UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                  FORM N-CSR

                   CERTIFIED SHAREHOLDER REPORT OF REGISTERED
                         MANAGEMENT INVESTMENT COMPANIES

                  Investment Company Act file number: 811-02151
                  ---------------------------------------------

                               BANCROFT FUND LTD.

-------------------------------------------------------------------------------
               (Exact name of registrant as specified in charter)

               65 Madison Avenue, Morristown, New Jersey 07960-7308
-------------------------------------------------------------------------------
               (Address of principal executive offices) (Zip code)

                               Thomas H. Dinsmore
                               BANCROFT FUND LTD.
                               65 Madison Avenue
                       Morristown, New Jersey 07960-7308
                     (Name and address of agent for service)

                                    Copy to:
                                Steven King, Esq.
                      Ballard Spahr Andrews & Ingersoll, LLP
                        1735 Market Street, 49th Floor
                          Philadelphia, PA 19103-7599


Registrant's telephone number, including area code: (973)631-1177

Date of fiscal year end:  October 31, 2007

Date of reporting period:  October 31, 2007


ITEM 1. REPORTS TO STOCKHOLDERS.

                               BANCROFT FUND LTD.

                               2007 ANNUAL REPORT
                               OCTOBER 31, 2007

Bancroft Fund Ltd. operates as a closed-end, diversified management investment
company and invests primarily in convertible securities, with the objectives
of providing income and the potential for capital appreciation; which
objectives the Fund considers to be relatively equal, over the long-term, due
to the nature of the securities in which it invests.


                                   HIGHLIGHTS

PERFORMANCE THROUGH OCTOBER 31, 2007 WITH DIVIDENDS REINVESTED



                                              Calendar               Annualized         10 Year
                                                YTD     1 Year    5 Years  10 Years    Volatility (c)
                                              --------  ------    -------  --------    --------------
                                                                        
Bancroft market price.......................   12.81%   18.27%     8.78%     7.69%        10.05%
Bancroft net asset value....................   11.72    14.53      9.91      6.43          9.22
Merrill Lynch All Convertibles Index (a)....   10.11    12.72     13.22      7.76         15.10
S&P 500 Index (a)...........................   10.87    14.56     13.86      7.09         16.35
Lehman Aggregate Bond Total Return Index (b)    4.78     5.38      4.41      5.91          3.98

(a) From Bloomberg L.P. pricing service.
(b) From Lipper, Inc. Closed-End Fund Performance Analysis, dated
     October 31, 2007.
(c) Volatility is a measure of risk based on the standard deviation of the
     return. The greater the volatility, the greater the chance of a profit or
     risk of a loss.

Bancroft's performance in the table above has not been adjusted for the fiscal
2004 rights offering; net asset value dilution was 2.38%. Performance data
represent past results and do not reflect future performance.

--------------------------------------------------------------------------------

QUARTERLY HISTORY OF NAV AND MARKET PRICE

                      Net Asset Values         Market Prices (AMEX, symbol BCV)
               -----------------------------   --------------------------------
Qtr. Ended      High       Low       Close       High       Low       Close
----------     ------     ------     ------     ------     ------     ------
 Jan. 07       $22.98     $22.24     $22.70     $19.84     $19.06     $19.80
 Apr. 07        23.43      22.23      23.27      20.68      19.59      20.68
 Jul. 07        24.19      23.24      23.25      21.80      20.65      20.95
 Oct. 07        24.35      22.47      24.35      21.80      18.88      21.35

--------------------------------------------------------------------------------

DIVIDEND DISTRIBUTIONS (12 MONTHS)

 Record        Payment                  Capital               *Corporate
  Date           Date        Income      Gains     Total       Deduction
--------       --------      ------     -------    ------      ----------
12/01/06       12/26/06      $0.265      $0.466    $0.731          16%
 3/15/07        3/29/07       0.210        --       0.210           9
 6/14/07        6/28/07       0.210        --       0.210           9
 9/13/07        9/27/07       0.210        --       0.210           9
                             ------     -------    ------
                             $0.895      $0.466    $1.361
                             ======     =======    ======

* Percentage of each ordinary income distribution qualifying for the corporate
dividend received tax deduction.



--------------------------------------------------------------------------------
To Our Shareholders ------------------------------------------------------------

December 10, 2007

During 2007, the U.S. equity and debt markets have been increasingly affected
by a dramatic rise in home mortgage defaults.  We have seen a substantial
increase in the volatility of these markets as many companies have had to
report surprise write-downs of highly rated financial instruments due to poor
underwriting practices and insufficient ratings analyses.  In February and
again in August, large drops in stock prices occurred while overall volatility
levels, as measured by the Chicago Board Options Exchange Volatility Index
(CBOE VIX), rose to levels rarely seen since 2001.  If events continue to be
driven by financial service related problems, the markets are likely to
continue to be volatile, and otherwise well-managed companies may be hurt along
with those more directly affected.  This happened during the savings and loan
crisis nearly two decades ago and it led many otherwise strong companies to
issue convertible securities to fill their capital needs.

The convertible securities market continues to grow and provide opportunities
for investment.  Through November, U.S. convertible issuance has amounted to
almost $80 billion in the form of 175 new issues.  The Citigroup Convertible
Index grew to $336.8 billion from under $300 billion last December as new
issuance continued to outpace redemptions and conversions.  Hedge fund models
continue to measure the overall convertible market as fairly valued, relative
to the equities market.  We believe that the convertible market continues to be
an attractive one in which individual undervalued convertibles are available.

Fiscal year performance of the Fund was enhanced by its exposure to the
minerals and mining, energy, and chemicals industries.  Among the better
performing issues in the portfolio were Freeport-McMoRan Copper & Gold Inc.
(metals and mining), Cameron International Corp. (energy) and Celanese Corp.
(chemicals).  Performance was held back by exposure to the financial services,
and the banking/savings and loan industries.

