Edgar Filing: FRANKLIN MULTI INCOME TRUST

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number 811-05873
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FRANKLIN MULTI INCOME TRUST
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(Exact name of registrant as specified in charter)

ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
(Address of principal executive offices) (Zip code)

MURRAY L. SIMPSON, ONE FRANKLIN PARKWAY, SAN MATEO, CA 94403-1906
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(Name and address of agent for service)

Registrant's telephone number, including area code: 650 312-2000
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Date of fiscal year end: 03/31
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Date of reporting period: 09/30/04
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ITEM 1. REPORTS TO STOCKHOLDERS.

[GRAPHIC OMITTED]

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SEPTEMBER 30, 2004
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SEMIANNUAL REPORT | INCOME
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FRANKLIN
MULTI-INCOME TRUST

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[LOGO](R)
FRANKLIN(R) TEMPLETON(R)
INVESTMENTS

FRANKLIN o Templeton o Mutual Series

FRANKLIN TEMPLETON INVESTMENTS

GAIN FROM OUR PERSPECTIVE

Franklin Templeton's distinct multi-manager
structure combines the specialized expertise
of three world-class investment management
groups--Franklin, Templeton and Mutual
Series.

SPECIALIZED EXPERTISE Each of our portfolio management groups
operates autonomously, relying on its own
research and staying true to the unique
investment disciplines that underlie its
success.

FRANKLIN. Founded in 1947, Franklin is a
recognized leader in fixed income investing
and also brings expertise in growth- and
value-style U.S. equity investing.

TEMPLETON. Founded in 1940, Templeton
pioneered international investing and, in
1954, launched what has become the industry's
oldest global fund. Today, with research
offices in over 25 countries, they offer
investors the broadest global reach in the
industry.

MUTUAL SERIES. Founded in 1949, Mutual Series
is dedicated to a unique style of value
investing, searching aggressively for
opportunity among undervalued stocks,
arbitrage situations and distressed
companies.

TRUE DIVERSIFICATION Because our management groups work
independently and adhere to distinctly
different investment approaches, Franklin,
Templeton and Mutual Series funds typically
have a low overlap of securities. That's why
our funds can be used to build truly
diversified portfolios covering every major
asset class.

RELIABILITY YOU CAN TRUST At Franklin Templeton Investments, we seek to
consistently provide investors with
exceptional risk-adjusted returns over the
long term, as well as the reliable account
services that have helped us become one of
the most trusted names in financial services.

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MUTUAL FUNDS | RETIREMENT PLANS | 529 COLLEGE SAVINGS PLANS | SEPARATE ACCOUNTS
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[GRAPHIC OMITTED]

Not part of the semiannual report

CONTENTS

SEMIANNUAL REPORT

Franklin Multi-Income Trust ............................................... 1

Performance Summary ....................................................... 5

Annual Shareholders'
Meeting ................................................................... 6

Dividend Reinvestment
and Cash Purchase Plan .................................................... 7

Financial Highlights and
Statement of Investments .................................................. 10

Financial Statements ...................................................... 16

Notes to Financial
Statements ................................................................ 20

Shareholder Information ................................................... 28

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SEMIANNUAL REPORT

FRANKLIN MULTI-INCOME TRUST

YOUR FUND'S GOAL: Franklin Multi-Income Trust seeks to provide high, current
income consistent with preservation of capital as well as growth of income
through dividend increases and capital appreciation.

PORTFOLIO BREAKDOWN
Based on Total Investments*
9/30/04

[THE FOLLOWING TABLE WAS REPRESENTED BY A BAR CHART IN THE PRINTED MATERIAL.]

Corporate Bonds 52.4%

Utilities Common Stocks 39.5%

Misc. Common & Preferred Stocks 3.6%

Foreign Currency Denominated Bonds 0.5%

Cash & Other Net Assets 4.0%

* Total investments include long-term and short-term investments and other
net assets, excluding long-term debt issued by the Fund.

Dear Shareholder:

We are pleased to bring you Franklin Multi-Income Trust's semiannual report for
the period ended September 30, 2004.

PERFORMANCE OVERVIEW

For the six months under review, Franklin Multi-Income Trust's cumulative total
returns were +4.83% based on change in net asset value and +0.92% based on
change in market price on the New York Stock Exchange. For comparison, the
Credit Suisse First Boston (CSFB) High Yield Index returned 4.30%, while
utilities stocks, as measured by the Standard & Poor's (S&P) Utilities Index,
returned 5.35%, for the six months ended September 30, 2004.(1) You can find the
Fund's long-term performance data in the Performance Summary on page 5.

ECONOMIC AND MARKET OVERVIEW

During the six months under review, the U.S. economy extended its recovery with
positive signs in employment trends and business strength. As of

(1) Sources: Credit Suisse First Boston; Standard & Poor's Micropal. The CSFB
High Yield Index is a trader-priced portfolio constructed to mirror the
high yield debt market. The S&P Utilities Index is a market
capitalization-weighted index that includes utility stocks in the Standard
& Poor's 500 Composite Index. The indexes are unmanaged and include
reinvestment of any income or distributions. One cannot invest directly in
an index, nor is an index representative of the Fund's portfolio.

THE DOLLAR VALUE, NUMBER OF SHARES OR PRINCIPAL AMOUNT, AND NAMES OF ALL
PORTFOLIO HOLDINGS ARE LISTED IN THE FUND'S STATEMENT OF INVESTMENTS (SOI). THE
SOI BEGINS ON PAGE 11.

Semiannual Report | 1

DIVIDEND DISTRIBUTIONS
4/1/04-9/30/04

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MONTH DIVIDEND PER SHARE
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April 3.50 cents
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May 3.50 cents
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June 3.50 cents
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July 3.50 cents
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August 3.50 cents
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September 3.50 cents
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TOTAL 21.00 CENTS
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September 2004, the unemployment rate dropped to 5.4% from 5.7% at the beginning
of the period, marking a steady decline.(2) Although tepid, job growth was
positive and contributed to the gradually improving employment picture.
Benefiting from income tax cuts, consumers continued to spend as their
disposable income grew.

Business spending also accelerated, posting strong results and fueling economic
growth. Nonresidential investment spending increased 12.5% and 11.7% in the
second and third quarters.(3) Low interest rates afforded many businesses the
opportunity to refinance their old debt at more attractive levels. Productivity
continued to climb, helping businesses to generate more goods and services
without substantially increasing inflation.

Although energy prices rose 4.7% during the period, the core Consumer Price
Index, a measure of inflation excluding food and energy, showed a benign
inflationary environment. It rose 2.0% for the 12 months ended September 30,
2004.(2) Expected inflation is a key determinant of interest rate levels, and
this low inflation environment contributed to the historically low overall
interest rates during the period.

The general interest rate decline over the past few years helped to provide some
stimulus to consumers and businesses. Even with recently rising interest rates,
healthier labor market conditions and improving business strength remained
during the period as other sources of economic stimulus.

The continuing fundamental improvement that began in the previous fiscal year
drove high yield bond returns. Credit quality improved as earnings grew in the
stronger economic environment. With the pains of recession still fresh in most
minds, and with the duration of the recovery uncertain, many companies retained
a focus on debt reduction. Improved credit quality helped the default rate
decline further during the period. Utility stocks benefited from continued low
interest rates, as yields on the 10-year Treasury remained historically low. In
addition, many utility companies generated improved earnings, which they used as
an opportunity to increase dividend payments or repurchase shares.

INVESTMENT STRATEGY

We invest primarily in two asset classes: high yield bonds and utility stocks.
Within the high yield portion of the portfolio, we use fundamental research to
invest in a diversified portfolio of bonds. Within the utility portion of the

(2) Source: Bureau of Labor Statistics.

(3) Source: Bureau of Economic Analysis.

2 | Semiannual Report

portfolio, we focus on companies with attractive dividend yields and a history
of increasing their dividends.

MANAGER'S DISCUSSION

During the six months under review, each of the Fund's primary asset classes
generated positive returns.

HIGH YIELD CORPORATE BONDS

The Fund benefited from its overweighted positions in the industrial and
chemical industries relative to the CSFB High Yield Index.(4) Industrial
manufacturing rebounded from depressed levels reached during recession and early
stages of recovery when results were weak and some companies were forced to
borrow to meet their cash needs. The economic recovery fueled the industry's
rebound; in particular, increased demand enabled companies to take advantage of
their operating leverage and deliver improved results. Likewise, the chemical
industry picked up as the economy continued to recover. Securities of companies
that produce commodity chemicals gained as improved operating rates led to
better financial results.

Among high yield corporate bonds, our underweighted position in the utility
sector and overweighted position in the wireless telecommunications industry
impeded the Fund's performance.(5) Given the Fund's utility stock weighting and
overall sector exposure, we kept high yield utility bond exposure below that of
the index. However, the utility sector was one of the top performing sectors in
the CSFB High Yield Index, so the Fund's relatively underweighted utility bond
exposure hindered performance. Wireless telecommunications bonds generated
returns below that of the index, as competitive industry dynamics surfaced and
subscriber growth disappointed for certain companies.

UTILITY STOCKS

The Fund held its utility exposure fairly constant over the course of the
reporting period, with approximately 41% of total market value in utility
stocks. This positioning, which is below the midpoint of our targeted range,
hindered performance during the period, as utility stocks generated a return
greater than that of the Fund's other primary asset class. Utility stocks
benefited as interest rates remained historically low during the period. In
addition, earnings for the group experienced year-over-year gains. With balance
sheets improved versus prior years, many companies used the better results as an
opportunity to benefit shareholders, either by increasing dividends or
repurchasing shares.

