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 811-21076

                         PIMCO Municipal Income Fund II
               (Exact name of registrant as specified in charter)

              1345 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10105
              -----------------------------------------------------
               (Address of principal executive offices) (Zip code)

    BRIAN S. SHLISSEL - 1345 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10105
    -------------------------------------------------------------------------
                     (Name and address of agent for service)

Registrant's telephone number, including area code: 212-739-3369

Date of fiscal year end:  MAY 31

Date of reporting period: MAY 31

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

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




                                                                   Annual Report

                                                                         5.31.03

ITEM 1. Report to Shareholders


PIMCO MUNICIPAL INCOME FUND II
PIMCO CALIFORNIA MUNICIPAL INCOME FUND II
PIMCO NEW YORK MUNICIPAL INCOME FUND II


CONTENTS

Letter to Shareholders ........................     1

Performance Summary and Statistics ............   2-4

Schedules of Investments ......................  5-21

Statements of Assets and Liabilities ..........    22

Statements of Operations ......................    23

Statements of Changes in Net Assets ...........    24

Notes to Financial Statements ................. 25-30

Financial Highlights ..........................    31

Report of Independent Auditors ................    32

Tax Information ...............................    33

Dividend Reinvestment Plan ....................    34

Board of Trustees .............................    35

Privacy Policy ................................    36


                                     [LOGO]
                                      PML
                                     Listed
                           THE NEW YORK STOCK EXCHANGE

                                     [LOGO]
                                      PCK
                                     Listed
                           THE NEW YORK STOCK EXCHANGE

                                     [LOGO]
                                      PNI
                                     Listed
                           THE NEW YORK STOCK EXCHANGE


                                      PIMCO
                                    --------
                                    ADVISORS






PIMCO MUNICIPAL INCOME FUNDS II LETTER TO SHAREHOLDERS

                                                                   July 16, 2003


Dear Shareholder:

We are pleased to provide you with the initial annual report of PIMCO  Municipal
Income Fund II, PIMCO  California  Municipal  Income Fund II, and PIMCO New York
Municipal Income Fund II ("PIMCO Municipal Income Funds" or the "Funds") for the
fiscal year ended May 31, 2003.

Please refer to the  following  pages for specific  information  for each of the
Funds.  If you have any questions  regarding the  information  provided,  please
contact  your  financial  advisor  or  call  our  shareholder  services  area at
1-800-331-1710.  Please note that a wide range of information  and resources can
be accessed through our Web site, www.pimcoadvisors.com.

We at the Funds,  together with PIMCO Advisors Fund  Management  LLC, the Funds'
investment  manager  and  Pacific  Investment  Management  Co.  LLC,  the Funds'
sub-adviser,  thank you for  investing  with us. We remain  dedicated to serving
your investment needs.

Sincerely,



/s/ Stephen Treadway                          /s/ Brian S. Shlissel

Stephen Treadway                              Brian S. Shlissel
CHAIRMAN                                      PRESIDENT, CHIEF EXECUTIVE OFFICER





PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. There is no guarantee that
these or any other investment techniques will be effective under all market
conditions.

                       5.31.03 | PIMCO Municipal Income Funds II Annual Report 1




PIMCO MUNICIPAL INCOME FUND II PERFORMANCE SUMMARY AND STATISTICS
(UNAUDITED)

SYMBOL:                 PRIMARY INVESTMENTS:              INCEPTION DATE:
PML                     Municipal fixed-income            June 28, 2002
                        securities, the interest from
OBJECTIVE:              which is exempt from federal      TOTAL NET ASSETS(1):
PIMCO Municipal         income tax.                       $1,351.9 million
Income Fund II                                            (at 5/31/03)
seeks to provide
income exempt from                                        PORTFOLIO MANAGER:
federal income tax.                                       Mark McCray


TOTAL RETURN(2):                                    Market Price          NAV
--------------------------------------------------------------------------------
Commencement of Operations (6/28/02) to 5/31/03     5.20%                 9.11%


COMMON SHARE PRICE PERFORMANCE (WEEKLY):
Commencement of Operations (6/28/02) to 5/31/03

  [Table below represents a line chart in the printed report.]

                 at Market Price          at NAV
                 ---------------          ------
6/28/02               15                  14.32
                      15.08               14.32
                      15.17               14.35
                      15.19               14.37
                      15.03               14.46
                      15.03               14.46
                      15.06               14.52
                      15                  14.57
                      15.02               14.5
                      15.04               14.63
                      15.02               14.77
                      15.11               14.89
                      15.04               15.1
                      15                  15.13
                      15.06               15.17
                      15.06               15.09
                      14.8                14.28
                      14.42               14.15
                      14.74               14.41
                      14.68               14.66
                      14.59               14.53
                      14.4                14.33
                      14.34               14.22
                      14.29               14.51
                      14.1                14.58
                      14.12               14.66
                      14.2                14.5
                      14.54               14.64
                      14.41               14.52
                      14.45               14.49
                      14.43               14.41
                      14.23               14.38
                      14.41               14.39
                      14.5                14.55
                      14.41               14.57
                      14.31               14.39
                      14.31               14.6
                      14.37               14.67
                      14.29               14.48
                      14.25               14.55
                      14.35               14.27
                      14.34               14.35
                      14.49               14.54
                      14.36               14.53
                      14.48               14.57
                      14.64               14.64
                      14.8                14.7
                      14.72               14.68
5/31/03               14.8                14.66


PORTFOLIO STATISTICS:
----------------------------------------
Market Price                     $14.80
----------------------------------------
Net Asset Value                  $14.66
----------------------------------------
Market Price Yield(3)             6.84%
----------------------------------------

(1) Inclusive of net assets attributable to Preferred Shares outstanding.

(2) PAST  PERFORMANCE  IS NO  GUARANTEE  OF  FUTURE  RESULTS.  Total  return  is
determined by subtracting the initial  investment  from the redeemable  value at
the end of the period and dividing the remainder by the initial  investment  and
expressing the result as a percentage.  The calculation  assumes that all income
dividends  and capital gain  distributions  by the Fund have been  reinvested at
prices obtained under the Fund's dividend  reinvestment  plan.  Total investment
return does not reflect broker commissions or sales charges.  Total return for a
period of less than one year is not annualized.

An  investment  in the Fund  involves  risk,  including  the loss of  principal.
Investment return,  price, yield and net asset value will fluctuate with changes
in market  conditions.  This data is provided  for  information  only and is not
intended for trading purposes. A portion of the income generated by the Fund may
be subject to federal, state and local taxes, and may at times be subject to the
alternative  minimum tax.  Closed-end  funds,  unlike  open-end  funds,  are not
continuously  offered.  There is a one-time  public  offering  and once  issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets  applicable  to common  shareholders  less total
liabilities  divided by the number of common  shares  outstanding.  Holdings are
subject to change daily.

(3) Market  Price Yield is  determined  by  dividing  the  annualized  per share
dividend payable to common shareholders by the market price per common share.


2  PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO CALIFORNIA MUNICIPAL INCOME FUND II PERFORMANCE SUMMARY AND STATISTICS
(UNAUDITED)

SYMBOL:                    PRIMARY INVESTMENTS:           INCEPTION DATE:
PCK                        Municipal fixed-income         June 28, 2002
                           securities, the interest
OBJECTIVE:                 from which is exempt from      TOTAL NET ASSETS(1):
PIMCO California           federal and California         $700.0 million
Municipal Income Fund II   State income tax.              (at 5/31/03)
seeks to provide current
income exempt from                                        PORTFOLIO MANAGER:
federal and California                                    Mark McCray
State income tax.


TOTAL RETURN(2):                                    Market Price          NAV
--------------------------------------------------------------------------------
Commencement of Operations (6/28/02) to 5/31/03     4.23%                 8.25%

COMMON SHARE PRICE PERFORMANCE (WEEKLY):
Commencement of Operations (6/28/02) to 5/31/03

  [Table below represents a line chart in the printed report.]

                 at Market Price          at NAV
                 ---------------          ------
6/28/02               15                  14.33
                      15.1                14.33
                      15.28               14.42
                      15.26               14.42
                      15.04               14.47
                      15.29               14.44
                      15.28               14.49
                      15.28               14.56
                      15.22               14.48
                      15.05               14.6
                      15.18               14.7
                      15.25               14.86
                      15.25               15.02
                      15.1                15.02
                      15.07               14.98
                      15.07               14.8
                      14.26               14.07
                      14.42               13.93
                      14.72               14.25
                      14.8                14.54
                      14.67               14.34
                      14.27               14.16
                      14.35               14.03
                      14.1                14.26
                      14.18               14.36
                      14.18               14.48
                      14.25               14.45
                      14.25               14.48
                      14.11               14.32
                      14.05               14.23
                      14.08               14.17
                      14.05               14.11
                      14.12               14.13
                      14.06               14.25
                      14.1                14.26
                      14.19               14.2
                      14.5                14.47
                      14.36               14.54
                      14.36               14.32
                      14.4                14.38
                      14.31               14.06
                      14.24               14.12
                      14.25               14.34
                      14.28               14.33
                      14.54               14.42
                      14.64               14.47
                      14.78               14.59
                      14.82               14.69
5/31/03               14.78               14.66


PORTFOLIO STATISTICS:
----------------------------------------
Market Price                     $14.78
----------------------------------------
Net Asset Value                  $14.66
----------------------------------------
Market Price Yield(3)             6.60%
----------------------------------------

(1) Inclusive of net assets to attributable Preferred Shares outstanding.

(2) PAST  PERFORMANCE  IS NO  GUARANTEE  OF  FUTURE  RESULTS.  Total  return  is
determined by subtracting the initial  investment  from the redeemable  value at
the end of the period and dividing the remainder by the initial  investment  and
expressing the result as a percentage.  The calculation  assumes that all income
dividends  and capital gain  distributions  by the Fund have been  reinvested at
prices obtained under the Fund's dividend  reinvestment  plan.  Total investment
return does not reflect broker commissions or sales charges.  Total return for a
period of less than one year is not annualized.

An  investment  in the Fund  involves  risk,  including  the loss of  principal.
Investment return,  price, yield and net asset value will fluctuate with changes
in market  conditions.  This data is provided  for  information  only and is not
intended for trading purposes. A portion of the income generated by the Fund may
be subject to federal, state and local taxes, and may at times be subject to the
alternative  minimum tax.  Closed-end  funds,  unlike  open-end  funds,  are not
continuously  offered.  There is a one-time  public  offering  and once  issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets  applicable  to common  shareholders  less total
liabilities  divided by the number of common  shares  outstanding.  Holdings are
subject to change daily.

(3) Market  Price Yield is  determined  by  dividing  the  annualized  per share
dividend payable to common shareholders by the market price per common share.


                       5.31.03 | PIMCO Municipal Income Funds II Annual Report 3




PIMCO NEW YORK MUNICIPAL INCOME FUND II PERFORMANCE SUMMARY AND STATISTICS
(UNAUDITED)

SYMBOL:                    PRIMARY INVESTMENTS:           INCEPTION DATE:
PNI                        Municipal fixed-income         June 28, 2002
                           securities, the interest
OBJECTIVE:                 from which is exempt from      TOTAL NET ASSETS(1):
PIMCO New York Municipal   federal, New York State        $239.5 million
Income Fund II seeks to    and New York City income       (at 5/31/03)
provide current income     tax.
exempt from federal, New                                  PORTFOLIO MANAGER:
York State and New York                                   Mark McCray
City income tax.


TOTAL RETURN(2):                                    Market Price          NAV
--------------------------------------------------------------------------------
Commencement of Operations (6/28/02) to 5/31/03     3.76%                 6.61%


COMMON SHARE PRICE PERFORMANCE (WEEKLY):
Commencement of Operations (6/28/02) to 5/31/03

  [Table below represents a line chart in the printed report.]

                 at Market Price          at NAV
                 ---------------          ------
6/28/02               15                  14.33
                      15.2                14.31
                      15.11               14.36
                      15.35               14.38
                      15.02               14.42
                      15.35               14.46
                      15.08               14.52
                      15                  14.56
                      15.16               14.48
                      15.06               14.59
                      15.14               14.69
                      15.12               14.76
                      15.14               14.91
                      15.03               14.91
                      15.06               15.02
                      14.97               14.95
                      14.65               14.29
                      14.25               14.16
                      14.06               14.35
                      14.32               14.62
                      14.3                14.51
                      14.13               14.33
                      14.22               14.19
                      14.06               14.44
                      14.1                14.55
                      14.05               14.63
                      14.02               14.62
                      14.15               14.71
                      14.17               14.54
                      14.09               14.54
                      13.95               14.42
                      14.03               14.4
                      14                  14.44
                      14.03               14.53
                      14.2                14.48
                      14.23               14.38
                      14.34               14.51
                      14.26               14.62
                      14.22               14.36
                      14.23               14.43
                      14.29               13.78
                      14.15               13.86
                      14.1                14.11
                      14.18               14.02
                      14.16               14.08
                      14.4                14.2
                      14.75               14.25
                      14.65               14.39
5/31/03               14.71               14.45


PORTFOLIO STATISTICS:
-------------------------------------
Market Price                  $14.71
-------------------------------------
Net Asset Value               $14.45
-------------------------------------
Market Price Yield(3)          6.63%
-------------------------------------

(1) Inclusive of net assets to Preferred Shares outstanding.

(2) PAST  PERFORMANCE  IS NO  GUARANTEE  OF  FUTURE  RESULTS.  Total  return  is
determined by subtracting the initial  investment  from the redeemable  value at
the end of the period and dividing the remainder by the initial  investment  and
expressing the result as a percentage.  The calculation  assumes that all income
dividends  and capital gain  distributions  by the Fund have been  reinvested at
prices obtained under the Fund's dividend  reinvestment  plan.  Total investment
return does not reflect broker commissions or sales charges.  Total return for a
period of less than one year is not annualized.

An  investment  in the Fund  involves  risk,  including  the loss of  principal.
Investment return,  price, yield and net asset value will fluctuate with changes
in market  conditions.  This data is provided  for  information  only and is not
intended for trading purposes. A portion of the income generated by the Fund may
be subject to federal, state and local taxes, and may at times be subject to the
alternative  minimum tax.  Closed-end  funds,  unlike  open-end  funds,  are not
continuously  offered.  There is a one-time  public  offering  and once  issued,
shares of closed-end funds are sold in the open market through a stock exchange.
Net asset value is total assets  applicable  to common  shareholders  less total
liabilities  divided by the number of common  shares  outstanding.  Holdings are
subject to change daily.

(3) Market  Price Yield is  determined  by  dividing  the  annualized  per share
dividend payable to common shareholders by the market price per common share.