For the calendar year-to-date and one-year periods ended October 31, 2007,
Bancroft's market return outperformed the Merrill Lynch All Convertibles
Index (the "Index") while performing in-line for the ten-year period and
underperforming for the five-year period.  The Fund's net asset value (NAV),
after adjustment for fund expenses (the index includes no expenses) and the
fiscal 2004 rights offering, outperformed the Index over the calendar year-to-
date, one and ten-year periods and was in-line for the five-year period.  For
that ten year-period, the Fund's NAV and market volatility, as measured by
standard deviation, were lower than that of the Index.  Many market
professionals consider the volatility of past returns to be a useful
approximation of the past levels of risk.  A higher volatility level equates to
a higher measure of risk, and thus the Fund's excellent results were achieved
with less risk than that implied by the Index.  This measure of historic
results may not reflect future performance but we believe it is informative.

We are sad to report that our long-time director, Donald M. Halsted, Jr.,
passed away on November 20th.  Mr. Halsted had been a director of the Fund
since its founding in 1971 and had made great contributions to the Board's
deliberations over the years. Our deepest sympathies go out to Mrs. Halsted and
the rest of the family.

On October 31, 2007 board member Duncan O. McKee retired.  Mr. McKee made
invaluable contributions to the Fund, and we are grateful to him for his
service to the Fund not only as a board member during the past two decades, but
also as counsel to the Fund for an additional fifteen years before that.  We
will miss his presence.

continued on the following page

Page 1


--------------------------------------------------------------------------------
To Our Shareholders (continued)-------------------------------------------------

Effective October 1, 2007, board member Robert J. McMullan resigned due to
personal and professional time commitments.  The Board thanks Mr. McMullan for
his contributions to the Fund and wishes him success in his other business
endeavors.

At its November 19, 2007 meeting, the Board of Trustees declared a distribution
of $2.175 per share.  The distribution consists of $0.166 undistributed net
investment income and net realized gains on investments of $2.009, payable on
December 26, 2007 to shareholders of record on November 29, 2007.

The 2008 annual meeting of shareholders will be held on February 11, 2008.
Time and location will be included in the proxy statement, scheduled to be
mailed to shareholders on January 12, 2008.  All shareholders are welcome to
attend, we hope to see you there.

/s/Thomas H. Dinsmore
Thomas H. Dinsmore
Chairman of the Board

--------------------------------------------------------------------------------
Major Portfolio Changes by underlying common stock -----------------------------
Six months ended October 31, 2007



ADDITIONS                                                    REDUCTIONS
                                                          
Amerivon Holdings LLC                                        Amazon.com, Inc.
Charming Shoppes, Inc.                                       Amgen, Inc.
Companhia Vale do Rio Doce ADS                               Celanese Corp.
 (exchangeable from Vale Capital Ltd.)                       Epicor Software Corp.
ConocoPhillips                                               FTI Consulting, Inc.
 (exchangeable from Merrill Lynch & Co., Inc.)               LSI Corp.
Gannett Co., Inc.                                            Manor Care, Inc.
General Cable Corp.                                          Nuveen Investments, Inc.
General Mills, Inc.                                           (exchangeable from Merrill Lynch & Co. and
(exchangeable from Lehman Brothers Holdings Inc.)             Morgan Stanley, Inc.)
Morgans Hotel Group Co.                                      NVIDIA Corp.
St. Jude Medical, Inc.                                        (exchangeable from IXIS Financial Products Inc.)
(exchangeable from NATIXIS Financial Products Inc.)          Reinsurance Group of America, Inc.
Sepracor Inc.                                                U.S. Bancorp
(exchangeable from NATIXIS Financial Products Inc.)          Vornado Realty Trust
Tesoro Corp.
 (exchangeable from Merrill Lynch & Co., Inc.)


Page 2


--------------------------------------------------------------------------------
Largest Investment Holdings by underlying common stock--------------------------



                                                                                    Value           % Total
                                                                                   (Note 1)        Net Assets
                                                                                  -----------      ----------
                                                                                               
Freeport-McMoRan Copper and Gold, Inc...........................................  $3,837,600         2.7%
  Freeport-McMoRan is involved in mineral exploration and development,
  mining, and milling of copper, gold and silver.  The company is also
  involved in smelting and refining copper concentrates.

LSB Industries, Inc.............................................................   3,420,000         2.5
  LSB manufactures and sells chemical products for the mining, agricultural
  and industrial markets.  The company also manufactures and sells
  commercial and residential climate control products.

Prudential Financial, Inc.......................................................   3,083,550         2.2
  Prudential provides financial services worldwide.  The company offers a
  variety of products and services including life insurance, mutual funds,
  annuities, asset management and real estate brokerage.

The Walt Disney Company.........................................................   3,040,625         2.2
  Disney, an entertainment company, has operations that include media
  networks, studio entertainment, theme parks and resorts, consumer
  products, and Internet and direct marketing.

Bristol-Myers Squibb Co.........................................................   2,993,400         2.1
  Bristol-Myers is a diversified worldwide health and personal care
  company that manufactures medicines and other products.  The company's
  products include therapies for various diseases and disorders, consumer
  medicines, infant formulas, and nutritional supplements.

New York Community Bancorp, Inc.................................................   2,973,745         2.1
  New York Community Bancorp is a multi-bank holding company that
  offers a full range of traditional and non-traditional products and services.

Celanese Corp...................................................................   2,955,700         2.1
  Celanese is a global industrial chemicals company that processes raw
  materials and natural products into chemicals and chemical-based products.

Chesapeake Energy Corp..........................................................   2,939,020         2.1
  Cheasapeake produces oil and natural gas.  The company's operations are
  focused on developmental drilling and producing property acquisitions in
  onshore natural gas producing areas of the United States and Canada.

Companhia Vale do Rio Doce......................................................   2,917,200         2.1
  Companhia Vale do Rio Doce produces and sells iron ore, pellets,
  manganese, alloys, gold, bauxite and alumina.  The company is based in
  Brazil, where it owns and operates railroads and maritime terminals.
  (exchangeable from Vale Capital Ltd.)

