U.S. SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM N-17F-2

CERTIFICATE OF ACCOUNTING OF SECURITIES AND SIMILAR INVESTMENTS IN THE

CUSTODY OF MANAGEMENT INVESTMENT COMPANIES

PURSUANT TO RULE N-17F-2

1. Investment Company Act File Number:				Date Examination completed:
811 - 08394				May 26, 2011

2. State Identification Number:

AL	AK	AZ	AR		CA	CO
CT	DE	DC	FL		GA	HI
ID	IL	IN	IA		KS	KY
LA	ME	MD	MA		MI	MN
MS	MO	MT	NE		NV	NH
NJ	NM	NY	NC		ND	OH
OK	OR	PA	RI		SC	SD
TN	TX	UT	VT		VA	WA
WV	WI	WY	PUERTO RICO

3. Exact name of investment company as specified in registration statement:

Templeton Dragon Fund, Inc.




4. Address of principal executive office: (number, street, city, state, zip code)
300 S.E. 2 ^nd Street, Fort Lauderdale, FL 33301-1923

[PWC LOGO]

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of

Franklin Templeton Limited Duration Income Trust

Templeton Global Investment Trust

Franklin Real Estate Securities Trust

Franklin Strategic Series

Franklin High Income Trust

Franklin Money Fund

Franklin Templeton Money Fund Trust

Institutional Fiduciary Trust

Franklin Global Trust

Franklin Gold and Precious Metals Fund

Franklin Universal Trust

Templeton China World Fund

Templeton Emerging Markets Fund

Templeton Emerging Markets Income Fund

Templeton Global Income Fund

Templeton Income Trust

Franklin Custodian Funds

Franklin Strategic Mortgage Portfolio

Franklin Investors Securities Trust

Franklin Templeton Global Trust

Franklin Templeton International Trust

Franklin Value Investors Trust

Templeton Developing Markets Trust

Franklin Templeton Fund Allocator Series

Franklin Templeton Variable Insurance Products Trust

Templeton Institutional Funds

Templeton International Emerging Markets Fund

and the Board of Directors of

Templeton Dragon Fund, Inc.

Templeton Russia and East European Fund, Inc.

PricewaterhouseCoopers LLP, 300 Madison Avenue, New York, NY 10017

T: (646) 471 3000, F: (646) 471 8320, www.pwc.com/us

We have examined management's assertion, included in the accompanying Management Statement Regarding Compliance with Certain Provisions of the Investment Company Act of 1940, that the funds (see Attachment I), (hereafter referred to as the “Funds”) complied with the requirements of subsections (b) and (c) of Rule 17f-2 under the Investment Company Act of 1940 (“the Act”) as of January 31, 2011. Management is responsible for the Funds' compliance with those requirements. Our responsibility is to express an opinion on management's assertion about the Funds' compliance based on our examination.

Our examination was conducted in accordance with the standards of the Public Company Accounting Oversight Board (United States) and, accordingly, included examining, on a test basis, evidence about the Funds' compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. Included among our procedures were the following tests performed as of January 31, 2011 and with respect to agreement of security purchases and sales, for the periods indicated in Attachment I:

Without prior notice to management, confirmation of all securities held by Franklin Templeton Investors Services, Inc., transfer agent, as they pertain to the security positions owned by the Funds and held in book entry form.
Reconciliation of such security positions to the books and records of the Funds.
Agreement of 100 security purchases and 100 security sales, since our last report, from the books and records of the Funds to the records of the transfer agent.

We believe that our examination provides a reasonable basis for our opinion. Our examination does not provide a legal determination on the Funds' compliance with specified requirements.

In our opinion, management's assertion that the Funds were in compliance with the requirements of subsections (b) and (c) of Rule 17f-2 of the Investment Company Act of 1940 as of January 31, 2011 with respect to securities reflected in the investment accounts of the Funds is fairly stated, in all material respects.

This report is intended solely for the information and use of, management, the Board of Trustees and Board of Directors and the Securities and Exchange Commission and is not intended to be and should not be used by anyone other than these specified parties.

