Unassociated Document



 
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 811-10525
 
Nuveen North Carolina Dividend Advantage Municipal Fund 2
(Exact name of registrant as specified in charter)
 
Nuveen Investments
        333 West Wacker Drive, Chicago, Illinois 60606         
(Address of principal executive offices) (Zip code)
 

Kevin J. McCarthy
Vice President and Secretary
        333 West Wacker Drive, Chicago, Illinois 60606         
(Name and address of agent for service)
 
Registrant's telephone number, including area code:         312-917-7700        
 
Date of fiscal year end:            5/31          
 
Date of reporting period:         8/31/11         
 
Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
 
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q 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 the 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. § 3507.

 
 
 
 
Item 1. Schedule of Investments
 

           
   
Portfolio of Investments (Unaudited) 
      
   
Nuveen North Carolina Dividend Advantage Municipal Fund 2 (NNO) 
      
   
August 31, 2011 
      
Principal 
    
Optional Call 
    
Amount (000) 
  
Description (1) 
Provisions (2) 
Ratings (3) 
Value 
   
Education and Civic Organizations – 11.2% (7.0% of Total Investments) 
      
   
Appalachian State University, North Carolina, Housing and Student Center System Revenue 
      
   
Refunding Bonds, Series 2002: 
      
$    1,040 
  
5.000%, 7/15/14 – NPFG Insured 
7/12 at 100.00 
Aa3 
$   1,079,915 
1,000 
  
5.000%, 7/15/15 – NPFG Insured 
7/12 at 100.00 
Aa3 
1,034,020 
   
North Carolina Capital Facilities Financing Agency, Revenue Bonds, Duke University, Series 2001A: 
      
715 
  
5.125%, 10/01/26 
10/11 at 100.00 
AA+ 
716,123 
380 
  
5.125%, 10/01/41 
10/11 at 100.00 
AA+ 
381,121 
800 
  
North Carolina Capital Facilities Financing Agency, Revenue Bonds, Johnson and Wales 
4/13 at 100.00 
N/R 
786,488 
   
University, Series 2003A, 5.000%, 4/01/33 – SYNCORA GTY Insured 
      
130 
  
University of North Carolina System, Pooled Revenue Bonds, Series 2002B, 5.375%, 4/01/19 – 
10/12 at 100.00 
A+ 
135,248 
   
AMBAC Insured 
      
1,000 
  
University of North Carolina System, Pooled Revenue Bonds, Series 2005A, 5.000%, 4/01/22 – 
4/15 at 100.00 
A+ 
1,064,050 
   
AMBAC Insured 
      
500 
  
University of North Carolina Wilmington, Certificates of Participation, Student Housing 
6/16 at 100.00 
A– 
537,835 
   
Project Revenue Bonds, Series 2006, 5.000%, 6/01/21 – FGIC Insured 
      
250 
  
University of North Carolina, Chapel Hill, System Net Revenue Bonds, Series 2002B, 5.000%, 12/01/11 
No Opt. Call 
Aaa 
253,035 
250 
  
University of North Carolina, Charlotte, Certificates of Participation, Student Housing 
3/15 at 100.00 
A 
267,243 
   
Project, Series 2005, 5.000%, 3/01/21 – AMBAC Insured 
      
6,065 
  
Total Education and Civic Organizations 
    
6,255,078 
   
Energy – 1.8% (1.1% of Total Investments) 
      
1,000 
  
Virgin Islands Public Finance Authority, Refinery Facilities Revenue Bonds, Hovensa Coker 
1/13 at 100.00 
Ba2 
994,800 
   
Project, Senior Lien Series 2002, 6.500%, 7/01/21 (Alternative Minimum Tax) 
      
   
Health Care – 36.4% (22.9% of Total Investments) 
      
1,065 
  
Albemarle Hospital Authority, North Carolina, Health Care Facilities Revenue Bonds, Series 
10/17 at 100.00 
N/R 
857,421 
   
