the Federal Reserve Bank of San Francisco and has served as vice chairman of the Federal Reserve System under Bernanke since 2010. In her confirmation testimony, she made it clear that she adheres to the traditional policy tenets of the Fed and its outgoing chairman. The most basic Fed tenet is that a decrease in interest rates translates into a decrease in the cost of capital, which stimulates borrowing, lending, consumption, and investment. Early in the financial crisis the Fed reduced short-term interest rates to nearly zero as a means of stimulus. When the stock market continued suffering losses in 2009, potentially causing a deep economic recession, the Fed employed another technique to stabilize the economic and financial system — Quantitative Easing (QE). Ms. Yellen has stated that she is supportive of QE. Under QE, the Fed creates money to finance its purchase of treasury and mortgage securities from financial institutions. This injection of money is intended to encourage lending at low rates, greater economic growth, and stability in asset prices.

The Fed has established two benchmarks to gauge the continued appropriateness of its accommodative monetary policy. The first benchmark is unemployment continuing to be above 6¹/2%. In December 2013, the November unemployment rate was reported as 7.0%. The second benchmark is deflation avoidance, measured by inflation not exceeding 2%. The year-over-year change in the Consumer Price Index through October 2013 was reported to be 1.0%. In May 2013, as the unemployment and inflation figures moved closer to the benchmarks, the Fed started to publicly consider a reduction in the amount of QE it was conducting, a process referred to as tapering. At the same time, the Fed went to great lengths to make it clear that tapering would not involve targeting higher interest rates. However, the capital markets reacted adversely. The stock market declined over 5% between May and June and interest rates on 10 year government bonds rose almost three quarters of a percent. The Fed responded to this market reaction by delaying tapering.

Did the capital markets overreact to the taper talk? Perhaps so, to the extent that tapering would be the result of improved economic conditions, greater corporate revenue and profits, and potentially higher stock values. Nonetheless, interest rates are the main tool of Fed policy, so in the long run, fixed income markets are likely to be challenged if monetary policy becomes less accommodative.

Having a perspective on uncertainty is always part of the investment process. The regulatory and monetary management roles of the government in the American enterprise system are designed to reduce uncertainty, but also have effects that only become clear in hindsight. 2014 may or may not be the start of a period of more moderate stock returns and higher interest rates. However, because of the asset classes and sectors in which your Fund invests, it is likely that in the long term, your returns will be dominated by dividends and will be less price volatile in both advancing and declining markets than the broader stock market.

About Your Fund: The Fund seeks to achieve its investment objectives by investing primarily in the public utility industry. Under normal market conditions, more than 65% of the Fund’s total assets are invested in a diversified portfolio of equity and fixed income securities of companies of public utility companies engaged in the production, transmission or distribution of electric energy, gas or telephone services. The Fund does not currently use derivatives and has no investments in complex or structured investment vehicles.

The Fund seeks to provide investors with a stable monthly dividend that is primarily derived from current fiscal year earnings and profits. The Investment Company Act of 1940 (1940 Act) and related Securities and Exchange Commission (SEC) rules generally prohibit investment companies from distributing long-term capital gains more often than once in a twelve-month period. However, in 2008, the SEC granted the Fund’s request for exemptive relief

from that prohibition, and the Fund is now permitted, subject to certain conditions, to make periodic distributions of long-term capital gains as frequently as twelve times a year. In connection with the exemptive relief, in February 2008 the Board of Directors reaffirmed the current 6.5 cent per share monthly distribution rate and formalized the monthly distribution process by adopting a Managed Distribution Plan (MDP). The Board reviews the operation of the MDP on a quarterly basis, with the most recent review having been conducted in November 2013, and retains an independent consultant to review the plan annually in February. The MDP is described on the inside front cover of this report and in a Question and Answer format on the Fund’s website, www.dnpselectincome.com.

The use of leverage enables the Fund to borrow at short-term rates and invest at longer-term rates. As of October 31, 2013 the Fund’s leverage consisted of $138.2 million of Remarketed Preferred Stock (RP) and $861.8 million of debt. On that date the total amount of leverage represented approximately 29% of the Fund’s total assets. The amount and type of leverage used is reviewed by the Board of Directors based on the Fund’s expected earnings relative to the anticipated costs (including fees and expenses) associated with the leverage. In addition, the long-term expected benefits of leverage are weighed against the potential effect of increasing the volatility of both the Fund’s net asset value and the market value of its common stock. Historically, the tendency of the U.S. yield curve to exhibit a positive slope (i.e., long-term rates higher than short-term rates) has fostered an environment in which leverage can make a positive contribution to the earnings of the Fund. There is no assurance that this will continue to be the case in the future. A prolonged period of low longer-term interest rates and the resultant modest reinvestment opportunities for the fixed income portion of the portfolio could adversely affect the income provided from leverage. If the use of leverage were to cease being beneficial, the amount and type of leverage employed by the Fund could potentially be modified or eliminated.

Automatic Distribution Reinvestment Plan and Direct Deposit Service: The Fund has a distribution reinvestment plan available as a benefit to all registered common shareholders and also offers direct deposit service through electronic funds transfer to all registered common shareholders currently receiving a monthly distribution check. These services are offered through Computershare. For more information and/or an authorization form on automatic distribution reinvestment or direct deposit, please contact Computershare (1.877.381.2537 or www.computershare.com/investor). Information on these services is also available on the Fund’s website at the address noted below.

Visit us on the Web: You can obtain the most recent shareholder financial reports and distribution information at our website, 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.

Nathan I. Partain, CFA
Director, President, and
Chief Executive Officer

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

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS
October 31, 2013


Shares	Description	Value (Note 2)

COMMON STOCKS & MLP INTERESTS—114.4%

	n ELECTRIC, GAS AND WATER—83.4%
1,500,000	Alliant Energy Corp.(a)	$	78,330,000
1,500,000	Ameren Corp.		54,270,000
1,000,000	American Water Works Co.		42,870,000
2,500,000	CMS Energy Corp.(a)		68,650,000
3,071,300	CenterPoint Energy
	Inc.(a)		75,553,980
640,000	DTE Energy Co.(a)		44,249,600
1,400,000	Dominion Resources,
	Inc.(a)(b)		89,250,000
1,600,000	Enbridge Inc.
	(Canada)(a)(b)		69,424,000
850,000	Entergy Corp.(a)		55,012,000
1,000,000	Exelon Corp.(a)(b)		28,540,000
1,185,000	FirstEnergy Corp.(a)		44,875,950
500,000	Great Plains Energy
	Inc.(a)(b)		11,720,000
900,000	Kinder Morgan Inc.(a)		31,779,000
188,673	National Grid plc ADR
	(United Kingdom)		11,873,192
4,796,214	National Grid plc
	(United Kingdom)		60,450,457
1,000,000	NextEra Energy, Inc.(a)(b)		84,750,000
2,000,000	NiSource Inc.(a)		63,040,000
2,000,000	Northeast Utilities
	Inc.(a)(b)		85,780,000
800,000	Northwest Natural
	Gas Co.(a)		34,744,000
1,500,000	PPL Corp.(a)		45,945,000
2,000,000	Pepco Holdings Inc.(a)		38,560,000
1,000,000	Piedmont Natural Gas Co.		34,140,000
1,500,000	Pinnacle West Capital
	Corp.(a)		84,045,000
1,800,000	Public Service Enterprise
	Group Inc.(a)		60,300,000
1,900,000	Questar Corp.(a)		44,954,000
1,000,000	Sempra Energy(a)		91,140,000
1,500,000	Southern Co.(a)		61,365,000
1,915,000	Spectra Energy Corp.(a)		68,116,550
3,000,000	TECO Energy Inc.(a)		51,510,000

