UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF
REGISTERED MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number:  811-7460 
 
Exact name of registrant as specified in charter:  Delaware Investments Dividend and 
  Income Fund, Inc. 
 
Address of principal executive offices:  2005 Market Street 
  Philadelphia, PA 19103 
 
Name and address of agent for service:  David F. Connor, Esq. 
  2005 Market Street 
  Philadelphia, PA 19103 
 
Registrant’s telephone number, including area code:  (800) 523-1918 
 
Date of fiscal year end:    November 30 
 
Date of reporting period:       August 31, 2007 

Item 1. Schedule of Investments.

Schedule of Investments (Unaudited)

Delaware Investments Dividend and Income Fund, Inc.

August 31, 2007

  Number of   
  Shares  Value  
Common Stock – 81.33%        
Consumer Discretionary – 5.78%       
=@Õ†Avado Brands   1,390 $          0
Gap   135,000  2,532,600
*Limited Brands   91,200  2,112,192
Mattel   101,200  2,188,956
Starwood Hotels & Resorts Worldwide   15,300  935,136
†Time Warner Cable Class A   7,218  264,901
      8,033,785
Consumer Staples – 5.56%       
B&G Foods Class A   40,900  523,111
Heinz (H.J.)   54,400  2,452,896
*Kimberly-Clark   34,700  2,383,543
Safeway   74,800  2,373,404
      7,732,954
Diversified REITs – 1.33%       
iStar Financial   32,700  1,196,820
Washington Real Estate Investment Trust   19,900  651,725
      1,848,545
Energy – 3.63%       
Chevron   28,500  2,501,160
ConocoPhillips   30,100  2,464,889
†Petroleum Geo-Services ADR   3,400  80,005
      5,046,054
Financials – 14.15%       
Allstate   45,400  2,485,650
Chubb   47,400  2,423,562
†Discover Financial Services   101,700  2,353,338
Hartford Financial Services Group   26,000  2,311,660
Highland Distressed Opportunities   39,500  492,960
Huntington Bancshares   126,000  2,168,460
Morgan Stanley   38,700  2,413,719
Wachovia   51,800  2,537,165
*Washington Mutual   67,700  2,485,944
      19,672,458
Health Care – 10.25%       
Abbott Laboratories   47,300  2,455,343
Baxter International   45,000  2,464,200
Bristol-Myers Squibb   81,700  2,381,555
Merck   47,100  2,363,007
Pfizer   101,000  2,508,840
Wyeth   45,000  2,083,500
      14,256,445
Health Care REITs – 2.40%       
Health Care Property Investors   27,400  833,508
Health Care REIT   9,500  379,050
*Medical Properties Trust   33,700  453,939
Nationwide Health Properties   27,900  774,225
Ventas   23,600    898,688
      3,339,410
Hotel REITs – 1.44%       
Ashford Hospitality Trust   33,700  367,667
Hersha Hospitality Trust   94,300  1,030,699
Host Hotels & Resorts   27,100  604,059
      2,002,425
Industrial REITs – 2.50%        
AMB Property   21,900  1,204,062
*First Potomac Realty Trust   20,900  442,871
ProLogis   30,500              1,834,880
      3,481,813


Industrials – 5.33%     
*†Allied Waste Industries  1  12
Donnelley (R.R.) & Sons  58,900  2,109,798
*†Foster Wheeler  1  104
Genesis Lease ADR   63,700  1,497,587
†Grupo Aeroportuario del Centro Norte ADR  10,200  270,810
*Macquarie Infrastructure  25,800  1,043,610
†Northwest Airlines  1  12
†Teekay Petrojarl ADR  2,167  26,799
Waste Management  65,400  2,463,617
     7,412,349
Information Technology – 9.02%     
Hewlett-Packard  49,900  2,462,565
Intel  107,200  2,760,400
*International Business Machines  21,100  2,462,159
Motorola  145,700  2,469,615
†Xerox  139,100  2,382,783
     12,537,522
Mall REITs – 3.57%     
*General Growth Properties   25,706  1,277,845
Macerich   14,000  1,137,080
Simon Property Group   26,900  2,553,348
     4,968,273
Manufactured Housing REITs – 0.53%     
Equity Lifestyle Properties   11,200  545,440
Sun Communities   6,700  191,017
     736,457
Materials – 1.76%     
duPont (E.I.) deNemours   50,200  2,447,250
     2,447,250
Media – 0.16%     
†Adelphia    325,000  102,375
†Adelphia Recovery Trust Series ACC-1  318,962  22,327
†Adelphia Recovery Trust Series Arahova  217,473  100,038
†Century Communications   500,000  400
     225,140
Mortgage REITs – 0.19%     
*Gramercy Capital  10,500  264,075
     264,075
Multifamily REITs – 2.02%     
American Campus Communities  14,500  410,930
*Apartment Investment & Management  16,600  742,020
Camden Property Trust  7,300  448,877
Equity Residential  30,000  1,207,200
     2,809,027
Office REITs – 4.06%     
Alexandria Real Estate Equities  8,900  830,637
Brandywine Realty Trust    36,448  939,629
*Duke Realty   26,000  878,540
Highwoods Properties   10,900  389,021
*Liberty Property Trust   16,500  644,490
Mack-Cali Realty   9,800  409,248
*Parkway Properties   15,000  694,200
PS Business Parks   8,500  480,250
*SL Green Realty   3,400  379,134
     5,645,149
Self-Storage REITs – 0.72%     
Public Storage   13,300  1,007,874
     1,007,874
Shopping Center REITs – 0.81%     
Cedar Shopping Centers   44,500  589,180
Equity One   12,500  327,000
Ramco-Gershenson Properties   6,400  206,400
     1,122,580
Specialty REITs – 0.61%     
*Entertainment Properties Trust   17,600  841,984
     841,984
Telecommunications – 3.66%     
AT&T   62,100  2,475,927
Verizon Communications   62,500               2,617,500
 5,093,427