2007, 5.250%, 10/01/38 
      
1,000 
  
Charlotte-Mecklenberg Hospital Authority, North Carolina, Carolinas HealthCare System Revenue 
1/18 at 100.00 
AA– 
979,620 
   
Bonds, Series 2008A, 5.000%, 1/15/47 
      
750 
  
Charlotte-Mecklenberg Hospital Authority, North Carolina, Health Care Refunding Revenue Bonds, 
1/19 at 100.00 
AA– 
759,555 
   
Carolinas HealthCare System, Series 2009A, 5.250%, 1/15/39 
      
1,000 
  
Charlotte-Mecklenberg Hospital Authority, North Carolina, Health Care Revenue Bonds, Carolinas 
1/21 at 100.00 
AA– 
1,012,490 
   
HealthCare System, Series 2011A, 5.250%, 1/15/42 
      
1,640 
  
Charlotte-Mecklenburg Hospital Authority, North Carolina, Healthcare System Revenue Bonds, 
1/12 at 100.00 
AA– 
1,642,230 
   
Carolinas Healthcare System, Series 2001A, 5.000%, 1/15/31 
      
500 
  
Johnston Memorial Hospital Authority, North Carolina, Mortgage Revenue Bonds, Johnston 
4/18 at 100.00 
AA+ 
515,255 
   
Memorial Hospital Project, Series 2008A, 5.250%, 10/01/36 – AGM Insured 
      
120 
  
New Hanover County, North Carolina, Hospital Revenue Bonds, New Hanover Regional Medical 
10/19 at 100.00 
AA+ 
125,155 
   
Center, Series 2006B, 5.125%, 10/01/31 – AGM Insured 
      
   
North Carolina Medical Care Commission Health Care Facilities Revenue Bonds Novant Health 
      
   
Inc., Series 2010A: 
      
1,250 
  
5.250%, 11/01/40 
11/20 at 100.00 
A+ 
1,244,350 
1,000 
  
5.000%, 11/01/43 
11/20 at 100.00 
A+ 
962,800 
1,000 
  
North Carolina Medical Care Commission, Health Care Facilities Refunding Revenue Bonds, Blue 
1/20 at 100.00 
A 
932,030 
   
Ridge HealthCare, Series 2010A, 5.000%, 1/01/36 
      
500 
  
North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Appalachian 
7/21 at 100.00 
BBB+ 
529,360 
   
Regional HealthCare System, Series 2011A, 6.500%, 7/01/31 
      
680 
  
North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, Cleveland County 
1/21 at 100.00 
A 
692,220 
   
Healthcare System, Refunding Series 2011A, 5.750%, 1/01/35 
      
455 
  
North Carolina Medical Care Commission, Health Care Facilities Revenue Bonds, WakeMed, Series 
10/14 at 100.00 
AA+ 
466,994 
   
2009A, 5.625%, 10/01/38 – AGC Insured 
      
2,000 
  
North Carolina Medical Care Commission, Healthcare Facilities Revenue Bonds, Novant Health 
11/13 at 100.00 
A+ 
2,051,040 
   
Obligated Group, Series 2003A, 5.000%, 11/01/20 
      
1,005 
  
North Carolina Medical Care Commission, Healthcare Facilities Revenue Bonds, Union Regional 
1/12 at 100.00 
A+ 
1,017,392 
   
Medical Center, Series 2002A, 5.250%, 1/01/13 
      
   
North Carolina Medical Care Commission, Hospital Revenue Bonds, Southeastern Regional Medical 
      
   
Center, Series 2002: 
      
1,000 
  
5.500%, 6/01/15 
6/12 at 101.00 
A 
1,034,540 
2,100 
  
5.250%, 6/01/22 
6/12 at 101.00 
A 
2,134,734 
925 
  
North Carolina Medical Care Commission, Hospital Revenue Bonds, Wilson Medical Center, Series 
11/17 at 100.00 
A– 
925,426 
   
2007, 5.000%, 11/01/27 
      
1,250 
  
North Carolina Medical Care Commission, Revenue Bonds, Blue Ridge Healthcare System, Series 
1/15 at 100.00 
A 
1,191,588 
   