TOP 10 HOLDINGS
9/30/04

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COMPANY
SECTOR/INDUSTRY % OF TOTAL
(SECURITY TYPE) INVESTMENTS*
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Exelon Corp. 2.7%
UTILITIES (STOCK)
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Dominion Resources Inc. 2.3%
UTILITIES (STOCK)
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Entergy Corp. 2.2%
UTILITIES (STOCK)
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FPL Group Inc. 2.0%
UTILITIES (STOCK)
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Southern Co. 2.0%
UTILITIES (STOCK)
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NiSource Inc. 1.8%
UTILITIES (STOCK)
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FirstEnergy Corp. 1.7%
UTILITIES (STOCK)
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American Electric Power Co. Inc. 1.6%
UTILITIES (STOCK)
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Nicor Inc. 1.6%
UTILITIES (STOCK)
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Edison International 1.6%
UTILITIES (STOCK)
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* Total investments include long-term and short-term investments and other
net assets, excluding long-term debt issued by the Fund.

(4) Industrial companies are part of producer manufacturing in the SOI.
Chemical companies are part of process industries in the SOI.

(5) Wireless telecommunications companies are part of communications in the
SOI.

Semiannual Report | 3

Thank you for your participation in Franklin Multi-Income Trust. We look forward
to serving you in the future.

Sincerely,

[PHOTO OMITTED]

/s/ Christopher J. Molumphy

Christopher J. Molumphy, CFA
Senior Portfolio Manager

[PHOTO OMITTED]

/s/ Glenn I. Voyles

Glenn I. Voyles, CFA
Portfolio Manager

Franklin Multi-Income Trust

THE FOREGOING INFORMATION REFLECTS OUR ANALYSIS, OPINIONS AND PORTFOLIO HOLDINGS
AS OF SEPTEMBER 30, 2004, THE END OF THE REPORTING PERIOD. THE WAY WE IMPLEMENT
OUR MAIN INVESTMENT STRATEGIES AND THE RESULTING PORTFOLIO HOLDINGS MAY CHANGE
DEPENDING ON FACTORS SUCH AS MARKET AND ECONOMIC CONDITIONS. THESE OPINIONS MAY
NOT BE RELIED UPON AS INVESTMENT ADVICE OR AN OFFER FOR A PARTICULAR SECURITY.
THE INFORMATION IS NOT A COMPLETE ANALYSIS OF EVERY ASPECT OF ANY MARKET,
COUNTRY, INDUSTRY, SECURITY OR THE FUND. STATEMENTS OF FACT ARE FROM SOURCES
CONSIDERED RELIABLE, BUT THE ADVISER MAKES NO REPRESENTATION OR WARRANTY AS TO
THEIR COMPLETENESS OR ACCURACY. ALTHOUGH HISTORICAL PERFORMANCE IS NO GUARANTEE
OF FUTURE RESULTS, THESE INSIGHTS MAY HELP YOU UNDERSTAND OUR INVESTMENT
MANAGEMENT PHILOSOPHY.

4 | Semiannual Report

PERFORMANCE SUMMARY AS OF 9/30/04

Your dividend income will vary depending on dividends or interest paid by
securities in the Fund's portfolio, adjusted for operating expenses. Capital
gain distributions are net profits realized from the sale of portfolio
securities. Total return reflects the Fund's dividend income, capital gain
distributions, if any, and any unrealized gains or losses. All total returns
include reinvested distributions according to the terms specified in the Fund's
dividend reinvestment and cash purchase plan and do not reflect any sales
charges paid at inception or brokerage commissions paid on secondary market
purchases.

PRICE AND DISTRIBUTION INFORMATION

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CHANGE 9/30/04 3/31/04
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Net Asset Value (NAV) +$0.16 $8.58 $8.42
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Market Price (NYSE) -$0.15 $7.50 $7.65
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DISTRIBUTIONS (4/1/04-9/30/04)
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Dividend Income $0.21
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PERFORMANCE

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6-MONTH 1-YEAR 5-YEAR 10-YEAR
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Cumulative Total Return(1)
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Based on change in NAV +4.83% +19.27% +33.96% +134.29%
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Based on change in market price +0.92% +12.45% +42.25% +132.30%
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Average Annual Total Return(1)
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Based on change in NAV +4.83% +19.27% +6.02% +8.89%
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Based on change in market price +0.92% +12.45% +7.30% +8.79%
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Distribution Rate(2) 5.60%
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PERFORMANCE DATA QUOTED REPRESENT PAST PERFORMANCE, WHICH DOES NOT GUARANTEE
FUTURE RESULTS. INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE WITH MARKET
CONDITIONS, AND YOU MAY HAVE A GAIN OR LOSS WHEN YOU SELL YOUR SHARES. CURRENT
PERFORMANCE MAY DIFFER FROM FIGURES SHOWN.

FOR MORE CURRENT PERFORMANCE, CALL FRANKLIN TEMPLETON INVESTMENTS AT
1-800/342-5236.

ENDNOTES

THE FUND'S PORTFOLIO INCLUDES A SUBSTANTIAL PORTION OF HIGHER-YIELDING,
LOWER-RATED CORPORATE BONDS BECAUSE OF THE RELATIVELY HIGHER YIELDS THEY OFFER.
THESE SECURITIES CARRY A GREATER DEGREE OF CREDIT RISK RELATIVE TO
INVESTMENT-GRADE SECURITIES. IN ADDITION TO OTHER FACTORS, SECURITIES ISSUED BY
UTILITY COMPANIES ARE PARTICULARLY SENSITIVE TO INTEREST RATE MOVEMENTS. WHEN
INTEREST RATES FALL, UTILITY SECURITIES PRICES TEND TO RISE; WHEN INTEREST RATES
RISE, THEIR PRICES GENERALLY FALL.

(1) Total return calculations represent the cumulative and average annual
changes in value of an investment over the periods indicated.

(2) Distribution rate is based on an annualization of the Fund's 3.50 cent per
share September dividend and the NYSE closing price of $7.50 on 9/30/04.

Semiannual Report | 5

ANNUAL SHAREHOLDERS' MEETING

September 8, 2004 At an annual Meeting of Shareholders of Franklin Multi-Income
Trust (the "Fund") held on September 8, 2004, shareholders approved the
following:

1. Regarding the proposal to elect nominees for Trustees:

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% OF % OF
SHARES OUTSTANDING % OF WITHHELD OR OUTSTANDING % OF
TRUSTEES FOR SHARES VOTED ABSTAIN SHARES VOTED
-----------------------------------------------------------------------------------------------------------------

Edward B. Jamieson 4,983,495.006 85.007% 96.473% 182,213.785 3.111% 3.527%
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Charles B. Johnson 4,979,498.006 85.009% 96.395% 186,210.785 3.179% 3.605%
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Rupert H. Johnson, Jr. 4,980,991.006 85.035% 96.424% 184,717.785 3.153% 3.576%
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6 | Semiannual Report

DIVIDEND REINVESTMENT
AND CASH PURCHASE PLAN

The Fund's Dividend Reinvestment and Cash Purchase Plan (the "Plan") offers you
a prompt and simple way to reinvest dividends and capital gain distributions in
shares of the Fund. The Plan also allows you to purchase additional shares of
the Fund by making voluntary cash payments. PFPC Inc. (the "Plan Agent"), P.O.
Box 9223, Chelsea, MA 02150-9223, acts as your Plan Agent in administering the
Plan. The complete Terms and Conditions of the Dividend Reinvestment and Cash
Purchase Plan are contained in the Fund's Dividend Reinvestment and Cash
Purchase Plan Brochure. A copy of that Brochure may be obtained from the Fund at
the address on the back cover of this report.

You are automatically enrolled in the Plan unless you elect to receive dividends
or distributions in cash. If you own shares in your own name, you should notify
the Plan Agent, in writing, if you wish to receive dividends or distributions in
cash.

If the Fund declares a dividend or capital gain distribution, you, as a
participant in the Plan, will automatically receive an equivalent amount of
shares of the Fund purchased on your behalf by the Plan Agent.

The Plan permits you on a voluntary basis to submit in cash payments of not less
than $100 each up to a total of $5,000 per month to purchase additional shares
of the Fund. It is entirely up to you whether you wish to buy additional shares
with voluntary cash payments, and you do not have to send in the same amount
each time if you do. These payments should be made by check or money order
payable to PFPC Inc. and sent to PFPC Inc., Attn: Franklin Multi-Income Trust,
P.O. Box 9223, Chelsea, MA 02150-9223.

Your cash payment will be aggregated with the payments of other participants and
invested on your behalf by the Plan Agent in shares of the Fund which are
purchased in the open market.

The Plan Agent will invest cash payments on approximately the 15th of each month
in which no dividend or distribution is payable and, during each month in which
a dividend or distribution is payable, will invest cash payments beginning on
the dividend payment date. UNDER NO CIRCUMSTANCES WILL INTEREST BE PAID ON YOUR
FUNDS HELD BY THE PLAN AGENT. Accordingly, you should send any voluntary cash
payments which you wish to make shortly before an investment date but in
sufficient time to ensure that your payment will reach the Plan Agent not less
than 2 business days before an investment date. Payments received less than 2
business days before an investment date will be invested during the next month
or, if there are more than 30 days until the next investment date, will be

Semiannual Report | 7

returned to you. You may obtain a refund of any cash payment by written notice,
if the Plan Agent receives the written notice not less than 48 hours before an
investment date.