Utilities – 1.85% 
†Mirant   189  7,365
Progress Energy   55,900  2,564,692
     2,572,057
Total Common Stock (cost $97,671,267)   113,097,053
 
Convertible Preferred Stock – 3.83% 
Automobiles & Automotive Parts – 0.07%     
General Motors 5.25% exercise price $64.90, expiration date 3/6/32   5,225  99,693
      99,693
Banking, Finance & Insurance – 1.52% 
Aspen Insurance 5.625% exercise price $29.28, expiration date 12/31/49   8,800  462,000
·Citigroup Funding 4.943% exercise price $29.50, expiration date 9/27/08   19,000  531,809
E Trade Group 6.125% exercise price $21.82, expiration date 11/18/08   9,000  190,125
Lehman Brothers Holdings 6.25% exercise price $54.24, expiration date 10/15/07   16,000  420,000
Sovereign Capital Trust IV 4.375% exercise price $29.16, expiration date 3/1/34   6,800  294,950
XL Capital 7.00% exercise price $ 80.59, expiration date 2/15/09   8,000  214,800
     2,113,684
Basic Materials – 0.83% 
Freeport-McMoRan Copper & Gold 6.75% exercise price $73.50, expiration date 5/1/10   5,000  663,100
Huntsman 5.00% exercise price $28.29, expiration date 2/16/08   9,900  486,338
     1,149,438
Cable, Media & Publishing – 0.27% 
#Interpublic Group 5.25% 144A exercise price $13.66, expiration date 12/31/49   360  368,685
 368,685
Energy – 0.39%     
Chesapeake Energy 4.50% exercise price $44.17, expiration date 12/31/49   3,650  345,838
El Paso Energy Capital Trust I 4.75% exercise price $41.59, expiration date 3/31/28   5,250  202,125
   547,963
Telecommunications – 0.14%     
Lucent Technologies Capital Trust I 7.75% exercise price $24.80, expiration date 3/15/17   205  200,900
   200,900
Utilities – 0.61%     
*Entergy 7.625% exercise price $87.46, expiration date 2/17/09   6,750  430,312
NRG Energy 5.75% exercise price $30.23, expiration date 3/16/09   1,225  413,438
   843,750
Total Convertible Preferred Stock (cost $5,044,641)     5,324,113
 
Preferred Stock – 3.20%     
Leisure, Lodging & Entertainment – 0.67% 
Red Lion Hotels Capital Trust 9.50%   36,249  935,224
   935,224
Real Estate – 2.53%     
Equity Inns Series B 8.75%   34,400  688,000
Ramco-Gershenson Properties 9.50%   38,600  971,176
SL Green Realty 7.625%   77,100  1,859,652
      3,518,828
Total Preferred Stock (cost $4,658,725)   4,454,052
       
   Principal  
  Amount
Commercial Mortgage-Backed Securities – 0.21%     
#First Union National Bank Commercial Mortgage Series 2001-C2 L 144A 6.46% 1/12/43  $300,000  285,871
Total Commercial Mortgage-Backed Securities (cost $304,488)     285,871
 
Convertible Bonds – 9.62%     
Aerospace & Defense – 0.70% 
#AAR 144A 1.75% 2/1/26 exercise price $29.43, expiration date 2/1/26   260,000  317,850
EDO 4.00% 11/15/25 exercise price $34.19, expiration date 11/15/25   235,000  325,181
#L-3 Communications 144A 3.00% 8/1/35 exercise price $101.70, expiration date 8/1/35    290,000  331,688
   974,719
Banking, Finance & Insurance – 0.20%     
·#US Bancorp 144A 3.61% 9/20/36 exercise price $38.28, expiration date 12/20/36   275,000  276,375
      276,375
Cable, Media & Publishing – 0.40% 
#Playboy Enterprises 144A 3.00% 3/15/25 exercise price $17.02, expiration date 3/15/25   600,000               558,750
     558,750