Nabors Industries Ltd...........................................................   2,736,206         2.0
  Nabors is a land drilling contractor, and also performs well-servicing and
  workovers.  The company conducts oil, gas and geothermal land drilling
  operations.  (exchangeable from Nabors Industries, Inc. and NATIXIS
  Financial Products, Inc.)

Total........................................................................... $30,897,046        22.1%
                                                                                 ===========        =====

Page 3


--------------------------------------------------------------------------------
MAJOR INDUSTRY EXPOSURE---------------------------------------------------------

                       -----------------
    Aerospace & Defense                 3.8%
                       -----------------
                       -------------------------------
 Banking/Savings & Loan                               6.1%
                       -------------------------------
                       -------------------------
      Computer Hardware                         5.3%
                       -------------------------
                       --------------------------------------------------
                 Energy                                                  14.3%
                       --------------------------------------------------
                       -------------------
            Health Care                   4.2%
                       -------------------
                       ---------------------------------------
              Insurance                                       7.6%
                       ---------------------------------------
                       ---------------------------
    Minerals and Mining                           5.8%
                       ---------------------------
                       ---------------------------------------------
        Pharmaceuticals                                             10.2%
                       ---------------------------------------------
                       ------------------------------------
         Semiconductors                                    6.5%
                       ------------------------------------
                       ---------------------
     Telecommunications                     4.6%
                       ---------------------

--------------------------------------------------------------------------------
DIVERSIFICATION OF ASSETS-------------------------------------------------------



                                                             % Total Net Assets
                                                                October 31,
                                              Value          ------------------
                              Cost           (Note 1)         2007        2006
                         ------------     ------------       ------      ------
                                                             
Aerospace and Defense....$  5,188,130     $  5,255,406          3.8%        5.0%
Agriculture                 2,047,767        1,963,300          1.4          --
Banking/Savings and Loan.   9,353,978        8,506,245          6.1         7.8
Chemicals................   2,245,391        3,932,140          2.8         3.2
Computer Hardware........   6,060,991        7,365,400          5.3         3.1
Computer Software........   3,600,989        4,177,750          3.0         3.0
Consumer Goods...........   4,320,560        5,157,719          3.7         1.1
Energy...................  18,626,924       20,075,939         14.3         8.8
Financial Services.......   4,313,224        3,265,700          2.3         2.7
Foods....................   2,308,000        2,323,253          1.7         1.7
Health Care..............   5,981,539        5,869,323          4.2         2.9
Insurance................   9,694,387       10,562,275          7.6        10.8
Media and Entertainment..   4,637,835        5,038,625          3.6         5.6
Minerals and Mining......   5,478,607        8,027,300          5.8         0.1
Multi-Industry...........   3,750,000        4,094,061          2.9         6.0
Pharmaceuticals..........  15,451,069       14,326,177         10.2        10.1
Real Estate..............     982,275        1,083,750          0.8         1.2
Retail...................   2,991,719        2,679,375          1.9         1.2
Semiconductors...........   8,052,688        9,074,375          6.5         9.6
Telecommunications.......   6,359,541        6,462,360          4.6         4.1
Transportation...........   1,928,424        1,937,500          1.4          --
Travel and Leisure.......   1,026,106        1,052,500          0.8          --
Other....................     --                --               --         6.8
Short-Term Securities....   5,098,668        5,098,668          3.7         5.1
                         ------------     ------------       ------      ------
  Total Investments......$129,498,812      137,329,141         98.4        99.9
                         ============
Other Assets,
 Net of Liabilities......                    2,251,075          1.6         0.1
                                          ------------       ------      ------
  Total Net Assets.......                 $139,580,216       100.00%     100.00%
                                          ============       ======      ======


Page 4




--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2007---------------------------------------

Principal                                                                             Identified      Value
 Amount                                                                                  Cost        (Note 1)
----------                                                                          ------------   ------------
                                                                                             