Shares	Description	Value (Note 2)
1,000,000	TransCanada Corp.
	(Canada)(a)	$	45,110,000
1,200,000	UNS Energy Corp.(a)		59,376,000
1,500,000	Vectren Corp.(a)(b)		52,380,000
1,000,000	WGL Holdings Inc.		45,010,000
2,000,000	Westar Energy Inc.(a)		63,220,000
1,650,000	The Williams Companies,
	Inc.(a)		58,921,500
600,000	Wisconsin Energy Corp.		25,266,000
2,700,000	Xcel Energy Inc.(a)(b)		77,922,000
		2,042,443,229
	n OIL & GAS STORAGE,
	TRANSPORTATION AND
	PRODUCTION—15.6%
466,800	Access Midstream
	Partners LP		24,992,472
453,000	Atlas Pipeline Partners LP		17,467,680
307,000	DCP Midstream
	Partners LP		14,914,060
559,000	El Paso Pipelines
	Partners LP		22,673,040
684,000	Enbridge Energy
	Partners LP		20,704,680
348,000	Energy Transfer Equity LP		23,521,320
383,000	Enterprise Products
	Partners LP		24,236,240
316,000	EQT Midstream
	Partners LP		16,631,080
282,000	Genesis Energy LP		14,370,720
242,000	Kinder Morgan Energy
	Partners LP		19,529,400
228,000	Linn Energy LLC		6,315,600
470,090	Magellan Midstream
	Partners LP		28,224,204
295,500	MarkWest Energy
	Partners LP		21,949,740
292,000	ONEOK Partners LP		15,700,840
475,610	Plains All American
	Pipeline LP		24,360,744
268,000	Spectra Energy
	Partners LP		11,716,960
162,000	Sunoco Logistics
	Partners LP		11,369,160

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

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS—(Continued)
October 31, 2013

Shares	Description	Value (Note 2)
392,000	Targa Resources
	Partners LP	$	20,427,120
294,000	Western Gas Partners LP		17,672,340
483,000	Williams Partners LP		24,835,860
			381,613,260

	n TELECOMMUNICATIONS—15.4%
1,708,260	AT&T Inc.(a)		61,839,012
939,200	BCE Inc. (Canada)(a)		40,883,376
1,600,000	CenturyLink Inc.(a)(b)		54,176,000
1,000,000	France Telecom SA
	(France)		13,744,537
3,518,491	Frontier Communications
	Corp.(a)(b)		15,516,545
1,515,800	Telus Corp. (Canada)		52,937,082
1,380,000	Verizon Communications
	Inc.(a)		69,703,800
941,030	Vodafone Group PLC ADR
	(United Kingdom)		34,648,725
4,000,000	Windstream Holdings,
	Inc.		34,200,000
			377,649,077
	Total Common Stocks &
	MLP Interests
	(Cost $2,264,985,407)		2,801,705,566

PREFERRED STOCKS—1.7%

	n NON-UTILITY—1.7%
100,000	Public Storage 6⁷/8%
	Series O Perpetual		2,580,000
600,000	Realty Income Corp. 6⁵/8%
	Series F Perpetual		14,682,000
400,000	Regency Centers Corp. 6⁵/8%
	Series 6 Perpetual		9,116,000
234,900	Vornado Realty Trust 6⁵/8%
	Series G Perpetual		5,630,553
350,000	Vornado Realty Trust 6⁵/8%
	Series I Perpetual		8,400,000
			40,408,553
	Total Preferred Stocks
	(Cost $41,261,811)		40,408,553

Par Value		Description	Value (Note 2)
BONDS —23.6%

		n ELECTRIC, GAS AND WATER—17.6%
$	22,000,000	Arizona Public Service Co.
		6⁷/8%, due 8/01/36(a)	$	27,077,512
	10,450,000	Atmos Energy Corp.
		8¹/2%, due 3/15/19(a)		13,482,339
	11,000,000	Cleveland Electric
		Illuminating Co. 8⁷/8%,
		due 11/15/18(a)		14,133,900
	6,750,000	Commonwealth Edison
		Company 6.95%,
		due 7/15/18		7,826,936
	15,305,000	Consolidated Edison Co. of
		New York 7¹/8%,
		due 12/01/18(a)		19,073,596
	9,354,000	Dominion Resources Inc.
		6.40%, due 6/15/18(a)		11,105,443
	10,000,000	DPL Capital Trust II
		8¹/8%, due 9/01/31		9,524,200
	4,125,000	Duke Energy Corp.
		6.30%, due 2/01/14		4,181,488
	6,488,000	Energy Transfer Partners
		7.60%, due 2/01/24		8,021,822
	8,850,000	Energy Transfer Partners
		8¹/4%, due 11/15/29		10,923,918
	5,000,000	Entergy Louisiana LLC
		6.30%, due 9/01/35		4,994,390
	20,000,000	Entergy Texas Inc. 7¹/8%,
		due 2/01/19(a)(b)		23,975,120
	5,000,000	Enterprise Products
		Operating LLC 6¹/2%,
		due 1/31/19		5,963,180
	12,826,000	EQT Corp. 8¹/8%,
		due 6/01/19(a)		15,815,253
	14,376,000	Exelon Generation Co. LLC
		6.20%, due 10/01/17(a)		16,507,170
	15,060,000	FPL Group Capital Inc.
		7⁷/8%, due 12/15/15(a)(b)		17,182,406
	10,000,000	Georgia Power Co. 5.70%,
		due 6/01/17(a)		11,434,400
	10,618,000	Indiana Michigan Power Co.
		7.00%, due 3/15/19(a)		12,813,855

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

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS—(Continued)
October 31, 2013


Par Value		Description	Value (Note 2)
$	8,030,000	Kinder Morgan, Inc. 6.85%,
		due 2/15/20	$	9,649,924
	14,445,000	Magellan Midstream
		Partners, LP 6.40%,
		due 7/15/18(a)		17,303,275
	5,000,000	Metropolitan Edison Co.
		7.70%, due 1/15/19		6,139,535
	12,000,000	National Fuel Gas Co.
		8³/4%, due 5/01/19(a)		15,124,092
	10,000,000	National Grid PLC
		(United Kingdom)
		6.30%, due 8/01/16		11,343,370
	3,350,000	Nevada Power Co. 7¹/8%,
		due 3/15/19		4,169,182
	10,345,000	Oncor Electric Delivery
		Co. LLC 7.00%,
		due 9/01/22(a)		12,728,881
	11,000,000	ONEOK, Inc. 6.00%,
		due 6/15/35(a)		10,231,441
	9,000,000	ONEOK Partners, LP
		8⁵/8%, due 3/01/19		11,489,895
	5,000,000	PPL Energy Supply LLC
		6¹/2%, due 5/01/18		5,679,010
	14,000,000	Progress Energy Inc. 7.05%,
		due 3/15/19(a)		17,062,262
	5,130,000	Public Service New Mexico
		7¹/2%, due 8/01/18		6,088,494
	5,000,000	Sempra Energy 6.15%,
		due 6/15/18		5,869,550
	15,169,000	Sempra Energy 6¹/2%,
		due 6/01/16(a)		17,202,829

