Edgar Filing: DEUTSCHE STRATEGIC MUNICIPAL INCOME TRUST

nq083114ce-smit.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

_______________________________

Investment Company Act file number: 811-05767

Deutsche Strategic Municipal Income Trust

(Exact name of registrant as specified in charter)

345 Park Avenue

New York, NY 10154

(Address of principal executive offices) (Zip code)

Paul Schubert

60 Wall Street

New York, NY 10005

(Name and address of agent for service)

Registrant's telephone number, including area code: (212) 250-3220

Date of fiscal year end: 11/30

Date of reporting period: 8/31/2014

ITEM 1.

SCHEDULE OF INVESTMENTS

Investment Portfolio

as of August 31, 2014 (Unaudited)

Deutsche Strategic Municipal Income Trust

(formerly DWS Strategic Municipal Income Trust)

			Principal Amount ($)				Value ($)
	Municipal Bonds and Notes 141.0%
Arizona 1.2%
Maricopa County, AZ, Pollution Control Corp. Revenue, El Paso Electric Co. Project, Series B, 7.25%, 4/1/2040				1,570,000			1,799,251
California 14.1%
California, Bay Area Toll Authority, Toll Bridge Revenue, San Francisco Bay Area, Series E-1, 0.04% **, 4/1/2045, LOC: Bank of Tokyo-Mitsubishi UFJ				360,000			360,000
California, Health Facilities Financing Authority Revenue, Catholic Healthcare West, Series A, 6.0%, 7/1/2034				1,000,000			1,145,050
California, M-S-R Energy Authority, Series B, 7.0%, 11/1/2034, GTY: Citigroup, Inc.				1,310,000			1,834,590
California, Morongo Band of Mission Indians, Enterprise Casino Revenue, Series B, 144A, 6.5%, 3/1/2028				1,000,000			1,089,030
California, South Bayside Waste Management Authority, Solid Waste Enterprise, Shoreway Environmental, Series A, 6.25%, 9/1/2029				1,425,000			1,644,137
California, State General Obligation:
	5.0%, 11/1/2043			1,500,000			1,693,365
	5.25%, 4/1/2035			1,230,000			1,419,260
	5.5%, 3/1/2040			1,000,000			1,157,030
	5.75%, 4/1/2031			1,000,000			1,189,480
	6.0%, 4/1/2038			1,000,000			1,191,230
	6.5%, 4/1/2033			1,950,000			2,385,142
California, State Public Works Board Lease Revenue, Capital Projects, Series I-1, 6.375%, 11/1/2034				1,000,000			1,214,740
California, State Public Works Board Lease Revenue, Riverside Campus Project, Series B, 6.125%, 4/1/2028				2,000,000			2,380,820
Orange County, CA, Water District, Certificates of Participation, Series A, 0.05% **, 8/1/2042, LOC: Citibank NA				400,000			400,000
Riverside County, CA, Transportation Commission Toll Revenue Senior Lien, Series A, 5.75%, 6/1/2048				1,000,000			1,136,750
San Buenaventura, CA, Community Memorial Health Systems, 7.5%, 12/1/2041				500,000			585,650

							20,826,274
Colorado 2.1%
Colorado, Public Energy Authority, Natural Gas Purchased Revenue, 6.25%, 11/15/2028, GTY: Merrill Lynch & Co., Inc.				635,000			811,041
Colorado, State Health Facilities Authority Revenue, Covenant Retirement Communities, Series A, 5.0%, 12/1/2033				440,000			464,002
Colorado, State Health Facilities Authority Revenue, School Health Systems, Series A, 5.5%, 1/1/2035				1,000,000			1,179,490
Denver, CO, City & County Airport Revenue, Series A, AMT, 5.25%, 11/15/2043				600,000			655,584

							3,110,117
Connecticut 2.0%
Connecticut, Harbor Point Infrastructure Improvement District, Special Obligation Revenue, Harbor Point Project, Series A, 7.875%, 4/1/2039				2,000,000			2,379,440
Mashantucket, CT, Mashantucket Western Pequot Tribe, 144A, 6.05%, 7/1/2031 (PIK)				2,279,575			502,510

							2,881,950
District of Columbia 0.8%
District of Columbia, Metropolitan Airport Authority Systems Revenue:
	Series A, AMT, 5.0%, 10/1/2038			200,000			221,454
	Series A, AMT, 5.0%, 10/1/2043			850,000			931,507