2005, 5.000%, 1/01/33 – FGIC Insured 
      
   
North Carolina Medical Care Commission, Revenue Bonds, Cleveland County Healthcare System, 
      
   
Series 2004A: 
      
595 
  
5.250%, 7/01/20 – AMBAC Insured 
7/14 at 100.00 
A 
620,210 
500 
  
5.250%, 7/01/22 – AMBAC Insured 
7/14 at 100.00 
A 
516,965 
150 
  
Northern Hospital District of Surry County, North Carolina, Health Care Facilities Revenue 
4/18 at 100.00 
BBB 
150,551 
   
Bonds, Series 2008, 6.250%, 10/01/38 
      
20,485 
  
Total Health Care 
    
20,361,926 
   
Housing/Single Family – 3.5% (2.2% of Total Investments) 
      
290 
  
North Carolina Housing Finance Agency, Home Ownership Revenue Bonds, 1998 Trust Agreement, 
1/12 at 100.00 
AA 
290,084 
   
Series 10A, 5.400%, 7/01/32 – AMBAC Insured (Alternative Minimum Tax) 
      
   
North Carolina Housing Finance Agency, Home Ownership Revenue Bonds, Series 13A: 
      
540 
  
4.700%, 7/01/12 (Alternative Minimum Tax) 
11/11 at 100.00 
AA 
541,237 
545 
  
4.850%, 7/01/13 (Alternative Minimum Tax) 
11/11 at 100.00 
AA 
546,019 
100 
  
North Carolina Housing Finance Agency, Home Ownership Revenue Bonds, Series 2011-1, 
1/21 at 100.00 
AA 
100,906 
   
4.500%, 1/01/28 
      
500 
  
North Carolina Housing Finance Agency, Home Ownership Revenue Bonds, Series 25-A, 4.900%, 
7/16 at 100.00 
AA 
493,830 
   
7/01/37 (Alternative Minimum Tax) 
      
1,975 
  
Total Housing/Single Family 
    
1,972,076 
   
Long-Term Care – 1.7% (1.0% of Total Investments) 
      
   
North Carolina Medical Care Commission, Healthcare Facilities Revenue Bonds, Presbyterian 
      
   
Homes, Series 2006: 
      
250 
  
5.400%, 10/01/27 
10/16 at 100.00 
N/R 
225,105 
600 
  
5.500%, 10/01/31 
10/16 at 100.00 
N/R 
530,142 
185 
  
North Carolina Medical Care Commission, Revenue Bonds, Pines at Davidson, Series 2006A, 
1/16 at 100.00 
N/R 
170,335 
   
5.000%, 1/01/36 
      
1,035 
  
Total Long-Term Care 
    
925,582 
   
Materials – 0.4% (0.3% of Total Investments) 
      
300 
  
Columbus County Industrial Facilities and Pollution Control Financing Authority, North 
3/17 at 100.00 
BBB 
265,965 
   
Carolina, Environmental Improvement Revenue Bonds, International Paper Company Project, 
      
   
Series 2007A, 4.625%, 3/01/27 
      
   
Tax Obligation/General – 9.8% (6.1% of Total Investments) 
      
1,475 
  
Durham, North Carolina, General Obligation Bonds, Series 2007, 5.000%, 4/01/22 
4/17 at 100.00 
AAA 
1,677,134 
1,050 
  
Forsyth County, North Carolina, General Obligation Bonds, Limited Obligation Series 2009, 
4/20 at 100.00 
AA+ 
1,138,715 
   
5.000%, 4/01/30 
      
500 
  
North Carolina, General Obligation Bonds, Series 2004A, 5.000%, 3/01/22 
3/14 at 100.00 
AAA 
542,335 
2,000 
  
Wake County, North Carolina, Limited Obligation Bonds, Series 2010, 5.000%, 1/01/37 
1/20 at 100.00 
AA+ 
2,117,900 
5,025 
  
Total Tax Obligation/General 
    
5,476,084 
   
Tax Obligation/Limited – 34.9% (21.9% of Total Investments) 
      