There is no direct charge to participants for reinvesting dividends and capital
gain distributions, since the Plan Agent's fees are paid by the Fund. However,
when shares are purchased in the open market, each participant will pay a pro
rata portion of any brokerage commissions incurred. The Plan Agent will deduct a
$5.00 service fee from each of your voluntary cash payments.

The automatic reinvestment of dividends and capital gain distributions does not
relieve you of any taxes which may be payable on dividends or distributions. In
connection with the reinvestment of dividends and capital gain distributions,
shareholders generally will be treated as having received a distribution equal
to the cash distribution that would have been paid.

The Fund does not issue new shares in connection with the Plan. All investments
are in full and fractional shares, carried to three decimal places. If the
market price exceeds the net asset value you will receive shares at a price
greater than net asset value per share in connection with purchases through the
Plan.

You will receive a monthly account statement from the Plan Agent, showing total
dividends and capital gain distributions, date of investment, shares acquired
and price per share, and total shares of record held by you and by the Plan
Agent for you. You are entitled to vote all shares of record, including shares
purchased for you by the Plan Agent, and, if you vote by proxy, your proxy will
include all such shares.

As long as you participate in the Plan, the Plan Agent will hold the shares it
has acquired for you in safekeeping, in its name or in the name of its nominee.
This convenience provides added protection against loss, theft or inadvertent
destruction of certificates. However, you may request that a certificate
representing your Plan shares be issued to you.

You may withdraw from the Plan at any time, without penalty, by notifying the
Plan Agent in writing at the address above. If you withdraw from the Plan, you
may specify either: (a) that you wish to receive, without charge, stock
certificates issued in your name for all full shares; or (b) that you prefer the
Plan Agent to sell your shares and send you the proceeds less brokerage
commissions and a $5.00 fee. The Plan Agent will convert any fractional shares
you hold at the time of your withdrawal to cash at current market price and send
you a check for the proceeds.

8 | Semiannual Report

If you hold shares in your own name, please address all notices, correspondence,
questions, or other communications regarding the Plan to the Plan Agent at the
address noted above. If your shares are not held in your name, you should
contact your brokerage firm, bank, or other nominee for more information and to
determine if your nominee will participate in the Plan on your behalf.

The Fund or the Plan Agent may amend or terminate the Plan. You will receive
written notice at least 90 days before the effective date of termination or of
any amendment. In the case of termination, you will receive written notice at
least 90 days before the record date of any dividend or capital gain
distribution by the Fund.

Semiannual Report | 9

FRANKLIN MULTI-INCOME TRUST

FINANCIAL HIGHLIGHTS

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SIX MONTHS ENDED
SEPTEMBER 30, 2004 YEAR ENDED MARCH 31,
(UNAUDITED) 2004 2003 2002 2001 2000
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PER SHARE OPERATING PERFORMANCE
(for a share outstanding throughout the period)

Net asset value, beginning of period ............... $ 8.42 $ 6.40 $ 8.71 $ 9.80 $ 8.97 $ 10.04
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Income from investment operations:

Net investment income ............................. .20 .44 .51 .63 .66 .71

Net realized and unrealized gains (losses) ........ .17 2.00 (2.25) (1.05) .84 (.84)
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Total from investment operations ................... .37 2.44 (1.74) (.42) 1.50 (.13)
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Less distributions from:

Net investment income ............................. (.21) (.42) (.57) (.67) (.67) (.70)

Net realized gains ................................ -- -- -- -- -- (.24)
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Total distributions ................................ (.21) (.42) (.57) (.67) (.67) (.94)
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Net asset value, end of period ..................... $ 8.58 $ 8.42 $ 6.40 $ 8.71 $ 9.80 $ 8.97
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Market value, end of period(a) ..................... $ 7.50 $ 7.65 $ 6.10 $ 8.70 $ 8.62 $ 7.00
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Total return (based on market value per share) ..... .92% 32.84% (23.67)% 9.23% 33.54% (12.29)%

RATIOS/SUPPLEMENTAL DATA

Net assets, end of period (000's) .................. $ 50,285 $ 49,322 $ 37,511 $ 51,047 $ 57,412 $ 52,559

Ratios to average net assets:

Expenses .......................................... 3.35%(b) 3.49% 4.47% 3.45% 3.23% 3.30%

Net investment income ............................. 4.85%(b) 5.71% 7.52% 6.97% 6.88% 7.33%

Portfolio turnover rate ............................ 12.59% 45.82% 48.45% 18.27% 26.72% 30.42%

Total debt outstanding at end of period (000's) .... $ 16,000 $ 14,000 $ 14,000 $ 16,000 $ 16,000 $ 16,000

Asset coverage per $1,000 of debt(c) ............... $ 4,143 $ 4,523 $ 3,679 $ 4,190 $ 4,588 $ 4,285

Average amount of notes per share during
the period ........................................ $ 2.42 $ 2.39 $ 2.54 $ 2.73 $ 2.73 $ 2.73

(a) Based on the last sale on the New York Stock Exchange.

(b) Annualized.

(c) Asset coverage per $1,000 of debt has been corrected. As of March 31,
2004, 2003, 2002, 2001 and 2000 the asset coverage previously presented
were $3,523, $2,679, $3,190, $3,588 and $3,285, respectively.

10 | See notes to financial statements. | Semiannual Report

FRANKLIN MULTI-INCOME TRUST

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2004 (UNAUDITED)

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SHARES/WARRANTS VALUE
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COMMON STOCKS AND WARRANTS 53.1%
COMMUNICATIONS 1.0%
(a) Metrocall Holdings Inc. ................................................................. 4,620 $ 299,607
(a) Telewest Global Inc. (United Kingdom) ................................................... 17,056 198,191
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497,798
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CONSUMER SERVICES .1%
Marriott International Inc., A .......................................................... 1,052 54,662
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ELECTRONIC TECHNOLOGY
(a) Loral Space & Communications Ltd., wts., 12/27/06 ....................................... 4,188 33
(a) Loral Space & Communications Ltd., wts., 1/15/07 ........................................ 1,000 18
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51
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TRANSPORTATION
(a) Continental Airlines Inc., B ............................................................ 357 3,041
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UTILITIES 52.0%
Alliant Energy Corp. .................................................................... 15,000 373,200
Ameren Corp. ............................................................................ 20,000 923,000
American Electric Power Co. Inc. ........................................................ 33,800 1,080,248
Atmos Energy Corp. ...................................................................... 35,000 881,650
Cinergy Corp. ........................................................................... 24,500 970,200
Dominion Resources Inc. ................................................................. 23,400 1,526,850
DTE Energy Co. .......................................................................... 20,000 843,800
Edison International .................................................................... 40,000 1,060,400
Energy East Corp. ....................................................................... 30,000 755,400
Entergy Corp. ........................................................................... 24,000 1,454,640
Exelon Corp. ............................................................................ 49,000 1,797,810
FirstEnergy Corp. ....................................................................... 27,500 1,129,700
FPL Group Inc. .......................................................................... 19,000 1,298,080
Nicor Inc. .............................................................................. 29,000 1,064,300
NiSource Inc. ........................................................................... 57,000 1,197,570
NSTAR ................................................................................... 15,500 761,050
ONEOK Inc. .............................................................................. 40,200 1,046,004
Pepco Holdings Inc. ..................................................................... 20,500 407,950
Pinnacle West Capital Corp. ............................................................. 24,000 996,000
PPL Corp. ............................................................................... 11,700 552,006
Progress Energy Inc. .................................................................... 21,000 889,140
Public Service Enterprise Group Inc. .................................................... 15,000 639,000
Puget Energy Inc. ....................................................................... 37,000 839,900
SCANA Corp. ............................................................................. 12,621 471,268
Sempra Energy ........................................................................... 26,000 940,940
Southern Co. ............................................................................ 43,000 1,289,140
TXU Corp. ............................................................................... 20,400 977,568
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26,166,814
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TOTAL COMMON STOCKS AND WARRANTS (COST $19,130,102) ..................................... 26,722,366
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Semiannual Report | 11

FRANKLIN MULTI-INCOME TRUST

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2004 (UNAUDITED) (CONTINUED)

PREFERRED STOCK (COST $625,000) 1.3%
UTILITIES
Heco Capital Trust III, 6.50%, pfd ...................................................... 25,000 $ 647,250
-------------
CONVERTIBLE PREFERRED STOCKS 2.3%
CONSUMER DURABLES 1.6%
Ford Motor Co. Capital Trust II, 6.50%, cvt. pfd ........................................ 15,300 799,884
-------------
UTILITIES .7%
CMS Energy Trust I, 7.75%, cvt. pfd ..................................................... 8,000 354,000
-------------
TOTAL CONVERTIBLE PREFERRED STOCKS (COST $1,023,846) .................................... 1,153,884
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PRINCIPAL AMOUNT(e)
-------------------