4  PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
 MUNICIPAL BONDS & NOTES--89.2%

                  ALABAMA--4.9%
   $ 45,645       Birmingham Waterworks & Sewer Board. Rev., Ser. B,
                     5.00%, 1/1/27-1/1/43 (MBIA)                                Aaa/AAA         $  47,331,353
      1,750       Huntsville Health Care Auth., Ser. B, 5.75%, 6/1/32            A2/NR              1,838,183
     16,580       Jefferson Cnty. Sewer Rev., Ser. B, 4.75%, 2/1/38 (FGIC)      Aaa/AAA            16,874,958
                                                                                                -------------
                                                                                                   66,044,494
                                                                                                -------------
                  ALASKA--1.3%
                  State Housing Fin. Corp.,
     13,885          Ser. A, 5.00%, 12/1/39                                     Aaa/AAA            14,228,376
      3,550          Ser. C, 5.25%, 6/1/32 (MBIA)                               Aaa/AAA             3,671,730
                                                                                                -------------
                                                                                                   17,900,106
                                                                                                -------------
                  ARIZONA--0.1%
      1,300       State Health Fac. Auth. Hosp. Rev., 5.75%, 12/1/32             NR/BBB             1,306,084
                                                                                                -------------
                  CALIFORNIA--2.3%
     12,300       Golden State Tobacco Securitization Corp., Tobacco
                     Settlement Rev., Ser. 2003-A-1, 6.25%-6.75%,
                     6/1/33-6/1/39                                               Baa2/A-           11,383,575
     17,955       State, GO, 5.25%, 2/1/29-4/1/32                                 A2/A             18,700,557
      1,000       Rancho Cucamonga Community Facs. Dist. Ser. A,
                     6.30%, 9/1/23                                                NR/NR             1,035,270
                                                                                                -------------
                                                                                                   31,119,402
                                                                                                -------------
                  COLORADO--4.9%
     30,000       Dawson Ridge Dist. No. 1, GO, Ser. A,
                     zero coupon, 10/1/22                                       Aaa/NR             12,086,700
      5,000       Denver Co. City & Cnty. Cert. of Participation, Ser. B,
                     5.50%, 12/1/25 (AMBAC)                                     Aaa/AAA             5,521,950
     25,000       Health Fac. Auth. Rev., Catholic Health Initiatives-A,
                     5.50%, 3/1/32                                              Aa2/AA             25,892,250
     18,305       Health Fac. Auth. Rev., Exempla Inc., Ser. A,
                     5.625%, 1/1/33                                              A1/A              19,039,214
      6,500       Health Fac. Auth. Rev., Liberty Height, Retirement Fac.,
                     zero coupon, 7/15/22                                       Aaa/AAA             2,638,025
                                                                                                -------------
                                                                                                   65,178,139
                                                                                                -------------
                  DISTRICT OF COLUMBIA--1.3%
     17,500       Washington DC Convention Ctr. Auth. Tax Rev.,
                     4.75%, 10/1/28 (AMBAC)                                     Aaa/AAA            17,761,975
                                                                                                -------------
                  FLORIDA--4.2%
      8,000       Highlands Cnty. Health Fac. Auth. Rev., Ser. A,
                     6.00%, 11/15/31                                              A3/A-             8,615,360
        635       Hillsborough Cnty. Health Fac. Indl. Dev. Rev.,
                     5.625%, 8/15/23                                            Baa2/BBB              634,562
      2,335       Hillsborough Cnty. Pollution Control Rev.,
                     Tampa Electric Co. Proj., 5.50%, 10/1/23      B            aa/BBB-             2,323,488
      7,135       Jacksonville Health Facs. Auth. Rev., Ser. A,
                     5.25%, 11/15/32                                             Aa2/AA             7,384,297
      5,350       Lakeland Elec. & Water Rev., Ser. A,
                     5.00%, 10/1/28 (MBIA)                                      Aaa/AAA             5,611,187



                       5.31.03 | PIMCO Municipal Income Funds II Annual Report 5




PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
                  FLORIDA--(CONTINUED)
   $ 11,500       Lakeland Hosp. Syst. Rev., Regional Health Sys.,
                     5.50%, 11/15/32                                             A1/NR          $  11,868,575
      3,000       Leesburg Hosp. Rev., Leesburg Regional Medical Center,
                     5.50%, 7/1/32                                               A2/A               3,077,400
      1,410       Melbourne Water & Sewer Rev., Ser. A,
                     5.00%, 10/1/32 (FGIC)                                      Aaa/AAA             1,482,869
      7,550       Orange Cnty. Health Fac., Adventist Health Sys.,
                     5.625%-6.25%, 11/15/24-11/15/32                             A3/A-              8,182,278
      6,615       State Board Education Ser. B, GO, 5.00%, 6/1/27 (FGIC)        Aaa/AAA             6,965,926
      1,500       Winter Springs Water & Sewer Rev.,
                     zero coupon, 10/1/29 (FGIC)                                Aaa/AAA               417,255
                                                                                                -------------
                                                                                                   56,563,197
                                                                                                -------------
                  GEORGIA--1.1%
      9,000       Atlanta Water & Wastewater, Ser. A,
                     5.00%, 11/1/39 (MBIA)                                      Aaa/AAA             9,400,860
      1,500       Grantor Trust Gov't Cert. of Participation Ser. A,
                     4.75%, 6/1/28 (MBIA)                                       Aaa/AAA             1,583,790
      9,600       Richmond Cnty. Dev Auth. Rev., zero coupon, 12/1/21           Aaa/NR              4,081,632
                                                                                                -------------
                                                                                                   15,066,282
                                                                                                -------------
                  HAWAII--1.5%
     19,170       Honolulu City & Cnty. Wastewater Syst. Rev.,
                     First Board Resolution, 4.75%, 7/1/28 (FGIC)                Aaa/NR            19,655,576
                                                                                                -------------
                  ILLINOIS--16.9%
     11,760       Central Lake Cnty. Water Agy. Rev., Ser. A,
                     5.125%, 5/1/28-5/1/32 (AMBAC)                               Aaa/NR            12,429,144
      5,000       Cicero Corp. GO, 5.25%, 12/1/31 (MBIA)                        Aaa/AAA             5,384,550
      5,050       Chicago GO, Ser. A, 5.125%, 1/1/29 (FGIC)                     Aaa/AAA             5,259,828
     94,485       Chicago City Colleges GO, zero coupon,
                     1/1/37-1/1/39 (FGIC)                                       Aaa/AAA            16,654,216
                  Chicago Board of Education School Reform GO,
      5,000          Ser. A, zero coupon, 12/1/28 (FGIC)                        Aaa/AAA             1,423,350
      4,500          zero coupon, 12/1/31 (FGIC)                                Aaa/AAA             1,095,750
      7,000       Chicago Midway Arpt. Rev., Ser. B, 5.00%, 1/1/31 (MBIA)       Aaa/AAA             7,208,740
      9,862       Chicago Special Assessment, Lake Shore East
                     6.625%-6.75%, 12/1/22-12/1/32                                NR/NR            10,213,519
    144,650       Dev. Fin. Auth. Retirement Housing Rev.,
                     zero coupon, 7/15/23-7/15/25                                NR/AAA            49,800,878
     20,100       Health Facs. Auth. Rev., Elmurst Memorial Healthcare,
                     5.625%, 1/1/28                                              A2/A-             20,829,027
    110,000       Metropolitan Pier & Exposition Auth.,
                     zero coupon, 12/15/30-12/15/33 (MBIA)                      Aaa/AAA            26,336,200
     68,470       State Sports Facs. Auth, 5.50%, 6/15/30 (AMBAC)               Aaa/AAA            50,582,897
     17,720       Univ. of Chicago Edl. Facs. Auth. Rev., Ser. A,
                     5.25%, 7/1/41                                               Aa1/AA            18,809,071
                                                                                                -------------
                                                                                                  226,027,170
                                                                                                -------------



6 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
                  INDIANA--0.4%
   $    500       State Bank Rev., Ser. D, 5.25%, 4/1/30 (AMBAC)                Aaa/AAA         $     534,925
      4,125       Fort Wayne Pollution Control Rev., 6.20%, 10/15/25             A3/BBB             4,424,269
                                                                                                -------------
                                                                                                    4,959,194
                                                                                                -------------
                  KANSAS--0.2%
      2,800       Univ. of Kansas, Hosp. Auth. Health Facs. Rev.,
                     5.625%, 9/1/32                                               NR/A-             2,904,916
                                                                                                -------------
                  KENTUCKY--0.2%
      2,500       Economic Dev. Finance Auth. Hospital Facs. Rev.,
                     5.25%, 10/1/30                                              A1/AA-             2,587,400
                                                                                                -------------
                  IOWA--0.5%
      8,850       Tobacco Settlement Auth., Ser. B, 5.60%, 6/1/35                Baa1/A-            6,863,971
                                                                                                -------------
                  LOUISIANA--4.3%
     20,400       Ochsner Clinic Foundation Pub. Facs. Auth. Rev., Ser. B,
                     5.50%, 5/15/32                                               A3/NR            21,045,864
     44,395       Tobacco Settlement Financing Corp., Ser. 2001B,
                     5.875%, 5/15/39.                                             A1/A             36,148,629
                                                                                                -------------
                                                                                                   57,194,493
                                                                                                -------------
                  MARYLAND--0.1%
      1,000       State Health & Higher Educational. Fac. Auth.
                     Rev. John Hopkins Univ., Ser. B, 5.00%, 1/1/25             Aa2/Baa1            1,024,630
                                                                                                -------------
                  MASSACHUSETTS--6.2%
      1,300       Massachusetts Bay Trans. Auth., Ser. A,
                     4.75%, 3/1/21 (MBIA)                                       Aaa/AAA             1,344,447
     32,000       Massachusetts Bay Trans. Auth., Sales Tax Rev., Ser. A,
                     5.00%, 7/1/32                                              Aaa2/AAA           33,544,960
     20,000       State GO, Ser. C, 5.25%, 11/1/30                              Aa2/AA-            21,440,600
      4,295       State Turnpike Auth., Ser. A, 4.75%,
                     1/1/34 (AMBAC)                                             Aaa/AAA             4,384,808
                  State Water Reserve Auth.,
     19,300          Ser. A 4.75%, 8/1/37                                       Aaa/AAA            19,527,740
      2,300          Ser. B, 4.75%, 12/1/21                                     Aaa/AAA             2,383,674
                                                                                                -------------
                                                                                                   82,626,229
                                                                                                -------------
                  MICHIGAN--3.8%
     10,250       Detroit City School Dist. Ser. A, 5.00%-5.125%,
                     5/1/31-5/1/32                                              Aaa/AAA            10,813,080
      2,500       Detroit Water Supply Sys. Ser. A, 5.00%, 7/1/30 (FGIC)Aaa/AAA                     2,618,250
     15,425       State Hosp. Fin. Auth. Rev., Oakwood Obligation Group,
                     Ser. A, 5.75%-6.00%, 4/1/22-4/1/32                          A2/A              16,167,460
      5,000       State Hosp. Fin. Auth. Rev., Ascension Health, Ser. B,
                     5.25%, 11/15/26                                             Aa2/AA             5,183,000
      7,775       West Ottawa Pub. School Dist., Ser. A, 5.00%, 5/1/32          Aaa/AAA             8,130,939
      8,000       Whitehall Dist. Schools, 5.00%, 5/1/27                        Aaa/AAA             8,362,640
                                                                                                -------------
                                                                                                   51,275,369
                                                                                                -------------
                  MISSISSIPPI--0.4%
      3,605       Business Finance Corp., Pollution Control Rev.,
                     5.875%, 4/1/22                                              Ba1/BBB-           3,606,586



                       5.31.03 | PIMCO Municipal Income Funds II Annual Report 7




PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       

                  MISSISSIPPI--(CONTINUED)
    $ 1,000       State Dev. Bank Oblig., Projects & Equipment Acquisitions,
                     5.00%, 7/1/24 (AMBAC)                                      Aaa/AAA         $   1,108,140
                                                                                                -------------
                                                                                                    4,714,726
                                                                                                -------------
                  MISSOURI--0.1%
      1,500       St. Louis Parking Facs. Rev., Downtown Parking Facility,
                     6.00%, 2/1/28                                               NR/NR              1,536,450
                                                                                                -------------
                  NEVADA--1.9%
      3,400       Clark Cnty. GO, 5.00%, 6/1/31 (FGIC)                          Aaa/AAA             3,564,220
     17,030       Reno Lien Transp., 5.125%-5.25%, 6/1/27-6/1/41 (AMBAC)        Aaa/AAA            18,172,505
      3,290       Truckee Meadows Water Auth Rev., Ser. A,
                     5.125%, 7/1/30 (FSA)                                       Aaa/AAA             3,466,541
                                                                                                -------------
                                                                                                   25,203,266
                                                                                                -------------
                  NEW HAMPSHIRE--0.2%
      3,000       Health & Educational Facs. Auth. Rev., 6.125%, 7/1/32         Baa1/BBB+           3,108,480
                                                                                                -------------
                  NEW JERSEY--2.0%
         60       Camden Cnty. Impt. Auth. Rev., Cooper Health,
                     5.875%-6.00%, 2/15/15-2/15/27                               Ba3/NR                55,581
     15,405       Economic Dev. Auth., Kapkowski Landfill Proj.,
                     5.75%, 10/1/21-4/1/31                                       Baa3/NR           16,301,227
        750       Economic Dev. Auth., Arbor Glen, Ser. A, 6.00%, 5/15/28         NR/NR               677,542
      3,500       State Educational Fac. Auth. Rev., Ser. D, 6.00%, 7/1/25        NR/NR             3,697,575
      6,000       Tobacco Settlement Financing Corp., Rev.,
                     6.125%-6.75%, 6/1/39-6/1/42                                 Baa2/A-            5,346,655
                                                                                                -------------
                                                                                                   26,078,580
                                                                                                -------------
                  NEW MEXICO--0.4%
      3,000       Farmington Pollution Control Rev., 5.80%, 4/1/22               Baa3/NR            3,018,840
      2,000       Farmington Pollution Control Rev., 5.80%, 4/1/22               Baa3/BBB-          2,010,660
                                                                                                -------------
                                                                                                    5,029,500
                                                                                                -------------
                  NEW YORK--0.8%
     10,600       Metropolitan Trans. Auth., Ser. A, 5.00%, 11/15/30 (FSA)       Aaa/AAA           11,187,664
                                                                                                -------------
                  NORTH CAROLINA--1.5%
     11,105       Cap. Facs. Fin. Agy. Rev., Duke Univ., Ser. A,
                     5.125%, 7/1/42                                              Aa1/AA+           11,697,341
      7,500       Lorian Cnty. Hospital Rev., 5.375%, 10/1/30                     A1/AA-            7,772,625
                                                                                                -------------
                                                                                                   19,469,966
                                                                                                -------------
                  PENNSYLVANIA--3.2%
      7,250       Allegheny Cnty. Hosp. Dev. Auth. Rev., Ser. B,
                     9.25%, 11/15/15-11/15/30                                     B1/B+             8,131,830
      4,500       Cumberland Cnty. Auth. Rev., Ser A, 7.25%, 1/1/35               NR/NR             4,592,835
      8,750       Montgomery Cnty. Higher Education & Health Auth.
                     Hosp. Rev. Ser. A, 5.125%, 6/1/27-6/1/32                     NR/A              8,841,088
      5,000       Philadelphia Auth. Dev. Lease Rev.,
                     Ser. B, 5.25%, 10/1/30 (FSA)                               Aaa/AAA             5,397,050
      3,050       Philadelphia Auth. Indl. Dev. Rev. Doubletree,
                     6.50%, 10/1/27                                               NR/NR             3,098,586
      3,000       Philadelphia GO, 5.25%, 9/15/25 (FSA)                         Aaa/AAA             3,227,640



8 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
                  PENNSYLVANIA--(CONTINUED)
   $  8,520       Philadelphia Hosp. & Higher Ed. Facs. Auth. Rev.,
                     6.85%, 7/1/22                                              Baa2/BBB        $   8,696,705
        500       Pittsburgh & Allegheny Cnty. Pub. Auditorium,
                     5.00%, 2/1/29 (AMBAC)                                      Aaa/AAA               525,430
                                                                                                -------------
                                                                                                   42,511,164
                                                                                                -------------
                  RHODE ISLAND--4.2%
     65,000       Tobacco Settlement Financing. Corp., Ser. A,
                     6.25%, 6/1/42                                               Baa2/A-           55,492,450
                                                                                                -------------
                  SOUTH CAROLINA--5.5%
     27,745       Greenville Cnty. School District, 5.50%, 12/1/28               A1/AA-            29,497,652
     18,120       Jobs Economic Dev. Auth. Economic Dev. Rev.,
                     5.625%, 11/15/30                                            A3/A-             18,936,125
     20,000       Lexington Cnty. Health Services Dist. Inc. Hosp. Rev.,
                     5.50%-5.75%, 11/1/28-11/1/32                                A2/A              20,919,750
      3,250       Tobacco Settlement Rev., Ser. B, 6.375%, 5/15/28               A1/A               2,941,217
      1,180       Transp. Infrastructure Rev., Ser. A, 5.00%, 10/1/29 (AMBAC)    Aaa/NR             1,248,227
                                                                                                -------------
                                                                                                   73,542,971
                                                                                                -------------
                  TENNESSEE--0.3%
      3,750       Knox Cnty. Health Educational & Housing Facs. Board,
                     Hospital Facs. Rev., 5.25%, 10/1/30                         A1/AA-             3,904,012
                                                                                                -------------
                  TEXAS--11.6%
      1,000       Arlington Indpt. School Dist, GO, 5.00%, 2/15/24               Aaa/NR             1,043,710
      4,480       Aubrey Indpt. School Dist., GO, 5.50%, 2/15/33                 Aaa/NR             4,485,690
      6,500       Brazos Cnty. Health Facs. Dev. Corp.,
                     Franciscan Services Corp., 5.375%, 1/1/32                    NR/A-             6,586,060
      2,700       Comal Cnty. Health Facs., Mckenna Memorial Hosp.,
                     6.25%, 2/1/32                                              Baa2/BBB            2,790,639
                  Dallas Area Rapid Transit.,
      9,070          5.00%, 12/1/31 (AMBAC)                                     Aaa/AAA             9,484,771
     12,975          5.00%, 12/1/32 (FGIC)                                      Aaa/AAA            13,635,428
        500       El Paso Intl. Airport Rev., Marriott Corp., 7.875%, 3/1/22     Ba3/NR               505,220
     20,000       Frisco Indpt. School Dist. GO, zero coupon, 8/15/34           Aaa/NR              4,194,400
     10,260       Galena Park Indpt. School Dist., GO, zero coupon, 8/15/31     Aaa/AAA             2,521,190
     19,750       Harris Cnty. GO, 4.75%, 8/15/31                                Aa1/AA+           20,700,370
      5,250       Harris Cnty. Health Facs. Dev. Corp. Rev., Ser. A,
                     5.375%, 2/15/26                                             NR/AA-             5,444,985
     25,000       Harris Cnty. Senior Lien Toll Road, 5.00%, 8/15/30 (FSA)      Aaa/AAA            26,219,500
      7,500       Keller Indpt. School Dist. GO, 4.875%, 8/15/31                Aaa/AAA             7,690,950
      3,170       Little Elm Indpt. School Dist. Ser. A, GO, 5.30%, 8/15/29      NR/AAA             3,305,644
      6,250       North Dallas Thruway Auth., 4.75%, 1/1/29 (FGIC)              Aaa/AAA             6,344,562
      5,000       Quinlin Indpt. School Dist. Go, 5.10%, 2/15/32                 Aaa/NR             5,214,550
                  State Turnpike Auth. Highway Imps. Rev.,
     10,000          zero coupon, 8/15/19 (AMBAC)                               Aaa/AAA             4,825,300
      8,880          5.00%, 8/15/42 (AMBAC)                                     Aaa/AAA             9,217,618
      4,900       State Water Financial Assistance, GO,
                     5.00%-5.25%, 8/1/35-8/1/36                                  Aa1/AA             5,122,807
      7,400       University Rev., Ser. B, 5.00%, 8/15/33                       Aaa/AAA             7,798,564