Par Value		Description	Value (Note 2)
$	2,615,000	Spectra Energy 6³/4%,
		due 7/15/18	$	3,065,538
	12,940,000	Spectra Energy 6.20%,
		due 4/15/18		14,903,089
	9,140,000	TransCanada PipeLines
		Ltd. (Canada) 7¹/8%,
		due 1/15/19		11,284,171
	14,380,000	Williams Partners, LP
		7¹/4%, due 2/01/17(a)		16,777,088
				430,148,554

		n TELECOMMUNICATIONS—5.3%
	10,000,000	BellSouth Capital Funding
		Corp. 7⁷/8%, due
		2/15/30 (a)		12,057,240
	15,000,000	Centurytel Inc. 6⁷/8%,
		due 1/15/28(a)		13,987,500
	5,900,000	Comcast Corp. 7.05%,
		due 3/15/33		7,404,642
	15,000,000	Koninklijke KPN NV
		(Netherlands) 8³/8%,
		due 10/01/30(a)(b)		18,952,860
	10,311,000	Rogers Wireless Inc.
		(Canada) 7¹/2%, due
		3/15/15 (a)		11,254,250
	10,000,000	TCI Communications Inc.
		8³/4%, due 8/01/15(a)		11,390,190
	5,000,000	TCI Communications Inc.
		7¹/8%, due 2/15/28		6,415,170
	23,304,000	Time Warner Cable Inc.
		7¹/2%, due 4/01/14(a)		23,934,420

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

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS—(Continued)
October 31, 2013

Par Value		Description	Value (Note 2)
$	15,500,000	Verizon Global Funding
		Corp. 7³/4%, due
		12/01/30 (a)(b)	$	19,445,696
	5,000,000	Vodafone Group PLC
		(United Kingdom) 7⁷/8%,
		due 2/15/30		6,487,915
				131,329,883


Par Value		Description	Value (Note 2)
		n NON-UTILITY—0.7%
$	8,000,000	Dayton Hudson Corp. 9⁷/8%,
		due 7/01/20	$	11,004,936
	200,000	Vornado Realty LP 7⁷/8%,
		due 10/01/39		5,290,000
				16,294,936
		Total Bonds
		(Cost $534,418,869)		577,773,373


TOTAL INVESTMENTS—139.7% (Cost $2,840,666,087)		3,419,887,492
Borrowings—(35.2%)		(861,800,000	)
Other assets less liabilities—(4.5%)		(109,851,847	)
NET ASSETS APPLICABLE TO COMMON STOCK—100.0%	$	2,448,235,645

(a) All or a portion of this security has been segregated and made available for loan.

(b) All or a portion of this security has been loaned.

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

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

DNP SELECT INCOME FUND INC.
SCHEDULE OF INVESTMENTS—(Continued)
October 31, 2013

The Fund’s investments are carried at fair value which is defined as the price that the Fund would receive upon selling an investment in a timely transaction to an independent buyer in the principal or most advantageous market of the investment. The three-tier hierarchy of inputs established to classify fair value measurements for disclosure purposes is 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 risks, etc.)

Level 3—significant unobservable inputs (including the Fund’s own assumptions in determining fair value of investments)

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. The following is a summary of the inputs used to value each of the Fund’s investments at October 31, 2013:


	Level 1	Level 2
Common stocks & MLP interests	$2,801,705,566	—
Preferred stocks	40,408,553	—
Bonds	—	$577,773,373
Total	$2,842,114,119	$577,773,373

There were no Level 3 priced securities held and there were no transfers between Level 1 and Level 2 related to securities held at October 31, 2013.

Percentages are based on total investments rather than total net assets applicable to common stock and include securities pledged as collateral for the Fund’s credit facility.

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


DNP SELECT INCOME FUND INC. STATEMENT OF ASSETS AND LIABILITIES October 31, 2013
ASSETS:
Investments at value (cost $2,840,666,087) including $471,561,972 of securities loaned	$	3,419,887,492
Cash		30,092,719
Receivables:
Interest		9,307,036
Dividends		9,114,950
Securities lending income		1,447
Prepaid expenses		99,220
Total assets		3,468,502,864
LIABILITIES:
Borrowings (Note 10)		861,800,000
Dividends payable on common stock		17,713,573
Investment advisory fee (Note 3)		1,567,927
Administrative fee (Note 3)		373,037
Interest payable on remarketed preferred stock		14,512
Accrued expenses		598,170
Remarketed preferred stock (1,382 shares issued and outstanding; liquidation
preference $100,000 per share) (Note 8)		138,200,000
Total liabilities		1,020,267,219
NET ASSETS APPLICABLE TO COMMON STOCK	$	2,448,235,645
CAPITAL:
Common stock ($0.001 par value per share; 300,000,000 shares authorized and 272,516,509
shares issued and outstanding)	$	272,517
Additional paid-in capital		1,909,524,320
Accumulated net realized loss on investments		(433,572	)
Distributions in excess of net investment income		(40,362,177	)
Net unrealized appreciation on investments and foreign
currency translation		579,234,557
Net assets applicable to common stock	$	2,448,235,645
NET ASSET VALUE PER SHARE OF COMMON STOCK	$	8.98

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


DNP SELECT INCOME FUND INC. STATEMENTS OF OPERATIONS



	For the ten months ended October 31, 2013			For the year ended December 31, 2012
INVESTMENT INCOME:
Interest	$	22,940,245		$	31,260,707
Dividends (less foreign withholding tax of $916,892 and $1,427,909,
respectively)		98,919,442			112,875,636
Less return of capital distributions (Note 2)		(20,113,376	)		(3,834,077	)
Securities lending income, net		346,719			343,682
Total investment income		102,093,030			140,645,948

EXPENSES:
Investment advisory fees (Note 3)		15,432,725			16,888,653
Interest expense and fees (Note 10)		9,044,185			11,188,532
Administrative fees (Note 3)		3,669,558			4,077,730
Remarketed preferred stock interest expense (Note 8)		204,391			408,317
Reports to shareholders		695,100			1,489,450
Remarketing agent fees—remarketed preferred stock		175,052			254,529
Broker-dealer commissions—auction preferred stock		—			272,688
Directors’ fees (Note 3)		328,877			403,307
Professional fees		285,250			414,984
Transfer agent fees		251,800			445,675
Custodian fees		350,800			382,375
Tender offer fees (Note 9)		—			158,705
Other expenses		406,720			554,230
Total expenses		30,844,458			36,939,175
Net investment income		71,248,572			103,706,773

REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain on investments		93,085,565			86,415,404
Net change in unrealized appreciation (depreciation) on
investments and foreign currency translation		213,269,141			(45,818,698	)
Net realized and unrealized gain		306,354,706			40,596,706