Computers & Technology – 2.87% 
Advanced Micro Devices     
     6.00% 5/1/15 exercise price $28.08, expiration date 5/1/15    230,000   198,375
    #144A 6.00% 5/1/15 exercise price $28.08, expiration date 5/1/15    450,000   388,125
Fairchild Semiconductor 5.00% 11/1/08 exercise price $30.00, expiration date 11/1/08    410,000   405,900
Flextronics International 1.00% 8/1/10 exercise price $15.53, expiration date 8/1/10    400,000   382,000
Hutchinson Technology 3.25% 1/15/26 exercise price $36.43, expiration date 1/15/26    340,000   303,450
#Informatica 144A 3.00% 3/15/26 exercise price $20.00, expiration date 3/15/26    510,000   499,163
#Intel 144A 2.95% 12/15/35 exercise price $31.53, expiration date 12/15/35    255,000   262,013
ON Semiconductor 2.625% 12/15/26 exercise price $10.50, expiration date 12/15/26    575,000   753,249
*SanDisk 1.00% 5/15/13 exercise price $82.36, expiration date 5/15/13    280,000   265,300
#Sybase 144A 1.75% 2/22/25 exercise price $25.22, expiration date 2/22/25    500,000   539,374
      3,996,949
Energy – 1.22%      
Halliburton 3.125% 7/15/23 exercise price $18.78, expiration date 7/15/23    250,000   465,000
Peabody Energy 4.75% 12/15/41 exercise price $61.95, expiration date 12/15/41    280,000   277,200
Pride International 3.25% 5/1/33 exercise price $25.70, expiration date 5/1/33    230,000   325,163
Schlumberger 2.125% 6/1/23 exercise price $40.00, expiration date 6/1/23    260,000   629,850
      1,697,213
Health Care & Pharmaceuticals – 1.95%      
#Allergan 144A 1.50% 4/1/26 exercise price $63.33, expiration date 4/1/26    415,000   462,205
Amgen     
    *0.375% 2/1/13 exercise price $79.48, expiration date 2/1/13    235,000   202,394
    #144A 0.375% 2/1/13 exercise price $79.48, expiration date 2/1/13    165,000   142,106
·Bristol-Myers Squibb 4.86% 9/15/23 exercise price $41.28, expiration date 9/15/23    300,000   302,640
CV Therapeutics 3.25% 8/16/13 exercise price $27.00, expiration date 8/16/13    125,000   103,438
Gilead Sciences 0.625% 5/1/13 exercise price $38.10, expiration date 5/1/13    150,000   166,875
LifePoint Hospitals 3.50% 5/14/14 exercise price $51.79, expiration date 5/14/14    110,000   93,913
#Nektar Therapeutics 144A 3.25% 9/28/12 exercise price $21.52, expiration date 9/28/12    350,000   292,688
Teva Pharmaceutical Finance 0.25% 2/1/26 exercise price $47.16, expiration date 2/1/26    345,000   352,331
·Wyeth 4.886% 1/15/24 exercise price $60.39, expiration date 1/15/24    550,000   587,454
      2,706,044
Leisure, Lodging & Entertainment – 0.26%     
#International Game Technology 144A 2.60% 12/15/36 exercise price $61.78, expiration date 12/15/36    375,000   363,281
      363,281
Real Estate – 0.32%      
#General Growth Properties 144A 3.98% 4/15/27 exercise price $88.72, expiration date 4/15/27    230,000   202,688
MeriStar Hospitality 9.50% 4/1/10 exercise price $10.18, expiration date 4/1/10    230,000   236,095
      438,783
Retail – 0.48%     
Pantry 3.00% 11/15/12 exercise price $50.10, expiration date 11/15/12    180,000   169,650
#Saks 144A 2.00% 3/15/24 exercise price $11.97, expiration date 3/15/24    160,000   228,600
#United Auto Group 144A 3.50% 4/1/26 exercise price $23.69, expiration date 4/1/26    260,000   266,825
      665,075
Telecommunications – 0.48%      
Level 3 Communications 3.50% 6/15/12 exercise price $5.46, expiration date 6/15/12    165,000   191,194
#Nortel Networks 144A     
     1.75% 4/15/12 exercise price $32.00, expiration date 4/15/12    115,000   96,313
     2.125% 4/15/14 exercise price $32.00, expiration date 4/15/14    115,000   93,581
Qwest Communications International 3.50% 11/15/25 exercise price $5.90, expiration date 11/15/25    180,000   292,950
      674,038
Transportation – 0.48%      
#ExpressJet 144A 4.25% 8/1/23 exercise price $18.20, expiration date 8/1/23    200,000   193,750
JetBlue Airways      
     3.50% 7/15/33 exercise price $28.33, expiration date 7/15/33    275,000   265,031
     3.75% 3/15/35 exercise price $17.10, expiration date 3/15/35    225,000   204,750
      663,531
Utilities – 0.26%     
#CenterPoint Energy 144A 3.75% 5/15/23 exercise price $11.18, expiration date 5/15/23    250,000   366,563
†Mirant (Escrow) 2.50% 6/15/21 exercise price $67.95, expiration date 6/15/21    180,000   -
      366,563
Total Convertible Bonds (cost $12,839,471)       13,381,321
 
Corporate Bonds – 24.96%      
Basic Industry – 2.91%      
AK Steel 7.75% 6/15/12    100,000   100,000
Bowater     
    *6.50% 6/15/13    60,000     46,800
     9.00% 8/1/09    50,000   48,000
     9.50% 10/15/12    300,000   265,500
Freeport McMoRan Copper & Gold 8.25% 4/1/15    275,000               292,188