                       5.31.03 | PIMCO Municipal Income Funds II Annual Report 9




PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
                  TEXAS--(CONTINUED)
   $  8,000       Wichita Falls Water & Sewer Rev.,
                     5.00%, 8/1/27 (AMBAC)                                      Aaa/AAA         $   8,387,040
                                                                                                -------------
                                                                                                  155,518,998
                                                                                                -------------
                  VIRGINIA--0.5%
      6,500       Fredericksburg Industrial Dev., Medicorp Health Syst.,
                     Ser. B, 5.125%-5.25%, 6/15/27-6/15/33                       A3/NR              6,660,425
                                                                                                -------------
                  WASHINGTON--1.6%
     15,000       King Cnty. Sewer Rev., Ser. A, 5.00%, 1/1/35 (FSA)            Aaa/AAA            15,691,200
      5,000       Tacoma Sewer Rev., Ser. A, 5.00%, 12/1/31 (FGIC)              Aaa/AAA             5,232,300
                                                                                                -------------
                                                                                                   20,923,500
                                                                                                -------------
                  WISCONSIN--0.8%
      9,725       Badger Tobacco Asset Securitization Corp.,
                     6.125%, 6/1/27                                              Baa2/A-            9,299,531
      1,000       State Health & Educational Facs. Auth. Rev.,
                     5.375%, 10/1/30                                             NR/A+              1,025,130
                                                                                                -------------
                                                                                                   10,324,661
                                                                                                -------------
                  Total Municipal Bonds & Notes (cost-$1,130,991,337)                           1,191,265,440
                                                                                                -------------

-------------------------------------------------------------------------------------------------------------
 VARIABLE RATE NOTES (a)(b)(g)--9.4%
-------------------------------------------------------------------------------------------------------------

                  ALABAMA--1.3%
      3,960       Birmingham Waterworks & Sewer Board. Rev.,
                     Ser. 781, 18.65%, 1/1/33 (MBIA)                             Aaa/NR             5,114,023
      6,675       Jefferson Cnty. Sewer Rev., Ser. 352,
                     14.02%, 2/1/36 (FGIC)                                       Aaa/NR             9,906,968
      2,100       Montgomery Care Fac., Ser. 435,
                     13.23%, 11/15/29 (MBIA)                                     Aaa/NR             2,378,964
                                                                                                -------------
                                                                                                   17,399,955
                                                                                                -------------
                  COLORADO--0.2%
      2,813       Denver City & Cnty. Airpt Rev., Ser. 425,
                     15.47%, 11/15/25 (FSA)                                      Aaa/NR             3,197,138
                                                                                                -------------
                  FLORIDA--0.6%
      2,228       Orange Cnty. School Board, Ser. 328,
                     15.38%, 8/1/24 (MBIA)                                       Aaa/NR             2,691,889
      4,052       State Governmental Utilities Rev., Ser. 327,
                     15.38%, 10/1/29 (AMBAC)                                     Aaa/NR             4,833,440
                                                                                                -------------
                                                                                                    7,525,329
                                                                                                -------------
                  ILLINOIS--0.9%
                  Chicago GO,
      2,225          Ser. 332, 15.88%, 1/1/28 (MBIA)                             Aaa/NR             2,648,195
      3,300          Ser. 426, 14.90%, 1/1/40 (FGIC)                             Aaa/NR             4,438,896
      1,932       Cook Cnty., Ser. 403,
                     13.23%, 11/15/28 (FGIC)                                     Aaa/NR             2,233,469
      2,200       State GO, Ser. 783, 18.65%, 4/1/27                             Aaa/NR             2,912,844
                                                                                                -------------
                                                                                                   12,233,404
                                                                                                -------------
                  INDIANA--0.6%
      6,429       Indianapolis Local Public Improvement Bond Bank,
                     Ser. 784, 18.65%, 7/1/33 (MBIA).                            Aaa/NR             8,515,255
                                                                                                -------------



10 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       

                  MASSACHUSETTS--2.8%
   $  2,100       Boston Water & Sewer Community Rev.,
                     Ser. 434, 13.37%, 11/1/28 (FGIC)                            Aa2/NR         $   2,430,792
      2,420       State GO, Ser. 785, 18.87%, 11/1/30 (FGIC)                     Aaa/NR             3,255,432
      1,190       State College Bldg. Auth. Proj. Rev.,
                     66.986%-67.852%, 11/1/22-11/1/31                             NR/NR             4,537,185
                  State Turnpike Auth. Rev.,
      8,498          Ser. 335, 13.37%, 1/1/39 (AMBAC)                            Aaa/NR             9,590,958
      4,500          Ser. 489, 13.37%, 1/1/37 (AMBAC)                            Aaa/NR             5,001,300
     11,049          Ser. 334, 13.37%, 1/1/37 (AMBAC)                            Aaa/NR            12,279,859
                                                                                                -------------
                                                                                                   37,095,526
                                                                                                -------------
                  MICHIGAN--0.5%
      4,950       Detroit Water Supply Sys., Ser. 782,
                     18.65%, 7/1/32 (MBIA)                                       Aaa/NR             6,679,976
                                                                                                -------------
                  NEVADA--0.3%
      3,300       State GO, Ser. 344, 13.07%, 5/15/28 (FGIC)                     Aaa/NR             3,778,896
                                                                                                -------------
                  OHIO--0.2%
      1,975       Hamilton Cnty. Sales Tax, Ser. 356,
                     15.59%, 12/1/27 (MBIA)                                      Aaa/NR             2,340,770
                                                                                                -------------
                  PENNSYLVANIA--0.5%
                  Philadelphia School Dist., GO,
      2,505          Ser. 345, 12.24%, 4/1/27 (MBIA)                             Aaa/NR             2,713,917
      4,016          Ser. 496, 12.42%, 4/1/27 (MBIA)                             Aaa/NR             4,350,393
                                                                                                -------------
                                                                                                    7,064,310
                                                                                                -------------
                  TEXAS--1.3%
      3,075       Denton Util. Sys. Rev., Ser. 428,
                     16.09%, 12/1/29 (MBIA)                                      Aaa/NR             3,732,558
      1,650       Houston Arpt. Sys. Rev., Ser. 404,
                     13.02%, 7/1/25 (FGIC)                                       Aaa/NR             1,819,092
                  Houston Water & Sewer Syst. Rev.,
      2,750          Ser. 427, 15.59%, 12/1/28                                   Aaa/NR             3,201,110
      3,838          Ser. 495, 16.59%, 12/1/30                                   NR/AAA             4,813,453
      3,080       State Affordable Housing, American Housing Foundation,
                     Ser. A, Ser. 780, 19.34%, 9/1/22 (MBIA)                                        4,192,650
                                                                                                -------------
                                                                                                   17,758,863
                                                                                                -------------
                  WASHINGTON--0.2%
      2,730       Central Puget Sound Regl. Tran. Auth. Sales Tax & Motor,
                     Ser. 360, 12.24%, 2/1/28                                    Aaa/NR             2,961,395
                                                                                                -------------

                  Total Variable Rate Notes (cost-$102,468,100)                                   126,550,817
                                                                                                -------------

-------------------------------------------------------------------------------------------------------------
 U.S. TREASURY BILLS (e)--2.2%
-------------------------------------------------------------------------------------------------------------

     29,285          1.0148%-1.0899%, 8/7/03-8/14/03
                  Total U.S. Treasury Bills (cost-$29,223,729)                  Aaa/AAA            29,223,499
                                                                                                -------------
                  TOTAL INVESTMENTS, BEFORE CALL OPTIONS WRITTEN
                     (cost-$1,262,683,166+)--100.8%                                             1,347,039,756
                                                                                                -------------



                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 11




PIMCO MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



                                                                             Credit Ratings
                                                                              Moody's/S&P*         Value**
--------------------------------------------------------------------------------------------------------------
 CALL OPTIONS WRITTEN (f)--(0.8)%
--------------------------------------------------------------------------------------------------------------

                                                                                         
  Contracts
                  U.S. Treasury Bond Futures, Chicago Board of Trade:
       (686)         Strike price $116, expires 6/20/03                                        $   (2,422,438)
       (393)         Strike price $114, expires 6/20/03                                            (2,093,953)
     (1,508)         Strike price $116, expires 8/22/03                                            (6,786,000)
                                                                                               --------------
                  Total call options written (premiums received-$2,227,143)                       (11,302,391)
                                                                                               --------------
                  TOTAL INVESTMENTS, NET OF CALL OPTIONS WRITTEN
                     (cost-$1,260,456,023)--100%                                               $1,335,737,365
                                                                                               --------------


----------
+   The cost basis of portfolio  securities  for federal  income tax purposes is
    $1,262,683,166.  Aggregate gross  unrealized  appreciation for securities in
    which  there is an excess of value  over tax cost is  $96,259,339  aggregate
    gross unrealized  depreciation for securities in which there is an excess of
    tax cost over  value is  $11,902,749  and net  unrealized  depreciation  for
    federal income tax purposes is $84,356,590.









                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


12 PIMCO Municipal Income Funds II Annual Report | 5.31.03





PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
 CALIFORNIA MUNICIPAL BONDS & NOTES--83.0%
--------------------------------------------------------------------------------------------------------------

   $ 34,300       ABAG Financing Auth. Rev., Ser. A,
                     5.20%-5.35%, 11/15/22-11/15/32                              NR/A           $  35,561,507
                  ABC Unified School Dist. GO,
      2,000          zero coupon, 8/1/23, Ser. B (FGIC)                         Aaa/AAA               767,220
      2,150          zero coupon, 8/1/30-8/1/31 (FGIC)                          Aaa/AAA               555,603
      1,000       Alpine Union School Dist. GO, Ser. B,
                     zero coupon, 8/1/24 (FSA)                                  Aaa/AAA               362,040
      8,115       Anaheim City School Dist. GO, 5.00%, 8/1/26 (FGIC)            Aaa/AAA             8,622,918
     53,000       Bakersfield, CP, Ser. B, zero coupon, 4/15/21                  NR/AAA            23,438,190
      1,965       Bay Area Govt. Assoc. Improvement Bd. Act 1915,
                     6.30%, 9/2/25                                                NR/NR             2,041,104
      2,000       Bay Area Govt. Assoc. Lease Rev., Ser. 2002-1,
                     5.00%, 7/1/32 (AMBAC)                                      Aaa/AAA             2,114,720
      1,085       Capistrano Unified School Dist., Community Fac. Dist.
                     Special Tax, 5.70%, 9/1/20                                   NR/NR             1,095,188
        565       Catholic Health Facs. Fin. Auth. Rev., Ser. A,
                     5.00%, 7/1/28                                              Baa2/BBB              534,869
      2,300       Ceres Unified School Dist., GO, zero coupon, 8/1/27 (FGIC)    Aaa/AAA               621,046
      9,865       Chula Vista Special Tax, 6.05%-6.20%, 9/1/25-9/1/33             NR/NR            10,063,267
      8,035       Clovis Unified School District, GO, Ser. B,
                     zero coupon, 8/1/23-8/1/27 (FGIC)                          Aaa/AAA             2,747,358
      1,410       Community College Financing Auth. Lease Rev., Ser. A,
                     5.00%, 8/1/27 (AMBAC)                                      Aaa/AAA             1,498,816
      6,355       Corona-Norco Unified School Dist., Public Financing Auth.
                     Special Tax, Ser. A, 5.55%-6.10%, 9/1/15-9/1/32             NR/NR              6,475,861
      1,110       Corona-Norco Unified School Dist. Special Tax,
                     5.10%, 9/1/25 (AMBAC)                                      Aaa/AAA             1,185,791
      2,800       Cotati Redev. Agcy. Tax Allocation, Ser. A,
                     5.00%, 9/1/31 (MBIA)                                       Aaa/AAA             2,950,528
      3,000       Dinuba Financing Auth. Lease Rev., 5.10%, 8/1/32 (MBIA)       Aaa/AAA             3,232,860
      2,825       Empire Union School Dist. Special Tax.,
                     zero coupon, 10/1/30-10/1/32 (AMBAC)                       Aaa/AAA               708,787
      1,000       Escondido Union School Dist. GO,
                     zero coupon, 8/1/27 (FSA)                                  Aaa/AAA               308,340
      2,440       Eureka Unified School Dist. GO, zero coupon, 8/1/27 (FSA)     Aaa/AAA               752,350
                  Foothill Eastern Corrider Agcy. Toll Road Rev.,
     42,010          zero coupon, 1/1/25-1/1/30, Ser. A                         Aaa/AAA            13,290,392
      1,500          zero coupon, 1/15/27 (MBIA)                                Aaa/AAA             1,193,895
        400       Franklin-McKinley School Dist. GO,
                     5.00%, 8/1/27 Ser. B (FSA)                                 Aaa/AAA               425,196
     47,900       Golden State Tobacco Securitization Corp. Rev.,
                     Ser. 2003-A-1, 6.25%-6.75%, 6/1/33-6/1/39                   A3/A-             44,351,995
        850       Golden Valley Unified School Dist. GO, Ser. B,
                     zero coupon, 8/1/35 (FGIC)                                 Aaa/AAA               175,304
      2,115       Health Facs. Financing Auth. Rev., 5.375%, 11/1/20              NR/A              2,294,394
      1,750       Huntington Beach Community Facs. Dist. Special Tax,
                     6.30%, 9/1/32                                                NR/NR             1,800,383



                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 13




PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
   $  2,080       Industry Urban Dev. Agcy. Tax Allocation,
                     4.75%, 5/1/21 (MBIA)                                       Aaa/AAA         $   2,160,122
      7,000       Irvine Improvement Board Act 1915 Special Assessment,
                     5.70%, 9/2/26                                                NR/NR             7,135,310
      1,900       Jurupa Unified School Dist. GO, zero coupon, 5/1/27 (FGIC)    Aaa/AAA               585,846
      2,450       Kings Canyon JT Unified School Dist. GO,
                     zero coupon, 8/1/27 (FGIC)                                 Aaa/AAA               755,433
      5,300       Livermore-Amador Valley Water Management Agcy.,
                     Sewer Rev., 5.00%, 8/1/31 (AMBAC)                          Aaa/AAA             5,582,543
      5,935       Long Beach Unified School Dist., GO, Ser. C,
                     5.00%, 8/1/27 (MBIA)                                        Aaa/NR             6,289,616
                  Los Angeles, CP,
      9,895          5.00%, 2/1/27 (MBIA)                                       Aaa/AAA            10,441,996
      2,685          5.00%, 10/1/27, Ser. AU (MBIA)                             Aaa/AAA             2,842,797
      7,200       Los Angeles Wastewater Syst. Rev., Ser. A,
                     5.00%, 6/1/30 (FGIC)                                       Aaa/AAA             7,594,560
      3,475       Loyola Marymount University Educational Facs. Auth. Rev.,
                     zero coupon, 10/1/34 (MBIA)                                 Aaa/NR               746,604
      1,000       Manhattan Beach Unified School Dist. GO,
                     zero coupon, 9/1/25 (FGIC)                                 Aaa/AAA               340,720
      7,295       Manteca Redev. Agcy. Tax Allocation,
                     5.00%, 10/1/32 (FSA)                                       Aaa/AAA             7,735,180
                  Manteca Unified School Dist. Special Tax,
      5,330          5.00%, 9/1/29, Ser. C                                      Aaa/AAA             5,653,478
      2,365          zero coupon, 9/1/25 (MBIA)                                 Aaa/AAA               805,803
      4,000       Merced Cnty., CP, 5.00%, 6/1/32 (AMBAC)                        Aaa/NR             4,216,120
      7,320       Modesto Elementary School Dist., Stanislaus Cnty. GO,
                     Ser. A, zero coupon, 8/1/23-5/1/27 (FGIC)                  Aaa/AAA             2,606,678
      2,150       Modesto High School Dist., Stanislaus Cnty. GO, Ser. A,
                     zero coupon, 8/1/26 (FGIC)                                 Aaa/AAA               697,589
      1,000       Modesto Public Financing Auth. Lease Rev.,
                     5.00%, 9/1/29 (AMBAC)                                      Aaa/AAA             1,051,870
      2,385       Monrovia Financing Auth. Lease Rev.,
                     5.125%, 12/1/31 (AMBAC)                                    Aaa/AAA             2,579,950
                  Montebello Unified School Dist. GO,
      7,105          zero coupon, 8/1/24-8/1/27 (FGIC)                          Aaa/AAA             2,366,818
      1,485          zero coupon, 8/1/24 (FSA)                                  Aaa/AAA               537,629
      2,400       Morgan Hill Unified School Dist. GO,
                     zero coupon, 8/1/23 (FGIC)                                 Aaa/AAA               920,664
      1,500       Mountain View-Whisman School Dist. GO, Ser. D,
                     5.00%, 6/1/27 (MBIA)                                       Aaa/AAA             1,593,315
      1,800       Murrieta Redev. Agcy. Tax, 5.00%, 8/1/32 (MBIA)               Aaa/AAA             1,907,370
      3,245       Newark Unified School Dist. GO, Ser. D,
                     zero coupon, 8/1/26 (FSA)                                  Aaa/AAA             1,041,028
      2,750       North City West School Facs. Financing Auth., Special Tax,
                     zero coupon, 9/1/27 (AMBAC)                                Aaa/AAA               844,497
      3,580       Oakland Redev. Agcy. Tax Allocation,
                     5.25%, 9/1/27-9/1/33                                         NR/A-             3,739,662