            CONVERTIBLE BONDS AND NOTES -- 59.2%

            Aerospace and Defense -- 3.5%
$1,500,000  AAR Corp. 1.75%, due 2026 cv. sr. notes (BB)........................... $  1,535,808   $  1,880,625
 1,000,000  Alliant Techsystems Inc. 2.75%, due 2011 cv. sr. sub. notes (B1).......    1,007,348      1,276,250
 1,500,000  DRS Technologies, Inc. 2%, due 2026 cv. sr. notes (B1)
             (Acquired 01/30/06 - 05/16/07; Cost $1,628,724) (1,2).................    1,628,724      1,661,250
                                                                                    ------------   ------------
                                                                                       4,171,880      4,818,125
                                                                                    ------------   ------------
            Agriculture -- 1.4%
 2,000,000  Merrill Lynch & Co., Inc. 1.5%, due 2012 cv. securities (Aa1)
             (exchangeable into Archer-Daniels-Midland Co. common stock)
             (Acquired 02/23/07; Cost $2,047,767) (1,2)............................    2,047,767      1,963,300
                                                                                    ------------   ------------
            Banking/Savings and Loan -- 2.1%
 1,000,000  PrivateBancorp, Inc. 3.625%, due 2027 cv. sr. notes (NR)...............    1,000,000        957,500
 2,000,000  U.S. Bancorp floating rate, due 2037 cv. sr. deb. (Aa2)................    1,980,803      2,000,400
                                                                                    ------------   ------------
                                                                                       2,980,803      2,957,900
                                                                                    ------------   ------------
            Computer Hardware -- 5.3%
 1,000,000  C&D Technologies, Inc. 5.25%, due 2025 cv. sr. notes (NR)..............    1,000,000        952,500
 2,000,000  Credit Suisse, New York Branch 14.00%, due 2008
             equity-linked notes (NR)
             (exchangeable for Corning Inc. common stock)..........................    2,000,000      1,995,400
 1,000,000  EMC Corp. 1.75%, due 2011 cv. sr. notes (BBB+).........................    1,029,116      1,687,500
 1,000,000  EMC Corp. 1.75%, due 2013 cv. sr. notes (BBB+).........................    1,031,875      1,710,000
 1,000,000  Richardson Electronics, Ltd. 8%, due 2011 cv. sr. sub. notes (NR)......    1,000,000      1,020,000
                                                                                    ------------   ------------
                                                                                       6,060,991      7,365,400
                                                                                    ------------   ------------
            Computer Software -- 3.0%
 1,000,000  Blackboard Inc. 3.25%, due 2027 cv. sr. notes (B-).....................    1,000,000      1,167,500
 1,000,000  GSI Commerce, Inc. 2.5%, due 2027 cv. sr. notes (NR)
             (Acquired 06/27/07; Cost $1,001,851) (2)..............................    1,001,851      1,175,000
 1,500,000  Lehman Brothers Holdings Inc. 1%, due 2009 medium-term notes (A1)
             (performance linked to Microsoft Corp. common stock) (1)..............    1,599,138      1,835,250
                                                                                    ------------   ------------
                                                                                       3,600,989      4,177,750
                                                                                    ------------   ------------
            Consumer Goods -- 2.4%
 1,500,000  Chattem, Inc. 1.625%, due 2014 cv. sr. notes (NR)......................    1,526,787      1,743,750
 1,000,000  Church & Dwight Co., Inc. 5.25%, due 2033 cv. sr. deb. (Ba1)...........    1,000,000      1,558,750
                                                                                    ------------   ------------
                                                                                       2,526,787      3,302,500
                                                                                    ------------   ------------
            Energy -- 5.7%
 1,000,000  Cameron International Corp. 2.50%, due 2026 cv. sr. notes (Baa1).......      991,739      1,572,500
 1,500,000  Covanta Holding Corp. 1%, due 2027 sr. cv. deb. (B1) (1)...............    1,594,643      1,661,250
 1,500,000  Nabors Industries, Inc. 0.94%, due 2011 sr. exchangeable notes (A-)
             (exchangeable for Nabors Industries Ltd. common stock)................    1,493,284      1,425,000
 1,225,000  Oil States International, Inc. 2.375%, due 2025
             contingent cv. sr. notes (NR).........................................    1,453,186      1,871,188
 1,250,000  Rentech, Inc. 4%, due 2013 cv. sr. notes (NR)..........................    1,250,000        987,500
   500,000  USEC Inc. 3%, due 2014 cv. sr. notes (CCC).............................      500,000        487,775
                                                                                    ------------   ------------
                                                                                       7,282,852      8,005,213
                                                                                    ------------   ------------
            Financial Services -- 1.5%
 2,000,000  Euronet Worldwide, Inc. 3.50%, due 2025 cv. deb. (B+) (1)..............    2,393,065      2,127,500
                                                                                    ------------   ------------


Page 5




--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2007 - continued --------------------------

Principal                                                                             Identified      Value
 Amount                                                                                  Cost        (Note 1)
----------                                                                          ------------   ------------
                                                                                             
            CONVERTIBLE BONDS AND NOTES -- continued

            Health Care -- 3.2%
$  375,000  China Medical Technologies, Inc. 3.5%, due 2011 cv. sr. sub. notes (NR) $    386,414   $    591,563
   500,000  LifePoint Hospitals, Inc. 3.25%, due 2025 cv. sr. sub. deb. (B2).......      477,605        436,875
   475,000  LifePoint Hospitals, Inc. 3.50%, due 2014 cv. sub. notes (B)...........      477,835        428,094
 1,000,000  Omnicare, Inc. 3.25%, due 2035 cv. sr. deb. (B2) (1)...................    1,086,650        823,750
 1,000,000  SonoSite Inc. 3.75%, due 2014 cv. sr. notes (NR).......................    1,015,790      1,162,500
 1,000,000  St. Jude Medical, Inc. 1.22%, due 2008 cv. sr. deb. (BBB+).............    1,004,063      1,011,250
                                                                                    ------------   ------------
                                                                                       4,448,357      4,454,032
                                                                                    ------------   ------------
            Insurance -- 2.2%
 3,000,000  Prudential Financial, Inc. floating rate, due 2036 cv. sr. notes (A3)..    2,982,464      3,083,550
                                                                                    ------------   ------------

            Media and Entertainment -- 3.6%
 2,000,000  Gannett Co., Inc. floating rate, due 2037 cv. sr. notes (A3)...........    1,993,036      1,998,000
 2,500,000  The Walt Disney Company 2.125%, due 2023 cv. sr. notes (A2)............    2,644,799      3,040,625
                                                                                    ------------   ------------
                                                                                       4,637,835      5,038,625
                                                                                    ------------   ------------
            Minerals and Mining -- 0.9%
 1,000,000  Newmont Mining Corp. 1.625%, due 2017 cv. sr. notes (BBB+)
             (Acquired 07/12/07; Cost $1,018,232) (2)..............................    1,018,232      1,272,500
                                                                                    ------------   ------------

            Multi-Industry -- 2.9%
   750,000  Diversa Corp. 5.5%, due 2027 cv. sr. notes (NR)
             (exchangeable for Verenium Corp. common stock)........................      750,000        674,061
 3,000,000  LSB Industries, Inc. 5.5%, due 2012 cv. sr. sub. deb. (NR)
             (Acquired 06/28/07; Cost $3,000,000) (2)..............................    3,000,000      3,420,000
                                                                                    ------------   ------------
                                                                                       3,750,000      4,094,061
                                                                                    ------------   ------------
            Pharmaceuticals -- 7.2%
 2,000,000  Alza Corp. 0%, due 2020 cv. sub. deb. (Aa1)
             (exchangeable for Johnson & Johnson common stock).....................    1,748,540      1,800,000
 3,000,000  Bristol-Myers Squibb Co. floating rate, due 2023 cv. sr. deb. (A2).....    3,005,943      2,993,400
 1,625,000  Mylan Inc. 1.25%, due 2012 sr. cv. notes (BB+).........................    1,665,215      1,462,500
 1,500,000  Teva Pharmaceutical Finance Co. B.V. 1.75%, due 2026 cv. sr. deb.(Baa2)
             (exchangeable for Teva Pharmaceutical Industries Ltd. ADR)............    1,487,915      1,601,250
 2,000,000  Wyeth floating rate, due 2024 cv. sr. deb. (A3)........................    2,168,455      2,144,520
                                                                                    ------------   ------------
                                                                                      10,076,068     10,001,670
                                                                                    ------------   ------------
            Real Estate -- 0.8%
 1,000,000  ProLogis 2.25%, due 2037 cv. sr. notes (BBB+)
             (Acquired 03/20/07 - 04/16/07; Cost $982,275) (2).....................      982,275      1,083,750
                                                                                    ------------   ------------