BONDS 69.8%
COMMERCIAL SERVICES .5%
JohnsonDiversey Inc., senior sub. note, B, 9.625%, 5/15/12 .............................. $ 200,000 225,000
(b) Key3Media Group Inc., senior sub. note, 11.25%, 6/15/11 ................................. 1,000,000 3,750
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228,750
-------------
COMMUNICATIONS 7.8%
Centennial Communications Corp., 144A, 8.625%, 2/01/14 .................................. 300,000 287,625
Dobson Communications Corp., senior note, 8.875%, 10/01/13 .............................. 400,000 260,000
Inmarsat Finance PLC, senior note, 144A, 7.625%, 6/30/12 (United Kingdom) ............... 400,000 399,000
Millicom International Cellular SA, senior note, 144A, 10.00%, 12/01/13 (Luxembourg) .... 500,000 505,000
Nextel Communications Inc., senior note, 7.375%, 8/01/15 ................................ 600,000 648,000
NTL Cable PLC, senior note, 144A, 8.75%, 4/15/14 (United Kingdom) ....................... 200,000 217,500
PanAmSat Corp., senior note, 144A, 9.00%, 8/15/14 ....................................... 400,000 418,000
Qwest Corp., 6.875%, 9/15/33 ............................................................ 500,000 423,750
Time Warner Telecom Inc., senior note, 10.125%, 2/01/11 ................................. 300,000 289,500
Time Warner Telecom Inc., senior note, 9.25%, 2/15/14 ................................... 300,000 300,000
Triton PCS Inc., senior note, 8.50%, 6/01/13 ............................................ 200,000 182,500
-------------
3,930,875
-------------
CONSUMER DURABLES 2.8%
D.R. Horton Inc., senior note, 8.50%, 4/15/12 ........................................... 500,000 567,500
(c) Jostens IH Corp., senior sub. note, 7.625%, 10/01/12 .................................... 300,000 303,000
Simmons Co., senior sub. note, 144A, 7.875%, 1/15/14 .................................... 400,000 418,000
True Temper Sports Inc., senior sub. note, 8.375%, 9/15/11 .............................. 100,000 93,500
-------------
1,382,000
-------------
CONSUMER NON-DURABLES 1.8%
Smithfield Foods Inc., senior note, 7.75%, 5/15/13 ...................................... 200,000 218,000
Smithfield Foods Inc., senior note, 144A, 7.00%, 8/01/11 ................................ 400,000 420,000
William Carter, senior sub. note, 10.875%, 8/15/11 ...................................... 242,000 272,855
-------------
910,855
-------------
CONSUMER SERVICES 16.6%
(b) Adelphia Communications Corp., senior note, 10.875%, 10/01/10 ........................... 1,000,000 925,000
Cablevision Systems Corp., senior note, 144A, 8.00%, 4/15/12 ............................ 600,000 630,000
Charter Communications Holdings II, senior note, 10.25%, 9/15/10 ........................ 600,000 615,750
Corrections Corp. of America, senior note, 7.50%, 5/01/11 ............................... 600,000 636,750
Dex Media West LLC, senior sub. note, 9.875%, 8/15/13 ................................... 490,000 578,200

12 | Semiannual Report

FRANKLIN MULTI-INCOME TRUST

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2004 (UNAUDITED) (CONTINUED)

------------------------------------------------------------------------------------------------------------------------------------
PRINCIPAL AMOUNT(e) VALUE
------------------------------------------------------------------------------------------------------------------------------------

BONDS (CONT.)
CONSUMER SERVICES (CONT.)
DIRECTV Holdings/Finance, senior note, 8.375%, 3/15/13 .................................. $ 500,000 $ 571,250
Emmis Operating Co., senior sub. note, 6.875%, 5/15/12 .................................. 500,000 521,250
Marquee Inc., senior note, 144A, 8.625%, 8/15/12 ........................................ 400,000 426,000
Nexstar Finance Inc., senior sub. note, 7.00%, 1/15/14 .................................. 600,000 594,000
Park Place Entertainment Corp., senior sub. note, 7.875%, 3/15/10 ....................... 500,000 567,500
Pinnacle Entertainment Inc., senior sub. note, B, 9.25%, 2/15/07 ........................ 35,000 36,050
Pinnacle Entertainment Inc., senior sub. note, 8.75%, 10/01/13 .......................... 100,000 103,000
Royal Caribbean Cruises Ltd., senior note, 8.00%, 5/15/10 ............................... 200,000 226,250
Royal Caribbean Cruises Ltd., senior note, 6.875%, 12/01/13 ............................. 400,000 428,000
Six Flags Inc., senior note, 9.50%, 2/01/09 ............................................. 600,000 589,500
Station Casinos Inc., senior sub. note, 6.875%, 3/01/16 ................................. 600,000 619,500
Young Broadcasting Inc., senior sub. note, 8.75%, 1/15/14 ............................... 300,000 289,500
-------------
8,357,500
-------------
DISTRIBUTION SERVICES
(b) AmeriServe Food Distribution Inc., senior note, 8.875%, 10/15/06 ........................ 250,000 --
-------------
ELECTRONIC TECHNOLOGY 4.0%
Argo-Tech Corp., senior note, 144A, 9.25%, 6/01/11 ...................................... 300,000 323,250
Communications & Power Industries, senior sub. note, 8.00%, 2/01/12 ..................... 500,000 525,000
Flextronics International Ltd., senior sub. note, 6.50%, 5/15/13 (Singapore) ............ 300,000 308,250
Solectron Corp., senior note, 9.625%, 2/15/09 ........................................... 300,000 333,750
Xerox Corp., senior note, 7.125%, 6/15/10 ............................................... 500,000 536,250
-------------
2,026,500
-------------
ENERGY MINERALS 2.8%
Foundation PA, senior note, 144A, 7.25%, 8/01/14 ........................................ 300,000 320,250
Peabody Energy Corp., senior note, B, 6.875%, 3/15/13 ................................... 300,000 325,500
Plains Exploration & Production Co., senior note, 144A, 7.125%, 6/15/14 ................. 200,000 215,500
Vintage Petroleum, senior sub. note, 7.875%, 5/15/11 .................................... 500,000 537,500
1,398,750
-------------
GOVERNMENT BONDS .7%
Eskom, 11.00%, 6/01/08 (South Africa) ................................................... 2,175,000 ZAR 358,622
-------------
HEALTH SERVICES 2.5%
Medcath Holdings Corp., senior note, 144A, 9.875%, 7/15/12 .............................. 200,000 210,000
Tenet Healthcare Corp., senior note, 7.375%, 2/01/13 .................................... 600,000 567,000
Vanguard Health Holding Co. II LLC, senior sub. note, 144A, 9.00%, 10/01/14 ............. 500,000 503,750
-------------
1,280,750
-------------
INDUSTRIAL SERVICES 2.9%
Allied Waste North America Inc., senior note, 7.875%, 4/15/13 ........................... 500,000 530,000
Grant Prideco Escrow, senior note, 9.00%, 12/15/09 ...................................... 200,000 224,500
Hanover Equipment Trust 01, senior secured note, B, FRN, 8.7500%, 9/01/11 ............... 600,000 658,500
URS Corp., senior sub. note, 12.25%, 5/01/09 ............................................ 60,000 64,200
-------------
1,477,200
-------------
NON-ENERGY MINERALS 1.3%
Ispat Inland ULC, senior note, 9.75%, 4/01/14 ........................................... 600,000 664,500
-------------

Semiannual Report | 13

FRANKLIN MULTI-INCOME TRUST

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2004 (UNAUDITED) (CONTINUED)

BONDS (CONT.)
PROCESS INDUSTRIES 8.7%
BCP Caylux Holding Lux SCA, senior sub. note, 144A, 9.625%, 6/15/14 ..................... $ 600,000 $ 651,000
(b) FiberMark Inc., senior note, 10.75%, 4/15/11 ............................................ 500,000 317,500
Georgia-Pacific Corp., senior note, 8.00%, 1/15/24 ...................................... 600,000 685,500
Graham Packaging Co., senior disc. note, B, 10.75%, 1/15/09 ............................. 200,000 208,500
Huntsman ICI Holdings LLC, senior disc. note, zero cpn., 12/31/09 ....................... 1,500,000 802,500
MDP Acquisitions PLC, senior note, 9.625%, 10/01/12 (Irish Republic) .................... 300,000 340,500
Nalco Co., senior sub. note, 8.875%, 11/15/13 ........................................... 400,000 432,000
(b) Pindo Deli Finance Mauritius Ltd., senior note, 10.25%, 10/01/04 (Indonesia) ............ 1,000,000 312,500
Rhodia SA, senior note, 10.25%, 6/01/10 (France) ........................................ 600,000 624,000
-------------
4,374,000
-------------
PRODUCER MANUFACTURING 6.7%
Case New Holland Inc., senior note, 144A, 9.25%, 8/01/11 ................................ 600,000 675,000
Fimep SA, senior note, 10.50%, 2/15/13 (France) ......................................... 500,000 587,500
Invensys PLC, senior note, 144A, 9.875%, 3/15/11 (United Kingdom) ....................... 400,000 412,000
Milacron Escrow Corp., senior secured note, 144A, 11.50%, 5/15/11 ....................... 500,000 532,500
THL Buildco Inc., senior sub. note, 144A, 8.50%, 9/01/14 ................................ 400,000 421,000
TRW Automotive Inc., senior note, 9.375%, 2/15/13 ....................................... 272,000 312,120
Westinghouse Air Brake, senior note, 6.875%, 7/31/13 .................................... 400,000 412,000
-------------
3,352,120
-------------
REAL ESTATE INVESTMENT TRUSTS 2.1%
Host Marriott LP, senior note, 9.25%, 10/01/07 .......................................... 500,000 562,500
Ventas Realty LP/Capital Corp., senior note, 9.00%, 5/01/12 ............................. 400,000 458,000
-------------
1,020,500
-------------
RETAIL TRADE .9%
Rite Aid Corp., senior note, 144A, 6.125%, 12/15/08 ..................................... 500,000 470,000
-------------
TECHNOLOGY SERVICES 1.3%
UGS Corp., senior sub. note, 144A, 10.00%, 6/01/12 ...................................... 600,000 657,000
-------------
TRANSPORTATION 2.1%
Great Lakes Dredge & Dock Corp., senior sub. note, 7.75%, 12/15/13 ...................... 400,000 348,000
Laidlaw International Inc., senior note, 10.75%, 6/15/11 ................................ 600,000 687,750
-------------
1,035,750
-------------
UTILITIES 4.3%
Aquila Inc., senior note, 14.875%, 7/01/12 .............................................. 400,000 541,000
Calpine Corp., senior secured note, 144A, 8.75%, 7/15/13 ................................ 600,000 456,000
Dynegy Holdings Inc., senior note, 8.75%, 2/15/12 ....................................... 500,000 522,500
Midwest Generation LLC, senior secured note, 8.75%, 5/01/34 ............................. 600,000 657,000
-------------
2,176,500
-------------
TOTAL BONDS (COST $35,393,822) .......................................................... 35,102,172
-------------
TOTAL LONG TERM INVESTMENTS (COST $56,172,770) .......................................... 63,625,672
-------------