14 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
   $  1,000       Orange Cnty. Community Facs. Dist. Special Tax, Ser. A,
                     6.00%, 8/15/25                                               NR/NR         $   1,029,880
      7,625       Orange Cnty. Water Dist. CP, Rev., Ser. B,
                     5.00%, 8/15/34 (MBIA)                                      Aaa/AAA             8,080,822
      3,685       Palmdale Community Redev. Agcy. Tax Allocation,
                     zero coupon, 12/1/30-12/1/32 (AMBAC)                       Aaa/AAA               911,509
      1,750       Paramount Unified School Dist. GO, Ser. B,
                     zero coupon, 9/1/23 (FSA)                                  Aaa/AAA               668,658
                  Perris Public Financing Auth. Rev.,
      1,190          4.75%, 10/1/23, Ser. B (MBIA)                              Aaa/AAA             1,239,718
      2,580          5.375%-5.625%, 10/1/20-10/1/31, Ser. C                      NR/BBB             2,716,724
     14,200       Poway Unified School Dist. Special Tax,
                     5.50%-6.125%, 9/1/25-9/1/33                                  NR/NR            14,233,848
      2,000       Rancho Cucamonga Community Facs. Dist., Special Tax,
                     Ser. A, 6.375%, 9/1/31                                       NR/NR             2,057,520
      1,500       Richmond Wastewater Rev., zero coupon, 8/1/30 (FGIC)          Aaa/AAA               396,465
     17,500       Rocklin Unified School Dist. GO,
                     zero coupon, 8/1/24-8/1/27 (FGIC)                          Aaa/AAA             5,863,930
      9,250       Roseville Redev. Agcy. Tax Allocation,
                     5.00%, 9/1/27-9/1/33 (MBIA)                                Aaa/AAA             9,813,223
                  Sacramento City Financing Auth. Rev., Ser. A,
      4,500          5.00%, 12/1/32 (FSA)                                       Aaa/AAA             4,754,160
      4,935          6.25%, 9/1/23                                                NR/NR             5,155,792
     16,000       Sacramento Cnty. Airport Syst. Rev., Ser. A,
                     5.00%, 7/1/32 (FSA)                                        Aaa/AAA            16,809,120
      1,500       San Diego Public Facs. Financing Auth. Lease Rev.,
                     5.00%, 4/1/32 (MBIA)                                       Aaa/AAA             1,579,725
      1,000       San Diego Public Facs. Financing Auth. Sewer Rev., Ser. A,
                     5.00%, 5/15/29 (FGIC)                                      Aaa/AAA             1,057,620
     16,285       San Diego Cnty. Water Auth. Water Rev., CP, Ser. A,
                     5.00%, 5/1/28-5/1/29 (MBIA)                                Aaa/AAA            17,270,605
                  San Francisco City & Cnty. Airport Community, Int'l Airport Rev.,
      5,585          4.50%, 5/1/28, Ser. 15B (MBIA)                             Aaa/AAA             5,613,260
     20,300          5.00%, 5/1/32, Ser. 28B (MBIA)                             Aaa/AAA            21,310,940
      7,660       San Francisco City & Cnty. Public Utilities Community
                     Water Rev., Ser. A, 5.00%, 11/1/27 (MBIA)                  Aaa/AAA             8,113,625
     10,405       San Joaquin Hills Transportation Corridor Agcy.
                     Toll Road Rev., zero coupon, 1/1/25                        AAA/AAA             3,787,004
     10,190       San Jose, GO, 5.125%, 9/1/31 (MBIA)                           Aa1/AA+            10,825,652
      7,875       San Juan Unified School Dist. GO,
                     zero coupon, 8/1/23-8/1/26 (FSA)                           Aaa/AAA             2,659,818
      5,000       Santa Margarita Community Fac. Water Dist. Special Tax,
                     6.00%-6.25%, 9/1/29-9/1/30                                   NR/NR             5,142,730
      2,300       San Mateo Union High School Dist. GO,
                     zero coupon, 9/1/20 (FGIC)                                 Aaa/AAA             1,053,538
      4,835       San Mateo Foster City School Dist. GO,
                     5.10%, 8/1/31 (FGIC)                                       Aaa/AAA             5,155,174



                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 15




PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
   $  1,730       San Rafael City High School Dist. GO, Ser. B,
                     5.00% 8/1/27 (FSA)                                         Aaa/AAA         $   1,836,931
      3,280       San Rafael Elementary School Dist. GO, Ser. B,
                     5.00%, 8/1/27 (FSA)                                        Aaa/AAA             3,482,737
      8,690       Santa Clara Unified School Dist. GO,
                     5.00%, 7/1/25-7/1/27 (MBIA)                                 NR/AAA             9,231,983
      1,260       Santa Cruz Cnty., CP, 5.25%, 8/1/32                            A2/NR              1,334,164
      3,500       Saugus Hart School Facs. Financing Auth. Special Tax,
                     6.10%-6.125%, 9/1/32-9/1/33                                  NR/NR             3,592,925
      1,000       Shasta Union High School Dist. GO,
                     zero coupon, 8/1/24 (FGIC)                                 Aaa/AAA               362,040
     12,975       South Gate Utility Auth. Rev., 5.00%, 10/1/32 (FGIC)           NR/AAA            13,758,431
      4,745       South Tahoe JT Powers Parking Financing Auth. Rev.,
                     Ser. A, 7.00%, 12/1/27                                       NR/NR             4,861,632
      1,800       Southern Mono Health Care Dist. GO,
                     zero coupon, 8/1/26 (MBIA)                                 Aaa/AAA               577,458
                  State GO,
      1,650          5.00%, 4/1/27 (AMBAC)                                      Aaa/AAA             1,742,301
      7,780          5.25%, 2/1/30 (XLCA)                                       Aaa/AAA             8,332,380
      9,375       State Health Facs. Financing Auth. Rev.,
                     5.125%-5.25%, 1/1/22-1/1/26                                   NR/A             9,714,244
      9,605       State Public Works Board Lease Rev., Ser. A,
                     5.00%, 10/1/22 (FSA)                                       Aaa/AAA            10,274,180
      1,710       State University Rev. & Colleges, Ser. A,
                     5.00%, 11/1/33 (AMBAC)                                     Aaa/AAA             1,805,828
      1,170       Statewide Community Dev. Auth. CP, 6.10%, 11/1/15               NR/NR             1,196,992
      5,000       Statewide Community Dev. Auth. Rev.,
                     6.75%, 10/1/30-7/1/32                                        NR/NR             5,243,200
      2,770       Statewide Community Dev. Auth., Rev., Ser. A,
                     5.50%, 11/1/32                                               A3/A              2,872,795
                  Statewide Financing Auth. Tobacco Settlement Rev.,
      1,955          5.625%, 5/1/29, Ser. A                                       A3/NR             1,696,099
     20,000          6.00%, 5/1/37, Ser. B                                        A3/NR            16,858,400
      7,750       Tamalpais Union High School Dist. GO,
                     5.00%, 8/1/27 (FSA)                                        Aaa/AAA             8,229,028
                  Tobacco Securization Agcy. Rev.,
     15,000          5.625%-6.00%, 6/1/23-6/1/35                                  A3/A-            13,498,950
      1,800          5.875%, 6/1/43, Ser. A                                       A3/NR             1,472,490
      4,500          6.00%, 6/1/42                                                A3/NR             3,757,455
      1,000       Tracy Community Facs. Dist. Special Tax, 6.00%, 9/1/27          NR/NR             1,017,440
      7,815       Tustin Unified School Dist. Special Tax,
                     5.00%, 9/1/38 (FSA)                                        Aaa/AAA             8,246,388
      1,555       Ventura Unified School Dist. GO, Ser. F,
                     5.00%, 8/1/32 (FSA)                                        Aaa/AAA             1,652,327
     10,000       Ventura Cnty. Community College Dist. GO, Ser. A,
                     5.00%, 8/1/27 (MBIA)                                       Aaa/AAA            10,629,900
      2,000       Vernon Elec. Syst. Rev., 5.50%, 4/1/33                        A2/BBB+             2,061,260



16 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
   $  3,535       Victor Elementary School Dist., Ser. A,
                     zero coupon, 8/1/24-8/1/26 (FGIC)                          Aaa/AAA         $   1,188,996
      1,000       Vista Unified School Dist. GO, Ser. A,
                     zero coupon, 8/1/26 (FSA)                                  Aaa/AAA               324,460
      7,320       West Contra Costa University School Dist. GO, Ser. A,
                     5.00%, 8/1/26-8/1/31 (MBIA)                                Aaa/AAA             7,752,555
      3,375       Westlands Water Dist. Rev. CP, 5.00%, 9/1/34 (MBIA)           Aaa/AAA             3,563,089
      2,110       Yuba City Unified School Dist. GO,
                     zero coupon, 9/1/25 (FGIC)                                 Aaa/AAA               718,919
                                                                                                -------------

                  Total California Municipal Bonds & Notes (cost-$549,953,619)                    572,132,157
                                                                                                -------------

-------------------------------------------------------------------------------------------------------------
 OTHER MUNICIPAL BONDS & NOTES--0.5%
-------------------------------------------------------------------------------------------------------------

                  PUERTO RICO--0.5%
      3,500       Public Building Auth. Rev., Ser. G,
                     4.75%, 7/1/32 (cost-$3,494,280)                            Baa1/A-             3,525,550
                                                                                                -------------

-------------------------------------------------------------------------------------------------------------
 CALIFORNIA VARIABLE RATE NOTES (a)(b)(g)--12.1%
-------------------------------------------------------------------------------------------------------------

                  Los Angeles Dept. of Water & Power, Waterworks Rev.,
      4,238          16.27%, 7/1/41 (FGIC) (c)                                   Aaa/NR             5,218,058
      2,500          16.12%, 7/1/41 (MBIA) (c)                                   Aaa/NR             3,078,500
     12,465       Los Angeles Unified School Dist. GO,
                     27.68%-31.46%, 1/11/11 (FSA) (c)                             NR/NR            19,148,073
      1,875       Modesto Public Financing Auth. Lease Rev., Ser. 354,
                     15.77%, 9/1/29 (AMBAC) (c)                                  AAA/NR             2,264,025
      4,952       Oakland, GO, Ser. 756, 15.77%, 1/15/32 (FGIC) (c)              Aaa/NR             6,009,190
      6,615       San Diego Public Facs. Financing Auth. Water Rev.,
                     15.77%, 8/1/32 (MBIA) (c)                                   Aaa/NR             8,065,008
                  San Diego Unified School Dist. GO,
      1,944          15.77%, 7/1/27 Ser. 758 (FGIC) (c)                          Aaa/NR             2,391,120
      2,209          15.77%, 7/1/26 Ser. 759 (FSA) (c)                            NR/NR             2,807,020
      3,743       San Jose GO, 15.77%, 9/1/32 (MBIA) (c)                         Aaa/NR             4,568,844
      2,288       San Jose Unified School Dist. Santa Clara Cnty. GO,
                     15.77%, 8/1/27 (FSA) (c)                                    Aaa/NR             2,853,062
      6,220       State GO, 49.39%, 9/1/12 (MBIA) (c)                            Aaa/NR            20,319,496
      5,228       University Revs., Ser. 762, 15.77%, 9/1/28 (FGIC)(c)           Aaa/NR             6,503,324
                                                                                                -------------

                  Total California Variable Rate Notes (cost-$67,112,067)                          83,225,720
                                                                                                -------------

-------------------------------------------------------------------------------------------------------------
 CALIFORNIA SHORT-TERM VARIABLE RATE DEMAND NOTES (d)--3.1%
-------------------------------------------------------------------------------------------------------------

      2,000       Eastern Municipal Water & Sewer Dist. Rev. CP, Ser. B,
                     1.10%, 6/5/03 (FGIC)                                       VMIG1/A1+           2,000,000
      2,850       Irvine Ranch Water Dist. GO, Ser. B, 1.25%, 6/2/03             NR/A1+             2,850,000
        700       Los Angeles Dept. Water & Power Waterworks Rev.,
                     Ser. B-2, 1.20%, 6/2/03                                    VMIG1/A1+             700,000
      5,500       Metropolitan Water Dist. Southern Waterworks Rev.,
                     Ser. C-1, 1.25%, 6/2/03                                    VMIG1/A1+           5,500,000
        800       Orange Cnty. Sanitation Dist. CP, Ser. B, 1.25%, 6/2/03       VMIG1/A1+             800,000
      2,600       State Health Facs. Fin. Auth. Rev., Ser. B,
                     1.30%, 6/2/03 (AMBAC)                                      VMIG1/A1+           2,600,000



                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 17




PIMCO CALIFORNIA MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
   $  3,900       State Infrastructure & Economic Dev. Bk. Rev., Ser. B,
                     1.30%, 6/2/03 (AMBAC)                                       Aaa/A1+        $   3,900,000
      2,000       State RAN, 1.32%, 6/20/03                                      MIG2/SP2           1,999,220
        800       Statewide Community Dev. Auth. CP,
                     1.25%, 6/2/03 (AMBAC)                                       VMIG1/A1             800,000
                                                                                                -------------
                  Total California Short-Term Variable Rate Demand Notes
                     (cost-$21,149,105)                                                            21,149,220
                                                                                                -------------

-------------------------------------------------------------------------------------------------------------
 U.S. TREASURY BILLS (e)--1.9%
-------------------------------------------------------------------------------------------------------------

      1,820          1.03%, 8/7/03                                              Aaa/AAA             1,816,396
     11,450          1.04%, 8/14/03                                             Aaa/AAA            11,424,810
                                                                                                -------------
                  Total U.S. Treasury Bills (cost-$13,241,616)                                     13,241,206
                                                                                                -------------
                  TOTAL INVESTMENTS, BEFORE CALL OPTIONS WRITTEN
                     (cost-$654,950,687++)--100.6%                                                693,273,853

-------------------------------------------------------------------------------------------------------------
 CALL OPTIONS WRITTEN (f)--(0.6)%
-------------------------------------------------------------------------------------------------------------

     Contracts
                  U.S. Treasury Bond Futures, Chicago Board of Trade:
      (201)          Strike Price $114, expires 6/20/03                                         $  (1,070,953)
      (373)          Strike Price $116, expires 6/20/03                                            (1,317,156)
      (373)          Strike Price $116, expires 8/22/03                                            (1,678,500)
                                                                                                -------------
                  Total call options written (premiums received-$743,511)                          (4,066,609)
                                                                                                -------------
                  TOTAL INVESTMENTS, NET OF CALL OPTIONS WRITTEN
                     (cost-$654,207,176)--100.0%                                                $ 689,207,244
                                                                                                -------------



----------
++  The cost basis of portfolio  securities  for federal  income tax purposes is
    $654,950,687.  Aggregate  gross  unrealized  appreciation  for securities in
    which  there is an excess of value over tax cost is  $45,964,508;  aggregate
    gross unrealized  depreciation for securities in which there is an excess of
    tax cost over value is $7,641,342,  net unrealized  appreciation for federal
    income tax purposes is $38,323,166.