            Retail -- 0.8%
 1,500,000  Charming Shoppes, Inc. 1.125%, due 2014 sr. cv notes (BB-).............    1,491,719      1,179,375
                                                                                    ------------   ------------

            Semiconductors -- 6.5%
 2,500,000  Agere Systems Inc. 6.5%, due 2009 cv. sub. notes (B+)
             (exchangeable for LSI Corp.)..........................................    2,534,359      2,546,875
 1,500,000  Cypress Semiconductor Corp. 1%, due 2009 cv. sr. notes (NR)............    1,520,469      2,392,500
 2,000,000  Fairchild Semiconductor Corp. 5%, due 2008 cv. sr. sub. notes (B)
             (exchangeable into Fairchild Semiconductor International, Inc.
             common stock).........................................................    1,992,796      1,990,000
 2,000,000  Intel Corp. 2.95%, due 2035 jr. sub. cv. deb. (A-) (1).................    2,005,064      2,145,000
                                                                                    ------------   ------------
                                                                                       8,052,688      9,074,375
                                                                                    ------------   ------------

Page 6




--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2007 - continued --------------------------

Principal                                                                             Identified      Value
 Amount                                                                                  Cost        (Note 1)
----------                                                                          ------------   ------------
                                                                                             
            CONVERTIBLE BONDS AND NOTES -- continued

            Telecommunications -- 4.1%
$1,000,000  Anixter International Inc. 1%, due 2013 sr. cv. notes (BB-)............ $  1,118,967   $  1,258,750
 2,000,000  Equinix, Inc. 2.5%, due 2012 cv. sub. notes (CCC+).....................    2,214,633      2,432,500
 1,000,000  General Cable Corp. 1%, due 2012 sr. cv. notes (B1)....................    1,018,691      1,097,500
 1,000,000  SAVVIS, Inc. 3%, due 2012 cv. sr. notes (NR)...........................    1,007,250        927,500
                                                                                    ------------   ------------
                                                                                       5,359,541      5,716,250
                                                                                    ------------   ------------
            Transportation -- 1.4%
 2,000,000  ExpressJet Holdings, Inc. 4.25%, due 2023 cv. notes (NR)...............    1,928,424      1,937,500
                                                                                    ------------   ------------

            Travel and Leisure -- 0.8%
 1,000,000  Morgans Hotel Group Co. 2.375%, due 2014 sr. sub. cv notes (NR)
             (Acquired 10/11/07 - 10/12/07; Cost $1,026,106) (2)...................    1,026,106      1,052,500
                                                                                    ------------   ------------

            TOTAL CONVERTIBLE BONDS AND NOTES...................................... $ 76,818,843   $ 82,705,876
                                                                                    ------------   ------------

            CORPORATE BONDS AND NOTES -- 1.1%

            Retail -- 1.1%
 1,500,000  Amerivon Holdings LLC 4%, due 2010 units (NR)
             (Acquired 06/01/07; Cost $1,500,000) (2,3)............................    1,500,000      1,500,000
                                                                                    ------------   ------------
  Shares
----------
            CONVERTIBLE PREFERRED STOCKS -- 9.6%

            Aerospace and Defense -- 0.3%
    40,000  Ionatron, Inc. 6.5% series A redeemable cv. pfd. (NR)
             (Acquired 10/27/05; Cost $1,000,000) (2)..............................    1,000,000        420,000
                                                                                    ------------   ------------

            Banking/Savings and Loan -- 4.0%
    59,179  New York Community Bancorp, Inc. 6% BONUSES units (Baa1)...............    2,992,817      2,973,745
    20,000  Sovereign Capital Trust IV 4.375% PIERS (Baa1)
             (exchangeable for Sovereign Bancorp, Inc. common stock) (1)...........    1,212,458        815,000
    40,000  Washington Mutual Capital Trust 5.375% PIERS units (A3)
             (exchangeable for Washington Mutual, Inc. common stock)...............    2,167,900      1,759,600
                                                                                    ------------   ------------
                                                                                       6,373,175      5,548,345
                                                                                    ------------   ------------
            Chemicals -- 2.1%
    55,000  Celanese Corp. 4.25% cv. perpetual pfd. (NR)...........................    1,344,391      2,955,700
                                                                                    ------------   ------------

            Energy -- 2.7%
    25,000  Chesapeake Energy Corp. 4.5% cum. cv. pfd. (B+)........................    2,566,320      2,623,000
    20,000  PetroQuest Energy, Inc. 6.875% cum. cv. perpetual pfd. (NR)............    1,000,000      1,141,100
                                                                                    ------------   ------------
                                                                                       3,566,320      3,764,100
                                                                                    ------------   ------------
            Telecommunications -- 0.5%
       100  Medis Technologies Ltd. 7.25% series A cum. cv. perpetual pfd. (NR)....    1,000,000        746,110
                                                                                    ------------   ------------

            TOTAL CONVERTIBLE PREFERRED STOCKS..................................... $ 13,283,886   $ 13,434,255
                                                                                    ------------   ------------

            MANDATORY CONVERTIBLE SECURITIES -- 24.0% (4)

            Chemicals -- 0.7%
    20,000  Huntsman Corp. 5%, due 02/16/08 mandatory cv. pfd. (NR)................      901,000        976,440
                                                                                    ------------   ------------

            Consumer Goods -- 1.3%
     1,750  The Stanley Works floating rate, due 05/17/12 equity units (A2)........    1,793,773      1,855,219
                                                                                    ------------   ------------


Page 7




--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2007 - continued --------------------------