							1,152,961
Florida 11.5%
Collier County, FL, Industrial Development Authority, Continuing Care Community Revenue, Arlington of Naples Project, Series A, 8.125%, 5/15/2044				500,000			544,965
Florida, Capital Region Community Development District, Capital Improvement Revenue, Series A, 7.0%, 5/1/2039				475,000			482,400
Florida, Middle Village Community Development District, Special Assessment, Series A, 6.0%, 5/1/2035				955,000			805,218
Florida, Tolomato Community Development District, Special Assessment:
	Series A-2, Step-up Coupon, 0% to 5/1/2017, 6.61% to 5/1/2039			50,000			36,703
	Series A-3, Step-up Coupon, 0% to 5/1/2019, 6.61% to 5/1/2040			110,000			65,826
	Series A-4, Step-up Coupon, 0% to 5/1/2022, 6.61% to 5/1/2040			55,000			24,388
	5.4%, 5/1/2037			1,645,000			1,654,344
	Series 1, 6.55%, 5/1/2027 *			10,000			10,209
	Series 2, 6.55%, 5/1/2027 *			400,000			237,688
	Series 3, 6.55%, 5/1/2027 *			130,000			1
	Series A-1, 6.55%, 5/1/2027			170,000			170,714
Florida, Village Community Development District No. 9, Special Assessment Revenue, 5.5%, 5/1/2042				165,000			179,578
Hillsborough County, FL, Industrial Development Authority Revenue, Health Facilities, University Community Hospital, Series A, Prerefunded, 5.625%, 8/15/2029				1,875,000			2,216,212
Martin County, FL, Health Facilities Authority, Martin Memorial Medical Center, 5.5%, 11/15/2042				335,000			362,916
Miami Beach, FL, Health Facilities Authority, Mount Sinai Medical Center:
	5.0%, 11/15/2044 (a)			500,000			542,860
	Prerefunded, 6.75%, 11/15/2029			1,600,000			1,619,898
Miami-Dade County, FL, Aviation Revenue:
	Series A, AMT, 5.0%, 10/1/2031			30,000			32,913
	Series A, 5.5%, 10/1/2041			3,000,000			3,420,180
Orlando & Orange County, FL, Expressway Authority Revenue, Series C, 5.0%, 7/1/2035				1,080,000			1,174,640
Tampa-Hillsborough County, FL, Expressway Authority:
	Series A, 5.0%, 7/1/2031			1,500,000			1,673,160
	Series A, 5.0%, 7/1/2037			1,590,000			1,743,626

							16,998,439
Georgia 6.7%
Americus-Sumter County, GA, Hospital Authority, Magnolia Manor Obligated Group, Series A, 6.25%, 5/15/2033				1,000,000			1,083,640
Atlanta, GA, Airport Revenue, Series C, AMT, 5.0%, 1/1/2037				375,000			402,199
Atlanta, GA, Tax Allocation, Beltline Project, Series B, 7.375%, 1/1/2031				1,000,000			1,180,490
Atlanta, GA, Water & Wastewater Revenue, Series A, 6.25%, 11/1/2034				2,000,000			2,387,900
DeKalb County, GA, Water & Sewer Revenue, Series A, 5.25%, 10/1/2036				1,000,000			1,150,270
Gainesville & Hall County, GA, Development Authority Retirement Community Revenue, ACTS Retirement Life Community, Series A-2, 6.625%, 11/15/2039				1,000,000			1,115,830
Georgia, Main Street Natural Gas, Inc., Gas Project Revenue, Series A, 5.5%, 9/15/2024, GTY: Merrill Lynch & Co., Inc.				1,220,000			1,454,764
Georgia, Medical Center Hospital Authority Revenue, Anticipation Certificates, Columbus Regional Healthcare System, 6.5%, 8/1/2038, INS: AGC				1,000,000			1,129,950

							9,905,043
Guam 2.4%
Guam, Government General Obligation, Series A, 7.0%, 11/15/2039				1,000,000			1,134,550
Guam, Government Waterworks Authority, Water & Wastewater System Revenue, Prerefunded, 6.0%, 7/1/2025				1,000,000			1,048,630
Guam, International Airport Authority Revenue, Series C, AMT, 6.375%, 10/1/2043				215,000			242,056
Guam, Power Authority Revenue, Series A, 5.5%, 10/1/2030				1,000,000			1,139,110