Georgia-Pacific 8.875% 5/15/31    470,000   460,600
Hexion US Finance 9.75% 11/15/14    215,000   233,275
Lyondell Chemical     
     8.00% 9/15/14     175,000   191,188
     8.25% 9/15/16    50,000   56,250
#MacDermid 144A 9.50% 4/15/17    315,000   294,525
Norske Skog Canada 8.625% 6/15/11    520,000   460,200
Port Townsend Paper     
    ‡0.00% 8/15/12    168,000   168,000
    #144A 11.00% 4/15/11    350,000   141,750
Potlatch 13.00% 12/1/09    250,000   282,884
#Sappi Papier Holding 144A 6.75% 6/15/12    525,000   513,782
‡Solutia 6.72% 10/15/37    225,000   176,625
#Steel Dynamics 144A 6.75% 4/1/15    100,000   96,750
Tube City IMS 9.75% 2/1/15    225,000   221,625
        4,049,942
Brokerage – 0.55%         
E Trade Financial 8.00% 6/15/11    170,000   163,200
LaBranche       
     9.50% 5/15/09    265,000   258,375
     11.00% 5/15/12    349,000   347,255
        768,830
Capital Goods – 1.30%       
Berry Plastics Holding 8.875% 9/15/14    150,000   150,375
CPG International I 10.50% 7/1/13    200,000   197,000
*Graham Packaging 9.875% 10/15/14    150,000   147,750
*#Hawker Beechcraft Acquisition 144A 9.75% 4/1/17    120,000   119,100
Interface 10.375% 2/1/10    350,000   364,000
Intertape Polymer 8.50% 8/1/14    165,000   150,975
#Momentive Performance Materials 144A 9.75% 12/1/14    250,000   239,375
#Mueller Water Products 144A 7.375% 6/1/17    25,000   23,875
*Smurfit-Stone Container Enterprises 8.00% 3/15/17    155,000   148,606
Trimas 9.875% 6/15/12    268,000   271,350
        1,812,406
Consumer Cyclical – 2.43%       
Carrols 9.00% 1/15/13    325,000   307,125
Ford Motor Credit       
     7.375% 10/28/09    300,000   284,016
     7.80% 6/1/12    295,000   272,044
    ·8.11% 1/13/12    125,000   114,578
General Motors       
    *6.375% 5/1/08    300,000   294,375
     8.375% 7/15/33    300,000   242,250
GMAC       
    *4.375% 12/10/07     200,000   197,430
     6.875% 9/15/11    25,000   22,315
#KAR Holdings 144A 10.00% 5/1/15    380,000   342,000
Lear 8.75% 12/1/16    425,000   395,251
Neiman Marcus PIK 9.00% 10/15/15    230,000   243,800
NPC International 9.50% 5/1/14    85,000   79,050
*#Outback Steakhouse 144A 10.00% 6/15/15    100,000   86,750
#TRW Automotive 144A       
     7.00% 3/15/14    15,000   14,025
     7.25% 3/15/17    125,000   114,375
#USI Holdings 144A 9.75% 5/15/15    145,000   133,400
#Vitro 144A 9.125% 2/1/17    245,000   237,038
        3,379,822
Consumer Non-Cyclical – 1.48%         
*Chiquita Brands 8.875% 12/1/15    175,000   151,375
*Constellation Brands 8.125% 1/15/12    175,000   176,313
DEL Laboratories 8.00% 2/1/12    200,000   182,000
National Beef Packing 10.50% 8/1/11    400,000   414,000
Pilgrim's Pride         
     8.375% 5/1/17    585,000   589,387
     9.625% 9/15/11    250,000   258,333
*#Pinnacle Foods Finance 144A 10.625% 4/1/17    190,000   173,850
*Smithfield Foods 7.75% 7/1/17    35,000   35,350
True Temper Sports 8.375% 9/15/11    100,000               78,500
        2,059,108


Emerging Markets – 0.13% 
#True Move 144A 10.75% 12/16/13   175,000   175,875
      175,875
Energy – 2.81%      
Chesapeake Energy 6.625% 1/15/16   95,000  92,388
Compton Petroleum Finance 7.625% 12/1/13   375,000  358,124
El Paso 7.00% 6/15/17   250,000  250,462
#El Paso Performance-Linked Trust 144A 7.75% 7/15/11   175,000  180,170
Geophysique-Veritas      
     7.50% 5/15/15   30,000  30,300
     7.75% 5/15/17   135,000  137,025
#Hilcorp Energy I 144A      
     7.75% 11/1/15   325,000  312,812
     9.00% 6/1/16   275,000  279,812
Inergy Finance      
     6.875% 12/15/14   150,000  144,000
     8.25% 3/1/16   75,000  76,313
Mariner Energy 8.00% 5/15/17   200,000  190,500
Massey Energy 6.625% 11/15/10   50,000  49,375
#OPTI Canada 144A       
     7.875% 12/15/14   85,000  85,638
     8.25% 12/15/14   35,000  35,613
PetroHawk Energy 9.125% 7/15/13   240,000  251,400
Plains Exploration & Production 7.00% 3/15/17   145,000  132,675
#Regency Energy Partners 144A 8.375% 12/15/13    156,000  161,460
·Secunda International 13.36% 9/1/12    260,000  265,199
#Seitel 144A 9.75% 2/15/14   230,000  213,325
#Stallion Oilfield Services 144A 9.75% 2/1/15   125,000  120,938
TNK-BP Finance 6.625% 3/20/17   130,000  121,823
#VeraSun Energy 144A 9.375% 6/1/17   210,000  195,825
Whiting Petroleum 7.25% 5/1/13   235,000  225,013
      3,910,190
Finance & Investments – 0.21%      
#Algoma Acquisition 144A 9.875% 6/15/15    90,000  84,600
#HUB International Holdings 144A 10.25% 6/15/15   100,000  91,500
#TemirBank 144A 9.50% 5/21/14   130,000  114,725
      290,825
Media – 2.78%       
CCH I Holdings 13.50% 1/15/14    570,000  541,500
Charter Communication Holdings 13.50% 1/15/11    675,000  681,749
Dex Media West 9.875% 8/15/13    250,000  265,000
Idearc 8.00% 11/15/16   185,000  183,613
Insight Midwest 9.75% 10/1/09    275,000  275,688
Intelsat 7.625% 4/15/12    125,000  104,688
#LBI Media 144A 8.50% 8/1/17   125,000  123,281
Mediacom Capital 9.50% 1/15/13   550,000  552,750
NTL Cable 9.125% 8/15/16   230,000  233,738
#Quebecor World 144A 9.75% 1/15/15   225,000  212,625
RH Donnelley 8.875% 1/15/16   130,000  133,900
*#Univision Communications PIK 144A 9.75% 3/15/15   320,000  306,400
Vertis 10.875% 6/15/09   90,000  79,650
WMG Acquisition 7.375% 4/15/14   195,000  172,575
      3,867,157
Real Estate – 0.37%      
American Real Estate Partners 8.125% 6/1/12   85,000  83,513
BF Saul REIT 7.50% 3/1/14   385,000  359,975
Rouse 7.20% 9/15/12   75,000  75,594
      519,082
Services Cyclical – 4.00%      
*Aramark Services 8.50% 2/1/15   300,000  300,375
#Bristow Group 144A 7.50% 9/15/17   195,000  195,000
#Cardtronics 144A 9.25% 8/15/13   100,000  95,500
Corrections Corporation of America 7.50% 5/1/11   100,000  101,000
FTI Consulting 7.625% 6/15/13   450,000  451,124
#Galaxy Entertainment Finance 144A 9.875% 12/15/12   350,000  357,000
Gaylord Entertainment 8.00% 11/15/13    120,000  118,800
Global Cash Access 8.75% 3/15/12    25,000  25,500
Harrah's Operating 6.50% 6/1/16    145,000  114,365
Hertz 8.875% 1/1/14   225,000  234,000
Kansas City Southern de Mexico 9.375% 5/1/12   400,000    416,000
Kansas City Southern Railway 9.50% 10/1/08    25,000              25,531