/s/PRICEWATERHOUSECOOPERS, LLP

PricewaterhouseCoopers, LLP

San Francisco, California

May 26, 2011

Management Statement Regarding Compliance With Certain

Provisions of the Investment Company Act of 1940

We, as members of management of the Franklin Templeton Funds indicated in Attachment I (the “Funds”), are responsible for complying with the requirements of subsections (b) and (c) of Rule 17f-2, “Custody of Investments by Registered Management Investment Companies,” of the Investment Company Act of 1940. We are also responsible for establishing and maintaining effective internal controls over compliance with those requirements. We have performed an evaluation of the Funds’ compliance with the requirements of subsection (b) of Rule 17f-2, as interpreted in Franklin Investors Securities Trust SEC No-Action Letter (publicly available September 24, 1992), and subsection (c) of Rule 17f-2 of the Investment Company Act of 1940, as of January 31, 2011, and for the periods indicated in Attachment I.

Based on this evaluation, we assert that the Funds were in compliance with the requirements of subsection (b) of Rule 17f-2, as interpreted in Franklin Investors Securities Trust SEC No-Action Letter (publicly available September 24, 1992), and subsection (c) of Rule 17f-2 of the Investment Company Act of 1940, as of January 31, 2011, and for the periods indicated in Attachment I, with respect to securities reflected in the investment accounts of the Funds.

By:

/s/GASTON GARDEY

Gaston Gardey

Chief Financial Officer and Chief Accounting Officer

Franklin Funds Board

Date

/s/MARK H. OTANI

Mark H. Otani

Chief Financial Officer and Chief Accounting Officer

Templeton Funds Board

Date

/s/MATTHEW T. HINKLE

Matthew T. Hinkle

Chief Financial Officer and Chief Accounting Officer

Franklin New Jersey Funds Board

Date

/s/LAURA F. FERGERSON

Laura F. Fergerson

Chief Executive Officer - Finance and Administration

Date

Attachment I

*Fund*		*Period*

*Franklin Templeton Limited Duration Income Trust*		October 1, 2010-January 31, 2011

*Templeton Global Investment Trust:*
	Templeton BRIC Fund	October 1, 2010-January 31, 2011
	Templeton Emerging Markets Small Cap Fund	October 1, 2010-January 31, 2011
	Templeton Frontier Markets Fund	October 1, 2010-January 31, 2011
	Templeton Income Fund	October 1, 2010-January 31, 2011

*Templeton Russia and East European Fund, Inc.*		October 1, 2010-January 31, 2011

*Franklin Real Estate Securities Trust:*
	Franklin Real Estate Securities Fund	October 1, 2010-January 31, 2011

*Franklin Strategic Series:*
	Franklin Biotechnology Discovery Fund	October 1, 2010-January 31, 2011
	Franklin Flex Cap Growth Fund	October 1, 2010-January 31, 2011
	Franklin Focused Core Equity Fund	October 1, 2010-January 31, 2011
	Franklin Growth Opportunities Fund	October 1, 2010-January 31, 2011
	Franklin Natural Resources Fund	October 1, 2010-January 31, 2011
	Franklin Small Cap Growth Fund	October 1, 2010-January 31, 2011
	Franklin Small-Mid Cap Growth Fund	October 1, 2010-January 31, 2011
	Franklin Strategic Income Fund	October 1, 2010-January 31, 2011

*Franklin High Income Trust:*
	Franklin High Income Fund	October 1, 2010-January 31, 2011

*Franklin Money Fund*		October 1, 2010-January 31, 2011

*Franklin Templeton Money Fund Trust:*
	Franklin Templeton Money Fund	October 1, 2010-January 31, 2011

*Institutional Fiduciary Trust:*
	Money Market Portfolio	October 1, 2010-January 31, 2011

*Franklin Global Trust:*
	Fiduciary Large Cap Equity Fund	October 1, 2010-January 31, 2011
	Franklin International Growth Fund	October 1, 2010-January 31, 2011
	Franklin Templeton Emerging Market Debt Opportunities Fund	October 1, 2010-January 31, 2011

*Franklin Gold and Precious Metals Fund*		October 1, 2010-January 31, 2011

*Franklin Universal Trust*		October 1, 2010-January 31, 2011

*Templeton China World Fund*		October 1, 2010-January 31, 2011

*Templeton Emerging Markets Fund*		October 1, 2010-January 31, 2011

*Templeton Emerging Markets Income Fund*		October 1, 2010-January 31, 2011

*Templeton Global Income Fund*		October 1, 2010-January 31, 2011

*Templeton Income Trust:*
	Templeton Global Bond Fund	October 1, 2010-January 31, 2011
	Templeton Global Total Return Fund	October 1, 2010-January 31, 2011
	Templeton International Bond Fund	October 1, 2010-January 31, 2011