30 
  
Cabarrus County, North Carolina, Certificates of Participation, Series 2002, 5.250%, 2/01/16 
2/13 at 100.00 
AA 
31,720 
1,750 
  
Charlotte, North Carolina, Certificates of Participation, Governmental Facilities Projects, 
6/13 at 100.00 
AA+ 
1,787,660 
   
Series 2003G, 5.000%, 6/01/28 
      
575 
  
Charlotte, North Carolina, Certificates of Participation, Transit Projects Phase 2, Series 
6/18 at 100.00 
AA+ 
593,803 
   
2008A, 5.000%, 6/01/33 
      
1,850 
  
Charlotte, North Carolina, Storm Water Fee Revenue Bonds, Series 2002, 5.250%, 6/01/18 
6/12 at 101.00 
AAA 
1,931,308 
800 
  
Craven County, North Carolina, Certificates of Participation, Series 2007, 5.000%, 6/01/27 – 
6/17 at 100.00 
AA– 
847,216 
   
NPFG Insured 
      
500 
  
Harnett County, North Carolina, Certificates of Participation, Series 2009, 5.000%, 6/01/29 – 
6/19 at 100.00 
AA+ 
525,350 
   
AGC Insured 
      
   
Hartnett County, North Carolina, Certificates of Participation, Series 2002: 
      
1,000 
  
5.250%, 12/01/15 – AGM Insured 
12/12 at 101.00 
AA+ 
1,066,210 
2,025 
  
5.375%, 12/01/16 – AGM Insured 
12/12 at 101.00 
AA+ 
2,159,845 
715 
  
Lee County, North Carolina, Certificates of Participation, Public Schools and Community 
4/14 at 100.00 
AA+ 
762,119 
   
College, Series 2004, 5.250%, 4/01/20 – AGM Insured 
      
1,380 
  
Pasquotank County, North Carolina, Certificates of Participation, Series 2004, 5.000%, 6/01/25 – 
6/14 at 100.00 
A 
1,412,264 
   
NPFG Insured 
      
2,070 
  
Pitt County, North Carolina, Certificates of Participation, School Facilities Project, Series 
4/14 at 100.00 
AA– 
2,106,763 
   
2004B, 5.000%, 4/01/29 – AMBAC Insured 
      
2,625 
  
Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, Series 2010A, 
No Opt. Call 
A+ 
569,809 
   
0.000%, 8/01/35 
      
   
Raleigh, North Carolina, Certificates of Participation, Downtown Improvement Project, 
      
   
Series 2004B: 
      
805 
  
5.000%, 6/01/20 
6/14 at 100.00 
AA+ 
858,468 
1,310 
  
5.000%, 6/01/21 
6/14 at 100.00 
AA+ 
1,390,290 
115 
  
Raleigh, North Carolina, Certificates of Participation, Series 2007, 5.000%, 2/01/27 
2/17 at 100.00 
AA+ 
122,535 
1,000 
  
Randolph County, North Carolina, Certificates of Participation, Series 2004, 5.000%, 6/01/20 – 
6/14 at 102.00 
AA+ 
1,078,680 
   
AGM Insured 
      
100 
  
Rutherford County, North Carolina, Certificates of Participation, Series 2007, 5.000%, 
12/17 at 100.00 
AA+ 
106,586 
   
12/01/27 – AGM Insured 
      
1,150 
  
Sampson County, North Carolina, Certificates of Participation, Series 2006, 5.000%, 6/01/34 – 
6/17 at 100.00 
AA+ 
1,180,234 
   
AGM Insured (UB) 
      
500 
  
Wilmington, North Carolina, Certificates of Participation, Series 2008A, 5.000%, 6/01/29 
6/18 at 100.00 
AA 
533,100 
400 
  
Wilson County, North Carolina, Certificates of Participation, School Facilities Project, 
4/17 at 100.00 
Aa3 
420,948 
   
Series 2007, 5.000%, 4/01/25 – AMBAC Insured 
      
20,700 
  
Total Tax Obligation/Limited 
    
19,484,908 
   
Transportation – 13.5% (8.5% of Total Investments) 
      