DISTRIBUTIONS ON AUCTION PREFERRED STOCK FROM:
Net investment income (Note 8)		—			(2,132,695	)
Net realized gain on investments		—			(1,362,017	)
Total distributions		—			(3,494,712	)

BENEFIT TO COMMON STOCKHOLDERS FROM TENDER
OFFER FOR PREFERRED STOCK (Note 9)		—			2,521,000

NET INCREASE IN NET ASSETS APPLICABLE TO COMMON
STOCK RESULTING FROM OPERATIONS	$	377,603,278		$	143,329,767

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


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



	For the ten months ended October 31, 2013			For the year ended December 31, 2012			For the year ended December 31, 2011
INCREASE (DECREASE) IN NET ASSETS:

FROM OPERATIONS:
Net investment income	$	71,248,572		$	103,706,773		$	99,425,829
Net realized gain		93,085,564			86,415,404			90,306,553
Net change in unrealized appreciation
(depreciation)		213,269,142			(45,818,698	)		194,368,675
Distributions on auction preferred stock from net
investment income		—			(2,132,695	)		(2,602,320	)
Distributions on auction preferred stock from
net realized gains on investments		—			(1,362,017	)		(335,558	)
Benefit to common stockholders from tender offer
for preferred stock		—			2,521,000			—
Net increase in net assets applicable to
common stock resulting from operations		377,603,278			143,329,767			381,163,179
DISTRIBUTIONS TO COMMON
STOCKHOLDERS FROM:
Net investment income (Note 5)		(80,551,446	)		(111,705,403	)		(160,576,350	)
Net realized gains on investment transactions
(Note 5)		(90,937,036	)		(69,262,530	)		(20,706,855	)
Return of capital (Note 5)		(4,785,164	)		(14,037,698	)		(6,312,497	)
Decrease in net assets from distributions to
common stockholders		(176,273,646	)		(195,005,631	)		(187,595,702	)
FROM CAPITAL STOCK TRANSACTIONS:
Shares of 24,849,991 issued to common stockholders
from rights offering, net of offering costs		(14,057	)		228,309,763			—
Shares issued to common stockholders from
dividend reinvestment of 2,899,056, 2,904,648
shares and 3,086,057 shares, respectively		27,461,774			28,895,764			29,088,638
Net increase in net assets derived from capital
share transactions		27,447,717			257,205,527			29,088,638
Total increase in net assets		228,777,349			205,529,663			222,656,115
TOTAL NET ASSETS APPLICABLE TO
COMMON STOCK:
Beginning of period		2,219,458,296			2,013,928,633			1,791,272,518
End of period (including distributions in excess
of net investment income of $40,362,177,
$35,256,560 and $30,566,546, respectively)	$	2,448,235,645		$	2,219,458,296		$	2,013,928,633

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


DNP SELECT INCOME FUND INC. STATEMENTS OF CASH FLOWS



	For the ten months ended October 31, 2013			For the year ended December 31, 2012
INCREASE (DECREASE) IN CASH
Cash flows provided by (used in) operating activities:
Interest received	$	30,636,620		$	40,558,088
Income dividends received		80,971,106			108,710,378
Long-term capital gains dividends received		432,633			1,648,930
Return of capital on investments		17,548,720			3,834,077
Securities lending income, net		349,924			340,661
Interest paid on borrowing		(8,227,474	)		(8,361,174	)
Expenses paid including distributions on remarketed preferred stock		(26,418,310	)		(31,564,046	)
Purchase of investment securities		(325,037,127	)		(619,745,964	)
Proceeds from sales and maturities of investment securities		360,523,707			430,665,166
Net cash provided by (used in) operating activities	$	130,779,799		$	(73,913,884	)
Cash flows provided by (used in) financing activities:
Distributions paid		(176,085,207	)		(193,201,579	)
Proceeds from issuance of common stock under dividend reinvestment plan		27,461,774			28,895,764
Proceeds (costs) of issuance of common stock through rights offering		(14,057	)		228,309,763
Payout for preferred stock redeemed through tender offer		—			(60,504,000	)
Payout for preferred stock redeemed		—			(198,775,000	)
Increase in borrowings		—			261,800,000
Net cash provided by (used in) financing activities		(148,637,490	)		66,524,948
Net decrease in cash and cash equivalents		(17,857,691	)		(7,388,936	)
Cash and cash equivalents—beginning of period		47,950,410			55,339,346
Cash and cash equivalents—end of period	$	30,092,719		$	47,950,410
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	$	377,603,278		$	143,329,767
Purchase of investment securities		(325,037,127	)		(619,745,964	)
Proceeds from sales and maturities of investment securities		360,523,707			430,665,166
Net realized gain on investments		(93,085,565	)		(86,415,404	)
Net change in unrealized (appreciation) depreciation on investments		(213,269,141	)		45,818,698
Amortization of premiums and discounts on debt securities		7,038,691			8,201,051
Long-term capital gains dividends received		432,633			1,648,930
Return of capital on investments		17,548,720			3,834,077
Decrease in interest receivable		657,684			1,096,329
Decrease (increase) in dividends receivable		2,165,041			(331,180	)
Increase (decrease) in accrued expenses		(3,801,327	)		508,667
Decrease (increase) in other receivable		3,205			(3,021	)
Benefit to common stockholders from tender offer for preferred stock		—			(2,521,000	)
Total adjustments		(246,823,479	)		(217,243,651	)
Net cash provided by (used in) operating activities	$	130,779,799		$	(73,913,884	)

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

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 periods indicated (excluding supplemental data provided below):


	For the ten months ended October 31, 2013			For the year ended December 31,


PER SHARE DATA:				2012			2011			2010			2009			2008
Net asset value:
Beginning of period	$	8.23		$	8.33		$	7.50		$	7.23		$	6.60		$	10.19
Net investment income		0.27			0.48			0.45			0.54			0.50			0.45
Net realized and unrealized
gain (loss)		1.13			0.21			1.17			0.52			0.93			(3.18	)
Dividends on auction
preferred stock from net
investment income		—			(0.02	)		(0.01	)		(0.01	)		(0.02	)		(0.06	)
Dividends on auction preferred
stock from net realized gains		—			—			—			—			—			(0.02	)
Benefit to common stockholders
from tender offer for
preferred stock		—			0.01			—			—			—			—
Net increase (decrease) from
investment operations applicable
to common stock		1.40			0.68			1.61			1.05			1.41			(2.81	)
Distributions on common
stock from:
Net investment income		(0.30	)		(0.44	)		(0.66	)		(0.67	)		(0.54	)		(0.53	)
Realized gains on investment
transactions		(0.33	)		(0.28	)		(0.09	)		—			—			(0.25	)
Return of capital		(0.02	)		(0.06	)		(0.03	)		(0.11	)		(0.24	)		—
Total distributions		(0.65	)		(0.78	)		(0.78	)		(0.78	)		(0.78	)		(0.78	)
Net asset value:
End of period	$	8.98		$	8.23		$	8.33		$	7.50		$	7.23		$	6.60
Per share market value:
End of period	$	9.70		$	9.47		$	10.92		$	9.14		$	8.95		$	6.15
RATIOS TO AVERAGE NET
ASSETS APPLICABLE
TO COMMON STOCK:
Operating expenses		1.55	%*		1.77	%		1.95	%		2.20	%		2.49	%		2.46	%
Net investment income		3.58	%*		5.03	%		5.24	%		6.25	%		7.14	%		5.11	%
SUPPLEMENTAL DATA:
Total return on market value (1)		9.69	%		(6.17	%)		29.60	%		11.35	%		61.41	%		(36.54	%)
Total return on net asset value (1)		17.35	%		8.53	%		22.54	%		15.65	%		23.96	%		(28.55	%)
Portfolio turnover rate		10	%		14	%		13	%		20	%		18	%		15	%
Asset coverage ratio on
borrowings, end of period		400	%		374	%		502	%		465	%		451	%		—
Asset coverage ratio on
preferred stock, end of period		1,872	%		1,706	%		604	%		548	%		526	%		253	%
Net assets applicable to common
stock, end of period
(000’s omitted)	$	2,448,236		$	2,219,458		$	2,013,929		$	1,791,273		$	1,703,400		$	1,527,981