14 | Semiannual Report

FRANKLIN MULTI-INCOME TRUST

STATEMENT OF INVESTMENTS, SEPTEMBER 30, 2004 (UNAUDITED) (CONTINUED)

------------------------------------------------------------------------------------------------------------------------------------
SHARES VALUE
------------------------------------------------------------------------------------------------------------------------------------

SHORT TERM INVESTMENT (COST $2,544,557) 5.1%
(d) Franklin Institutional Fiduciary Trust Money Market Portfolio ........................... 2,544,557 $ 2,544,557
-------------
TOTAL INVESTMENTS (COST $58,717,327) 131.6% ............................................. 66,170,229
OTHER ASSETS, LESS LIABILITIES (31.6)% .................................................. (15,884,806)
-------------
NET ASSETS 100.0% ....................................................................... $ 50,285,423
=============

CURRENCY ABBREVIATION | ZAR - South African Rand

(a) Non-income producing.

(b) Defaulted securities. See Note 9.

(d) See Note 8 regarding investments in Franklin Institutional Fiduciary Trust
Money Market Portfolio.

(e) The principal amount is stated in U.S. dollars unless otherwise indicated.

Semiannual Report | See notes to financial statements. | 15

FRANKLIN MULTI-INCOME TRUST

FINANCIAL STATEMENTS

STATEMENT OF ASSETS AND LIABILITIES
September 30, 2004 (unaudited)

Assets:
Investments in securities:
Cost - Unaffiliated issuers ................................................................... $ 56,172,770
Cost - Sweep Money Fund (Note 8) .............................................................. 2,544,557
=============
Value - Unaffiliated issuers .................................................................. 63,625,672
Value - Sweep Money Fund (Note 8) ............................................................. 2,544,557
Receivables:
Dividends and Interest ........................................................................ 734,109
Note issuance costs (Note 3) ................................................................... 111,843
-------------
Total assets .............................................................................. 67,016,181
-------------
Liabilities:
Payables:
Investment securities purchased ............................................................... 400,925
Affiliates .................................................................................... 46,551
Note (Note 3) ................................................................................. 16,000,000
Accrued interest (Note 3) ..................................................................... 27,533
Distributions to shareholders .................................................................. 205,016
Other liabilities .............................................................................. 50,733
-------------
Total liabilities ......................................................................... 16,730,758
-------------
Net assets, at value ..................................................................... $ 50,285,423
=============
Net assets consist of:
Distributions in excess of net investment income ............................................... $ (581,766)
Net unrealized appreciation (depreciation) ..................................................... 7,452,542
Accumulated net realized gain (loss) ........................................................... (10,368,975)
Capital shares ................................................................................. 53,783,622
-------------
Net assets, at value ..................................................................... $ 50,285,423
=============
Net asset value per share ($50,285,423 / 5,857,600 shares outstanding) .......................... $ 8.58
=============

16 | See notes to financial statements. | Semiannual Report

FRANKLIN MULTI-INCOME TRUST

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF OPERATIONS
for the six months ended September 30, 2004 (unaudited)

Investment income:
Dividends:
Unaffiliated issuers ...................................................................... $ 587,205
Sweep money fund (Note 8) ................................................................. 4,696
Interest ................................................................................... 1,389,369
------------
Total investment income .............................................................. 1,981,270
------------
Expenses:
Management fees (Note 4) ................................................................... 264,321
Transfer agent fees ........................................................................ 24,243
Custodian fees (Note 5) .................................................................... 635
Reports to shareholders .................................................................... 15,152
Registration and filing fees ............................................................... 8,632
Professional fees .......................................................................... 18,753
Trustees' fees and expenses ................................................................ 3,069
Amortization of note issuance costs (Note 3) ............................................... 11,035
Other ...................................................................................... 3,273
------------
Expenses before interest expense ....................................................... 349,113
Interest expense (Note 3) .............................................................. 460,658
------------
Total expenses ........................................................................ 809,771
Expenses reductions (Note 5) .......................................................... (36)
------------
Net expenses ......................................................................... 809,735
------------
Net investment income ................................................................ 1,171,535
------------
Realized and unrealized gains (losses):
Net realized gain (loss) from:
Investments ............................................................................... (278,585)
Foreign currency transactions ............................................................. 249
------------
Net realized gain (loss) ............................................................. (278,336)
Net change in unrealized appreciation (depreciation) on:
Investments ............................................................................... 1,301,103
Translation of assets and liabilities denominated in foreign currencies ................... (964)
------------
Net change in unrealized appreciation (depreciation) ........................................ 1,300,139
------------
Net realized and unrealized gain (loss) ..................................................... 1,021,803
------------
Net increase (decrease) in net assets resulting from operations ............................. $ 2,193,338
============

Semiannual Report | See notes to financial statements. | 17

FRANKLIN MULTI-INCOME TRUST

FINANCIAL STATEMENTS (CONTINUED)

STATEMENTS OF CHANGES IN NET ASSETS
for the six months ended September 30, 2004 (unaudited)
and the year ended March 31, 2004

-------------------------------------
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2004 MARCH 31, 2004
-------------------------------------

Increase (decrease) in net assets:
Operations:
Net investment income .................................................................... $ 1,171,535 $ 2,574,538
Net realized gain (loss) from investments and foreign currency transactions .............. (278,336) (1,276,521)
Net change in unrealized appreciation (depreciation) on investments and translation of
assets and liabilities denominated in foreign currencies ................................ 1,300,139 12,973,693
---------------------------------
Net increase (decrease) in net assets resulting from operations ...................... 2,193,338 14,271,710
Distributions to shareholders from net investment income .................................. (1,230,096) (2,460,192)
---------------------------------
Net increase (decrease) in net assets ................................................ 963,242 11,811,518
Net assets:
Beginning of period ....................................................................... 49,322,181 37,510,663
---------------------------------
End of period ............................................................................. $ 50,285,423 $ 49,322,181
=================================
Distributions in excess of net investment income included in net assets:
End of period ............................................................................. $ (581,766) $ (523,205)
=================================

18 | See notes to financial statements. | Semiannual Report

FRANKLIN MULTI-INCOME TRUST

FINANCIAL STATEMENTS (CONTINUED)

STATEMENT OF CASH FLOWS
for the period ended September 30, 2004 (unaudited)

Cash flow from operating activities:
Dividends and interest received ........................................................................... $ 1,869,333
Operating expenses paid ................................................................................... (341,256)
Interest expense paid ..................................................................................... (472,500)
-------------
Cash provided - operations ............................................................................... 1,055,577
=============
Cash flow from investing activities:
Purchases of investment securities ........................................................................ (9,182,745)
Proceeds from disposition of investment securities ........................................................ 9,129,689
Purchase of short term investment securities, net ......................................................... (1,679,657)
-------------
Cash used - investments .................................................................................. (1,732,713)
=============
Cash flow from financing activities:
Note maturity ............................................................................................. (14,000,000)
Note issuance ............................................................................................. 16,000,000
Payment of note issuance costs ............................................................................ (92,768)
Distributions to shareholders ............................................................................. (1,230,096)
-------------
Cash provided - financing ................................................................................ 677,136
=============

Net increase (decrease) cash ............................................................................... --
Cash at beginning of year .................................................................................. --
-------------
Cash at end of period ...................................................................................... $ --
=============

RECONCILIATION OF NET INVESTMENT INCOME TO NET CASH PROVIDED BY OPERATIONS
FOR THE PERIOD ENDED SEPTEMBER 30, 2004

Net investment income ...................................................................................... $ 1,171,535
Adjustments to reconcile net investment income to net cash provided by operating activities:
Amortization income ...................................................................................... (65,963)
Amortization of note issuance costs ...................................................................... 11,035
Reinvested dividends from Sweep Money Fund ............................................................... (4,696)
Increase in dividends and interest receivable ............................................................ (41,278)
Decrease in liabilities .................................................................................. (15,056)
-------------
Cash provided - operations ................................................................................. $ 1,055,577
=============

Semiannual Report | See notes to financial statements. | 19

FRANKLIN MULTI-INCOME TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

Franklin Multi-Income Trust (the Fund) is registered under the Investment
Company Act of 1940 as a non-diversified, closed-end investment company. The
Fund has two classes of securities: senior fixed-rate note (the Note) and shares
of beneficial interest (the Shares). The Fund seeks high current income.

The following summarizes the Fund's significant accounting policies.