							3,564,346
Hawaii 0.4%
Hawaii, State Department of Budget & Finance, Special Purpose Revenue, Hawaiian Electric Co., Inc., 6.5%, 7/1/2039, GTY: Hawaiian Electric Co., Inc.				500,000			582,170
Idaho 0.2%
Idaho, Health Facilities Authority Revenue, St. Luke's Regional Medical Center, 6.75%, 11/1/2037				305,000			344,412
Illinois 6.8%
Chicago, IL, Airport Revenue, O'Hare International Airport Revenue, Series B, 6.0%, 1/1/2041				2,000,000			2,317,020
Chicago, IL, General Obligation, Series A, 5.25%, 1/1/2035				1,000,000			1,041,740
Illinois, Finance Authority Revenue, Friendship Village of Schaumburg, Series A, 5.625%, 2/15/2037				2,000,000			1,928,960
Illinois, Finance Authority Revenue, Park Place of Elmhurst, Series A, 8.0%, 5/15/2030				1,000,000			660,000
Illinois, Finance Authority Revenue, The Admiral at Lake Project, Series A, 8.0%, 5/15/2040				1,000,000			1,047,680
Illinois, Finance Authority Revenue, Three Crowns Park Plaza, Series A, 5.875%, 2/15/2038				1,000,000			1,006,390
Illinois, Metropolitan Pier & Exposition Authority Revenue, McCormick Place Project, Series A, 5.0%, 6/15/2042				300,000			323,967
Illinois, Railsplitter Tobacco Settlement Authority, 6.0%, 6/1/2028				365,000			430,145
Illinois, State Finance Authority Revenue, Trinity Health Corp., Series L, 5.0%, 12/1/2030				1,000,000			1,119,460
Illinois, State General Obligation, 5.5%, 7/1/2038				130,000			140,915

							10,016,277
Indiana 2.9%
Indiana, Finance Authority Hospital Revenue, Deaconess Hospital Obligation, Series A, 6.75%, 3/1/2039				525,000			596,253
Indiana, State Finance Authority Revenue, Community Foundation of Northwest Indiana, 5.0%, 3/1/2041				1,000,000			1,073,000
Indiana, State Finance Authority Revenue, Greencroft Obligation Group, Series A, 7.0%, 11/15/2043				460,000			527,933
Indiana, State Finance Authority Revenue, I-69 Development Partners LLC, AMT, 5.25%, 9/1/2034				225,000			242,802
Valparaiso, IN, Exempt Facilities Revenue, Pratt Paper LLC Project, AMT, 7.0%, 1/1/2044, GTY: Pratt Industries (U.S.A.)				780,000			886,158
Vigo County, IN, Hospital Authority Revenue, Union Hospital, Inc., 144A, 5.7%, 9/1/2037				1,000,000			1,008,000

							4,334,146
Iowa 1.4%
Iowa, Finance Authority Retirement Community Revenue, Edgewater LLC Project, 6.5%, 11/15/2027				1,000,000			1,043,900
Iowa, State Finance Authority, Midwestern Disaster Area Revenue, Fertilizer Co. Project, 5.25%, 12/1/2025				1,000,000			1,083,760

							2,127,660
Kansas 0.2%
Lenexa, KS, Health Care Facility Revenue, Lakeview Village, Inc. Project, 7.25%, 5/15/2039				300,000			331,164
Kentucky 5.3%
Kentucky, Economic Development Finance Authority, Hospital Facilities Revenue, Owensboro Medical Health Systems, Series A, 6.5%, 3/1/2045				2,000,000			2,287,780
Kentucky, Economic Development Finance Authority, Louisville Arena Project Revenue, Series A-1, 6.0%, 12/1/2033, INS: AGC				365,000			395,025
Kentucky, Public Transportation Infrastructure Authority Toll Revenue, 1st Tier-Downtown Crossing, Series A, 6.0%, 7/1/2053				1,440,000			1,656,547
Louisville & Jefferson County, KY, Metropolitan Government Health Systems Revenue, Norton Healthcare, Inc., 5.0%, 10/1/2030				3,425,000			3,548,506

							7,887,858
Louisiana 2.0%
Louisiana, Local Government Environmental Facilities, Community Development Authority Revenue, 6.75%, 11/1/2032				1,000,000			1,114,150
Louisiana, St. John Baptist Parish Revenue, Marathon Oil Corp., Series A, 5.125%, 6/1/2037				1,500,000			1,576,560
Louisiana, Tobacco Settlement Financing Corp. Revenue, Series A, 5.25%, 5/15/2035				180,000			193,426