* Annualized

(1)

Total return on market value assumes a purchase of common stock at the current market price on the first day and a sale at the current market price on the last day of each period shown in the table and assumes reinvestment of dividends at the actual reinvestment prices obtained under the terms of the Fund’s dividend reinvestment plan. Total return on net asset value uses the same methodology, but with use of net asset value for beginning, ending and reinvestment values.

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

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS
October 31, 2013

Note 1. Organization

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 “1940 Act”). The primary investment objectives of the Fund are current income and long-term growth of income. Capital appreciation is a secondary objective. In 2013, the Fund changed its fiscal year end to October 31 from December 31.

Note 2. Significant Accounting Policies

The following are the significant accounting policies of the Fund:

A. Investment Valuation: Equity securities traded on a national or foreign securities exchange or traded over-the-counter and quoted on the NASDAQ Stock Market are valued at the last reported sale price using valuation data provided by an independent pricing service or, if there was no sale on the valuation date, then the security is valued at the mean of the bid and ask prices as obtained on that day from one or more dealers regularly making a market in that security and are generally classified as Level 1. Fixed income securities are valued at the mean of bid and ask prices provided by an independent pricing service or broker-dealers when such prices are believed to reflect the fair market value of such securities and are generally classified as Level 2. Such bid and ask prices are determined taking into account securities prices, yields, maturities, call features, ratings, and institutional size trading in similar securities and developments related to specific securities. Short-term investments having a maturity of 60 days or less at time of purchase are valued on an amortized cost basis, to the extent that amortized cost approximates market value, and are classified as Level 2. Any 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 and are classified as Level 2 or 3 based on the valuation inputs.

B. Investment Transactions and Investment Income: Security transactions are recorded on the trade date. Realized gains and losses from sales of securities are determined on the 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.

The Fund invests in master limited partnerships (“MLPs”) which make distributions that are primarily attributable to return of capital. Dividend income is recorded using management’s estimate of the percentage of income included in the distributions received from the MLP investments based on their historical dividend results. Distributions received in excess of this estimated amount are recorded as a reduction of cost of investments (i.e., a return of capital). The actual amounts of income and return of capital are only determined by each MLP after its fiscal year-end and may differ from the estimated amounts. For the ten months ended October 31, 2013, the Fund estimated that 100% of the MLP distributions received would be treated as a return of capital. For the fiscal year ended December 31, 2012, 100% of the MLP distributions were treated as a return of capital.

C. Federal Income Taxes: It is the Fund’s intention 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 and capital gains to its shareholders. Therefore, no provision for Federal income or excise taxes is required.

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
October 31, 2013

Management of the Fund has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Since tax authorities can examine previously filed tax returns, the Fund’s tax returns from 2010 to 2013 are subject to review.

D. Foreign Currency Translation: Investment securities and other assets and liabilities denominated in foreign currencies are translated into U.S. dollar amounts at the date of valuation at the mean of the quoted bid and asked prices of such currencies. Purchases and sales of investment securities and income and expense items denominated in foreign currencies are translated into U.S. dollar amounts at the rate of exchange prevailing on the respective dates of such transactions. The Fund does not isolate that portion of the results of operations resulting from changes in foreign exchange rates on investments from the fluctuations arising from changes in market prices of securities held. Such fluctuations are included with the net realized and unrealized gain or loss on investments.

E. Use of Estimates: The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

F. Accounting Standards: The Fund adopted Accounting Standards Update (“ASU”) No. 2013-01, Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities which amended ASU No. 2011-11, Disclosures about Offsetting Assets and Liabilities, which required an entity to disclose information about offsetting and related arrangements for assets and liabilities, financial instruments and derivatives that are either currently offset in accordance with current requirements or are subject to enforceable master netting arrangements or similar agreements. ASU 2013-01 limits the scope of the new balance sheet disclosures to derivatives, repurchase agreements and securities lending transactions to the extent that they are (i) offset in the financial statements or (ii) subject to an enforceable master netting arrangement or similar agreement.

Note 3. Agreements and Management Arrangements

A. Adviser and Administrator: The Fund has an Advisory Agreement with Duff & Phelps Investment Management Co. (the “Adviser”) an indirect, wholly owned subsidiary of Virtus Investment Partners, Inc. (“Virtus”), to provide professional investment management services for the Fund and has an Administration Agreement with J. J. B. Hilliard, W. L. Lyons, LLC (the “Administrator”) to provide administrative and management services for the Fund. The Adviser receives a quarterly fee at an annual rate of 0.60% of the Average Weekly Managed Assets of the Fund up to $1.5 billion and 0.50% of Average Weekly Managed Assets in excess thereof. The Administrator receives a quarterly fee at annual rates of 0.20% of Average Weekly Managed Assets up to $1 billion, and 0.10% of Average Weekly Managed Assets over $1 billion. For purposes of the foregoing calculations, “Average Weekly Managed Assets” is defined as the average weekly value of the total assets of the Fund minus the sum of all accrued liabilities of the Fund (other than the aggregate amount of any outstanding borrowings or other indebtedness constituting financial leverage).

B. Directors: The Fund pays each director not affiliated with the Adviser an annual fee plus a fee for certain meetings of the board or committees of the board attended. Total fees paid to directors for the ten months ended October 31, 2013 were $328,877.

C. Affiliated Shareholder: At October 31, 2013, Virtus Partners, Inc. (a wholly owned subsidiary of Virtus) held 164,634 shares of the Fund, which represents 0.06% of the shares of common stock outstanding. These shares may be sold at any time.

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
October 31, 2013

Note 4. Investment Transactions

Purchases and sales of investment securities (excluding short-term investments) for the ten months ended October 31, 2013 and for the year ended December 31, 2012 were $325,037,127 and $360,523,707 and $619,745,965 and $430,665,166, respectively.