                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS


18 PIMCO Municipal Income Funds II Annual Report | 5.31.03





PIMCO NEW YORK MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
 NEW YORK MUNICIPAL BONDS & NOTES--90.5%
--------------------------------------------------------------------------------------------------------------

   $ 1,250        Buffalo Municipal Water Fin. Auth., Water Syst. Rev., Ser. B,
                     5.00%-5.125%, 7/1/27-7/1/32 (FSA)                          Aaa/AAA         $   1,333,148
    10,000        Erie Cnty. Tobacco Asset 6.50%, 7/15/32                       Baa2/A-            10,077,300
     5,000        Metropolitan Transportation Auth. Dedicated Tax Fund,
                     Ser. A, 5.00%, 11/15/30                                     A1/AA-             5,206,200
                  Metropolitan Transportation Auth. Rev.,
     1,850           5.00%, 11/15/30, Ser. A (FSA)                              Aaa/AAA             1,952,564
    10,000           5.25%, 11/15/31, Ser. E                                     A2/A              10,659,000
     7,000        Metropolitan Transportation Auth. Service Contract,
                     Ser. B, 5.35%, 7/1/31                                      A3/AAA              7,509,110
                  New York City, GO
     1,500           5.75%, 8/1/16, Ser. A                                       A2/A               1,680,000
     4,000           5.00%, 3/1/33, Ser. I                                       A2/A               4,067,600
     3,100        New York City Health & Hospital Corp., Rev., Ser. A,
                     5.375%-5.45%, 2/15/26                                      A3/BBB              3,225,618
     1,250        New York City Indl. Dev. Agcy., Civic Fac. Rev.,
                     6.45%, 7/1/32                                              Baa3/NR             1,335,050
     1,000        New York City Indl Dev. Agcy. Rev.,
                     4.95%, 11/20/32 (GNMA)                                      NR/AAA             1,024,610
                  New York City Municipal Water Fin. Auth.,
                     Water & Sewer Sys. Rev., Ser. A,
     5,000           5.00%, 6/15/32                                              Aa2/AA             5,201,050
    15,000           5.125%, 6/15/34                                             Aa2/AA            15,860,250
                  New York City Transitional Fin. Auth. Rev.,
     7,195           5.00%, 11/15/26, Ser. A.                                    Aa2/AA+            7,593,891
    10,000           5.00%, 11/1/27, Ser. B                                      Aa2/AA+           10,536,600
     3,600        Port Auth. New York & New Jersey, 5.00%, 4/15/32              Aaa/AAA             3,811,356
     6,590        Sachem Central School District of Holbrook,
                     5.00%, 6/15/28-6/15/29                                     Aaa/AAA             6,998,784
     7,500        State Dormitory Auth. Lease Rev., State Univ. Dormitory Facs.,
                     5.00%, 7/1/32                                               A1/AA-             7,822,050
     3,225        State Dormitory Auth. Revs., FHA-NY & Presbyterian Hospital,
                     4.75%, 8/1/27(AMBAC)                                       Aaa/AAA             3,335,424
     5,000        State Dormitory Auth. Revs., FHA-Saint Barnabas, Ser. A,
                     5.00%, 2/1/31(AMBAC)                                       Aaa/AAA             5,277,900
     8,850        State Dormitory Auth. Revs., North General Hospital,
                     5.00%, 2/15/25                                              NR/AA-             9,116,828
     5,300        State Dormitory Auth. Revs., Lenox Hill Hospital,
                     5.50%, 7/1/30                                               A3/NR              5,630,243
     1,400        State Dormitory Auth. Revs., Long Island Univ.,
                     5.25%, 9/1/28                                              Baa3/AA             1,495,382
     7,000        State Dormitory Auth. Revs., Memorial Sloan-Kettering
                     Center, Ser. 1, 5.00%, 7/1/34                               Aa2/AA             7,309,610
     4,270        State Dormitory Auth. Rev., Teachers College,
                     5.00%, 7/1/32 (MBIA)                                        Aaa/NR             4,505,619
      8,600       State Dormitory Auth. Rev., State Personal Income Tax,
                     5.00%, 3/15/32                                               NR/AA             8,957,330



                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 19




PIMCO NEW YORK MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



   Principal
    Amount                                                                  Credit Ratings
     (000)                                                                   Moody's/S&P*           Value**
--------------------------------------------------------------------------------------------------------------
                                                                                       
   $ 2,000        State Environmental Facs. Corp., State Clean
                     Water & Drinking, 5.125%, 6/15/31                          Aaa/AAA         $   2,144,040
     2,500        State Power Auth., Ser. A, 4.75%, 11/15/22                     Aa2/AA-            2,618,175
     6,000        State Urban Dev. Corp., Correctional & Youth Facs. Services,
                     Ser. A, 5.50%, 1/1/17                                       NR/AA-             6,843,660
     6,100        State Urban Dev. Corp., Personal Income Tax, Ser. C,
                     5.00%, 3/15/33                                              A1/AA              6,328,994
                  Tobacco Trust II Settlement Asset Backed, Inc.
    25,000           5.75%, 7/15/32                                              A3/A-             22,926,000
    10,000           6.375%, 7/15/39                                             A3/A               9,585,000
                  Triborough Bridge & Tunnel Auth. Revs., Ser. A,
     4,700           5.00%, 1/1/32 (FGIC)                                       Aaa/AAA             4,964,798
     6,000           5.00%, 1/1/27                                              Aa3/AA-             6,329,160
       750        Westchester Cnty. Indl Dev. Agcy. Continuing Care,
                     6.50%, 1/1/34                                                NR/NR               760,080
                                                                                                -------------

                  Total New York Municipal Bonds & Notes (cost-$206,712,172)                      214,022,424
                                                                                                -------------

-------------------------------------------------------------------------------------------------------------
 OTHER MUNICIPAL BONDS & NOTES--2.7%
-------------------------------------------------------------------------------------------------------------

                  PUERTO RICO--2.7%
     5,675        Children Trust Fund Puerto Rico Tobacco Settlement Rev.,
                     5.625%, 5/15/43                                             Baa2/A-            4,864,156
     1,500        Puerto Rico Commonwealth Highway & Transportation Auth.,
                     Ser. D, 5.25%, 7/1/38                                       Baa1/A             1,570,485
                                                                                                -------------

                  Total Other Municipal Bonds & Notes (cost-$6,967,227)                             6,434,641
                                                                                                -------------

-------------------------------------------------------------------------------------------------------------
 NEW YORK VARIABLE RATE NOTES (a) (b) (g)--5.6%
-------------------------------------------------------------------------------------------------------------

     6,994        Long Island Power Auth. Elec. Syst. Rev., Ser. 339,
                     16.71%, 12/1/26 (MBIA)                                      Aaa/NR             8,922,665
     3,939        New York City Municipal Water Fin. Auth., Water & Sewer
                     Sys. Rev., Ser. 364, 12.31%, 6/15/25 (MBIA)                 Aaa/NR             4,404,747
                                                                                                -------------

                  Total New York Variable Rate Notes (cost-$10,526,506)                            13,327,412
                                                                                                -------------

-------------------------------------------------------------------------------------------------------------
 U.S. TREASURY BILLS (e)--2.1%
-------------------------------------------------------------------------------------------------------------

     4,960        1.00-1.07%, 8/7/03-8/14/03 (cost-$4,949,474)                  Aaa/AAA             4,949,292
                                                                                                -------------
                  TOTAL INVESTMENTS BEFORE CALL OPTIONS WRITTEN
                     (cost-$229,155,379+++)--100.9%                                               238,733,769
                                                                                                -------------










20 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO NEW YORK MUNICIPAL INCOME FUND II SCHEDULE OF INVESTMENTS
May 31, 2003



                                                                                                   Value**
-------------------------------------------------------------------------------------------------------------
                                                                                          
 CALL OPTIONS WRITTEN (f)--(0.9)%
-------------------------------------------------------------------------------------------------------------

     Contracts    U.S. Treasury Bond Futures, Chicago Board of Trade:
      (116)          Strike price $116, expires 6/20/03                                         $    (363,719)
      (114)          Strike price $114, expires 6/20/03                                              (367,641)
      (116)          Strike price $116, expires 8/22/03                                            (1,507,500)
                                                                                                -------------
                  Total call options written (premiums received-$453,255)                          (2,238,860)
                                                                                                -------------
                  TOTAL INVESTMENTS, NET OF CALL OPTIONS WRITTEN
                     (cost-$228,702,123)--100%                                                  $ 236,494,909
                                                                                                -------------


--------------------------------------------------------------------------------
+++ The cost basis of portfolio  securities  for federal  income tax purposes is
    $229,155,379.  Aggregate  gross  unrealized  appreciation  for securities in
    which  there is an excess of value over tax cost is  $12,671,179,  aggregate
    gross unrealized  depreciation for securities in which there is an excess of
    tax cost  over  value is  $3,092,789  and net  unrealized  appreciation  for
    federal income tax purposes is $9,578,390.

--------------------------------------------------------------------------------
NOTES TO SCHEDULES OF INVESTMENTS:

*   Unaudited

**  Long-term  debt  securities  are  valued  by an  independent  price  service
    authorized by the Board of Trustees.

(a) Variable Rate Notes are instruments whose interest rates change on specified
    date (such as a coupon date or interest  payment date) and/or whose interest
    rates  vary  with  changes  in a  designated  base  rate  (such as the prime
    interest rate).

(b) Security exempt from  registration  under Rule 144a of the Securities Act of
    1933.   These   securities  may  be  resold  in  transactions   exempt  from
    registration,  typically to qualified  institutional  investors.  At May 31,
    2003,  these  securities  amounted to  $126,550,817  or 9.4% of investments,
    $85,224,940 or 12.4% of investments  and $13,327,412 or 5.6% of investments,
    respectively, for Municipal, California and New York Municipal.

(c) Security deemed illiquid.

(d) Maturity date shown is date of next call.

(e) All or partial  principal  amount  segregated  as initial  margin on futures
    contracts.

(f) Non-income producing security.

(g) Residual Interest  Municipal Bonds. The interest rate shown bears an inverse
    relationship  to the  interest  rate on another  security or the value of an
    index.

--------------------------------------------------------------------------------
GLOSSARY:

AMBAC -- insured by American Municipal Bond Assurance Corp.
CP -- Certificates of Participation
FGIC -- insured by insured Financial Guaranty Insurance Co.
FSA -- insured by Financial Security Assurance, Inc.
GNMA -- Government National Mortgage Association
GO -- General Obligation Bonds
MBIA -- insured by Municipal Bond Investors Assurance
NR -- Not Rated
RAN -- Revenue Anticipation Note
XLCA -- insured by XL Capital Assurance





                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 21




PIMCO MUNICIPAL INCOME FUNDS II STATEMENTS OF ASSETS AND LIABILITIES
May 31, 2003



                                                                               CALIFORNIA      NEW YORK
                                                             MUNICIPAL II     MUNICIPAL II   MUNICIPAL II
                                                            --------------   -------------  -------------
                                                                                   
ASSETS:
Investments, at value (cost-$1,262,683,166, $654,950,687
  and $229,155,379, respectively)                           $1,347,039,756   $693,273,853   $238,733,769
---------------------------------------------------------   --------------   ------------   ------------
Cash                                                                    --        115,742             --
---------------------------------------------------------   --------------   ------------   ------------
Interest receivable                                             21,860,250     11,735,657      4,223,197
---------------------------------------------------------   --------------   ------------   ------------
Receivable for investments sold                                         --      1,600,095             --
---------------------------------------------------------   --------------   ------------   ------------
Receivable for variation margin on futures contracts               212,069         97,859         78,328
---------------------------------------------------------   --------------   ------------   ------------
Prepaid expenses                                                    76,700         50,198         32,405
---------------------------------------------------------   --------------   ------------   ------------
  Total Assets                                               1,369,188,775    706,873,404    243,067,699
---------------------------------------------------------   --------------   ------------   ------------

LIABILITIES:
Due to custodian                                                   324,177             --        233,015
---------------------------------------------------------   --------------   ------------   ------------
Dividends payable to common and preferred shareholders           4,934,476      2,460,782        851,976
---------------------------------------------------------   --------------   ------------   ------------
Options written, at value (premiums received-
  $2,227,143, $743,511, $453,255, respectively)                 11,302,391      4,066,609      2,238,860
---------------------------------------------------------   --------------   ------------   ------------
Investment management fees payable                                 573,773        295,722        100,805
---------------------------------------------------------   --------------   ------------   ------------
Accrued expenses                                                   168,771         79,893         37,442
---------------------------------------------------------   --------------   ------------   ------------
  Total Liabilities                                             17,303,588      6,903,006      3,462,098
---------------------------------------------------------   --------------   ------------   ------------
PREFERRED SHARES ($0.00001 PAR VALUE AND $25,000 NET
  ASSET AND LIQUIDATION VALUE PER SHARE APPLICABLE TO
  AN AGGREGATE OF 20,200, 10,400 AND 3,600 SHARES ISSUED
  AND OUTSTANDING, RESPECTIVELY)                               505,000,000    260,000,000     90,000,000
---------------------------------------------------------   --------------   ------------   ------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS                  $846,885,187   $439,970,398   $149,605,601
---------------------------------------------------------   --------------   ------------   ------------

COMPOSITION OF NET ASSETS APPLICABLE TO
  COMMON SHAREHOLDERS:
Common Stock:
  Par value ($0.00001 per share)                              $        578   $        300   $        104
---------------------------------------------------------   --------------   ------------   ------------
  Paid-in-capital in excess of par                             821,208,452    426,317,796    146,978,939
---------------------------------------------------------   --------------   ------------   ------------
Undistributed (dividends in excess of) net investment income       725,557      (465,795)      (322,399)
---------------------------------------------------------   --------------   ------------   ------------
Accumulated net realized loss                                  (39,952,745)   (16,230,403)    (4,710,282)
---------------------------------------------------------   --------------   ------------   ------------
Net unrealized appreciation of investments,
  futures contracts and options written                         64,903,345     30,348,500      7,659,239
---------------------------------------------------------   --------------   ------------   ------------
NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS                  $846,885,187   $439,970,398   $149,605,601
---------------------------------------------------------   --------------   ------------   ------------
Common Shares Outstanding                                       57,780,866     30,006,873     10,354,582
---------------------------------------------------------   --------------   ------------   ------------
NET ASSET VALUE PER COMMON SHARE                                    $14.66         $14.66         $14.45
---------------------------------------------------------   --------------   ------------   ------------





                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

22 PIMCO Municipal Income Funds II Annual Report | 5.31.03





PIMCO MUNICIPAL INCOME FUNDS II STATEMENTS OF OPERATIONS
For the period June 28, 2002* through May 31, 2003



                                                                               CALIFORNIA      NEW YORK
                                                             MUNICIPAL II     MUNICIPAL II   MUNICIPAL II
                                                            --------------   -------------  -------------
                                                                                    


INVESTMENT INCOME:
Interest                                                     $60,992,145      $29,744,348    $10,195,370
--------------------------------------------------------     -----------      -----------    -----------

EXPENSES:
Investment management fees                                     7,555,858        3,891,841      1,345,276
--------------------------------------------------------     -----------      -----------    -----------
Auction agent fees and commissions                               997,739          522,827        182,737
--------------------------------------------------------     -----------      -----------    -----------
Custodian and accounting agent fees                              214,821          118,107         75,465
--------------------------------------------------------     -----------      -----------    -----------
Trustees' fees and expenses                                       92,930           42,690         14,702
--------------------------------------------------------     -----------      -----------    -----------
Legal fees                                                        33,795           17,200          6,595
--------------------------------------------------------     -----------      -----------    -----------
Audit and tax service fees                                        59,655           57,816         27,390
--------------------------------------------------------     -----------      -----------    -----------
New York Stock Exchange listing fees                              48,264           33,120         24,982
--------------------------------------------------------     -----------      -----------    -----------
Reports to shareholders                                           47,361           22,324          8,700
--------------------------------------------------------     -----------      -----------    -----------
Transfer agent fees                                               26,031           24,974         24,370
--------------------------------------------------------     -----------      -----------    -----------
Insurance expenses                                                 6,207            3,479          1,551
--------------------------------------------------------     -----------      -----------    -----------
Miscellaneous                                                      7,426            5,139          2,138
--------------------------------------------------------     -----------      -----------    -----------
  Total expenses                                               9,090,087        4,739,517      1,713,906
--------------------------------------------------------     -----------      -----------    -----------
  Less: investment management fees waived                     (1,743,658)        (898,117)      (310,448)
--------------------------------------------------------     -----------      -----------    -----------
        custody credits earned on cash balances                 (130,921)        (117,097)       (73,960)
--------------------------------------------------------     -----------      -----------    -----------
  Net expenses                                                 7,215,508        3,724,303      1,329,498
--------------------------------------------------------     -----------      -----------    -----------