                                                                                      Identified      Value
 Shares                                                                                  Cost        (Note 1)
----------                                                                          ------------   ------------
                                                                                             
            MANDATORY CONVERTIBLE SECURITIES -- continued

            Energy -- 6.0%
    40,000  Bristow Group Inc. 5.5%, due 09/15/09 mandatory cv. pfd. (B)........... $  2,027,500   $  2,565,600
     1,000  Chesapeake Energy Corp. 6.25%, due 06/15/09 mandatory cv. pfd. (B+)....      250,000        316,020
     2,000  Merrill Lynch & Co., Inc. 5.4%, due 09/27/10 PRIDES (A+)
             (linked to the performance of ConocoPhillips common stock)............    2,000,000      1,924,390
    41,135  Merrill Lynch & Co., Inc. 12%, due 06/27/08
             capped appreciation notes (NR)
             (linked to the performance of Tesoro Corp. common stock)..............    1,999,984      2,189,410
    45,950  NATIXIS Financial Products Inc. 9.55%, due 01/26/08
             mandatory trigger exchangeable notes (NR)
             (exchangeable for Nabors Industries, Inc. common stock)
             (Acquired 07/23/07; Cost $1,500,268) (2)..............................    1,500,268      1,311,206
                                                                                    ------------   ------------
                                                                                       7,777,752      8,306,626
                                                                                    ------------   ------------
            Financial Services -- 0.8%
    70,000  E*TRADE Financial Corp. 6.125%, due 11/18/08 equity units (Ba3)........    1,920,159      1,138,200
                                                                                    ------------   ------------

            Foods -- 0.9%
    50,000  Lehman Brothers Holdings Inc. 6%, due 10/12/10 PIES (A1)
             (exchangeable for General Mills, Inc. common stock)...................    1,250,000      1,259,000
                                                                                    ------------   ------------

            Health Care -- 1.0%
    33,950  NATIXIS Financial Products Inc. 9%, due 04/22/08
             mandatory trigger exchangeable notes (NR)
             (exchangeable for St. Jude Medical, Inc. common stock)
             (Acquired 10/17/07; Cost $1,533,182) (2)..............................    1,533,182      1,415,291
                                                                                    ------------   ------------

            Insurance -- 5.4%
     4,000  Alleghany Corp. 5.75%, due 06/15/09 mandatory cv. pfd. (BBB-)..........    1,058,400      1,442,000
    75,000  Citigroup Funding Inc. variable rate, due 10/27/08
             exchangeable notes (Aa1)
             (exchangeable for Genworth Financial, Inc. common stock)..............    2,212,500      2,013,750
    80,000  MetLife, Inc. 6.375%, due 08/15/08 common equity units (BBB+)..........    2,084,000      2,681,600
    52,500  XL Capital Ltd. 7%, due 02/15/09 equity security units (A3)............    1,357,023      1,341,375
                                                                                    ------------   ------------
                                                                                       6,711,923      7,478,725
                                                                                    ------------   ------------
            Minerals and Mining -- 4.8%
    22,500  Freeport-McMoRan Copper & Gold Inc. 6.75%, due 05/01/10
             mandatory cv. pfd. (B+)...............................................    2,422,775      3,837,600
    30,000  Vale Capital Ltd. 5.5%, due 06/15/10 mandatory convertible notes (NR)
             (exchangeable for Companhia Vale do Rio Doce ADS).....................    1,534,600      2,192,100
    10,000  Vale Capital Ltd. 5.5%, due 06/15/10 mandatory convertible notes (NR)
             (exchangeable for Companhia Vale do Rio Doce
             Preference A Shares ADS)..............................................      503,000        725,100
                                                                                    ------------   ------------
                                                                                       4,460,375      6,754,800
                                                                                    ------------   ------------
            Pharmaceuticals -- 3.1%
    63,012  NATIXIS Financial Products Inc. 8.1%, due 12/05/07
             mandatory trigger exchangeable notes (NR)
             (exchangeable for Sepracor Inc. common stock)
             (Acquired 05/23/07; Cost $3,000,001) (2)..............................    3,000,001      1,786,012
     9,500  Schering-Plough Corp. 6%, due 08/13/10 mandatory cv. pfd. (Baa3).......    2,375,000      2,538,495
                                                                                    ------------   ------------
                                                                                       5,375,001      4,324,507
                                                                                    ------------   ------------

            TOTAL MANDATORY CONVERTIBLE SECURITIES (4)............................. $ 31,723,165   $ 33,508,808
                                                                                    ------------   ------------


Page 8




--------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS OCTOBER 31, 2007 - continued --------------------------

                                                                                      Identified      Value
 Shares                                                                                  Cost        (Note 1)
----------                                                                          ------------   ------------
                                                                                             
            COMMON STOCKS -- 0.8%

            Aerospace and Defense -- 0.0%
     4,696  Ionatron, Inc. (5)..................................................... $     16,250   $     17,281
                                                                                    ------------   ------------
            Foods -- 0.8%
    18,435  General Mills, Inc.....................................................    1,058,000      1,064,253
                                                                                    ------------   ------------

            TOTAL COMMON STOCKS....................................................    1,074,250      1,081,534
                                                                                    ------------   ------------
Principal
  Amount
----------
            SHORT-TERM SECURITIES -- 3.7%

            Commercial Paper -- 3.7%
$5,100,000  American Express Credit Corp. 4.70%, due 11/01/07 (P1).................    5,098,668      5,098,668
                                                                                    ------------   ------------


            Total Convertible Bonds and Notes -- 59.2%............................. $ 76,818,843   $ 82,705,876
            Total Corporate Bonds and Notes -- 1.1%................................    1,500,000      1,500,000
            Total Convertible Preferred Stocks -- 9.6%.............................   13,283,886     13,434,255
            Total Mandatory Convertible Securities -- 24.0%........................   31,723,165     33,508,808
            Total Common Stocks -- 0.8%............................................    1,074,250      1,081,534
            Total Short-Term Securities -- 3.7%....................................    5,098,668      5,098,668
                                                                                    ------------   ------------
            Total Investments -- 98.4%............................................. $129,498,812    137,329,141
                                                                                    ============
            Other assets and liabilities, net -- 1.6%..............................                   2,251,075
                                                                                                   ------------
            Total Net Assets -- 100.0%.............................................                $139,580,216
                                                                                                   ============



(1)      Contingent payment debt instrument which accrues contingent interest.
         See Note 1(f).