Note 5. Distributions and Tax Information

At October 31, 2013, the federal tax cost and aggregate gross unrealized appreciation (depreciation) were as follows:

Federal Tax Cost		Unrealized Appreciation		Unrealized Depreciation		Net Unrealized Appreciation
$2,863,733,755		$672,974,447		($116,820,710)		$556,153,737

The difference between the book basis and tax basis of unrealized appreciation (depreciation) and cost of investments is primarily attributable to MLP earnings and basis adjustments, the tax deferral of wash sales losses, the accretion of market discount and amortization of premiums and alternative tax treatment of certain securities.

The Fund declares and pays monthly dividends on its common shares of a stated amount per share. Subject to approval and oversight by the Fund’s Board of Directors, the Fund seeks to maintain a stable distribution level (a “Managed Distribution Plan”) consistent with the Fund’s primary investment objective of current income. If and when sufficient investment income is not available on a monthly basis, the Fund will distribute long-term capital gains and/or return capital in order to maintain the $0.065 per common share distribution level. The amount and timing of distributions are determined in accordance with federal tax regulations, which may differ from U.S. generally accepted accounting principles.

The tax character of distributions paid to common shareholders during the ten months ended October 31, 2013 and years ended December 31, 2012 and 2011 was as follows:

		10/31/13			12/31/12		12/31/11
	Distributions paid from:
	Ordinary income	$	84,571,087		$	109,901,354	$	160,576,350
	Long-term capital gains		86,728,956			69,262,530		20,706,855
	Return of capital		4,785,164			14,037,698		6,312,497
	Total distributions	$	176,085,207		$	193,201,582	$	187,595,702

At October 31, 2013, the components of distributable earnings on a tax basis were as follows:

	Undistributed net ordinary income		$0
	Undistributed long-term capital gains		$0
	Unrealized net appreciation		556,166,893
	Other ordinary timing differences		(17,728,085	)
		$	538,438,808

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
October 31, 2013

Note 6. Reclassification of Capital Accounts

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 differences between book and tax basis reporting have been identified and appropriately reclassified on the Statement of Assets and Liabilities. At October 31, 2013, the following reclassifications were recorded:

Paid-in capital		Accumulated net realized loss on investments		Distributions in excess of net investment income
$(2,855,387)		$(1,341,870)		$4,197,257

The reclassifications primarily relate to premium amortization, MLP recharacterization of gains and recharacterization of distributions. These reclassifications have no impact on the net asset value of the Fund.

Note 7. Capital Transaction

In a rights offering which expired September 21, 2012 (“Expiration Date”), shareholders exercised rights to purchase 24,849,991 shares of common stock at $9.57 (“Subscription Price”) per share for proceeds, net of expenses of $228,309,763. The Subscription Price was established on the Expiration Date, and represented 112% of the net asset value per common share at the close of trading on the Expiration Date. Total offering costs, which were borne by the Fund, were $1,436,214. The sales concession and other offering costs incurred in connection with the issuance of the common shares were recorded as a reduction of paid-in surplus on common stock.

Note 8. 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. In 2006, the Fund issued 20,000 shares of Auction Preferred Stock (“APS”) in five series of 4,000 shares each at a public offering price of $25,000 per share. The underwriting discount and other offering costs incurred in connection with the issuance of the RP and APS were recorded as a reduction of paid-in surplus on common stock.

During the years ended December 31, 2009 and December 31, 2012, the Fund redeemed $600,000,000 and $200,000,000, respectively, of its outstanding preferred shares. In 2009, all shares of Series A, Series B and Series C of RP were redeemed at a redemption price of $100,000 per share plus accrued but unpaid dividends and all shares of Series M, Series T and Series W of APS were redeemed at a redemption price of $25,000 per share plus accrued but unpaid dividends. In 2012 the Fund conducted a tender offer for its outstanding preferred stock that expired on June 18, 2012 and accepted for purchase 667 shares of its preferred stock as more fully described in Note 9. On December 21, 2012 and December 24, 2012, the Fund redeemed the remaining outstanding shares of APS Series TH and APS Series F, respectively, at a redemption price of $25,000 per share plus accrued but unpaid dividends in each case.

The 1,382 shares of RP outstanding on October 31, 2013 consist of two series, 780 shares of Series D and 602 shares of Series E.

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
October 31, 2013

Dividends on the RP are cumulative at a rate which was initially established for each series at the time of its initial offering. Since the initial offering of each series of RP, the dividend rate on each series of RP has been reset every 49 days by a remarketing process. Beginning in mid-February 2008, the remarketings for the RP have experienced successive failures as a result of general dislocations affecting the auction rate securities markets. A failed remarketing or auction occurs when there are more sellers of RP than buyers. The result is that the current holders retain their shares, and the dividend rate for the next dividend period is automatically set to the maximum dividend rate permitted by the Fund’s charter. These maximum dividend rates ranged from 0.12% to 0.35% during the ten months ended October 31, 2013. A failed remarketing is not an event of default for the Fund, but it is a liquidity problem for the holders of its preferred stock. It is impossible to predict how long this imbalance will last. A successful remarketing of the Fund’s RP may not occur for a long period of time, if ever. Even if the RP market becomes more liquid, the holders of the Fund’s RP may not have the amount of liquidity they desire or the ability to sell the RP at par.

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; therefore, the RP is classified as a liability on the statement of assets and liabilities and the related dividends as interest expense on the statement of operations. The mandatory redemption dates are as follows: 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. The holders of the RP are entitled 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.

Note 9. Preferred Stock Tender Offer

The Fund conducted a tender offer that commenced on May 3, 2012 and expired on June 18, 2012, for up to $200,000,000 of its outstanding preferred stock at a price equal to 96% of the per share liquidation preference plus any unpaid dividends accrued through the expiration of the offer. Under the terms of the tender offer on June 18, 2012, the Fund accepted 618 shares of RP at a price equal to 96% of its liquidation preference of $100,000 per share ($96,000 per share) and 49 shares of its APS at a price equal to 96% of its liquidation preference of $25,000 per share ($24,000 per share) plus dividends accrued and unpaid through the expiration of the offer. Because the tender offer price was less than the preferred stock per share liquidation preference, the tender offer had a positive impact on NAV in the amount of $2,521,000 which is shown in the Statement of Operations under the caption “Benefit to common stockholders from tender offer for preferred stock”.

Note 10. Borrowings

The Fund has a Committed Facility Agreement (the “Facility”) with a commercial bank (the “Bank”) that allows the Fund to borrow cash from the Bank, up to a limit of $1,000,000,000 for the purpose of redeeming shares of preferred stock. Borrowings under the Facility are collateralized by certain assets of the Fund (the “Hypothecated Securities”). The Fund expressly grants the Bank the right to re-register the Hypothecated Securities in its own name or in another name other than the Fund’s and to pledge, repledge, hypothecate, rehypothecate, sell, lend or otherwise transfer or use the Hypothecated Securities. Interest is charged at 3 month LIBOR (London Inter-bank Offered Rate)

DNP SELECT INCOME FUND INC.
NOTES TO FINANCIAL STATEMENTS—(Continued)
October 31, 2013

plus an additional percentage rate on the amount borrowed and on the undrawn balance (the commitment fee). The Fund also incurred a one time arrangement fee that was paid in six equal installments based on a percentage of the total borrowing limit. Total commitment fees paid for the ten months ended October 31, 2013 were $881,025 and are included in interest expense and fees on the Statement of Operations. The Bank has the ability to require repayment of the Facility upon six months notice or following an event of default. For the ten months ended October 31, 2013, the average daily borrowings under the Facility and the weighted daily average interest rate were $861,800,000 and 1.12%, respectively. At October 31, 2013, the Fund had outstanding borrowings of $861,800,000. The interest rate applicable to the borrowing on October 31, 2013 was 1.09%.