*Franklin Custodian Funds:*
	Franklin DynaTech Fund	October 1, 2010-January 31, 2011
	Franklin Growth Fund	October 1, 2010-January 31, 2011
	Franklin Income Fund	October 1, 2010-January 31, 2011
	Franklin U.S. Government Securities Fund	October 1, 2010-January 31, 2011
	Franklin Utilities Fund	October 1, 2010-January 31, 2011

*Franklin Strategic Mortgage Portfolio*		October 1, 2010-January 31, 2011

*Franklin Investors Securities Trust:*
	Franklin Adjustable U.S. Government Securities Fund	October 1, 2010-January 31, 2011
	Franklin Balanced Fund	October 1, 2010-January 31, 2011
	Franklin Convertible Securities Fund	October 1, 2010-January 31, 2011
	Franklin Equity Income Fund	October 1, 2010-January 31, 2011
	Franklin Floating Rate Daily Access Fund	October 1, 2010-January 31, 2011
	Franklin Limited Maturity U.S. Government Securities Fund	October 1, 2010-January 31, 2011
	Franklin Low Duration Total Return Fund	October 1, 2010-January 31, 2011
	Franklin Total Return Fund	October 1, 2010-January 31, 2011

*Franklin Templeton Global Trust:*
	Franklin Templeton Hard Currency	October 1, 2010-January 31, 2011

*Franklin Templeton International Trust:*
	Franklin India Growth Fund	October 1, 2010-January 31, 2011

*Franklin Value Investors Trust:*
	Franklin All Cap Value Fund	October 1, 2010-January 31, 2011
	Franklin Balance Sheet Investment Fund	October 1, 2010-January 31, 2011
	Franklin Large Cap Value Fund	October 1, 2010-January 31, 2011
	Franklin MicroCap Value Fund	October 1, 2010-January 31, 2011
	Franklin MidCap Value Fund	October 1, 2010-January 31, 2011
	Franklin Small Cap Value Fund	October 1, 2010-January 31, 2011

*Templeton Developing Markets Trust*		October 1, 2010-January 31, 2011

*Franklin Templeton Fund Allocator Series:*
	Franklin Templeton 2015 Retirement Target Fund	October 1, 2010-January 31, 2011
	Franklin Templeton 2025 Retirement Target Fund	October 1, 2010-January 31, 2011
	Franklin Templeton 2035 Retirement Target Fund	October 1, 2010-January 31, 2011
	Franklin Templeton 2045 Retirement Target Fund	October 1, 2010-January 31, 2011
	Franklin Templeton Conservative Target Fund	October 1, 2010-January 31, 2011
	Franklin Templeton Corefolio Allocation Fund	October 1, 2010-January 31, 2011
	Franklin Templeton Founding Funds Allocation Fund	October 1, 2010-January 31, 2011
	Franklin Templeton Growth Target Fund	October 1, 2010-January 31, 2011
	Franklin Templeton Moderate Target Fund	October 1, 2010-January 31, 2011
	Franklin Templeton Perspectives Allocation Fund	October 1, 2010-January 31, 2011

*Franklin Templeton Variable Insurance Products Trust:*
	Franklin Flex Cap Growth Securities Fund	October 1, 2010-January 31, 2011
	Franklin Founding Funds Allocation Fund	October 1, 2010-January 31, 2011
	Franklin Large Cap Value Securities Fund	October 1, 2010-January 31, 2011
	Franklin Rising Dividends Securities Fund	October 1, 2010-January 31, 2011
	Franklin Small Cap Value Securities Fund	October 1, 2010-January 31, 2011
	Franklin Small-Mid Cap Growth Securities Fund	October 1, 2010-January 31, 2011
	Franklin Strategic Income Securities Fund	October 1, 2010-January 31, 2011
	Templeton Developing Markets Securities Fund	October 1, 2010-January 31, 2011
	Templeton Foreign Securities Fund	October 1, 2010-January 31, 2011

*Templeton Dragon Fund, Inc.*		October 1, 2010-January 31, 2011

*Templeton Institutional Funds:*
	Foreign Equity Series	October 1, 2010-January 31, 2011
	Emerging Markets Series	October 1, 2010-January 31, 2011

Templeton International Emerging Markets Fund		October 1, 2010–January 31, 2011

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