A. SECURITY VALUATION

Securities listed or traded on a recognized national exchange are valued at the
last reported sales price. Securities listed or traded on NASDAQ are valued at
their official closing price. Debt securities, other over-the-counter securities
and listed securities for which no sale is reported are valued within the range
of the latest quoted bid and asked prices by independent pricing services or
recognized dealers in such securities. Foreign securities are valued at the
close of trading of the foreign exchange or the NYSE, whichever is earlier. If
events occur that materially affect the values of securities after the prices or
foreign exchange rates are determined, but prior to 4:00 p.m. Eastern time or
the close of trading on the NYSE, whichever is earlier, or if market quotations
are deemed not readily available or reliable, the securities will be valued at
fair value. Investments in open-end mutual funds are valued at the closing net
asset value. All security valuation procedures are approved by the Board of
Trustees.

B. FOREIGN CURRENCY TRANSLATION

Portfolio securities and other assets and liabilities denominated in foreign
currencies are translated into U.S. dollars based on the exchange rate of such
currencies against U.S. dollars on the date of valuation. Purchases and sales of
securities and income items denominated in foreign currencies are translated
into U.S. dollars at the exchange rate in effect on the transaction date.

The Fund does not separately report the effect of changes in foreign exchange
rates from changes in market prices on securities held. Such changes are
included in net realized and unrealized gain or loss from investments.

Realized foreign exchange gains or losses arise from sales of foreign
currencies, currency gains or losses realized between the trade and settlement
dates on securities transactions and the difference between the recorded amounts
of dividends, interest, and foreign withholding taxes and the U.S. dollars
equivalent of the amounts actually received or paid. Net unrealized foreign
exchange gains and losses arise from changes in foreign exchange rates on
foreign denominated assets and liabilities other than investments in securities
held at the end of the reporting period.

20 | Semiannual Report

FRANKLIN MULTI-INCOME TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

C. SECURITIES PURCHASED ON A WHEN-ISSUED OR DELAYED DELIVERY BASIS

The Fund may purchase securities on a when-issued or delayed delivery basis,
with payment and delivery scheduled for a future date. These transactions are
subject to market fluctuations and are subject to the risk that the value at
delivery may be more or less than the trade date purchase price. Although the
Fund will generally purchase these securities with the intention of holding the
securities, it may sell the securities before the settlement date. Sufficient
assets have been segregated for these securities.

D. FOREIGN CURRENCY CONTRACTS

When the Fund purchases or sells foreign securities it may enter into foreign
exchange contracts to minimize foreign exchange risk from the trade date to the
settlement date of the transactions. A foreign exchange contract is an agreement
between two parties to exchange different currencies at an agreed upon exchange
rate on a specified date. Realized and unrealized gains and losses on these
contracts are included in the Statement of Operations.

The risks of these contracts include movement in the values of the foreign
currencies relative to the U.S. dollar and the possible inability of the
counterparties to fulfill their obligations under the contracts.

E. INCOME TAXES

No provision has been made for income taxes because the Fund's policy is to
qualify as a regulated investment company under Sub Chapter M of the Internal
Revenue Code and to distribute substantially all of its taxable income. Fund
distributions to shareholders are determined on an income tax basis and may
differ from net investment income and realized gains for financial reporting
purposes.

F. SECURITY TRANSACTIONS, INVESTMENT INCOME, EXPENSES AND DISTRIBUTIONS

Security transactions are accounted for on trade date. Realized gains and losses
on security transactions are determined on a specific identification basis.
Interest income and estimated expenses are accrued daily. Discounts and premiums
on securities purchased are amortized over the lives of the respective
securities. Dividend income and distributions to shareholders are recorded on
the ex-dividend date.

G. ACCOUNTING ESTIMATES

The preparation of 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 of assets and
liabilities at the date of the financial statements and the amounts of income
and expense during the reporting period. Actual results could differ from those
estimates.

Semiannual Report | 21

FRANKLIN MULTI-INCOME TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

H. GUARANTEES AND INDEMNIFICATIONS

Under the Fund's organizational documents, its officers and trustees are
indemnified against certain liability arising out of the performance of their
duties to the Funds. Additionally, in the normal course of business, the Fund
enters into contracts with service providers that contain general
indemnification clauses. The Fund's maximum exposure under these arrangements is
unknown as this would involve future claims that may be made against the Fund
that have not yet occurred. However, based on experience, the Fund expects the
risk of loss to be remote.

2. SHARES OF BENEFICIAL INTEREST

At September 30, 2004, there were an unlimited number of shares authorized
($0.01 par value). During the period ended September 30, 2004, there were no
share transactions; all reinvested distributions were satisfied with previously
issued shares purchased in the open market.

3. SENIOR FIXED-RATE NOTE

On September 15, 2004, the Fund's $14 million, 6.75% senior note matured and was
replaced with a new note described below.

On September 15, 2004, the Fund issued $16 million principal amount of a new
class of five-year senior notes (the Note). The Note is a general unsecured
obligation of the Fund and ranks senior to Trust shares and all existing or
future unsecured indebtedness of the Fund.

The Note bears interest, payable semi-annually, at the rate of 4.13% per year,
to maturity on September 15, 2009. The Note was issued in a private placement,
and is not available for resale; therefore, no market value can be obtained for
the Note. The Fund is required to maintain on a monthly basis a specified
discounted asset value for its portfolio in compliance with guidelines
established by Standard & Poor's Corporation, and is required to maintain asset
coverage for the Note of at least 300%. The Fund has met these requirements
during the period ended September 30, 2004.

The issuance costs of $112,769 incurred by the Fund are deferred and amortized
on an interest method basis over the term of the Note.

4. TRANSACTIONS WITH AFFILIATES

Certain officers and trustees of the Fund are also officers or directors of the
following entities:

--------------------------------------------------------------------------------
ENTITY AFFILIATION
--------------------------------------------------------------------------------
Franklin Advisers, Inc. (Advisers) Investment manager
Franklin Templeton Services, LLC (FT Services) Administrative manager

22 | Semiannual Report

FRANKLIN MULTI-INCOME TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

4. TRANSACTIONS WITH AFFILIATES (CONTINUED)

A. MANAGEMENT FEES

The Fund pays an investment management fee to Advisers of .85% per year of the
average weekly net assets of the Fund excluding the principal amount of the
Note.

B. ADMINISTRATIVE FEES

Under an agreement with Advisers, FT Services provides administrative services
to the Fund. The fee is paid by Advisers based on average daily net assets, and
is not an additional expense of the Fund.

5. EXPENSE OFFSET ARRANGEMENT

The Fund has entered into an arrangement with its custodian whereby credits
realized as a result of uninvested cash balances are used to reduce a portion of
the Fund's custodian expenses. During the period ended September 30, 2004, the
custodian fees were reduced as noted in the Statement of Operations.

6. INCOME TAXES

At March 31, 2004, the Fund had tax basis capital losses of $9,610,384 which may
be carried over to offset future capital gains. Such losses expire as follows:

Capital loss carryovers expiring in:
2008 ......................................................... $ 24,985
2010 ......................................................... 150,106
2011 ......................................................... 5,087,216
2012 ......................................................... 4,348,077
-----------
$ 9,610,384
===========

At March 31, 2004, the Fund had deferred capital losses occurring subsequent to
October 31, 2003 of $111,477. For tax purposes, such losses will be reflected in
the year ending March 31, 2005.

At September 30, 2004, the net unrealized appreciation (depreciation) based on
the cost of investments for income tax purposes was as follows:

Cost of investments ........................................... $ 59,288,873
=============
Unrealized appreciation ....................................... $ 9,936,098
Unrealized depreciation ....................................... (3,054,742)
-------------
Unrealized appreciation (depreciation) ........................ $ 6,881,356
=============

Net investment income differs for financial statement and tax purposes primarily
due to differing treatments of defaulted securities, foreign currency
transactions, and bond discounts and premiums.

Net realized losses differ for financial statement and tax purposes primarily
due to differing treatment of wash sales, foreign currency transactions and bond
discounts and premiums.

Semiannual Report | 23

FRANKLIN MULTI-INCOME TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

7. INVESTMENT TRANSACTIONS

Purchases and sales of securities (excluding short-term securities) for the
period ended September 30, 2004 aggregated $8,983,670 and $7,765,828
respectively.

8. INVESTMENTS IN FRANKLIN INSTITUTIONAL FIDUCIARY TRUST MONEY MARKET PORTFOLIO

The Fund may invest in the Franklin Institutional Fiduciary Trust Money Market
Portfolio (the Sweep Money Fund), an open-end investment company managed by
Advisers. Management fees paid by the Funds are reduced on assets invested in
the Sweep Money Fund, in an amount not to exceed the management fees paid by the
Sweep Money Fund.

9. CREDIT RISK AND DEFAULTED SECURITIES

The Fund has 54.3% of its portfolio invested in below investment grade and
comparable quality unrated high yield securities, which tend to be more
sensitive to economic conditions than higher rated securities. The risk of loss
due to default by the issuer may be significantly greater for the holders of
high yielding securities because such securities are generally unsecured and are
often subordinated to other creditors of the issuer.

The Fund held defaulted securities and/or other securities for which the income
has been deemed uncollectible. At September 30, 2004, the value of these
securities was $1,558,750 representing 2.4% of the Fund's portfolio. The Fund
discontinues accruing income on these securities and provides an estimate for
losses on interest receivable. For information as to specific securities, see
the accompanying Statement of Investments.