Majestic Star Casino 9.50% 10/15/10   360,000  354,600
Mandalay Resort Group      
     9.375% 2/15/10  90,000   94,500
     9.50% 8/1/08   225,000  231,188
#Mobile Services Group 144A 9.75% 8/1/14    235,000  237,938
Northwest Airlines 10.00% 2/1/09   55,000  5,775
#Penhall International 144A 12.00% 8/1/14   175,000  182,875
#Pokagon Gaming Authority 144A 10.375% 6/15/14   400,000  429,999
#Rental Services 144A 9.50% 12/1/14   400,000  393,500
Seabulk International 9.50% 8/15/13   250,000  267,813
Station Casinos 6.625% 3/15/18   150,000  121,500
Town Sports International 11.00% 2/1/14   175,000  161,000
Wheeling Island Gaming 10.125% 12/15/09    505,000  502,474
*Williams Scotsman 8.50% 10/1/15   45,000  48,825
#Wimar Opco 144A 9.625% 12/15/14   125,000  93,125
      5,559,307
Services Non-Cyclical – 1.96%        
Allied Waste North America      
     *7.375% 4/15/14   115,000  112,700
     7.875% 4/15/13   195,000  198,900
Casella Waste Systems 9.75% 2/1/13   570,000  574,275
#Community Health Systems 144A 8.875% 7/15/15   115,000  115,431
Geo Subordinate 11.00% 5/15/12   225,000  219,938
HCA 6.50% 2/15/16   195,000  159,900
HealthSouth 10.75% 6/15/16   345,000  357,075
#Universal Hospital PIK 144A 8.50% 6/1/15   175,000  167,125
US Oncology      
     9.00% 8/15/12   65,000  65,325
     10.75% 8/15/14   160,000  161,600
·*#US Oncology Holdings PIK 144A 9.797% 3/15/12  330,000  306,900
Vanguard Health Holding 11.25% 10/1/15  395,000  288,350
      2,727,519
Technology & Electronics – 0.39%      
*Freescale Semiconductor 8.875% 12/15/14   290,000  268,975
Solectron Global Finance 8.00% 3/15/16  210,000  224,175
Sungard Data Systems 10.25% 8/15/15   40,000  41,400
      534,550
Telecommunications – 2.48%      
American Tower 7.125% 10/15/12   300,000  301,500
#Broadview Networks Holdings 144A 11.375% 9/1/12   135,000  139,050
·Centennial Communications 11.11% 1/1/13   225,000  231,750
#Digicel Group 144A 9.25% 9/1/12   275,000  281,188
·#Hellas Telecommunications II 144A 11.11% 1/15/15   425,000  418,625
Hughes Network Systems 9.50% 4/15/14   475,000  472,624
Inmarsat Finance 10.375% 11/15/12   275,000  261,938
#MetroPCS Wireless 144A 9.25% 11/1/14    250,000  247,500
#PAETEC Holding 144A 9.50% 7/15/15   100,000  96,000
Qwest     
     7.50% 10/1/14   200,000  206,000
    ·8.61% 6/15/13   200,000  212,000
Rural Cellular      
     9.875% 2/1/10   275,000  286,000
    ·11.106% 11/1/12   75,000  77,625
Time Warner Telecom Holdings 9.25% 2/15/14   140,000  145,600
Triton PCS 8.50% 6/1/13   65,000  65,731
      3,443,131
Utilities – 1.16%        
#Calpine 144A 8.496% 7/15/09   337,238  350,727
Elwood Energy 8.159% 7/5/26   271,201  277,310
Midwest Generation 8.30% 7/2/09   171,912  174,920
Mirant Americas 8.30% 5/1/11   375,000  372,188
Mirant North America 7.375% 12/31/13   165,000  165,000
Orion Power Holdings 12.00% 5/1/10   250,000  273,750
      1,613,895
Total Corporate Bonds (cost $35,825,918)      34,711,639 
  