1,000 
  
Charlotte, North Carolina, Airport Revenue Bonds, Charlotte Douglas International Refunding 
7/20 at 100.00 
A+ 
1,018,880 
   
Series 2010A, 5.000%, 7/01/39 
      
1,935 
  
Charlotte, North Carolina, Airport Revenue Bonds, Series 2004A, 5.000%, 7/01/34 – NPFG Insured 
7/14 at 100.00 
A+ 
1,954,969 
660 
  
North Carolina State Ports Authority, Port Facilities Revenue Bonds, Senior Lien Series 2010A, 
2/20 at 100.00 
A3 
677,992 
   
5.250%, 2/01/40 
      
   
North Carolina Turnpike Authority, Triangle Expressway System Revenue Bonds, Series 2009A: 
      
90 
  
5.375%, 1/01/26 – AGC Insured 
1/19 at 100.00 
AA+ 
98,091 
220 
  
5.500%, 1/01/29 – AGC Insured 
1/19 at 100.00 
AA+ 
237,301 
430 
  
5.750%, 1/01/39 – AGC Insured 
1/19 at 100.00 
AA+ 
457,705 
   
North Carolina Turnpike Authority, Triangle Expressway System Senior Lien Revenue Bonds, 
      
   
Series 2009B: 
      
150 
  
0.000%, 1/01/31 – AGC Insured 
No Opt. Call 
AA+ 
50,700 
125 
  
0.000%, 1/01/33 – AGC Insured 
No Opt. Call 
AA+ 
37,376 
50 
  
0.000%, 1/01/35 – AGC Insured 
No Opt. Call 
AA+ 
13,260 
5,600 
  
0.000%, 1/01/37 – AGC Insured 
No Opt. Call 
AA+ 
1,325,408 
350 
  
0.000%, 1/01/38 – AGC Insured 
No Opt. Call 
AA+ 
78,057 
435 
  
Piedmont Triad Airport Authority, North Carolina, Airport Revenue Bonds, Series 2005A, 5.000%, 
7/15 at 100.00 
A2 
469,047 
   
7/01/20 – SYNCORA GTY Insured 
      
1,100 
  
Raleigh Durham Airport Authority, North Carolina, Airport Revenue Bonds, Refunding Series 
No Opt. Call 
Aa3 
1,149,082 
   
2010A, 5.000%, 5/01/36 
      
12,145 
  
Total Transportation 
    
7,567,868 
   
U.S. Guaranteed – 7.4% (4.6% of Total Investments) (4) 
      
200 
  
Charlotte-Mecklenburg Hospital Authority, North Carolina, Healthcare System Revenue Bonds, DBA 
1/15 at 100.00 
AA+ (4) 
230,712 
   
Carolinas Healthcare System, Series 2005A, 5.000%, 1/15/45 (Pre-refunded 1/15/15) 
      
500 
  
North Carolina Medical Care Commission, Revenue Bonds, Northeast Medical Center, Series 2004, 
11/14 at 100.00 
Aa3 (4) 
572,265 
   
5.000%, 11/01/24 (Pre-refunded 11/01/14) 
      
   
Raleigh, North Carolina, Combined Enterprise System Revenue Bonds, Series 2004: 
      
1,000 
  
5.000%, 3/01/21 (Pre-refunded 3/01/14) 
3/14 at 100.00 
AAA 
1,115,960 
1,250 
  
5.000%, 3/01/22 (Pre-refunded 3/01/14) 
3/14 at 100.00 
AAA 
1,392,300 
505 
  
University of North Carolina System, Pooled Revenue Refunding Bonds, Series 2002A, 5.375%, 
10/12 at 100.00 
N/R (4) 
532,841 
   
4/01/19 (Pre-refunded 10/01/12) – AMBAC Insured 
      
270 
  
University of North Carolina, Charlotte, Parking System Revenue Bonds, Series 2002, 5.000%, 
1/12 at 101.00 
A1 (4) 
276,982 
   