10. REGULATORY MATTERS

MASSACHUSETTS ADMINISTRATIVE PROCEEDING

On September 20, 2004, Franklin Resources, Inc. (Franklin Resources, Inc. and
its subsidiaries are referred to collectively as the "Company") announced that
an agreement has been reached by two of its subsidiaries, Franklin Advisers,
Inc. ("Franklin Advisers") and Franklin Templeton Alternative Strategies, Inc.
("FTAS"), with the Securities Division of the Office of the Secretary of the
Commonwealth of Massachusetts (the "State of Massachusetts") related to an
administrative complaint filed on February 4, 2004. The administrative complaint
addressed one instance of market timing that was also a subject of the August 2,
2004 settlement that Franklin Advisers reached with the SEC, as described below.

Under the terms of the settlement consent order issued by the State of
Massachusetts, Franklin Advisers and FTAS have consented to the entry of a
cease-and-desist order and agreed to pay a $5 million administrative fine to the
State of Massachusetts. The consent order has multiple

24 | Semiannual Report

FRANKLIN MULTI-INCOME TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

10. REGULATORY MATTERS (CONTINUED)

MASSACHUSETTS ADMINISTRATIVE PROCEEDING (CONTINUED)

sections, including "Statements of Fact" and "Violations of Massachusetts
Securities Laws." The Company admitted the "Statements of Fact." The Company did
not admit or deny the "Violations of the Massachusetts Securities Laws." While
Franklin Advisers and FTAS did not admit or deny engaging in any wrongdoing, the
Company believes that it is in its best interest and the interests of its funds'
shareholders to settle this issue now and move forward.

On October 25, 2004, the State of Massachusetts filed an administrative
complaint against Franklin Resources, Inc. ("FRI") alleging a violation of the
Massachusetts Uniform Securities law (the "Act") in connection with having filed
on September 20, 2004, an allegedly false and misleading report on Form 8-K with
the SEC. The Massachusetts administrative complaint seeks an order calling for
FRI to cease and desist from further violations of the Act and to pay an
administrative fine in an amount to be determined.

FRI's SEC filing of September 20, 2004 described the settlement consent order
with the State of Massachusetts and reported while "Franklin Advisers and FTAS
did not admit or deny engaging in any wrongdoing, the Company believes that it
is in the best interest of the Company and its funds' shareholders to settle
this issue now and move forward." The October 25, 2004 State of Massachusetts
administrative complaint alleges that this description of the settlement consent
order was materially false and misleading under Massachusetts law. FRI's
management disagrees with the allegation made in this administrative complaint
and continues to believe that the description of the terms of the settlement
consent order issued by the State of Massachusetts is neither false nor
misleading.

U.S. SECURITIES AND EXCHANGE COMMISSION (SEC) SETTLEMENT

On August 2, 2004, the Company announced that an agreement has been reached by
Franklin Advisers with the SEC that resolves the issues resulting from the SEC's
investigation of market timing activity and the SEC issued an "Order instituting
administrative and cease-and-desist proceedings pursuant to sections 203(e) and
203(k) of the Investment Advisers Act of 1940 and sections 9(b) and 9(f) of the
Investment Company Act of 1940, making findings and imposing remedial sanctions
and a cease-and-desist order" (the "Order"). The SEC's Order concerns the
activities of a limited number of third parties that ended in 2000 and those
that are the subject of the Massachusetts administrative complaint described
above.

Under the terms of the SEC's Order, pursuant to which Franklin Advisers neither
admits nor denies any wrongdoing, Franklin Advisers has agreed to pay $50
million, of which $20 million is a civil penalty, to be distributed to
shareholders of certain funds in accordance with a plan to be developed by an
Independent Distribution Consultant. At this time, it is unclear which funds
will receive distributions or which shareholders of any particular fund will
receive distributions. The SEC Order also requires Franklin Advisers to, among
other things, enhance and periodically review compliance policies and
procedures.

Semiannual Report | 25

FRANKLIN MULTI-INCOME TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

10. REGULATORY MATTERS (CONTINUED)

OTHER GOVERNMENTAL INVESTIGATIONS

As part of ongoing investigations by the SEC, the U.S. Attorney for the Northern
District of California, the New York Attorney General, the California Attorney
General, the U.S. Attorney for the District of Massachusetts, the Florida
Department of Financial Services and the Commissioner of Securities, the West
Virginia Attorney General, the Vermont Department of Banking, Insurance,
Securities, and Health Care Administration and the National Association of
Securities Dealers, relating to certain practices in the mutual fund industry,
including late trading, market timing and payments to securities dealers who
sell fund shares, the Company and its subsidiaries, as well as certain current
or former executives and employees of the Company, have received requests for
information and/or subpoenas to testify or produce documents. The Company and
its current employees have been providing documents and information in response
to these requests and subpoenas. In addition, the Company has responded to
requests for similar kinds of information from regulatory authorities in some of
the foreign countries where the Company conducts its global asset management
business.

The staff of the SEC has also informed the Company that it is considering
recommending a civil action or proceeding against Franklin Advisers and Franklin
Templeton Distributors, Inc. ("FTDI") concerning payments to securities dealers
who sell fund shares (commonly referred to as "revenue sharing"). The staff of
the California Attorney General's Office ("CAGO") also has advised the Company
that the California Attorney General is authorized to bring a civil action
against the Company and FTDI arising from the same events. Even though the
Company currently believes that the charges the SEC staff and CAGO staff are
contemplating are unwarranted, it also believes that it is in the best interest
of the Company's and funds' shareholders to resolve these issues voluntarily, to
the extent the Company can reasonably do so. The Company continues to have
discussions towards resolving these governmental investigations.

OTHER LEGAL PROCEEDINGS

The Company, in addition to other entities within Franklin Templeton
Investments, including certain of its subsidiaries, other funds, and current and
former officers, employees, and directors have been named in multiple lawsuits
in different federal courts in Nevada, California, Illinois, New York and
Florida, alleging violations of various federal securities laws and seeking,
among other things, monetary damages and costs. Specifically, the lawsuits claim
breach of duty with respect to alleged arrangements to permit market timing
and/or late trading activity, or breach of duty with respect to the valuation of
the portfolio securities of certain funds managed by Company subsidiaries,
resulting in alleged market timing activity. The majority of these lawsuits
duplicate, in whole or in part, the allegations asserted in the Massachusetts
administrative complaint described above. The lawsuits are styled as class
actions or derivative actions on behalf of either the named funds or the
Company.

26 | Semiannual Report

FRANKLIN MULTI-INCOME TRUST

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)

10. REGULATORY MATTERS (CONTINUED)

OTHER LEGAL PROCEEDINGS (CONTINUED)

Various subsidiaries of the Company have also been named in multiple lawsuits
filed in state courts in Illinois alleging breach of duty with respect to
valuation of the portfolio securities of certain funds managed by such
subsidiaries.

In addition, the Company and certain of its subsidiaries, as well as certain
current and former officers, employees, and directors have been named in
multiple lawsuits alleging violations of various securities laws and pendent
state law claims relating to the disclosure of directed brokerage payments
and/or payment of allegedly excessive advisory, commission, and distribution
fees. These lawsuits are styled as class actions and derivative actions brought
on behalf of certain funds.

The Company's management strongly believes that the claims made in each of these
lawsuits are without merit and intends to vigorously defend against them.

The Company cannot predict with certainty the eventual outcome of the foregoing
governmental investigations or class actions or other lawsuits. If the Company
finds that it bears responsibility for any unlawful or inappropriate conduct
that caused losses to the Fund, it is committed to making the Fund or its
shareholders whole, as appropriate.

Semiannual Report | 27

FRANKLIN MULTI-INCOME TRUST

SHAREHOLDER INFORMATION

PROXY VOTING POLICIES AND PROCEDURES

The Fund has established Proxy Voting Policies and Procedures ("Policies") that
the Fund uses to determine how to vote proxies relating to portfolio securities.
Shareholders may view the Fund's complete Policies online at
franklintempleton.com. Alternatively, shareholders may request copies of the
Policies free of charge by calling the Proxy Group collect at 1-954/847-2268 or
by sending a written request to: Franklin Templeton Companies, LLC, 500 East
Broward Boulevard, Suite 1500, Fort Lauderdale, FL 33394, Attention: Proxy
Group. Copies of the Fund's proxy voting records are also made available online
at franklintempleton.com and posted on the Securities and Exchange Commission's
website at sec.gov and reflect the 12-month period beginning July 1, 2003, and
ending June 30, 2004.

QUARTERLY STATEMENT OF INVESTMENTS

The Fund files a complete statement of investments with the Securities and
Exchange Commission for the first and third quarters for each fiscal year on
Form N-Q. Shareholders may view the filed Form N-Q by visiting the Commission's
website at sec.gov. The filed form may also be viewed and copied at the
Commission's Public Reference Room in Washington, DC. Information regarding the
operations of the Public Reference Room may be obtained by calling
1-800/SEC-0330.

CERTIFICATIONS

The Fund's Chief Executive Officer - Finance and Administration is required by
the New York Stock Exchange's Listing Standards to file annually with the
Exchange a certification that he is not aware of any violation by the Fund of
the Exchange's Corporate Governance Standards applicable to the Fund. The Fund
has filed such certification.

In addition, the Fund's Chief Executive Officer - Finance and Administration and
Chief Financial Officer and Chief Accounting Officer are required by the rules
of the SEC to provide certain certifications with respect to the Fund's Form
N-CSR and Form N-CSRS (which includes the Fund's annual and semiannual reports
to shareholders) that are filed semiannually with the SEC. The Fund has filed
such certifications with its Form N-CSRS for the year ended March 31, 2004.
Additionally, the Fund expects to file, on or before November 29, 2004, such
certifications with its Form N-CSR for the six months ended September 30, 2004.