«Senior Secured Loans – 1.53%      
Allied Waste North America 7.73% 3/28/14   100,000              97,551
Building Materials 8.256% 2/22/14    100,000    90,000


Community Health 7.61% 7/2/14   175,000  168,734
DaimlerChrysler 13.51% 8/2/13   175,000  164,237
Ford Motor 8.36% 4/30/10   148,500  139,729
Georgia Pacific Term Tranche Loan B 7.115% 12/22/12   100,000  96,250
Goodyear Tire 6.85% 4/30/10   125,000  118,438
Idearc 7.32% 11/17/14   100,000  97,042
Rental Service 8.87% 11/30/13   100,000  99,000
Stallion Oilfield Services 9.82% 6/12/13   125,000  121,875
Talecris Biotherapeutics 2nd Lien 11.86% 12/6/14    150,000  150,281
Telesat Canada 9.00% 2/14/08   400,000  384,000
Time Warner Telecom Holdings 7.62% 1/7/13   100,000  97,000
Tribune        
     8.49% 5/17/09   100,000  97,625
     8.698% 5/30/14   100,000  90,625
Windstream Term Loan B 6.85% 7/17/13   125,000  121,979
Total Senior Secured Loans (cost $2,188,000)        2,134,366
    
  Number of  
  Shares  
Warrant– 0.00%      
†#Solutia 144A, exercise price $7.59, expiration date 7/15/09   650  -
Total Warrant (cost $55,294)        -
  Principal  
  Amount  
Repurchase Agreements– 4.98%        
With BNP Paribas 5.05% 9/4/07       
(dated 8/31/07, to be repurchased at $4,845,432,       
collateralized by $1,286,000 U.S. Treasury Notes 2.625%       
due 3/15/09, market value $1,272,051, $2,121,000       
U.S. Treasury Notes 5.625% due 5/15/08, market value       
$2,173,452 and $1,416,000 U.S. Treasury Notes 6.50%       
due 2/15/10, market value $1,495,812)   $4,840,000  4,840,000
With UBS Warburg 5.02% 9/4/07       
(dated 8/31/07, to be repurchased at $2,082,161,        
collateralized by $2,097,000 U.S. Treasury Notes 4.875%       
due 1/31/09, market value $2,124,627)   2,081,000  2,081,000
Total Repurchase Agreements (cost $6,921,000)        6,921,000
   
Total Value of Securities Before Securities Lending Collateral – 129.66%        
     (cost $165,508,804)       180,309,415
   
Securities Lending Collateral** – 14.34%        
Investment Companies       
     Mellon GSL DBT II Collateral Fund   19,949,627  19,949,627
Total Securities Lending Collateral (cost $19,949,627)       19,949,627
   
Total Value of Securities – 144.00%        
     (cost $185,458,431)       200,259,042©
Obligation to Return Securities Lending Collateral** – (14.34%)        (19,949,627)
Commercial Paper Payable– (31.46%)            
     (par $44,000,000)       (43,744,376)
Receivables and Other Assets Net of Liabilities (See Notes) – 1.80%        2,502,142
Net Assets Applicable to 10,458,774 Shares Outstanding – 100.00%                   $  139,067,181

†Non-income producing security for the period ended August 31, 2007.
‡Non-income producing security. Security is currently in default.
=Security is being fair valued in accordance with the Fund’s fair valuation policy. At August 31, 2007, the aggregate amount of fair valued securities equaled $0, which represented 0.00% of the Fund’s net assets. See Note 1 in "Notes."
@Illiquid security. At August 31, 2007, the aggregate amount of illiquid securities equaled $0, which represented 0.00% of the Fund’s net assets.
See Note 6 in “Notes.”
ÕRestricted Security. Investment in a security not registered under the Securities Act of 1933, as amended. This security has certain restrictions on resale which may limit its liquidity. At August 31, 2007, the aggregate amount of the restricted security equaled $0 or 0.00% of the Fund’s net assets. See Note 6 in “Notes.”
·Variable rate security. The rate shown is the rate as of August 31, 2007.
Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective.


#Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At August 31, 2007, the aggregate amount of Rule 144A securities equaled $15,869,171 which represented 11.41% of the Fund’s net assets. See Note 6 in "Notes."
«Senior Secured Loans generally pay interest at rates which are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally: (i) the prime rate offered by one or more United States banks, (ii) the lending rate offered by one or more European banks such as the London Inter-Bank Offered Rate (LIBOR), and (iii) the certificate of deposit rate. Senior Secured Loans may be subject to restrictions on resale.
*Fully or partially on loan.
**See Note 5 in "Notes."
©Includes $19,334,963 of securities loaned.

Summary of Abbreviations:
ADR – American Depositary Receipts
REITs – Real Estate Investment Trusts
PIK – Pay-in-kind

The following swap contracts were outstanding at August 31, 2007:

Swap Contracts1
Credit Default Swap

                 Unrealized
Swap Counterparty &     Notional    Annual Protection    Termination    Appreciation
Referenced Obligation               Amount              Payments              Date              (Depreciation)
Protection Purchased:         
Capmark Financial Group 5 yr CDS   $70,000 1.65%  9/20/12   $6,807
CDX North America         
     Crossover Index 8   150,000  1.40%  6/20/12   1,199
     High Yield 8   150,000  2.75%  6/20/12   1,258
     Investment Grade Index HVOL   283,000  0.75%  6/20/12   (586)
Gannet 7 yr CDS   122,000  0.88%  9/20/14   (1,243)
New York Times 7 yr CDS   122,000  0.75%  9/20/14   (980)
Sara Lee 7yr CDS   122,000  0.60%  9/20/14   (831)
          $5,624
Protection Sold:           
Residential Capital 5 yr CDS     $125,000    8.75%  9/20/08  $(5,232)  
Reynolds American 5 yr CDS    244,000  1.00%  9/20/12   (60)
             $(5,292)

The use of swap contracts involves elements of market risk and risks in excess of the amounts recognized in the financial statements. The notional amounts presented above represent the Fund’s (as defined below) total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Fund’s net assets.