NET INVESTMENT INCOME                                         53,776,637       26,020,045      8,865,872
--------------------------------------------------------     -----------      -----------    -----------

REALIZED AND UNREALIZED GAIN (LOSS):
Net realized gain (loss) on:
Investments                                                    5,189,194        1,919,963        216,072
--------------------------------------------------------     -----------      -----------    -----------
Futures contracts                                            (39,249,756)     (18,150,366)    (4,926,354)
--------------------------------------------------------     -----------      -----------    -----------
Net unrealized appreciation of investments,
  futures contracts and options written                       64,903,345       30,348,500      7,659,239
--------------------------------------------------------     -----------      -----------    -----------
Net realized and unrealized gain on investments,
  futures contracts and options written                       30,842,783       14,118,097      2,948,957
--------------------------------------------------------     -----------      -----------    -----------
NET INCREASE IN NET ASSETS RESULTING FROM
INVESTMENT OPERATIONS                                         84,619,420       40,138,142     11,814,829
--------------------------------------------------------     -----------      -----------    -----------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
  Net Investment Income                                       (4,384,249)      (2,140,933)      (794,061)
--------------------------------------------------------     -----------      -----------    -----------
  Net Realized Gains                                            (504,626)              --             --
--------------------------------------------------------     -----------      -----------    -----------
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON
SHAREHOLDERS RESULTING FROM INVESTMENT OPERATIONS            $79,730,545      $37,997,209    $11,020,768
--------------------------------------------------------     -----------      -----------    -----------


* Commencement of operations




                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 23



PIMCO MUNICIPAL INCOME FUNDS II STATEMENTS OF CHANGES IN NET ASSETS
                                APPLICABLE TO COMMON SHAREHOLDERS
For the period June 28, 2002* through May 31, 2003



                                                                               CALIFORNIA      NEW YORK
                                                             MUNICIPAL II     MUNICIPAL II   MUNICIPAL II
                                                            --------------   -------------  -------------
                                                                                    

INVESTMENT OPERATIONS:
Net investment income                                         $ 53,776,637   $ 26,020,045    $ 8,865,872
-----------------------------------------------------------   ------------   ------------    -----------
Net realized loss on investments and futures contracts         (34,060,562)   (16,230,403)    (4,710,282)
-----------------------------------------------------------   ------------   ------------    -----------
Net unrealized appreciation on investments, futures contracts
  and options written                                           64,903,345     30,348,500      7,659,239
-----------------------------------------------------------   ------------   ------------    -----------
Net increase in net assets resulting from investment
  operations                                                    84,619,420     40,138,142     11,814,829
-----------------------------------------------------------   ------------   ------------    -----------

DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income                                           (4,384,249)    (2,140,933)      (794,061)
-----------------------------------------------------------   ------------   ------------    -----------
Net realized gains                                                (504,626)            --             --
-----------------------------------------------------------   ------------   ------------    -----------
Net increase in net assets applicable to common
  shareholders resulting from investment operations.            79,730,545     37,997,209     11,020,768
-----------------------------------------------------------   ------------   ------------    -----------

DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS
  FROM:
Net investment income                                          (48,666,775)   (24,344,907)    (8,394,210)
-----------------------------------------------------------   ------------   ------------    -----------
Net realized gains                                              (5,387,613)            --             --
-----------------------------------------------------------   ------------   ------------    -----------
Total dividends and distributions to
  common shareholders                                          (54,054,388)   (24,344,907)    (8,394,210)
-----------------------------------------------------------   ------------   ------------    -----------

CAPITAL SHARE TRANSACTIONS:
Net proceeds from the sale of common stock                     823,703,945    428,317,500    147,473,483
-----------------------------------------------------------   ------------   ------------    -----------
Preferred shares underwriting discount charged to paid-in
  capital in excess of par                                      (5,050,000)    (2,600,000)      (900,000)
-----------------------------------------------------------   ------------   ------------    -----------
Common stock and preferred shares offering costs charged to
  paid-in capital in excess of par                              (1,540,514)      (951,964)      (458,454)
-----------------------------------------------------------   ------------   ------------    -----------
Reinvestment of dividends and distributions                      3,995,596      1,452,557        764,011
-----------------------------------------------------------   ------------   ------------    -----------
Net increase from capital transactions                         821,109,027    426,218,093    146,879,040
-----------------------------------------------------------   ------------   ------------    -----------
Total increase in net assets applicable to common
  shareholders                                                 846,785,184    439,870,395    149,505,598
-----------------------------------------------------------   ------------   ------------    -----------

NET ASSETS APPLICABLE TO COMMON SHAREHOLDERS:
Beginning of period                                                100,003        100,003        100,003
-----------------------------------------------------------   ------------   ------------    -----------
End of period (including undistributed (dividends in excess of)
  net investment income of $725,557, $(465,795) and
  $(322,399), respectively.                                   $846,885,187   $439,970,398   $149,605,601
-----------------------------------------------------------   ------------   ------------    -----------

COMMON SHARES ISSUED AND REINVESTED:
Issued                                                          57,501,148     29,900,000     10,294,833
-----------------------------------------------------------   ------------   ------------    -----------
Issued in reinvestment of dividends and distributions              272,737         99,892         52,768
-----------------------------------------------------------   ------------   ------------    -----------
NET INCREASE                                                    57,773,885     29,999,892     10,347,601
-----------------------------------------------------------   ------------   ------------    -----------


* Commencement of operations




                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

24 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2003


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

PIMCO Municipal  Income Fund II ("Municipal  II"),  PIMCO  California  Municipal
Income Fund II ("California  Municipal II") and PIMCO New York Municipal  Income
Fund II ("New York  Municipal  II")  collectively  referred to as the "Funds" or
"PIMCO  Municipal  Income Funds II", were  organized as  Massachusetts  business
trusts on March 29, 2002.  Prior to commencing  operations on June 28, 2002, the
Funds had no operations  other than matters  relating to their  organization and
registration as closed-end  management investment companies registered under the
Investment  Company  Act of 1940 and the rules and  regulations  thereunder,  as
amended,  and the sale and  issuance of 6,981 shares of  beneficial  interest of
each  Fund at an  aggregate  purchase  price of  $100,003  per  Fund to  Allianz
Dresdner  Asset  Management  of America  L.P.,  ("ADAM").  PIMCO  Advisors  Fund
Management  LLC, (the  "Investment  Manager"),  serves as the Fund's  Investment
Manager  and  is an  indirect,  wholly-owned  subsidiary  of  ADAM.  ADAM  is an
indirect,  majority-owned  subsidiary of Allianz AG. The Funds have an unlimited
amount of $0.00001 par value common stock authorized.

Municipal II invests substantially all of its assets in a portfolio of municipal
bonds,  the interest from which is exempt from federal income taxes.  California
Municipal II invests  substantially  all of its assets in municipal  bonds which
pay interest that is exempt from federal and California  income taxes.  New York
Municipal II invests  substantially  all of its assets in municipal  bonds which
pay  interest  that is exempt  from  federal,  New York  State and New York City
income  taxes.  The Funds will seek to avoid bonds  generating  interest  income
which could  potentially  subject  individuals to  alternative  minimum tax. The
issuers'  abilities  to meet their  obligations  may be affected by economic and
political developments in a specific state or region.

Municipal  II,  California  Municipal  II  and  New  York  Municipal  II  issued
50,500,000,  26,000,000 and 9,000,000 shares of common stock,  respectively,  in
their initial public offerings. An additional 7,001,148, 3,900,000 and 1,294,833
shares of  Municipal  II,  California  Municipal II and New York  Municipal  II,
respectively,  were issued in connection with the exercises of the underwriters'
over-allotment option on July 15, 2002 and August 6, 2002. These shares were all
issued at $15.00 per share before an underwriting  discount of $0.675 per share.
The Investment Manager has agreed to reimburse the amount by which the aggregate
of each Fund's  organizational and offering cost (other than sales load) exceeds
$0.03  per  share.   Offering  costs  of   $1,174,197,   $682,616  and  $308,845
(representing  $0.02 per share for Municipal II and California  Municipal II and
$0.03 per share for New York  Municipal II), were offset against the proceeds of
the offerings and have been charged to paid-in capital in excess of par.

In addition,  the  underwriters  discount and offering costs associated with the
Funds'  issuance of Preferred  Shares in the amounts of $5,050,000 and $366,317,
$2,600,000 and $269,348 and $900,000 and $149,609,  for Municipal II, California
Municipal  II and New York  Municipal  II,  respectively,  have been  charged to
paid-in capital in excess of par.

The  preparation  of the  financial  statements in  accordance  with  accounting
principles   generally  accepted  in  the  United  States  of  America  requires
management to make estimates and  assumptions  that affect the reported  amounts
and  disclosures in the financial  statements.  Actual results could differ from
those estimates. In the normal course of business the Funds enter into contracts
that   contain   a   variety   of   representations    which   provide   general
indemnifications.  The Funds'  maximum  exposure  under  these  arrangements  is
unknown as this would  involve  future claims that may be made against the Funds
that have not yet occurred. However, the Funds expect the risk of any loss to be
remote.

The  following  is a summary of  significant  accounting  policies  consistently
followed by the Funds:

(a) VALUATION OF  INVESTMENTS

Portfolio  securities  and other assets for which market  quotations are readily
available  are  valued  each day at  market  value.  Market  value is  generally
determined  on the basis of the last  reported  sales price,  or if no sales are
reported,   based  on  quotes  obtained  from  a  quotation   reporting  system,
established market makers, or independent pricing services approved by the Board
of Trustees.  Any security or other asset for which  market  quotations  are not
readily  available  is valued at fair value as  determined  in good faith  under
procedures established by the Board of Trustees.

(b) FEDERAL  INCOME TAXES

The Funds intend to distribute  all of their  taxable  income and to comply with
the other  requirements of the U.S.  Internal  Revenue Code of 1986, as amended,
applicable to regulated investment companies. Accordingly, no provision for U.S.
federal income taxes is required. In addition, by distributing substantially all
of their taxable  ordinary  income and long-term  capital gains,  if any, during
each calendar  year,  the Funds intend not to be subject to U.S.  federal excise
tax.



                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 25




PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2003


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(c) INVESTMENT TRANSACTIONS AND INVESTMENT INCOME

Investment  transactions are accounted for on the trade date. Realized gains and
losses on  investments  are determined on the  identified  cost basis.  Interest
income is recorded on an accrual basis.  Original issue discounts or premiums on
debt  securities  purchased  are  accreted  or  amortized  daily to  non-taxable
interest income. Market discount, if any, is accreted daily to taxable income.

(d) DIVIDENDS AND  DISTRIBUTIONS--COMMON  STOCK

The  Funds  declare  dividends  from net  investment  income  monthly  to common
shareholders.  Distributions  of net realized capital gains, if any, are paid at
least  annually.   Each  Fund  records   dividends  and   distributions  to  its
shareholders on the ex-dividend  date. The amount of dividends and distributions
from net  investment  income and net realized  capital  gains are  determined in
accordance with federal income tax regulations,  which may differ from generally
accepted  accounting   principles.   These  "book-tax"  differences  are  either
considered temporary or permanent in nature. To the extent these differences are
permanent in nature,  such amounts are reclassified  within the capital accounts
based on their  federal  income  tax  treatment;  temporary  differences  do not
require  reclassification.  To the extent dividends and/or  distributions exceed
current and  accumulated  earnings  and profits for federal  income tax purposes
they are reported as dividends and/or distributions of paid-in capital in excess
of par.

(e) CUSTODY  CREDITS  EARNED ON CASH  BALANCES

The Funds benefit from an expense offset  arrangement  with their custodian bank
whereby  uninvested  cash balances earn credits which reduce  monthly  custodian
expenses.  Had these cash balances been invested in income producing securities,
they would have generated income for the Funds.

(f) FUTURES  CONTRACTS

A  futures  contract  is an  agreement  between  two  parties  to buy and sell a
financial  instrument at a set price on a future date. Upon entering into such a
contract,  the Funds are  required  to pledge to the broker an amount of cash or
securities equal to the minimum  "initial margin"  requirements of the exchange.
Pursuant to the contracts,  the Funds agree to receive from or pay to the broker
an amount of cash equal to the daily  fluctuation in the value of the contracts.
Such  receipts or payments are known as  "variation  margin" and are recorded by
the Funds as unrealized  appreciation  or  depreciation.  When the contracts are
closed, the Funds record a realized gain or loss equal to the difference between
the value of the  contracts  at the time they were  opened  and the value at the
time they were closed. Any unrealized  appreciation or depreciation  recorded is
simultaneously reversed. The use of futures transactions involves the risk of an
imperfect  correlation  in the  movements  in the  price of  futures  contracts,
interest rates and the underlying hedged assets,  and the possible  inability of
counterparties to meet the terms of their contracts.

Futures contracts outstanding at May 31, 2003 were as follows:



                                                                                       Unrealized
                                                                # of      Expiration   Appreciation
Fund                                   Type                   Contracts      Date     (Depreciation)
----------------------------------------------------------------------------------------------------

                                                                          
Municipal II             Short: U.S. Treasury 30 Year Bond     1,622        6/19/03   $(10,180,772)
                             U.S. Treasury 30 Year Bond          765        9/19/03       (197,225)
                                                                                      ------------
                                                                                      $(10,377,997)
                                                                                      ============

California Municipal II  Short: U.S. Treasury 30 Year Bond       751        6/19/03   $ (4,561,334)
                             U.S. Treasury 30 Year Bond          350        9/30/03        (90,234)
                                                                                      ------------
                                                                                      $ (4,651,568)
                                                                                      ============

New York Municipal II    Short: U.S. Treasury 30 Year Bond        22        6/30/03   $   (133,546)
                                                                                      ============




26 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2003


1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONCLUDED)

(g) OPTION TRANSACTIONS

For  hedging  purposes,  the Funds may  purchase  and write  (sell) put and call
options on Municipal Bonds, U.S. government securities, swap agreements, indexes
or  futures  contracts  which are  standardized  and  traded on a U.S.  or other
exchange,  boards of  trade,  or  similar  entity,  or  quoted  on an  automated
quotation  system.  The risk  associated  with  purchasing an option is that the
Funds pay a premium  whether or not the option is exercised.  Additionally,  the
Funds bear the risk of loss of premium  and  change in market  value  should the
counterparty not perform under the contract.  Put and call options purchased are
accounted for in the same manner as portfolio securities.

The  cost of  securities  acquired  through  the  exercise  of call  options  is
increased by the premiums paid.  The proceeds from the  securities  sold through
the exercise of put options is decreased by the premiums paid.

When an option is written,  the premium received is recorded as an asset with an
equal liability  which is  subsequently  adjusted to the current market value of
the  option  written.  Premiums  received  from  writing  options  which  expire
unexercised  are  recorded  on the  expiration  date  as a  realized  gain.  The
difference  between the  premium  received  and the amount  paid on  effecting a
closing purchase transaction,  including brokerage commissions,  is also treated
as a realized  gain,  or if the  premium  is less than the  amount  paid for the
closing  purchase  transactions,  as a  realized  loss.  If  a  call  option  is
exercised,  the premium is added to the proceeds from the sale of the underlying
security in determining whether there has been a realized gain or loss. If a put
option is  exercised,  the premium  reduces the cost basis of the  security.  In
writing an option,  the Funds bear the market risk of an  unfavorable  change in
the price of the security  underlying the written option.  Exercise of an option
written  could result in the Funds  purchasing  a security at a price  different
from the current market price.

Transactions in options written for the period ended May 31, 2003 were:

                                                      Contracts         Premiums
--------------------------------------------------------------------------------

Municipal II:
-------------
Options outstanding, beginning of period                     --               --
Options written                                           2,587       $2,227,143
                                                        -------       ----------
Options outstanding, May 31, 2003                         2,587       $2,227,143
                                                        =======       ==========

California Municipal II:
------------------------
Options outstanding, beginning of period                     --               --
Options written                                             947       $  743,511
                                                        -------       ----------
Options outstanding, May 31, 2003                           947       $  743,511
                                                        =======       ==========

New York Municipal II:
----------------------
Options outstanding, beginning of period                     --               --
Options written                                             507       $  453,255
                                                        -------       ----------
Options outstanding, May 31, 2003                           507       $  453,255
                                                        =======       ==========


2. INVESTMENT MANAGER AND SUB-ADVISER

Each Fund has entered into an Investment Management Agreement (the "Agreements")
with the Investment Manager to serve as Investment Manager to each Fund. Subject
to the supervision by each Fund's Board of Trustees,  the Investment  Manager is
responsible for managing,  either directly or through others selected by it, the
investment  activities  of the Fund and the Fund's  business  affairs  and other
administrative matters. Pursuant to the Agreements,  the Investment Manager will
receive an annual  fee,  payable  monthly,  at the annual  rate of 0.65% of each
Fund's  average  daily net  assets  (including  net assets  attributable  to any
preferred shares that may be outstanding). In order to reduce Fund expenses, the
Investment Manager has contractually  agreed to reimburse each Fund for fees and
expenses  at the  annual  rate of 0.15% of the Fund's  average  daily net assets
(including  net  assets  attributable  to  any  preferred  shares  that  may  be
outstanding) from the commencement of operations  through June 30, 2007, and for
a declining amount thereafter through June 30, 2009.