							2,884,136
Maine 0.8%
Maine, Health & Higher Educational Facilities Authority Revenue, Maine General Medical Center, 6.75%, 7/1/2036				1,000,000			1,114,920
Maryland 4.0%
Maryland, Economic Development Corp., Pollution Control Revenue, Potomac Electric Power Co., 6.2%, 9/1/2022				1,500,000			1,799,280
Maryland, State Economic Development Corp. Revenue, Senior Lien Project, Chesapeake Bay:
	Series A, 5.0%, 12/1/2031 (b)			1,000,000			468,390
	Series B, 5.25%, 12/1/2031 (b)			1,000,000			468,390
Maryland, State Health & Higher Educational Facilities Authority Revenue, Anne Arundel Health Systems, Series A, 6.75%, 7/1/2039				500,000			605,795
Maryland, State Health & Higher Educational Facilities Authority Revenue, Washington County Hospital:
	5.75%, 1/1/2033			1,000,000			1,041,110
	6.0%, 1/1/2028			1,385,000			1,475,593
Westminster, MD, Project Revenue, Lutheran Village Millers Grant, Inc., Series A, 6.25%, 7/1/2044 (a)				60,000			60,387

							5,918,945
Massachusetts 4.1%
Massachusetts, Industrial Development Revenue, Development Finance Agency, Series A, 7.1%, 7/1/2032				1,630,000			1,630,799
Massachusetts, Project Revenue, Health & Educational Facilities Authority, Jordan Hospital, Series E, 6.75%, 10/1/2033				1,790,000			1,791,808
Massachusetts, State Development Finance Agency Revenue, Linden Ponds, Inc. Facility:
	Series B, 11/15/2056*			505,485			2,239
	Series A-2, 5.5%, 11/15/2046			101,629			71,263
	Series A-1, 6.25%, 11/15/2039			1,903,948			1,557,087
Massachusetts, State Health & Educational Facilities Authority Revenue, Milford Regional Medical Center, Series E, 5.0%, 7/15/2037				950,000			960,089

							6,013,285
Michigan 6.3%
Detroit, MI, Water & Sewerage Department, Sewerage Disposal System Revenue, Series A, 5.25%, 7/1/2039				280,000			297,046
Detroit, MI, Water Supply Systems Revenue, Series A, 5.75%, 7/1/2037				1,000,000			1,074,950
Kalamazoo, MI, Economic Development Corp. Revenue, Limited Obligation, Heritage Community, 5.5%, 5/15/2036				1,000,000			1,001,900
Kentwood, MI, Economic Development, Limited Obligation, Holland Home, Series A, 5.375%, 11/15/2036				2,000,000			2,009,860
Michigan, State Building Authority Revenue, Facilities Program, Series I-A, 5.5%, 10/15/2045				2,000,000			2,279,400
Michigan, State Finance Authority Revenue, Detroit Water & Sewer, Series C-3, 5.0%, 7/1/2033, INS: AGMC (a)				180,000			192,773
Royal Oak, MI, Hospital Finance Authority Revenue, William Beaumont Hospital, Prerefunded, 8.25%, 9/1/2039				1,000,000			1,293,310
Tawas City, MI, Hospital Finance Authority, St. Joseph Health Services, Series A, ETM, 5.75%, 2/15/2023				1,200,000			1,205,592

							9,354,831
Minnesota 0.8%
Minneapolis, MN, Health Care Systems Revenue, Fairview Health Services, Series A, 6.75%, 11/15/2032				1,000,000			1,188,720
Mississippi 1.2%
Lowndes County, MS, Solid Waste Disposal & Pollution Control Revenue, Weyerhaeuser Co. Project, Series A, 6.8%, 4/1/2022				250,000			301,320
Mississippi, Business Finance Corp., Pollution Control Revenue, Systems Energy Resources, Inc. Project, 5.875%, 4/1/2022				1,000,000			1,000,780
Warren County, MS, Gulf Opportunity Zone, International Paper Co., Series A, 6.5%, 9/1/2032				435,000			491,098

							1,793,198
Missouri 1.8%
Missouri, State Health & Educational Facilities Authority Revenue, Lutheran Senior Services, Series C, 5.0%, 2/1/2042				2,000,000			2,035,500
Missouri, State Health & Educational Facilities Authority, Health Facilities Revenue, Lester E Cox Medical Centers, Series A, 5.0%, 11/15/2048				150,000			163,020
St. Louis, MO, Lambert-St. Louis International Airport Revenue, Series A-1, 6.625%, 7/1/2034				415,000			480,445