1/01/20 (Pre-refunded 1/01/12) – NPFG Insured 
      
3,725 
  
Total U.S. Guaranteed 
    
4,121,060 
   
Utilities – 7.6% (4.8% of Total Investments) 
      
500 
  
North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, Series 2005, 
1/16 at 100.00 
A– 
564,895 
   
5.250%, 1/01/20 – AMBAC Insured 
      
   
North Carolina Eastern Municipal Power Agency, Power System Revenue Refunding Bonds, 
      
   
Series 1993B: 
      
745 
  
5.500%, 1/01/17 – FGIC Insured 
11/11 at 100.00 
Baa1 
747,064 
15 
  
5.500%, 1/01/21 
11/11 at 100.00 
A– 
15,029 
225 
  
North Carolina Municipal Power Agency 1, Catawba Electric Revenue Bonds, Refunding Series 
1/19 at 100.00 
A 
234,731 
   
2009A, 5.000%, 1/01/30 
      
2,600 
  
Wake County Industrial Facilities and Pollution Control Financing Authority, North Carolina, 
2/12 at 101.00 
A1 
2,674,672 
   
Revenue Refunding Bonds, Carolina Power and Light Company, Series 2002, 5.375%, 2/01/17 
      
4,085 
  
Total Utilities 
    
4,236,391 
   
Water and Sewer – 31.1% (19.6% of Total Investments) 
      
500 
  
Brunswick County, North Carolina, Enterprise System Revenue Bonds, Series 2008A, 5.000%, 
4/18 at 100.00 
AA+ 
524,395 
   
4/01/31 – AGM Insured 
      
500 
  
Cape Fear Public Utility Authority, North Carolina, Water & Sewer System Revenue Bonds, Series 
8/18 at 100.00 
AA 
526,690 
   
2008, 5.000%, 8/01/35 
      
1,520 
  
Charlotte, North Carolina, Water and Sewerage System Revenue Bonds, Series 2002A, 
No Opt. Call 
AAA 
1,658,487 
   
5.250%, 7/01/13 
      
500 
  
Dare County, North Carolina, Utilities System Revenue Bonds, Series 2011, 5.000%, 2/01/41 
2/21 at 100.00 
AA 
530,630 
1,000 
  
Durham County, North Carolina, Enterprise System Revenue Bonds, Series 2002, 5.000%, 6/01/23 – 
6/13 at 100.00 
AA 
1,054,770 
   
NPFG Insured 
      
3,050 
  
Durham, North Carolina, Utility System Revenue Bonds, Refunding Series 2011, 5.000%, 6/01/41 
6/21 at 100.00 
AAA 
3,287,687 
610 
  
Oak Island, North Carolina, Enterprise System Revenue Bonds, Series 2008A, 5.000%, 6/01/23 - 
6/18 at 100.00 
A2 
652,511 
   
NPFG Insured 
      
700 
  
Oak Island, North Carolina, Enterprise System Revenue Bonds, Series 2009A, 6.000%, 6/01/34 - 
6/19 at 100.00 
AA+ 
762,986 
   
AGC Insured 
      
500 
  
Oak Island, North Carolina, Enterprise System Revenue Bonds, Series 2011, 5.750%, 6/01/36 – 
6/21 at 100.00 
AA+ 
539,630 
   
AGC Insured 
      
   
Raleigh, North Carolina, Combined Enterprise System Revenue Bonds, Series 2006A: 
      
3,095 
  
5.000%, 3/01/31 (UB) 
3/16 at 100.00 
AAA 
3,302,025 
975 
  
5.000%, 3/01/36 (UB) 
3/16 at 100.00 
AAA 
1,025,612 
40 
  
Raleigh, North Carolina, Combined Enterprise System Revenue Bonds, Series 2006A, 
No Opt. Call 
AAA 
48,027 
   
Residuals Series 11-R-645-2, 13.404%, 3/01/14 (IF) 
      
1,000 
  
Wilmington, North Carolina, Water and Sewer Revenue Bonds, Series 2005, 5.000%, 6/01/25 – 
6/15 at 100.00 
AA+ 
1,082,687 
   