The Investment Manager has retained its affiliate, Pacific Investment Management
Company LLC (the  "Sub-Adviser") to manage each Fund's  investments.  Subject to
the supervision of the Investment Manager,  the Sub-Adviser makes all investment
decisions  with respect to each Fund's assets.  The Investment  Manager (not the
Funds) pays a portion of the fees it receives to the  Sub-Adviser  in return for
its services,  at the maximum  annual rate of 0.50% of each Fund's average daily
net assets



                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 27




PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2003


2. INVESTMENT MANAGER AND SUB-ADVISER (CONCLUDED)

(including net assets  attributable to any preferred shares that may
be outstanding).  The Sub-Adviser has contractually agreed to waive a portion of
the fees it is entitled to receive from the  Investment  Manager,  such that the
Sub-Adviser  will  receive  0.26%  of  each  Fund's  average  daily  net  assets
(including  net  assets  attributable  to  any  preferred  shares  that  may  be
outstanding)  from the  commencement of the Funds'  operations  through June 30,
2007, and will receive an increasing  amount (not to exceed 0.50% of each Fund's
average  daily net assets,  including net assets  attributable  to any preferred
shares that may be outstanding) thereafter through June 30, 2009. The Investment
Manager informed the Funds that it paid the Sub-Adviser  $3,022,340,  $1,556,737
and  $538,110  in  connection  with  sub-advisory  services  for  Municipal  II,
California Municipal II and New York Municipal II, respectively,  for the period
ended May 31, 2003.

3. INVESTMENTS IN SECURITIES

For the period ended May 31, 2003,  purchases  and sales of  investments,  other
than short-term securities, were as follows:

                                               California             New York
                        Municipal II          Municipal II          Municipal II
--------------------------------------------------------------------------------
Purchases             $1,521,993,996         $882,949,540          $285,262,209
Sales                    300,096,771          480,587,216            51,546,891


4. INCOME TAX INFORMATION

Municipal II:
-------------

The tax  character of dividends and  distributions  paid for the period June 28,
2002 (commencement of operations) through May 31, 2003 were:

Ordinary Income           $ 4,567,905
Tax Exempt Income         $51,126,211
Long-Term Capital Gain    $ 3,249,147

At May 31, 2003,  the tax  character of  distributable  earnings of $725,557 was
composed entirely of tax exempt income.

In  accordance  with U.S.  Treasury  regulations,  Municipal II elected to defer
realized  capital losses of  $59,405,989,  arising after October 31, 2002.  Such
losses are treated for tax purposes as arising on June 1, 2003.

California Municipal II:
------------------------

The tax character of dividends  paid for the period June 28, 2002  (commencement
of operations) through May 31, 2003 were:

Ordinary Income           $   406,539
Tax Exempt Income         $26,079,301

At May 31,  2003,  the tax basis of  overdistributed  earnings of  $465,795  was
composed entirely of tax exempt income.

At May 31, 2003,  California  Municipal II had a capital  loss  carryforward  of
$1,122,615,  all of which will expire in 2011, available as a reduction,  to the
extent provided in the regulations, of any future net realized capital gains. To
the extent that these losses are used to offset future  realized  capital gains,
such gains will not be distributed.

In accordance with U.S. Treasury regulations, California Municipal II elected to
defer realized  capital losses of  $23,082,454,  arising after October 31, 2002.
Such losses are treated for tax purposes as arising on June 1, 2003.

New York Municipal II:
----------------------

The tax character of dividends  paid for the period June 28, 2002  (commencement
of operations) through May 31, 2003 were:

Ordinary Income            $   35,774
Tax Exempt Income          $9,152,497

At May 31,  2003,  the tax basis of  overdistributed  earnings of  $322,399  was
composed entirely of tax exempt income.




28 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2003


4. INCOME TAX INFORMATION (CONCLUDED)

At May 31,  2003,  New York  Municipal  II had a capital  loss  carryforward  of
$214,685, all of which expires in 2011, available as a reduction,  to the extent
provided in the  regulations,  of any future net realized  capital gains. To the
extent that these losses are used to offset future realized capital gains,  such
gains will not be distributed.

In accordance with U.S. Treasury  regulations,  New York Municipal II elected to
defer realized  capital  losses of  $6,147,656,  arising after October 31, 2002.
Such losses are treated for tax purposes as arising on June 1, 2003.

5. AUCTION PREFERRED SHARES

Municipal II has issued 4,040 shares of Preferred  Shares Series A, 4,040 shares
of Preferred  Shares Series B, 4,040 shares of Preferred  Shares Series C, 4,040
shares of Preferred  Shares Series D and 4,040 shares of Preferred Shares Series
E, each with a net asset and liquidation value of $25,000 per share plus accrued
dividends.

California  Municipal II has issued 2,080 shares of Preferred  Shares  Series A,
2,080 shares of  Preferred  Shares  Series B, 2,080  shares of Preferred  Shares
Series  C,  2,080  shares  of  Preferred  Shares  Series D and  2,080  shares of
Preferred  Shares  Series E, each  with a net  asset  and  liquidation  value of
$25,000 per share plus accrued dividends.

New York  Municipal II has issued 1,800 shares of Preferred  Shares Series A and
1,800 shares of Preferred Shares Series B, each with a net asset and liquidation
value of $25,000 per share, plus accrued dividends.

Dividends  are  accumulated   daily  at  an  annual  rate  set  through  auction
procedures.  Distributions  of net  realized  capital  gains,  if any,  are paid
annually.

For the period ended May 31, 2003, the annualized dividend rates ranged from:


                                         High             Low        At 5/31/03
--------------------------------------------------------------------------------

Municipal II:
-------------
Series A                                 1.75%           0.85%          1.15%
Series B                                 1.90%           0.80%          1.10%
Series C                                 1.75%           0.90%          1.10%
Series D                                 1.97%           0.80%          1.10%
Series E                                 1.80%           0.90%          1.10%

California Municipal II:
------------------------
Series A                                 1.50%           0.60%          0.65%
Series B                                 1.50%           0.60%          0.85%
Series C                                 1.50%           0.60%          0.65%
Series D                                 1.50%           0.65%          1.05%
Series E                                 1.55%           0.60%          1.05%

New York Municipal II:
----------------------
Series A                                 1.50%           0.60%          1.05%
Series B                                 1.60%           0.85%          1.05%

The Funds are subject to certain  limitations and  restrictions  while Preferred
Shares  are   outstanding.   Failure  to  comply  with  these   limitations  and
restrictions   could   preclude  the  Funds  from  declaring  any  dividends  or
distributions to common  shareholders or repurchasing common shares and/or could
trigger the mandatory redemption of Preferred Shares at their liquidation value.

Preferred Shares, which are entitled to one vote per share,  generally vote with
the common stock but vote separately as a class to elect two Trustees and on any
matters affecting the rights of the Preferred Shares.



                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 29




PIMCO MUNICIPAL INCOME FUNDS II NOTES TO FINANCIAL STATEMENTS
May 31, 2003


6. SUBSEQUENT DIVIDEND DECLARATIONS--COMMON SHAREHOLDERS

On June 16, 2003, the following  dividends were declared to common  shareholders
payable July 15, 2003 to shareholders of record on June 27, 2003:

             Municipal II                         $0.084375 per common share
             California Municipal II              $0.08125 per common share
             New York Municipal II                $0.08125 per common share

On July 15, 2003, the following  dividends were declared to common  shareholders
payable August 15, 2003 to shareholders of record on July 25, 2003:

             Municipal II                         $0.084375 per common share
             California Municipal II              $0.08125 per common share
             New York Municipal II                $0.08125 per common share


7. CHANGE IN INVESTMENT POLICY

On December 17, 2002, the Board of Trustees  approved a change in the investment
policy of each Fund to invest,  under normal market conditions,  at least 90% of
each of its  "total"  assets in  municipal  bonds to at least 90% of each of its
"net" assets (and not "total" assets) in municipal bonds.









30 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO MUNICIPAL INCOME FUNDS II FINANCIAL HIGHLIGHTS

For a share of common stock  outstanding  for the period June 28, 2002*  through
May 31, 2003



                                                                               CALIFORNIA      NEW YORK
                                                             MUNICIPAL II     MUNICIPAL II   MUNICIPAL II
                                                            --------------   -------------  -------------
                                                                                    

Net asset value, beginning of period                            $14.33**       $14.33**        $14.33**
-----------------------------------------------------------   --------       --------        --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income                                             0.93           0.87            0.86
-----------------------------------------------------------   --------       --------        --------
Net realized and unrealized gain on investments,
  futures contracts and options written                           0.53           0.46            0.28
-----------------------------------------------------------   --------       --------        --------
Total from investment operations                                  1.46           1.33            1.14
-----------------------------------------------------------   --------       --------        --------
DIVIDENDS AND DISTRIBUTIONS ON PREFERRED SHARES FROM:
Net investment income                                            (0.08)         (0.07)          (0.08)
-----------------------------------------------------------   --------       --------        --------
Net realized gains                                               (0.01)           --              --
-----------------------------------------------------------   --------       --------        --------
Total dividends and distributions on preferred shares            (0.09)         (0.07)          (0.08)
-----------------------------------------------------------   --------       --------        --------
Net increase in net assets applicable to common
  shareholders resulting from investment operations               1.37           1.26            1.06
-----------------------------------------------------------   --------       --------        --------
DIVIDENDS AND DISTRIBUTIONS TO COMMON SHAREHOLDERS FROM:
Net investment income                                            (0.84)         (0.81)          (0.81)
-----------------------------------------------------------   --------       --------        --------
Net realized gains                                               (0.09)           --              --
-----------------------------------------------------------   --------       --------        --------
Total dividends and distributions to common shareholders         (0.93)         (0.81)          (0.81)
-----------------------------------------------------------   --------       --------        --------
CAPITAL SHARE TRANSACTIONS:
Common stock offering costs charged to paid-in capital
  in excess of par                                               (0.02)         (0.02)          (0.03)
-----------------------------------------------------------   --------       --------        --------
Preferred shares offering costs/underwriting discounts
  charged to paid-in capital in excess of par                    (0.09)         (0.10)          (0.10)
-----------------------------------------------------------   --------       --------        --------
Total capital share transactions                                 (0.11)         (0.12)          (0.13)
-----------------------------------------------------------   --------       --------        --------
Net asset value, end of period                                  $14.66         $14.66          $14.45
-----------------------------------------------------------   --------       --------        --------
Market price, end of period                                     $14.80         $14.78          $14.71
-----------------------------------------------------------   --------       --------        --------
TOTAL INVESTMENT RETURN (1)                                       5.2%           4.2%            3.8%
-----------------------------------------------------------   --------       --------        --------
RATIOS/SUPPLEMENTAL DATA:
Net assets applicable to common shareholders,
  end of period (000)                                         $846,885       $439,970        $149,606
-----------------------------------------------------------   --------       --------        --------
Ratio of expenses to average net assets (2)(3)(4)                 0.95%(5)       0.97%(6)        1.02%(7)
-----------------------------------------------------------   --------       --------        --------
Ratio of net investment income to average net assets (2)(4)       6.99%(5)       6.56%(6)        6.47%(7)
-----------------------------------------------------------   --------       --------        --------
Preferred shares asset coverage per share                      $66,920        $67,301         $66,552
-----------------------------------------------------------   --------       --------        --------
Portfolio turnover                                                 27%            84%             27%
-----------------------------------------------------------------------------------------------------


*   Commencement of operations

**  Initial public offering price of $15.00 per share less underwriting discount
    of $0.675 per share.

(1) Total investment return is calculated assuming a purchase of common stock at
    the  current  market  price on the first day of the period and a sale at the
    current market price on the last day for the period reported.  Dividends and
    distributions  are  assumed,  for  purposes  of  this  calculation,   to  be
    reinvested at prices obtained under the Fund's dividend  reinvestment  plan.
    Total  investment  return does not reflect  brokerage  commissions  or sales
    charges.  Total investment  return for a period of less than one year is not
    annualized.

(2) Calculated on the basis of income and expenses applicable to both common and
    preferred shares relative to the average net assets of common shareholders.

(3) Inclusive  of  expenses  offset by  custody  credits on cash  balances  from
    custodian bank. (See note 1(e) in Notes to Financial Statements).

(4) Annualized.

(5) During the period indicated  above, the Investment  Manager waived a portion
    of its investment management fee. If such waiver had not been in effect, the
    ratio of  expenses  to average  net  assets and the ratio of net  investment
    income to average net assets  would have been 1.18%  (annualized)  and 6.76%
    (annualized), respectively.

(6) During the period indicated  above, the Investment  Manager waived a portion
    of its investment management fee. If such waiver had not been in effect, the
    ratio of  expenses  to average  net  assets and the ratio of net  investment
    income to average net assets  would have been 1.20%  (annualized)  and 6.34%
    (annualized), respectively.

(7) During the period indicated  above, the Investment  Manager waived a portion
    of its investment management fee. If such waiver had not been in effect, the
    ratio of  expenses  to average  net  assets and the ratio of net  investment
    income to average net assets  would have been 1.25%  (annualized)  and 6.25%
    (annualized), respectively.



                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 31




PIMCO MUNICIPAL INCOME FUNDS II REPORT OF INDEPENDENT AUDITORS


To the Shareholders and Board of Trustees of
PIMCO Municipal Income Fund II, PIMCO California Municipal Income Fund II and
PIMCO New York Municipal Income Fund II


In our opinion, the accompanying statements of assets and liabilities, including
the schedules of  investments,  and the related  statements of operations and of
changes  in net  assets  applicable  to common  shareholders  and the  financial
highlights present fairly, in all material  respects,  the financial position of
PIMCO Municipal  Income Fund II, PIMCO  California  Municipal Income Fund II and
PIMCO New York Municipal Income Fund II (collectively  hereafter  referred to as
the "Funds") at May 31, 2003, and the results of each of their  operations,  the
changes in each of their net assets  applicable to common  shareholders  and the
financial  highlights for the period June 28, 2002  (commencement of operations)
through  May 31,  2003,  in  conformity  with  accounting  principles  generally
accepted  in the  United  States of  America.  These  financial  statements  and
financial highlights  (hereafter referred to as "financial  statements") are the
responsibility  of the Funds'  management;  our  responsibility is to express an
opinion on these financial statements based on our audit. We conducted our audit
of these financial  statements in accordance with auditing  standards  generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable  assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence  supporting the amounts and  disclosures  in the financial  statements,
assessing the  accounting  principles  used and  significant  estimates  made by
management,  and evaluating the overall  financial  statement  presentation.  We
believe that our audit,  which  included  confirmation  of securities at May 31,
2003 by  correspondence  with the  custodian  and broker,  provides a reasonable
basis for our opinion.




PricewaterhouseCoopers LLP
New York, New York
July 16, 2003









32 PIMCO Municipal Income Funds II Annual Report | 5.31.03



PIMCO MUNICIPAL INCOME FUNDS II TAX INFORMATION (UNAUDITED)


Subchapter M of the  Internal  Revenue  Code of 1986,  as amended,  required the
Funds to advise  shareholders within 60 days of the Funds' tax year end (May 31,
2003) as to the federal tax status of dividends  and  distributions  received by
shareholders during such tax year.  Accordingly,  please note that substantially
all  dividends  paid from net  investment  income from the Funds  during the tax
period ended May 31, 2003 were federally  exempt  interest  dividends.  However,
these Funds  invested in  municipal  bonds  containing  market  discount,  whose
accretion is taxable.  Accordingly,  the  percentage of dividends  paid from net
investment income during the tax year which are taxable were:

Municipal II                                8.20%
California Municipal II                     1.53%
New York Municipal II                       0.39%

Municipal II  distributed  $3,249,147  of long-term  capital  gains.  California
Municipal II and New York  Municipal  II did not  distribute  long-term  capital
gains.

Since the Funds' fiscal year is not the calendar year, another notification will
be sent with respect to calendar year 2003. In January 2004, you will be advised
on  IRS  Form  1099  DIV as to the  federal  tax  status  of the  dividends  and
distributions  received  during the calendar year 2003.  The amount that will be
reported,  will be the amount to use on your 2003 federal  income tax return and
may differ from the amount which must be reported in connection with each Fund's
tax year ended May 31, 2003.  Shareholders are advised to consult with their tax
advisors as to the  federal,  state and local tax status of the income  received
from the Funds.  In January  2004,  an  allocation  of interest by state will be
provided  which may be of value in reducing a  shareholder's  state or local tax
liability, if any.