1See Note 4 in “Notes.”

 
Notes

1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principals and are consistently followed by Delaware Investments Dividend and Income Fund, Inc. (Fund).

Security Valuation – Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and the asked prices will be used. U.S. Government and agency securities are valued at the mean between the bid and asked prices. Long-term debt securities, credit default swap contracts and interest rate swap contracts are valued by an independent pricing service or broker and such prices are believed to reflect the fair value of such securities. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Securities lending collateral, which is invested in investment companies, is valued at unit value per share. Generally, total return swap contracts, spread swap contracts and other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Fund’s Board of Directors. In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures, or with respect to foreign securities, aftermarket trading or significant events after local market trading (e.g., government actions or pronouncements, trading volume or volatility on markets, exchanges among dealers, or news events).

In September 2006, the Financial Accounting Standards Board (FASB) issued FASB Statement No. 157 "Fair Value Measurements" (Statement 157). Statement 157 establishes a framework for measuring fair value in generally accepted accounting principles, clarifies the definition of fair value within that framework, and expands disclosures about the use of fair value measurements. Statement 157 is intended to increase consistency and comparability among fair value estimates used in financial reporting. Statement 157 is effective for fiscal years beginning after November 15, 2007. Management does not expect the adoption of Statement 157 to have an impact on the amounts reported in the financial statements.


Federal Income Taxes – The Fund intends to continue to qualify for federal income tax purposes as a regulated investment company and make the requisite distributions to shareholders. Accordingly, no provision for federal income taxes has been made in the financial statements.

On July 13, 2006, the FASB released FASB Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Fund's tax returns to determine whether the tax positions are "more-likely-than-not" of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is required for fiscal years beginning after December 15, 2006 and is to be applied to all open tax years as of the effective date. Recent Securities Exchange Commission (SEC) guidance allows implementing FIN 48 in the Fund’s net asset value calculations as late as the Fund's last net asset value calculation in the first required financial statement reporting period. As a result, the Fund will incorporate FIN 48 in its semiannual report on May 31, 2008. Although the Fund's tax positions are currently being evaluated, management does not expect the adoption of FIN 48 to have a material impact on the Fund's financial statements.

Distributions – The Fund has a managed distribution policy. Under the policy, the Fund declares and pays monthly distributions and is managed with a goal of generating as much of the distribution as possible from ordinary income (net investment income and short-term capital gains). The balance of the distribution then comes from long-term capital gains to the extent permitted and, if necessary, a return of capital. The current annualized rate is $0.96 per share. The Fund continues to evaluate its monthly distribution in light of ongoing economic and market conditions and may change the amount of the monthly distributions in the future.

Borrowings – The Fund issues short-term commercial paper at a discount from par. The discount is amortized as interest expense over the life of the commercial paper using the straight-line method (See Note 3).

Use of Estimates – The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Repurchase Agreements – The Fund may invest in a pooled cash account along with members of the Delaware Investments® Family of Funds pursuant to an exemptive order issued by the SEC. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S government. The respective collateral is held by the Fund’s custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings.

Other – Expenses directly attributable to the Fund are charged directly to the Fund. Other expenses common to various funds within the Delaware Investments® Family of Funds are generally allocated amongst such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Discounts and premiums on non-convertible debt securities are amortized to interest income over the lives of the respective securities. Distributions received from investments in Real Estate Investment Trusts (REITs) are recorded as dividend income on ex-dividend date, subject to reclassification upon notice of the character of such distributions by the issuer.

2. Investments
At August 31, 2007, the cost of investments for federal income tax purposes has been estimated since the final tax characteristics cannot be determined until fiscal year end. At August 31, 2007, the cost of investments and unrealized appreciation (depreciation) for the Fund was as follows:

Cost of investments   $185,571,921
Aggregate unrealized appreciation   21,535,810
Aggregate unrealized depreciation   (6,848,689 )
Net unrealized appreciation   $ 14,687,121  

3. Commercial Paper
As of August 31, 2007, $44,000,000 (par value) of commercial paper was outstanding with an amortized cost of $43,744,376. The weighted average discount rate of commercial paper outstanding at August 31, 2007, was 5.36%. The average daily balance of commercial paper outstanding during the period ended August 31, 2007 was $43,700,444 at a weighted discount rate of 5.57%. The maximum amount of commercial paper outstanding at any time during the period was $44,000,000. In conjunction with the issuance of the commercial paper, the Fund entered into a line of credit arrangement with J.P. Morgan Chase for $30,000,000. Interest on borrowings is based on market rates in effect at the time of borrowing. The commitment fee is computed at the rate of 0.10% per annum on the unused balance. During the period ended August 31, 2007, there were no borrowings under this arrangement.

4. Swap Contracts
The Fund may enter into interest rate swap contracts, index swap contracts and credit default swap (CDS) contracts in accordance with its investment objectives. The Fund may use interest rate swaps to adjust the Fund's sensitivity to interest rates or to hedge against changes in interest rates. Index swaps may be used to gain exposure to markets that the Fund invests in, such as the corporate bond market. The Fund may also use index swaps as a substitute for futures or options contracts if such contracts are not directly available to the Fund on favorable terms. The Fund may enter into CDS contracts in order to hedge against a credit event, to enhance total return or to gain exposure to certain securities or markets.