							2,678,965
Nevada 6.6%
Clark County, NV, School District, Series A, 5.0%, 6/15/2022, INS: NATL				5,140,000			5,866,128
Henderson, NV, Health Care Facility Revenue, Catholic Healthcare West, Series B, 5.25%, 7/1/2031				2,000,000			2,111,440
Las Vegas Valley, NV, Water District, Series B, 5.0%, 6/1/2037				1,565,000			1,762,190

							9,739,758
New Hampshire 1.2%
New Hampshire, State Business Finance Authority, Solid Waste Disposal Revenue, Waste Management, Inc. Project, AMT, 5.2%, 5/1/2027				1,750,000			1,832,285
New Jersey 5.5%
New Jersey, Health Care Facilities Financing Authority Revenue, St. Joseph's Health Care System, 6.625%, 7/1/2038				715,000			779,536
New Jersey, State Economic Development Authority Revenue, The Goethals Bridge Replacement Project, AMT, 5.375%, 1/1/2043				1,000,000			1,087,520
New Jersey, State Economic Development Authority, Continental Airlines, Inc. Project, AMT, 4.875%, 9/15/2019				755,000			778,420
New Jersey, State Economic Development Authority, Special Facilities Revenue, Continental Airlines, Inc. Project, Series B, AMT, 5.625%, 11/15/2030				500,000			540,185
New Jersey, State Transportation Trust Fund Authority, Series B, 5.5%, 6/15/2031				1,500,000			1,738,380
New Jersey, Tobacco Settlement Financing Corp., Series 1A, 4.75%, 6/1/2034				4,280,000			3,177,772

							8,101,813
New York 9.8%
Long Island, NY, Power Authority, Series 3A, 0.05% **, 5/1/2033, LOC: JPMorgan Chase Bank NA				1,250,000			1,250,000
New York, Metropolitan Transportation Authority Revenue:
	Series D, 5.0%, 11/15/2038			275,000			305,055
	Series E, 5.0%, 11/15/2042			305,000			335,448
New York & New Jersey, Port Authority, Special Obligation Revenue, JFK International Air Terminal LLC, 6.0%, 12/1/2042				680,000			787,963
New York & New Jersey Port Authority, One Hundred Forty-Seventh, AMT, 5.0%, 10/15/2023, INS: NATL				8,260,000			9,028,841
New York City, NY, Industrial Development Agency, Special Facility Revenue, American Airlines, JFK International Airport, AMT, 8.0%, 8/1/2028, GTY: American Airlines Group				2,000,000			2,211,000
New York, NY, General Obligation, Series E, 0.05% **, 8/1/2034, LOC: Bank of America NA				500,000			500,000

							14,418,307
North Carolina 0.8%
North Carolina, Medical Care Commission, Health Care Facilities Revenue, University Health Systems, Series D, 6.25%, 12/1/2033				1,000,000			1,160,790
Ohio 1.2%
Ohio, American Municipal Power, Inc. Revenue, Fremont Energy Center Project, Series B, 5.0%, 2/15/2037				1,575,000			1,721,900
Pennsylvania 3.1%
Butler County, PA, Hospital Authority Revenue, Butler Health Systems Project, 7.25%, 7/1/2039				2,000,000			2,355,420
Montgomery County, PA, Industrial Development Authority Revenue, Whitemarsh Continuing Care, 6.25%, 2/1/2035				600,000			605,052
Philadelphia, PA, Redevelopment Authority Revenue, First Lien Mortgage, Series A, 6.5%, 1/1/2029				502,300			503,375
Westmoreland County, PA, Industrial Development Authority Revenue, Retirement Community-Redstone, Series A, Prerefunded, 5.875%, 1/1/2032				1,000,000			1,072,540

							4,536,387
Puerto Rico 5.1%
Commonwealth of Puerto Rico, Aqueduct & Sewer Authority Revenue, Series A, 6.0%, 7/1/2038				2,000,000			1,572,240
Commonwealth of Puerto Rico, General Obligation, Series A, 8.0%, 7/1/2035				220,000			201,956
Puerto Rico, Public Buildings Authority Revenue, Series Q, 5.625%, 7/1/2039				1,000,000			749,260
Puerto Rico, Sales Tax Financing Corp., Sales Tax Revenue:
	Series A, 5.5%, 8/1/2042			1,000,000			802,030
	Series A, 6.0%, 8/1/2042			1,000,000			847,040
	Series A, 6.375%, 8/1/2039			2,000,000			1,713,900
Puerto Rico, Sales Tax Financing Corp., Sales Tax Revenue, Convertible Capital Appreciation, Series A, Step-up Coupon, 0% to 8/1/2016, 6.75% to 8/1/2032				2,000,000			1,577,200