The Bank has the ability to borrow the Hypothecated Securities (“Rehypothecated Securities”). The Fund is entitled to receive a fee from the Bank in connection with any borrowing of Rehypothecated Securities. The fee is computed daily based on a percentage of the difference between the fair market rate as determined by the Bank and the Fed Funds Open and is paid monthly. The Fund can designate any Hypothecated Security as ineligible for rehypothecation and can recall any Rehypothecated Security at any time and if the Bank fails to return it (or an equivalent security) in a timely fashion, the Bank will be liable to the Fund for the ultimate delivery of such security and certain costs associated with delayed delivery. In the event the Bank does not return the security or an equivalent security, the Fund will have the right to, among other things, apply and set off an amount equal to 100% of the then-current fair market value of such Rehypothecated Securities against any amounts owed to the Bank under the Facility. The Fund is entitled to receive an amount equal to any and all interest, dividends or distributions paid or distributed with respect to any Hypothecated Security on the payment date. At October 31, 2013, Hypothecated Securities under the Facility had a market value of $2,289,129,808 and Rehypothecated Securities had a market value of $471,561,972. If at the close of any business day, the value of all outstanding Hypothecated Securities exceeds the value of the borrowings, the Bank shall promptly, at its option, either reduce the amount of the outstanding securities or deliver an amount of cash at least equal to the excess amount.

Note 11. 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 Fund that have not occurred. However, the Fund has not had prior claims or losses pursuant to these arrangements and expects the risk of loss to be remote.

Note 12. Subsequent Events:

Management has evaluated the impact of all subsequent events on the Fund through the date the financial statements were issued, and has determined that there were no subsequent events requiring recognition or disclosure in these financial statements.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Shareholders and Board of Directors of
DNP Select Income Fund Inc.

We have audited the accompanying statement of assets and liabilities, including the schedule of investments, of DNP Select Income Fund Inc. (the “Fund”) as of October 31, 2013, and the related statements of operations, statements of changes in net assets, and statements of cash flows, and the financial highlights for each of the periods indicated therein. 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.

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 audits to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included 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 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 October 31, 2013, by correspondence with the custodian. 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 October 31, 2013, the results of its operations, the changes in its net assets, its cash flows, and the financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.

Chicago, Illinois
December 16, 2013

TAX INFORMATION (Unaudited)

For the ten month period ended October 31, 2013, the Fund makes the following disclosures for federal income tax purposes. The percentage, or the maximum amount allowable, of its ordinary income dividends (“QDI) to qualify for the lower tax rates applicable to individual shareholders, the percentage of ordinary income dividends earned by the Fund which qualifies for the dividends received deduction (“DRD”) for corporate shareholders, and the long-term capital gains dividends (“LTCG”) ($ reported in thousands) are listed below. The actual percentage of QDI, DRD and LTCG for the calendar year will be designated in year-end tax statements.


QDI	DRD	LTCG
88%	77%	$86,728,956

INFORMATION ABOUT PROXY VOTING BY THE FUND (Unaudited)

The Fund’s Board of Directors has adopted proxy voting policies and procedures. These proxy voting policies and procedures may be changed at any time by the Fund’s Board of Directors.

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 website www.dnpselectincome.com or on the SEC’s website 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 www.dnpselectincome.com or on the SEC’s website at www.sec.gov.

INFORMATION ABOUT THE FUND’S PORTFOLIO HOLDINGS (Unaudited)

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 January 31 and July 31) on Form N-Q. The Fund’s Form N-Q is available on the SEC’s web site at 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 (800) 732-0330. In addition, the Fund’s Form N-Q 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 www.dnpselectincome.com.

ADDITIONAL INFORMATION (Unaudited)

Since January 1, 2013: (i) there have been no material changes in the Fund’s investment objectives or policies that have not been approved by the shareholders; (ii) there have been no changes in the Fund’s charter or by-laws that would delay or prevent a change in control of the Fund which have not been approved by the shareholders; (iii) there have been no material changes in the principal risk factors associated with an investment in the Fund; and (iv) there have been no changes in the persons who are primarily responsible for the day-to-day management of the Fund’s portfolio.

Additional information, if any relating to the Fund’s directors and officers, in addition to such information as is found elsewhere in this Annual Report, may be requested by contacting the Fund at the address provided in this report.


Name and Age	Position(s) Held with Fund	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held by the Director During Past 5 Years
Independent Directors
Stewart E. Conner Age: 72	Director	Term expires 2015; Director since 2004	Retired attorney since 2005; Attorney, Wyatt Tarrant & Combs LLP 1966–2005 (Chairman, Executive Committee 2000–2004; Managing Partner 1988–2000)	4

Robert J. Genetski Age: 70	Director	Term expires 2016; Director since 2001	President, Robert Genetski & Associates, Inc. (economic and financial consulting firm) since 1991; Senior Managing Director, Chicago Capital Inc. (financial services firm) 1995–2001; former Senior Vice President and Chief Economist, Harris Trust & Savings Bank; author of several books	4	Director, Midwest Banc Holdings, Inc. 2005–2010

Nancy Lampton Age: 71	Director and Vice Chairperson of the Board	Term expires 2015; Director since 1994	Vice Chairperson of the Board of the Fund since 2006, DTF and DUC since 2007 and DPG since 2011; Chairman and Chief Executive Officer, Hardscuffle Inc. (insurance holding company) since 2000; Chairman and Chief Executive Officer, American Life and Accident Insurance Company of Kentucky since 1971	4	Advisory Board Member, CanAlaska Uranium Ltd. (uranium exploration company); Director, Constellation Energy Group, Inc. (public utility holding company) 1999–2012

Name and Age	Position(s) Held with Fund	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held by the Director During Past 5 Years
Philip R. McLoughlin Age: 67	Director	Term expires 2016; Director since 2009	Private investor since 2010; Partner, CrossPond Partners, LLC (investment management consultant) 2006–2010; Managing Director, SeaCap Partners LLC (strategic advisory firm) 2009–2010	66	Chairman of the Board, The World Trust Fund (closed–end fund) since 2010 (Director since 1991); Director, Argo Group International Holdings, Ltd. (insurance holding company; f/k/a PXRE Group Ltd.) 1985–2009

Geraldine M. McNamara Age: 62	Director	Term expires 2014; Director since 2009	Private investor since 2006; Managing Director, U.S. Trust Company of New York 1982–2006	52

Eileen A. Moran Age: 59	Director	Term expires 2015; Director since 2008	Private investor since 2011; President and Chief Executive Officer, PSEG Resources L.L.C. (investment company) 1990–2011	4