                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 33




PIMCO MUNICIPAL INCOME FUNDS II DIVIDEND REINVESTMENT PLAN (UNAUDITED)


Pursuant  to the Funds'  Dividend  Reinvestment  Plan (the  "Plan"),  all Common
Shareholders  whose  shares  are  registered  in their own  names  will have all
dividends,  including any capital gain dividends,  reinvested  automatically  in
additional Common Shares by PFPC Inc., as agent for the Common Shareholders (the
"Plan  Agent"),  unless the  shareholder  elects to receive cash. An election to
receive cash may be revoked or reinstated at the option of the  shareholder.  In
the case of record  shareholders  such as banks,  brokers or other nominees that
hold Common Shares for others who are the beneficial owners, the Plan Agent will
administer  the Plan on the basis of the number of Common Shares  certified from
time to  time  by the  record  shareholder  as  representing  the  total  amount
registered  in such  shareholder's  name and held for the account of  beneficial
owners who are to participate in the Plan. Shareholders whose shares are held in
the name of a bank,  broker or nominee should contact the bank,  whose broker or
nominee elects not to participate  on the  investor's  behalf),  will be paid in
cash by check mailed, in the case of direct shareholder, to the record holder by
PFPC Inc., as the Funds' dividend disbursement agent.

Unless you (or your broker or nominee)  elects not to  participate  in the Plan,
the number of Common Shares you will receive will be determined as follows:

(1)    If Common  Shares are  trading at or above net asset value on the payment
       date, the Funds will issue new shares at the greater of (i) the net asset
       value per  Common  Share on the  payment  date or (ii) 95% of the  market
       price per Common Share on the payment date; or

(2)    If Common  Shares are  trading  below net asset  value  (minus  estimated
       brokerage  commissions that would be incurred upon the purchase of Common
       Shares on the open  market)  on the  payment  date,  the Plan  Agent will
       receive the dividend or  distribution  in cash and will  purchase  Common
       Shares in the open market,  on the New York Stock  Exchange or elsewhere,
       for the participants'  accounts. It is possible that the market price for
       the Common  Shares may increase  before the Plan Agent has  completed its
       purchases.  Therefore,  the average  purchase price per share paid by the
       Plan Agent may exceed the market price on the payment date,  resulting in
       the  purchase of fewer shares than if the  dividend or  distribution  had
       been paid in Common Shares  issued by the Funds.  The Plan Agent will use
       all  dividends  and  distributions  received in cash to  purchase  Common
       Shares in the open market on or shortly after the payment date, but in no
       event later than the ex-dividend date for the next distribution. Interest
       will not be paid on any uninvested cash payments.

You may withdraw  from the Plan at any time by giving  notice to the Plan Agent.
If you withdraw or the Plan is  terminated,  you will receive a certificate  for
each  whole  share in your  account  under the Plan and you will  receive a cash
payment for any fraction of a share in your account. If you wish, the Plan Agent
will sell your shares and send you the proceeds, minus brokerage commissions.

The Plan  Agent  maintains  all  shareholders'  accounts  in the Plan and  gives
written confirmation of all transactions in the accounts,  including information
you may need for tax  records.  The Plan Agent will also furnish each person who
buys Common  Shares with  written  instructions  detailing  the  procedures  for
electing not to participate in the Plan and to instead receive  distributions in
cash.  Common  Shares  in  your  account  will  be held  by the  Plan  Agent  in
non-certificated  form. Any proxy you receive will include all Common Shares you
have received under the Plan.

There is no brokerage charge for reinvestment of your dividends or distributions
in  Common  Shares.  However,  all  participants  will pay a pro  rata  share of
brokerage  commissions  incurred  by the Plan Agent  when it makes  open  market
purchases.

Automatically  reinvested  dividends  and  distributions  are  taxed in the same
manner as cash dividends and distributions.

The Funds and the Plan Agent  reserve the right to amend or terminate  the Plan.
There is no direct  service charge to  participants  in the Plan;  however,  the
Funds reserve the right to amend the Plan to include a service charge payable by
the  participants.  Additional  information  about the Plan may be obtained from
PFPC  Inc.,  400  Belleview  Parkway,  Wilmington,  DE 19809,  telephone  number
1-800-331-1710.

OTHER INFORMATION:

Since  June 28,  2002,  there has been no:  (i)  material  changes in the Funds'
investment  objectives  or  policies;  (ii)  changes  to the  Funds'  charter or
by-laws;  (iii) material  changes in the principal risk factors  associated with
investment in the Funds; or (iv) change in the person primarily  responsible for
the day-to-day management of each Fund's portfolio.




34 PIMCO Municipal Income Funds II Annual Report | 5.31.03




PIMCO MUNICIPAL INCOME FUNDS II BOARD OF TRUSTEES

STEPHEN TREADWAY, TRUSTEE, CHAIRMAN, CHAIRMAN OF THE BOARD
1345 Avenue of the Americas, New York, NY 10105
Age: 55
Trustee since: 2002
Term of office: After initial term, expected to stand for re-election at 2005
annual meeting of shareholders.
Trustee/Director of 51 funds in Fund Complex; Trustee/Director of no funds
outside of Fund Complex

PRINCIPAL  OCCUPATION(S)  DURING  PAST 5 YEARS:  Managing  Director  of  Allianz
Dresdner Asset Management of America L.P.; Managing Director and Chief Executive
Officer  of  PIMCO  Advisors  Distributors  LLC;  Managing  Director  and  Chief
Executive  Officer  PIMCO  Advisors  Fund  Management;  Member  of the  Board of
Management of Allianz  Dresdner Asset  Management GmbH. Mr. Treadway serves as a
director/trustee  and holds various  executive  officer  positions in connection
with Allianz  Dresdner Asset  Management of America L.P.'s  affiliated open- and
closed-end mutual funds.

PAUL BELICA, TRUSTEE
1345 Avenue of the Americas, New York, NY 10105
Age: 81
Trustee since: 2002
Term of office: After initial term, expected to stand for re-election at 2004
annual meeting of shareholders.
Trustee of 14 funds in Fund Complex; Trustee of 2 funds outside of Fund Complex

PRINCIPAL  OCCUPATION(S)  DURING  PAST 5 YEARS:  Trustee of  thirteen  open- and
closed-end  management  investment  companies  affiliated with Allianz  Dresdner
Asset  Management of America L.P.;  Manager,  Stratigos Fund,  L.L.C.,  Whistler
Fund, L.L.C., Xanthus Fund, L.L.C., and Wynstone Fund, L.L.C.; Director, Student
Loan Finance  Corp.,  Education  Loans,  Inc.,  Goal Funding,  Inc.  Surety Loan
Funding,  Inc.; Formerly,  Advisor,  Smith Barney,  Inc.; Director,  The Central
European Value Fund, Inc.; Deck House Inc.

ROBERT E. CONNOR, TRUSTEE
1345 Avenue of the Americas, New York, NY 10105
Age: 68
Trustee since: 2002
Term of office: After initial term, expected to stand for re-election at 2006
annual meeting of shareholders.
Trustee/Director of 16 funds in Fund Complex; Trustee/Director of no funds
outside of Fund Complex

PRINCIPAL  OCCUPATION(S) DURING PAST 5 YEARS:  Director/Trustee of fifteen open-
and closed-end  management investment companies affiliated with Allianz Dresdner
Asset Management of America L.P.; Corporate Affairs Consultant; Formerly, Senior
Vice President, Corporate Office, Smith Barney Inc.

JOHN J. DALESSANDRO II, TRUSTEE
1345 Avenue of the Americas, New York, NY 10105
Age: 65
Trustee since: 2002
Term of office: After initial term, expected to stand for re-election at 2004
annual meeting of shareholders.
Trustee of 13 funds in Fund Complex; Trustee of no funds outside of Fund Complex

PRINCIPAL  OCCUPATION(S)  DURING  PAST 5 YEARS:  President  and  Director,  J.J.
Dalessandro II ltd.,  registered  broker-dealer and member of the New York Stock
exchange;   Trustee  of  thirteen  closed-end  management  investment  companies
affiliated with Allianz Dresdner Asset Management of America L.P.

HANS W. KERTESS, TRUSTEE
1345 Avenue of the Americas, New York, NY 10105
Age: 63
Trustee since: 2002
Term of office: After initial term, expected to stand for re-election at 2006
annual meeting of shareholders.
Trustee of 8 funds in Fund Complex; Trustee of no funds outside of Fund Complex

PRINCIPAL  OCCUPATION(S)  DURING PAST 5 YEARS:  Consultant,  Dain  Raucher  Inc;
Trustee of eight  closed-end  management  investment  companies  affiliated with
Allianz Dresdner Asset Management of America L.P.  Formerly,  Managing Director,
Salomon Brothers; Managing Director, Dain Rauscher Inc.

R. PETER SULLIVAN III, TRUSTEE
1345 Avenue of the Americas, New York, NY 10105
Age: 61
Trustee since: 2002
Term of office: After initial term, expected to stand for re-election at 2005
annual meeting of shareholders.
Trustee of 7 funds in Fund Complex; Trustee of no funds outside of Fund Complex

PRINCIPAL  OCCUPATION(S)  DURING  PAST 5  YEARS:  Trustee  of  seven  closed-end
management   investment   companies   affiliated  with  Allianz  Dresdner  Asset
Management of America L.P. Formerly,  Managing Partner,  Bear Wagner Specialists
LLC (formerly, Wagner Stott Mercator LLC), specialist firm on the New York Stock
Exchange.



                      5.31.03 | PIMCO Municipal Income Funds II Annual Report 35




PIMCO MUNICIPAL INCOME FUNDS II PRIVACY POLICY


OUR COMMITMENT TO YOU

We consider customer privacy to be a fundamental aspect of our relationship with
clients.  We are committed to maintaining the  confidentiality,  integrity,  and
security of our current,  prospective and former clients' personal  information.
We have  developed  policies  designed to protect  this  confidentiality,  while
allowing client needs to be served.

OBTAINING PERSONAL INFORMATION

In the  course of  providing  you with  products  and  services,  we may  obtain
non-public  personal  information  about  you.  This  information  may come from
sources  such as account  applications  and other  forms,  from  other  written,
electronic or verbal correspondence, from your transactions, from your brokerage
or  financial  advisory  firm,  financial  adviser or  consultant,  and/or  from
information captured on our internet web sites.

RESPECTING YOUR PRIVACY

We do not  disclose  any  personal  or account  information  provided  by you or
gathered by us to non-affiliated third parties,  except as required or permitted
by law. As is common in the industry,  non-affiliated companies may from time to
time be  used to  provide  certain  services,  such  as  preparing  and  mailing
prospectuses,  reports,  account  statements and other  information,  conducting
research on client satisfaction,  and gathering shareholder proxies. We may also
retain  non-affiliated  companies  to  market  our  products  and enter in joint
marketing  agreements with other  companies.  These companies may have access to
your personal and account information,  but are permitted to use the information
solely to provide the specific service or as otherwise  permitted by law. We may
also  provide  your  personal  and  account  information  to your  brokerage  or
financial advisory firm and/or to your financial adviser or consultant.

SHARING INFORMATION WITH THIRD PARTIES

We  do  reserve  the  right  to  disclose  or  report  personal  information  to
non-affiliated  third parties in limited  circumstances where we believe in good
faith that disclosure is required under law, to cooperate with regulators or law
enforcement  authorities,  to protect our rights or property, or upon reasonable
request by any mutual fund in which you have chosen to invest.  In addition,  we
may disclose  information  about you or your accounts to a non-affiliated  third
party at your request or if you consent in writing to the disclosure.

SHARING INFORMATION WITH AFFILIATES

We may share client information with our affiliates in connection with servicing
your account or to provide you with information about products and services that
we believe may be of interest to you. The information we share may include,  for
example,  your  participation in our mutual funds or other investment  programs,
your ownership of certain types of accounts (such as IRAs),  or other data about
your  accounts.  Our  affiliates,  in turn,  are not  permitted  to  share  your
information  with  non-affiliated  entities,  excpet as required or permitted by
law.

IMPLEMENTATION OF PROCEDURES

We  take  seriously  the  obligation  to  safeguard  your  non-public   personal
information.  We have implemented procedures designed to restrict access to your
non-public  personal  information  to  our  personnel  who  need  to  know  that
information  to provide  products or  services to you. To guard your  non-public
personal  information,  physical,  electronic,  and procedural safeguards are in
place.






36 PIMCO Municipal Income Funds II Annual Report | 5.31.03




TRUSTEES AND PRINCIPAL OFFICERS

Stephen Treadway
   Trustee, Chairman, Chairman of the Board
Paul Belica
   Trustee
Robert E. Connor
   Trustee
John J. Dalessandro II
   Trustee
Hans W. Kertess
   Trustee
R. Peter Sullivan, III
   Trustee
Brian S. Shlissel
   President & Chief Executive Officer
Newton B. Schott, Jr.
   Executive Vice President & Secretary
Mark V. McCray
   Vice President
Lawrence G. Altadonna
   Treasurer, Principal Financial & Accounting Officer

INVESTMENT MANAGER

PIMCO Advisors Fund Management LLC
1345 Avenue of the Americas
New York, NY 10105

SUB-ADVISER

Pacific Investment Management Company LLC
840 Newport Center Drive
Newport Beach, CA 92660

TRANSFER AGENT, DIVIDEND PAYING AGENT AND REGISTRAR

PFPC Inc.
400 Bellevue Parkway
Wilmington, DE 19809

INDEPENDENT AUDITORS

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036

LEGAL COUNSEL

Ropes & Gray
One International Place
Boston, MA 02210-2624

This report,  including the financial  information herein, is transmitted to the
shareholders  of PIMCO  Municipal  Income Fund II,  PIMCO  California  Municipal
Income  Fund  II  and  PIMCO  New  York  Municipal  Income  Fund  II  for  their
information. It is not a prospectus, circular or representation intended for use
in the  purchase  of  shares of the Funds or any  securities  mentioned  in this
report.

Notice  is hereby  given in  accordance  with  Section  23(c) of the  Investment
Company Act of 1940,  as amended,  that from time to time each Fund may purchase
shares of its common stock in the open market.

Daily  information  on the Funds is  available  at  www.pimcoadvisors.com  or by
calling 1-800-331-1710.




PIMCO
--------
ADVISORS





ITEM 2. CODE OF ETHICS   Disclosure requirement not currently effective

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT  Disclosure requirement not currently

ITEM 4.  PRINCIPAL  ACCOUNTANT  FEES AND  SERVICES  Disclosure  requirement  not
currently effective

ITEM 5.  AUDIT  COMMITTEE  OF  LISTED  REGISTRANT   Disclosure  requirement  not
currently effective

ITEM 6. [RESERVED]

ITEM 7.  DISCLOSURE  OF PROXY VOTING  POLICIES  AND  PROCEDURES  FOR  CLOSED-END
MANAGEMENT INVESTMENT COMPANIES Disclosure requirement not currently effective

ITEM 8. [RESERVED]

ITEM 9. CONTROLS AND PROCEDURES

(a)  The  registrant's  President  and Chief  Executive  Officer  and  Principal
     Financial Officer have concluded that the registrant's  disclosure controls
     and procedures  (as defined in Rule 30a-2(c)  under the Investment  Company
     Act of 1940,  as amended are effective  based on their  evaluation of these
     controls and  procedures  as of a date within 90 days of the filing date of
     this document.

(b)  There were no significant changes in the registrant's  internal controls or
     in factors that could affect these controls subsequent to the date of their
     evaluation,  including any  corrective  actions with regard to  significant
     deficiencies and material weaknesses.

ITEM 10. EXHIBITS

(a)  Disclosure requirement not currently effective.

(b)  A separate certification for each principal executive officer and principal
     financial officer of the registrant as required by Rule 30a-2 under the Act
     (17 CFR 270.30a-2).




                                   SIGNATURES


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

(Registrant) PIMCO MUNICIPAL INCOME FUND II
             -----------------------------------------------------

By   /s/ Brian S. Shlissel
     -------------------------------------------------------------
     President and Chief Executive Officer

Date July 31, 2003
     -------------------------------------------------------------

By   /s/ Lawrence G. Altadonna
     -------------------------------------------------------------
     Treasurer

Date July 31, 2003
     -------------------------------------------------------------

Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.

By   /s/ Brian S. Shlissel
     -------------------------------------------------------------
     President and Chief Executive Officer

Date July 31, 2003
     -------------------------------------------------------------

By   /s/ Lawrence G. Altadonna
     -------------------------------------------------------------
     Treasurer

Date July 31, 2003
     -------------------------------------------------------------