							7,463,626
South Carolina 1.3%
Hardeeville, SC, Assessment Revenue, Anderson Tract Municipal Improvement District, Series A, 7.75%, 11/1/2039				935,000			880,873
South Carolina, State Public Service Authority Revenue, Santee Cooper, Series A, 5.75%, 12/1/2043				890,000			1,049,799

							1,930,672
Tennessee 1.6%
Clarksville, TN, Natural Gas Acquisition Corp., Gas Revenue:
	5.0%, 12/15/2017, GTY: Merrill Lynch & Co., Inc.			500,000			555,540
	5.0%, 12/15/2018, GTY: Merrill Lynch & Co., Inc.			540,000			609,422
Johnson City, TN, Health & Educational Facilities Board Hospital Revenue, Mountain States Health Alliance, Series A, 7.75%, 7/1/2038				1,000,000			1,177,130

							2,342,092
Texas 17.1%
Brazos River, TX, Harbor Navigation District, Brazoria County Environmental Health, Dow Chemical Co. Project:
	Series B-2, 4.95%, 5/15/2033			1,000,000			1,066,110
	Series A-3, AMT, 5.125%, 5/15/2033			1,000,000			1,060,910
Central Texas, Regional Mobility Authority Revenue, Series A, 5.0%, 1/1/2043				1,500,000			1,603,200
Central Texas, Regional Mobility Authority Revenue, Senior Lien, 6.0%, 1/1/2041				545,000			619,507
Dallas-Fort Worth, International Airport Revenue:
	Series F, AMT, 5.0%, 11/1/2035			1,000,000			1,065,140
	Series D, AMT, 5.0%, 11/1/2038			2,000,000			2,134,440
Houston, TX, Airport System Revenue, United Airlines, Inc., Terminal E Project, AMT, 4.75%, 7/1/2024				615,000			646,814
Matagorda County, TX, Navigation District No. 1, Pollution Control Revenue, AEP Texas Central Co. Project, Series A, 4.4%, 5/1/2030, INS: AMBAC				2,250,000			2,416,207
North Texas, Tollway Authority Revenue, Toll Second Tier, Series F, 5.75%, 1/1/2033				2,000,000			2,235,860
Red River, TX, Health Facilities Development Corp., Retirement Facilities Revenue, MRC Crossings Project, Series A, 8.0%, 11/15/2049				285,000			320,813
Red River, TX, Health Facilities Development Corp., Retirement Facilities Revenue, Sears Methodist Retirement System Obligated Group Project, Series A, 5.45%, 11/15/2038				2,410,000			1,036,252
San Antonio, TX, Convention Center Hotel Finance Corp., Contract Revenue, Empowerment Zone, Series A, AMT, 5.0%, 7/15/2039, INS: AMBAC				1,000,000			1,003,560
Tarrant County, TX, Cultural Education Facilities Finance Corp., Hospital Revenue, Scott & White Healthcare, 5.0%, 8/15/2043				2,100,000			2,291,520
Tarrant County, TX, Cultural Education Facilities Finance Corp., Retirement Facility, Mirador Project, Series A, 8.25%, 11/15/2044				570,000			555,676
Texas, Grand Parkway Transportation Corp., System Toll Revenue, Series B, 5.0%, 4/1/2053				500,000			546,740
Texas, Love Field Airport Modernization Corp., Special Facilities Revenue, Southwest Airlines Co. Project, 5.25%, 11/1/2040				1,055,000			1,121,634
Texas, SA Energy Acquisition Public Facility Corp., Gas Supply Revenue, 5.5%, 8/1/2020, GTY: The Goldman Sachs Group, Inc.				2,000,000			2,318,780
Texas, State Municipal Gas Acquisition & Supply Corp., III Gas Supply Revenue:
	5.0%, 12/15/2030			165,000			179,210
	5.0%, 12/15/2031			1,000,000			1,077,260
	5.0%, 12/15/2032			1,000,000			1,069,940
Texas, State Private Activity Bond, Surface Transportation Corp. Revenue, Senior Lien, North Tarrant Express Mobility Partners Segments LLC, AMT, 6.75%, 6/30/2043				280,000			337,630
Travis County, TX, Health Facilities Development Corp. Revenue, Westminster Manor Health, 7.125%, 11/1/2040				510,000			577,447