Christian H. Poindexter Age 75	Director	Term expires 2014; Director since 2003	Retired Executive Committee Chairman, Constellation Energy Group, Inc. (public utility holding company) since 2003 (Executive Committee Chairman 2002–2003; Chairman of the Board 1999–2002; Chief Executive Officer 1999–2001; President 1999–2000); Chairman, Baltimore Gas and Electric Company 1993–2002 (Chief Executive Officer 1993–2000; President 1998–2000; Director 1988–2003)	4	Director, The Baltimore Life Insurance Company 1998– 2011

Name and Age	Position(s) Held with Fund	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held by the Director During Past 5 Years
Carl F. Pollard Age: 75	Director	Term expires 2014; Director since 2002	Owner, CFP Thoroughbreds LLC (f/k/a Hermitage Farm LLC) since 1995; Chairman, Columbia Healthcare Corporation 1993–1994; Chairman and 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)	4	Chairman of the Board and Director, Churchill Downs Incorporated 2001–2011 (Director 1985–2011)

David J. Vitale Age: 67	Director and Chairman of the Board	Term expires 2015; Director since 2000	Chairman of the Board of the Fund, DUC and DTF since 2009 and DPG since 2011; President, Chicago Board of Education since 2011; Chairman, Urban Partnership Bank since 2010; Private investor 2009–2010; Senior Advisor to the CEO, Chicago Public Schools 2007– 2008 (Chief Administrative Officer 2003–2007); President and Chief Executive Officer, Board of Trade of the City of Chicago, Inc. 2001–2002; 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)	4	Director, United Continental Holdings, Inc. (airline holding company; f/k/a UAL Corporation), Urban Partnership Bank, Alion Science and Technology Corporation, ISO New England Inc. (not for profit independent system operator of New England’s electricity supply), Ariel Capital Management, LLC and Wheels, Inc.(automobile fleet management)

Name and Age	Position(s) Held with Fund	Term of Office and Length of Time Served	Principal Occupation(s) During Past 5 Years	Number of Portfolios in Fund Complex Overseen by Director	Other Directorships Held by the Director During Past 5 Years
Interested Director
Nathan I. Partain, CFA Age: 57	Director, President, Chief Executive Officer and Chief Investment Officer	Term expires 2016; Director since 2007	President and Chief Investment Officer of the Adviser since 2005 (Executive Vice President 1997–2005); Director of Utility Research, Duff & Phelps Investment Research Co. 1989–1996 (Director of Equity Research 1993–1996 and Director of Fixed Income Research 1993); President and Chief Executive Officer of the Fund since 2001 (Chief Investment Officer since 1998; Executive Vice President 1998–2001; Senior Vice President 1997–1998); President and Chief Executive Officer of DUC and DTF since 2004 and of DPG since 2011	4	Chairman of the Board and Director, Otter Tail Corporation (manages diversified operations in the electric, plastics, manufacturing and other business operations sectors)

Name, Address and Age	Position(s) Held with Fund and Length of Time Served	Principal Occupation(s) During Past 5 Years
T. Brooks Beittel, CFA Age: 63	Senior Vice President and Secretary since 1995 (Treasurer 1995–2002);	Executive Vice President and Assistant Chief Investment Officer of the Adviser since 2008 (Senior Vice President 1993–2008,Vice President 1987–1993)

Alan M. Meder, CFA, CPA Age: 54	Treasurer, Principal Financial and Accounting Officer and Assistant Secretary since 2011 (Assistant Treasurer 2010– 2011)	Senior Vice President of the Adviser since 1994 (Chief Risk Officer since 2001); Chair of the Board of Governors of CFA Institute 2012–2013 (Vice Chairman of the Board 2011–2012; Member since 2008); Financial Accounting Standards Advisory Council Member since 2011

Joyce B. Riegel Age: 59	Chief Compliance Officer since 2004	Senior Vice President and Chief Compliance Officer of the Adviser since 2004 (Vice President and Compliance Officer 2002–2004); Vice President and Chief Compliance Officer, Stein Roe Investment Counsel LLC 2001–2002

Dianna P. Wengler J.J.B. Hilliard, W.L. Lyons, LLC 500 West Jefferson Street Louisville, KY 40202 Age: 53	Vice President since 2006 (Assistant Secretary since 1988; Assistant Vice President 2004–2006)	Vice President, J.J.B. Hilliard, W.L. Lyons, LLC since 1990; Senior Vice President, Hilliard-Lyons Government Fund, Inc. 2006–2010 (Vice President 1998–2006; Treasurer 1988–2010)

	Fiscal year ended	Fiscal year ended
	October 31, 2013(1)	December 31, 2012

(a) Audit Fees (2)	$69,900	$69,700
(b) Audit-Related Fees (3)(7)	7,400	32,400
(c ) Tax Fees (4)(7)	21,500	19,800
(d) All Other Fees (5)(7)	—	—
(e) Aggregate Non-Audit Fees (6)(7)	28,900	52,200

Service		Fees(1)
	DNP	Affiliates(2)
1. Services required under generally accepted auditing standards to perform the audit of the annual financial statements of the Fund, including performance of tax qualification tests relating to the Fund’s regulated investment company status and issuance of an internal control letter for the Fund’s Form N-SAR	$69,900	N/A
2. Reading of the Fund’s semi-annual financial statements	(3)	N/A
3. Consultations by the Fund’s management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard setting bodies (Note: Under SEC rules, some consultations may be “audit-related” services rather than “audit” services)	(3)	N/A

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

	Registered Investment				Other Pooled Investment
	Companies (1)				Vehicles (2)		Other Accounts (3)

Name of Portfolio Manager	Number of Accounts	Total Assets (in millions)			Number of Accounts	Total Assets (in millions)	Number of Accounts	Total Assets (in millions)
Nathan I. Partain	0		$	—	0	—	0		—
T. Brooks Beittel	2		$	577.6	0	—	0		—
Geoffrey P. Dybas	4		$	1,522.5	2	$ 47.9	11	$	542.40
Deborah A. Jansen	1		$	1,088.3	0	—	0		—
Connie M. Luecke	2		$	262.9	0	—	0		—
Daniel J. Petrisko	1		$	431.4	0	—	9	$	1,905.0
Randle L. Smith	2		$	199.1	0	—	0		—

(1)	Registered Investment Companies include all open and closed-end mutual funds. For Registered Investment Companies, assets represent net assets of all open-end investment companies and gross assets of all closed- end investment companies.

(2)	Other Pooled Investment Vehicles include, but are not limited to, securities of issuers exempt from registration under Section 3(c) of the Investment Company Act of 1940, such as private placements and hedge funds.

(3)	Other Accounts include, but are not limited to, individual managed accounts, separate accounts, institutional accounts, pension funds and collateralized bond obligations.

	Name of Portfolio Manager		Dollar Range of Equity Securities in the Fund
	T. Brooks Beittel		$10,001-$50,000
	Geoffrey P. Dybas		None
	Deborah A. Jansen		None
	Connie M. Luecke		$10,001-$50,000
	Nathan I. Partain		$100,001 - $500,000
	Daniel J. Petrisko		None
	Randle L. Smith		$100,001-$500,000

(Registrant)		DNP SELECT INCOME FUND INC.

By (Signature and Title)*		/s/ Nathan I. Partain
		Nathan I. Partain
		President and Chief Executive Officer
		(Principal Executive Officer)
Date		December 27, 2013