28 | Semiannual Report

LITERATURE REQUEST

TO RECEIVE A BROCHURE AND PROSPECTUS, PLEASE CALL US AT 1-800/DIAL BEN(R)
(1-800/342-5236) OR VISIT FRANKLINTEMPLETON.COM. INVESTORS SHOULD CAREFULLY
CONSIDER A FUND'S INVESTMENT GOALS, RISKS, CHARGES AND EXPENSES BEFORE
INVESTING. THE PROSPECTUS CONTAINS THIS AND OTHER INFORMATION. PLEASE CAREFULLY
READ THE PROSPECTUS BEFORE INVESTING. TO ENSURE THE HIGHEST QUALITY OF SERVICE,
WE MAY MONITOR, RECORD AND ACCESS TELEPHONE CALLS TO OR FROM OUR SERVICE
DEPARTMENTS. THESE CALLS CAN BE IDENTIFIED BY THE PRESENCE OF A REGULAR BEEPING
TONE.

FRANKLIN TEMPLETON INVESTMENTS

INTERNATIONAL

Mutual European Fund
Templeton China World Fund
Templeton Developing Markets Trust
Templeton Foreign Fund
Templeton Foreign Smaller Companies Fund
Templeton International (Ex EM) Fund

GLOBAL

Mutual Discovery Fund
Templeton Capital Accumulator Fund
Templeton Global Long-Short Fund
Templeton Global Opportunities Trust
Templeton Global Smaller Companies Fund
Templeton Growth Fund
Templeton World Fund

GROWTH

Franklin Aggressive Growth Fund
Franklin Capital Growth Fund
Franklin Flex Cap Growth Fund
Franklin Small Cap Growth Fund II(1)
Franklin Small-Mid Cap Growth Fund

VALUE

Franklin Balance Sheet
Investment Fund(2)
Franklin Equity Income Fund
Franklin Large Cap Value Fund
Franklin MicroCap Value Fund(2)
Franklin Small Cap Value Fund
Mutual Beacon Fund
Mutual Qualified Fund
Mutual Recovery Fund(3)
Mutual Shares Fund

BLEND

Franklin Blue Chip Fund
Franklin Convertible Securities Fund
Franklin Growth Fund
Franklin Rising Dividends Fund
Franklin U.S. Long-Short Fund(4)

SECTOR

Franklin Biotechnology Discovery Fund
Franklin DynaTech Fund
Franklin Global Communications Fund
Franklin Global Health Care Fund
Franklin Gold and Precious Metals Fund
Franklin Natural Resources Fund
Franklin Real Estate Securities Fund
Franklin Technology Fund
Franklin Utilities Fund
Mutual Financial Services Fund

ASSET ALLOCATION

Franklin Templeton Corefolio
Allocation Fund
Franklin Templeton Founding Funds
Allocation Fund
Franklin Templeton Perspectives
Allocation Fund

TARGET FUNDS

Franklin Templeton Conservative Target Fund
Franklin Templeton Growth Target Fund
Franklin Templeton Moderate Target Fund

INCOME

Franklin Adjustable U.S. Government
Securities Fund(5)
Franklin's AGE High Income Fund
Franklin Federal Money Fund(5), (6)
Franklin Floating Rate Daily Access Fund
Franklin Floating Rate Trust(3)
Franklin Income Fund
Franklin Limited Maturity
U.S. Government Securities Fund(5), (7)
Franklin Money Fund(5), (6)
Franklin Strategic Income Fund
Franklin Strategic Mortgage Portfolio
Franklin Templeton Hard Currency Fund
Franklin Total Return Fund
Franklin U.S. Government Securities Fund(5)
Templeton Global Bond Fund

TAX-FREE INCOME(8)

NATIONAL FUNDS

Double Tax-Free Income Fund
Federal Tax-Free Income Fund
High Yield Tax-Free Income Fund
Insured Tax-Free Income Fund(9)
Tax-Exempt Money Fund(5), (6)

LIMITED-TERM FUNDS

California Limited-Term Tax-Free Income Fund
Federal Limited-Term Tax-Free Income Fund
New York Limited-Term Tax-Free Income Fund

INTERMEDIATE-TERM FUNDS

California Intermediate-Term
Tax-Free Income Fund
Federal Intermediate-Term
Tax-Free Income Fund
New York Intermediate-Term
Tax-Free Income Fund

STATE-SPECIFIC

Alabama
Arizona
California(10)
Colorado
Connecticut
Florida(10)
Georgia
Kentucky
Louisiana
Maryland
Massachusetts(9)
Michigan(9)
Minnesota(9)
Missouri
New Jersey
New York(10)
North Carolina
Ohio(9)
Oregon
Pennsylvania
Tennessee
Virginia

INSURANCE FUNDS
Franklin Templeton Variable Insurance
Products Trust(11)

(1) The fund is closed to new investors. Existing shareholders can continue
adding to their accounts.

(2) The fund is only open to existing shareholders and select retirement
plans.

(3) The fund is a continuously offered, closed-end fund. Shares may be
purchased daily; there is no daily redemption. However, each quarter,
pending board approval, the fund will authorize the repurchase of 5%-25%
of the outstanding number of shares. Investors may tender all or a portion
of their shares during the tender period.

(4) Upon reaching approximately $350 million in assets, the fund intends to
close to all investors.

(5) An investment in the fund is neither insured nor guaranteed by the U.S.
government or by any other entity or institution.

(6) Although the fund seeks to preserve the value of your investment at $1.00
per share, it is possible to lose money by investing in the fund.

(7) Formerly Franklin Short-Intermediate U.S. Government Securities Fund.
Effective 9/1/04, the fund's name changed; its investment goal and
strategy remained the same.

(8) For investors subject to the alternative minimum tax, a small portion of
fund dividends may be taxable. Distributions of capital gains are
generally taxable.

(9) Portfolio of insured municipal securities.

(10) These funds are available in two or more variations, including long-term
portfolios, portfolios of insured securities, a high-yield portfolio (CA)
and limited-term, intermediate-term and money market portfolios (CA and
NY).

(11) The funds of the Franklin Templeton Variable Insurance Products Trust are
generally available only through insurance company variable contracts.

09/04 Not part of the semiannual report

[LOGO](R)
FRANKLIN(R) TEMPLETON(R) One Franklin Parkway
INVESTMENTS San Mateo, CA 94403-1906

SEMIANNUAL REPORT
FRANKLIN MULTI-INCOME TRUST

INVESTMENT MANAGER

Franklin Advisers, Inc.
1-800/DIAL BEN(R)

TRANSFER AGENT

PFPC Inc.
P.O. Box 43027
Providence, RI 02940-3027

To ensure the highest quality of service, telephone calls to or from our service
departments may be monitored, recorded and accessed. These calls can be
identified by the presence of a regular beeping tone.

MIT S2004 11/04

ITEM 2. CODE OF ETHICS.

(a) The Registrant has adopted a code of ethics that applies to its principal
executive officers and principal financial and accounting officer.

(d) N/A

(f) Pursuant to Item 11(A), the Registrant is attaching as an exhibit a copy of
its code of ethics that applies to its principal executive officers and
principal financial and accounting officer.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

(a)(1) The Registrant has an audit committee financial expert serving on its
audit committee.

(2) The audit committee financial expert is Frank W.T. LaHaye and he is
"independent" as defined under the relevant Securities and Exchange Commission
Rules and Releases.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. N/A

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. N/A

ITEM 6. SCHEDULE OF INVESTMENTS. N/A

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR
CLOSED-END MANAGEMENT INVESTMENT COMPANIES. N/A

ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT
INVESTMENT COMPANY AND AFFILIATED PURCHASERS. None

ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have
been no changes to the procedures by which shareholders may recommend nominees
to the Registrant's Board of Trustees that would require disclosure herein.

ITEM 10. CONTROLS AND PROCEDURES.
(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. The Registrant maintains
disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the Registrant's filings under the Securities
Exchange Act of 1934 and the Investment Company Act of 1940 is recorded,
processed, summarized and reported within the periods specified in the rules and
forms of the Securities and Exchange Commission. Such information is accumulated
and communicated to the Registrant's management, including its principal
executive officer and principal financial officer, as appropriate, to allow
timely decisions regarding required disclosure. The Registrant's management,
including the principal executive officer and the principal financial officer,
recognizes that any set of controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives.

Within 90 days prior to the filing date of this Shareholder Report on Form
N-CSR, the Registrant had carried out an evaluation, under the supervision and
with the participation of the Registrant's management, including the
Registrant's principal executive officer and the Registrant's principal
financial officer, of the effectiveness of the design and operation of the
Registrant's disclosure controls and procedures. Based on such evaluation, the
Registrant's principal executive officer and principal financial officer
concluded that the Registrant's disclosure controls and procedures are
effective.

(B) CHANGES IN INTERNAL CONTROLS. There have been no significant changes in the
Registrant's internal controls or in other factors that could significantly
affect the internal controls subsequent to the date of their evaluation in
connection with the preparation of this Shareholder Report on Form N-CSR.

ITEM 11. EXHIBITS.

(A) Code of Ethics

(B) (1) Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Galen G. Vetter, Chief Financial Officer

(B) (2) Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
of Jimmy D. Gambill, Chief Executive Officer - Finance and Administration, and
Galen G. Vetter, Chief Financial Officer

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.

FRANKLIN MULTI INCOME TRUST

By /s/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date November 29, 2004

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/Jimmy D. Gambill
Chief Executive Officer - Finance and Administration
Date November 29, 2004

By /s/Galen G. Vetter
Chief Financial Officer
Date November 29, 2004