AGM Insured 
      
2,275 
  
Winston-Salem, North Carolina, Water and Sewer System Revenue Bonds, Series 2007A, 5.000%, 
6/17 at 100.00 
AAA 
2,420,120 
   
6/01/37 (UB) 
      
16,265 
  
Total Water and Sewer 
    
17,416,257 
$ 92,805 
  
Total Investments (cost $86,055,877) – 159.3% 
    
89,077,995 
   
Floating Rate Obligations – (8.6)% 
    
(4,805,000)
   
MuniFund Term Preferred Shares, at Liquidation Value – (53.1)% (5) 
    
(29,700,000)
   
Other Assets Less Liabilities – 2.4% 
    
1,332,262 
   
Net Assets Applicable to Common Shares – 100% 
    
$ 55,905,257 
 
 
 
 
 

 
Fair Value Measurements
 
Fair value is defined as the price that the Fund would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:
 
Level 1 – Quoted prices in active markets for identical securities.
 
Level 2 – Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
 
Level 3 – Significant unobservable inputs (including management’s assumptions in determining the fair value of investments).
 
The inputs or methodologies used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the Fund’s fair value measurements as of August 31, 2011:
 
         
 
Level 1 
Level 2 
Level 3 
Total 
Investments: 
        
Municipal Bonds 
$ — 
$89,077,995 
$ — 
$89,077,995 
 
 
During the period ended August 31, 2011, the Fund recognized no significant transfers to or from Level 1, Level 2 or Level 3.
 
Income Tax Information
 
The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to timing differences in recognizing taxable market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate securities reflected as financing transactions, if any. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.
 
At August 31, 2011, the cost of investments was $81,230,617.
 
Gross unrealized appreciation and gross unrealized depreciation of investments at August 31, 2011, were as follows:
 
   
Gross unrealized: 
  
Appreciation 
$3,437,703 
Depreciation 
(395,341)
Net unrealized appreciation (depreciation) of investments 
$3,042,362 
 
 
     
(1) 
  
All percentages shown in the Portfolio of Investments are based on net assets applicable to Common 
   
shares unless otherwise noted. 
(2) 
  
Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. 
   
There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities 
   
may be subject to periodic principal paydowns. 
(3) 
  
Ratings: Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), Moody’s Investor Service, 
   
Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s 
   
or BBB by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by 
   
any of these national rating agencies. 
(4) 
  
Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, 
   
which ensure the timely payment of principal and interest. Bonds backed by U.S. Government or agency 
   
securities are given an implied rating equal to the rating of such securities. 
(5) 
  
MuniFund Term Preferred Shares, at Liquidation Value as a percentage of Total Investments is 33.3%. 
N/R 
  
Not rated. 
(IF) 
  
Inverse floating rate investment. 
(UB) 
  
Underlying bond of an inverse floating rate trust reflected as a financing transaction. 
 
 
 
 
 
Item 2. Controls and Procedures.

a.  
The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rule 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934 (17 CFR 240.13a-15(b) or 240.15d-15(b)).
 
 
b.  
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal quarter that have materially affected, or are reasonably likely to materially affect, the registrant's internal control over financial reporting.
 
Item 3. Exhibits.

File as exhibits as part of this Form a separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)), exactly as set forth below: See EX-99 CERT attached hereto.

 
 
 
 
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)  Nuveen North Carolina Dividend Advantage Municipal Fund 2 
 
By (Signature and Title)     /s/ Kevin J. McCarthy                    
                                                   Kevin J. McCarthy
                                                   Vice President and Secretary
 
Date         October 28, 2011        
 
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 (Signature and Title)     /s/ Gifford R. Zimmerman                    
                                                    Gifford R. Zimmerman
                                                  Chief Administrative Officer (principal executive officer) 
 
Date         October 28, 2011        
 
By (Signature and Title)     /s/ Stephen D. Foy                              
                                                   Stephen D. Foy
                                                  Vice President and Controller (principal financial officer) 
 
Date         October 28, 2011