An interest rate swap involves payments received by the Fund from another party based on a variable or floating interest rate, in return for making payments based on a fixed interest rate. An interest rate swap can also work in reverse with the Fund receiving payments based on a fixed interest rate and making payments based on a variable or floating interest rate. Interest rate swaps may be used to adjust the Fund's sensitivity to interest rates or to hedge against changes in interest rates. Periodic payments on such contracts are accrued daily and recorded as unrealized appreciation/depreciation on swap contracts. Upon periodic payment/receipt or termination of the contract, such amounts are recorded as realized gains or losses on swap contracts.

Index swaps involve commitments to pay interest in exchange for a market linked return based on a notional amount. To the extent the total return of the security, instrument or basket of instruments underlying the transaction exceeds the offsetting interest obligation, the Fund will receive a payment from the counterparty. To the extent the total return of the security, instrument or basket of instruments underlying the transaction falls short of the offsetting interest obligation, the Fund will make a payment to the counterparty. The change in value of swap contracts outstanding, if any, is recorded as unrealized appreciation or depreciation daily. A realized gain or loss is recorded on maturity or termination of the swap contract.

A CDS contract is a risk-transfer instrument through which one party (purchaser of protection) transfers to another party (seller of protection) the financial risk of a credit event, as it relates to a particular reference security or basket of securities (such as an index). In exchange for the protection offered by the seller of protection, the purchaser of protection agrees to pay the seller of protection a periodic amount at a stated rate that is applied to the notional amount of the CDS contract. In addition, an upfront payment may be made or received by the Fund in connection with an unwinding or assignment of a CDS contract. Upon the occurrence of a credit event, the seller of protection would pay the par (or other agreed-upon) value of the referenced security (or basket of securities) to the counterparty.

During the period ended August 31, 2007, the Fund entered into CDS contracts as a purchaser and seller of protection. Periodic payments on such contracts are accrued daily and recorded as unrealized losses on swap contracts. Upon payment, such amounts are recorded as realized losses on swap contracts. Upfront payments made or received in connection with CDS contracts are amortized over the expected life of the CDS contracts as realized losses (gains) on swap contracts. The change in value of CDS contracts is recorded as unrealized appreciation or depreciation daily. A realized gain or loss is recorded upon a Credit Event or the maturity or termination of the agreement.

CDS may involve greater risks than if the Fund had invested in the referenced obligation directly. CDS are subject to general market risk, liquidity risk, counterparty risk and credit risk. If the Fund enters into a CDS contract as a purchaser of protection and no credit event occurs, its exposure is limited to the periodic payments previously made to the counterparty.

Because there is no organized market for swap contracts, the value of open swaps may differ from that which would be realized in the event the Fund terminated its position in the agreement. Risks of entering into these contracts include the potential inability of the counterparty to meet the terms of the contracts. This type of risk is generally limited to the amount of favorable movement in the value of the underlying security, instrument or basket of instruments, if any, at the day of default. Risks also arise from potential losses from adverse market movements and such losses could exceed the unrealized amounts shown on the Schedule of Investments.

5. Securities Lending
The Fund, along with other funds in the Delaware Investments® Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with Mellon Bank, N.A. (Mellon). Initial security loans made pursuant to the Lending Agreement are required to be secured by U.S. government obligations and/or cash collateral not less than 102% of the market value of the securities issued in the United States. With respect to each loan, if the aggregate market value of the collateral held on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is invested in a collective investment vehicle (Collective Trust) established by Mellon for the purpose of investment on behalf of clients participating in its securities lending programs. The Collective Trust invests in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top two tiers by Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc. or repurchase agreements collateralized by such securities. However, in the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Fund, or at the discretion of the lending agent, replace the loaned securities. The Fund continues to record dividends on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Fund has the right under the Lending Agreement to recover the securities from the borrower on demand. The security lending agent and the borrower retain a portion of the earnings from the collateral investments. The Fund records security lending income net of such allocation.

At August 31, 2007, market value of securities on loan was $19,334,963, for which cash collateral was received and invested in accordance with the Lending Agreement. Such investments are presented on the Schedule of Investments under the caption “Securities Lending Collateral.”

6. Credit and Market Risk
The Fund invests in high-yield fixed income securities, which carry ratings of BB or lower by Standard & Poor’s Ratings Group and/or Ba or lower by Moody’s Investors Service, Inc. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.

The Fund may invest up to 10% of its total assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Fund's Board of Directors has delegated to Delaware Management Company the day-to-day functions of determining whether individual securities are liquid for purposes of the Fund's limitation on investments in illiquid assets. Rule 144A and illiquid securities have been identified on the Schedule of Investments.

The Fund invests in REITs and is subject to some of the risks associated with that industry. If the Fund holds real estate directly as a result of defaults or receives rental income directly from real estate holdings, its tax status as a regulated investment company may be jeopardized. There were no direct real estate holdings during the period ended August 31, 2007. The Fund's REIT holdings are also affected by interest rate changes, particularly if the REITs it holds use floating rate debt to finance their ongoing operations.

7. Change in Custodian
On August 9, 2007, Mellon Bank, N.A., One Mellon Center, Pittsburgh, PA 15285, became the Fund’s custodian.

Item 2. Controls and Procedures.

     The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.

     There were no significant changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 3. Exhibits.

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