(2)      Security not registered under the Securities Act of 1933, as amended
         (i.e., the security was purchased in a Rule 144A or a Reg D
         transaction). The security may be resold only pursuant to an exemption
         from registration under the 1933 Act, typically to qualified
         institutional buyers. The Fund generally has no rights to demand
         registration of these securities. The aggregate market value of these
         securities at October 31, 2007 was $18,060,809 which represented
         12.9% of the Fund's net assets.

(3)      Investment is a restricted security, valued at fair value as determined
         in good faith in accordance with procedures adopted by the Board of
         Trustees.  It is possible that the estimated value may differ
         significantly from the amount that might ultimately be realized in the
         near term, and the difference could be material. The market value of
         this security amounts to $1,500,000 which represented 1.1% of the
         Fund's net assets.

(4)      These securities are required to be converted on the dates listed; they
         generally may be converted prior to these dates at the option of the
         holder.

(5)      Non-income producing security.

ADR      American Depositary Receipts.
ADS      American Depositary Shares.
BONUSES  Bifurcated Option Note Unit Securities.
PIES     Premium Income Exchangeable Securities.
PIERS    Preferred Income Equity Redeemable Securities.
PRIDES   Preferred Redeemable Income Dividend Equity Securities.

Ratings in parentheses by Moody's Investors Service, Inc. or Standard & Poor's.
NR is used whenever a rating is unavailable.


Summary of Portfolio Ratings

            % of
         Portfolio
         ---------
Aa            6
A            20
Baa          15
Ba            6
B            19
Caa           2
NR           31
Common Stock  1

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

Page 9





---------------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES----------------------------------------------
                                                                 OCTOBER 31, 2007
                                                                 ----------------
                                                              
Assets:
  Investments at value (cost $129,498,812) (Note 1).............     $137,329,141
  Cash..........................................................           78,718
  Receivable for securities sold................................        2,460,139
  Dividends and interest receivable.............................          958,579
     Other assets...............................................           28,408
                                                                     ------------
     Total assets...............................................      140,854,985
                                                                     ------------
Liabilities:
  Payable for securities purchased..............................        1,207,679
  Accrued management fee (Note 2)...............................           12,227
  Accrued expenses..............................................           25,363
  Other liabilities.............................................           29,500
                                                                     ------------
  Total liabilities.............................................        1,274,769
                                                                     ------------

Net Assets......................................................     $139,580,216
                                                                     ============

Net assets consist of:
  Capital shares (Note 3).......................................     $     57,330
  Additional paid-in capital....................................      119,345,966
  Undistributed net investment income...........................          236,184
  Accumulated net realized gain from investment transactions....       12,110,407
  Unrealized appreciation on investments........................        7,830,329
                                                                     ------------

Net Assets......................................................     $139,580,216
                                                                     ============
Net asset value per share ($139,580,216 /
  5,733,016 outstanding shares).................................     $      24.35
                                                                     ============



---------------------------------------------------------------------------------
STATEMENT OF OPERATIONS----------------------------------------------------------
FOR THE YEAR ENDED OCTOBER 31, 2007

                                                                  
Investment Income (Note 1):
  Interest......................................................     $  3,590,738
  Dividends.....................................................        2,431,274
                                                                     ------------
     Total Income                                                       6,022,012
                                                                     ------------
Expenses (Note 2):
  Management fee................................................          912,823
  Custodian.....................................................           20,135
  Transfer agent................................................           28,047
  Audit fees....................................................           34,700
  Legal fees....................................................          135,543
  Trustees' fees................................................          107,625
  Reports to shareholders.......................................           38,175
  Administrative services fees..................................           60,626
  Other.........................................................           88,321
                                                                     ------------
     Total Expenses.............................................        1,425,995
                                                                     ------------
Net Investment Income...........................................        4,596,017
                                                                     ------------
Realized and Unrealized Gain on Investments:
  Net realized gain from investment transactions................       11,500,969
  Net change in unrealized appreciation of investments..........        2,263,067
                                                                     ------------
  Net gain on investments.......................................       13,764,036
                                                                     ------------
Net Increase in Net Assets Resulting from Operations............     $ 18,360,053
                                                                     ============


                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS
Page 10





-----------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN NET ASSETS------------------------------------------------------
FOR THE YEARS ENDED OCTOBER 31, 2007 AND 2006
                                                                 2007            2006
                                                             ------------    ------------
                                                                       

Change in net assets from operations:
   Net investment income.................................... $  4,596,017    $  4,479,182
   Net realized gain from investment transactions...........   11,500,969       7,233,885
   Net change in unrealized appreciation of investments.....    2,263,067       1,251,584
                                                             ------------    ------------
     Net increase in net assets resulting from operations...   18,360,053      12,964,651
                                                             ------------    ------------

Distributions to shareholders from:
   Net investment income....................................   (5,102,460)     (4,395,566)
   Net realized gain on investments.........................   (2,621,312)             --
                                                             ------------    ------------
     Total distributions....................................   (7,723,772)     (4,395,566)
                                                             ------------    ------------

Capital share transactions (Note 3).........................    2,097,228         655,492
                                                             ------------    ------------

Change in net assets........................................   12,733,509       9,224,577

Net assets at beginning of period...........................  126,846,707     117,622,130
                                                             ------------    ------------

Net assets at end of period................................. $139,580,216    $126,846,707
                                                             ============    ============

   Undistributed net investment income at end of period..... $    236,184    $    742,627
                                                             ============    ============



--------------------------------------------------------------------------------
Notes to Financial Statements --------------------------------------------------

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES

(a) Organization - Bancroft Fund Ltd. (the "Fund"), is registered under the
Investment Company Act of 1940 as a diversified, closed-end management
investment company.