							25,284,650
Virgin Islands 1.1%
Virgin Islands, Public Finance Authority Revenue, Gross Receipts Tax Loan Note, Series A, 5.0%, 10/1/2032				1,500,000			1,654,485
Virginia 1.8%
Virginia, Route 460 Funding Corp., Toll Road Revenue, Series A, 5.0%, 7/1/2052				1,000,000			1,040,810
Washington County, VA, Industrial Development Authority, Hospital Facility Revenue, Mountain States Health Alliance, Series C, 7.75%, 7/1/2038				1,370,000			1,615,710

							2,656,520
Washington 3.3%
Washington, State Health Care Facilities Authority Revenue, Series C, 5.375%, 8/15/2028, INS: Radian				595,000			616,444
Washington, State Health Care Facilities Authority Revenue, Virginia Mason Medical Center, Series A, 6.125%, 8/15/2037				2,000,000			2,113,520
Washington, State Health Care Facilities Authority, Catholic Health Initiatives, Series A, 5.0%, 2/1/2041				1,000,000			1,069,550
Washington, State Housing Finance Commission, Rockwood Retirement Communities Project, Series A, 7.375%, 1/1/2044				1,000,000			1,095,980

							4,895,494
Wisconsin 2.5%
Wisconsin, State Health & Educational Facilities Authority Revenue, Agnesian Healthcare, Inc., Series B, 5.0%, 7/1/2036				500,000			544,270
Wisconsin, State Health & Educational Facilities Authority Revenue, Prohealth Care, Inc. Obligation Group, 6.625%, 2/15/2039				1,110,000			1,300,343
Wisconsin, State Health & Educational Facilities Authority Revenue, Thedacare, Inc., Series A, 5.5%, 12/15/2038				1,765,000			1,907,576

							3,752,189

Total Municipal Bonds and Notes (Cost $186,447,959)					208,300,036
	Underlying Municipal Bonds of Inverse Floaters (c) 11.8%
California 3.1%
San Diego County, CA, Water Authority Revenue, Certificates of Participation, Series 2008-A, 5.0%, 5/1/2027, INS: AGMC (d)				2,121,349			2,397,998
San Diego County, CA, Water Authority Revenue, Certificates of Participation, Series 2008-A, 5.0%, 5/1/2028, INS: AGMC (d)				1,930,312			2,182,046
	Trust: San Diego County, CA, Water Utility Improvements, Certificates of Participation, Series 2008-1104, 144A, 9.354%, 11/1/2015, Leverage Factor at purchase date: 2 to 1

							4,580,044
New York 4.1%
New York, State Dormitory Authority, State Personal Income Tax Revenue, Series A, 5.0%, 3/15/2023 (d)				5,535,000			6,143,307
	Trust: New York, State Dormitory Authority Revenue, Secondary Issues, Series 1955-2, 144A, 18.243%, 3/15/2015, Leverage Factor at purchase date: 4 to 1
Tennessee 4.6%
Nashville & Davidson County, TN, Metropolitan Government, 5.0%, 1/1/2024 (d)				5,918,585			6,766,684
	Trust: Nashville & Davidson County, TN, Metropolitan Government, Series 2631-1, 144A, 18.256%, 1/1/2016, Leverage Factor at purchase date: 4 to 1

Total Underlying Municipal Bonds of Inverse Floaters (Cost $15,599,083)					17,490,035

			% of Net Assets				Value ($)

Total Investment Portfolio (Cost $202,047,042) †		152.8				225,790,071
MTPS, at Liquidation Value		(40.9)				(60,475,000)
Floating Rate Notes (c)		(7.2)				(10,615,039)
Other Assets and Liabilities, Net		1.7				2,550,589
ARPS, at Liquidation Value		(6.4)				(9,525,000)

Net Assets		100.0				147,725,621

For information on the Fund's policies regarding the valuation of investments and other significant accounting policies, please refer to the Fund's most recent semi-annual or annual financial statements.
The following table represents bonds that are in default:

Security	Coupon			Maturity Date	Principal Amount ($)		Cost ($)		Value ($)
Florida, Tolomato Community Development District, Special Assessment, Series 1 *		6.55	%	5/1/2027		10,000		4,160		10,209
Florida, Tolomato Community Development District, Special Assessment, Series 2 *		6.55	%	5/1/2027		400,000		141,280		237,688
Florida, Tolomato Community Development District, Special Assessment, Series 3 *		6.55	%	5/1/2027		130,000		1		1
Maryland, State Economic Development Corp. Revenue, Senior Lien Project, Chesapeake Bay, Series A (b)		5.0	%	12/1/2031		1,000,000		485,000		468,390
Maryland, State Economic Development Corp. Revenue, Senior Lien Project, Chesapeake Bay, Series B (b)		5.25	%	12/1/2031		1,000,000		1,000,000		468,390
								1,630,441		1,184,678

*	Non-income producing security.
**	Variable rate demand notes are securities whose interest rates are reset periodically at market levels. These securities are often payable on demand and are shown at their current rates as of August 31, 2014.
†	The cost for federal income tax purposes was $190,153,436. At August 31, 2014, net unrealized appreciation for all securities based on tax cost was $25,021,596. This consisted of aggregate gross unrealized appreciation for all securities in which there was an excess of value over tax cost of $29,409,103 and aggregate gross unrealized depreciation for all securities in which there was an excess of tax cost over value of $4,387,507.
(a)	When-issued security.
(b)	Partial interest paying security. The rate shown represents 36.8% of the original coupon rate.
(c)	Securities represent the underlying municipal obligations of inverse floating rate obligations held by the Fund. The Floating Rate Notes represent leverage to the Fund and is the amount owed to the floating rate note holders.
(d)	Security forms part of the below inverse floater. The Fund accounts for these inverse floaters as a form of secured borrowing, by reflecting the value of the underlying bond in the investments of the Fund and the amount owed to the floating rate note holder as a liability.
144A: Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers.
AGC: Assured Guaranty Corp.
AGMC: Assured Guaranty Municipal Corp.
AMBAC: Ambac Financial Group, Inc.
AMT: Subject to alternative minimum tax.
ETM: Bonds bearing the description ETM (escrow to maturity) are collateralized usually by U.S. Treasury securities which are held in escrow and used to pay principal and interest on bonds so designated.
GTY: Guaranty Agreement
INS: Insured
LOC: Letter of Credit
NATL: National Public Finance Guarantee Corp.
PIK: Denotes that all or a portion of the income is paid in-kind in the form of additional principal.
Prerefunded: Bonds which are prerefunded are collateralized usually by U.S. Treasury securities which are held in escrow and used to pay principal and interest on tax-exempt issues and to retire the bonds in full at the earliest refunding date.
Radian: Radian Asset Assurance, Inc.

Fair Value Measurements

Various inputs are used in determining the value of the Fund's investments. These inputs are summarized in three broad levels. Level 1 includes quoted prices in active markets for identical securities. Level 2 includes other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, and credit risk). Level 3 includes significant unobservable inputs (including the Fund's own assumptions in determining the fair value of investments).The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities.

The following is a summary of the inputs used as of August 31, 2014 in valuing the Fund's investments.

Assets	Level 1		Level 2		Level 3		Total
Municipal Bonds and Notes(e)	$	—	$	225,790,071	$	—	$	225,790,071
Total	$	—	$	225,790,071	$	—	$	225,790,071

There have been no transfers between fair value measurement levels during the period ended August 31, 2014.
(e)	See Investment Portfolio for additional detailed categorizations.

ITEM 2.	CONTROLS AND PROCEDURES

	(a) The Chief Executive and Financial Officers concluded that the Registrant’s Disclosure Controls and Procedures are effective based on the evaluation of the Disclosure Controls and Procedures as of a date within 90 days of the filing date of this report.

	(b) There have been no changes in the registrant’s internal control over financial reporting that occurred during the registrant’s last fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal controls over financial reporting.

ITEM 3.	EXHIBITS

	Certification pursuant to Rule 30a-2(a) under the Investment Company Act of 1940 (17 CFR 270.30a-2(a)) is filed and attached hereto as Exhibit 99.CERT.

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:	Deutsche Strategic Municipal Income Trust

By:	/s/Brian E. Binder Brian E. Binder President

Date:	October 23, 2014

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 E. Binder Brian E. Binder President

Date:	October 23, 2014



By:	/s/Paul Schubert Paul Schubert Chief Financial Officer and Treasurer

Date:	October 23, 2014