(b) Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles 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 reported amounts
of revenue and expenses during the reporting period.  Actual results could
differ from those estimates.

(c) Indemnification - Under the Fund's organizational documents, each trustee,
officer or other agent of the Fund (including the Fund's investment adviser) is
indemnified against certain liabilities that may arise out of performance of
their duties to the Fund.  Additionally, in the normal course of business, the
Fund enters into contracts that contain a variety of 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.  The risk of material loss as a result of such indemnification is
considered remote.

(d) Federal Income Taxes - The Fund's policy is to distribute substantially all
of its taxable income within the prescribed time and to otherwise comply with
the provisions of the Internal Revenue Code applicable to regulated investment
companies.  Therefore, no provision for federal income or excise taxes is
believed necessary.

On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48 "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements.  FIN 48
requires the evaluation of tax positions taken or expected to be taken in the
course of preparing the Fund's tax return to determine whether the tax
positions are "more-likely-than-not" of being sustained by the applicable tax
authority.  Tax positions not deemed to meet the more-likely-than-not threshold
would be recorded as a tax benefit or expense in the current year. The
interpretation will become effective for tax years beginning after December 15,
2006.  Management believes the adoption of FIN 48 will have no impact to the
financial statements.

Page 11



--------------------------------------------------------------------------------
Notes to Financial Statements (continued)---------------------------------------

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

(e) Security Valuation - Investments in securities traded on a national
securities exchange are valued at market using the last reported sales
price as of the close of regular trading.   Listed securities for which no
sales were reported are valued at the mean between closing reported bid and
asked prices as of the close of regular trading.  Unlisted securities traded in
the over-the-counter market are valued using an evaluated quote provided by an
independent pricing service, or, if an evaluated quote is unavailable, such
securities are valued using prices received from dealers, provided that if the
dealer supplies both bid and asked prices, the price to be used is the mean of
the bid and asked prices. The independent pricing service derives an evaluated
quote by obtaining dealer quotes, analyzing the listed markets, reviewing
trade execution data and employing sensitivity analysis. Evaluated quotes may
also reflect appropriate factors such as individual characteristics of the
issue, communications with broker-dealers, and other market data.  Securities
for which quotations are not readily available, restricted securities and other
assets are valued at fair value as determined in good faith by management
pursuant to procedures approved by the Board of Trustees.  Short-term debt
securities with original maturities of 60 days or less are valued at amortized
cost.

(f) Securities Transactions and Related Investment Income - Security
transactions are accounted for on the trade date (date the order to buy or sell
is executed) with gain or loss on the sale of securities being determined based
upon identified cost.  Dividend income is recorded on the ex-dividend date and
interest income is recorded on the accrual basis, including accretion of
discounts and amortization of non-equity premium. For certain securities, known
as "contingent payment debt instruments," Federal tax regulations require the
Fund to record non-cash, "contingent" interest income in addition to interest
income actually received. Contingent interest income amounted to 12 cents per
share for the year ended October 31, 2007.  In addition, Federal tax
regulations require the Fund to reclassify realized gains on contingent payment
debt instruments to interest income.  At October 31, 2007 there were net
unrealized gains of approximately $0.001 per share on contingent payment debt
instruments.

(g) Change in Method of Accounting - Effective November 1, 2004, the Fund began
amortizing discounts and premiums on all debt securities.  Prior to
November 1, 2004, the Fund amortized discounts on original issue discount debt
securities.  The new method of amortization was adopted in accordance with the
provisions of the AICPA Audit and Accounting Guide, Audits of Investment
Companies and the financial highlights presented herein have been restated to
reflect the new method retroactive to November 1, 2001.  The effect of this
accounting change is included in the financial highlights for the years ended
October 31, 2003 and 2004.  The cumulative effect of this accounting change had
no impact on the total net assets of the Fund or on distributions for tax
purposes, but resulted in a $103,986 increase in the cost of securities held
and a corresponding $103,986 reduction in the net unrealized gains based on the
securities held on November 1, 2001.  These changes had no effect on previously
reported total net assets or total returns.

(h) Distributions to Shareholders - Distributions to shareholders from net
investment income are recorded by the Fund on the ex-dividend date.
Distributions from capital gains, if any, are recorded on the ex-dividend date
and paid annually.  The amount and character of income and capital gains to be
distributed are determined in accordance with income tax regulations, which may
differ from generally accepted accounting principles. The tax character of
distributions paid during the fiscal years ended October 31, 2007 and 2006 were
as follows:
                                      2007          2006
                                   ----------    ----------
Ordinary Income                    $5,102,460    $4,395,566
Net Realized Gain on Investments    2,621,312           ---
                                   ----------    ----------
                                   $7,723,772    $4,395,566
                                   ==========    ==========

Page 12


--------------------------------------------------------------------------------
Notes to Financial Statements (continued)---------------------------------------

NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES (continued)

At October 31, 2007 the components of distributable earnings and federal
tax cost were as follows:

Unrealized appreciation                         $ 13,835,252
Unrealized depreciation                           (6,108,487)
                                                ------------
Net unrealized appreciation                        7,726,765
                                                ------------

Undistributed ordinary income                      3,868,336
Undistributed capital gains                        8,581,821
                                                ------------
Total distributable earnings                      12,450,157
                                                ------------

Total accumulated earnings                      $ 20,176,922
                                                ============

Cost for federal income tax purposes            $129,602,376
                                                ============

(i) Market Risk - It is the Fund's policy to invest at least 65% of its assets
in convertible securities.  Although convertible securities do derive part of
their value from that of the securities into which they are convertible, they
are not considered derivative financial instruments.  However, certain of the
Fund's investments include features which render them more sensitive to price
changes of their underlying securities.  Thus they expose the Fund to greater
downside risk than traditional convertible securities, but generally less than
that of the underlying common stock.  The market value of those securities was
$33,508,808 at October 31, 2007, representing 24.0% of net assets.

(j) Accounting Pronouncements - In September 2006, the Financial Accounting
Standards Board (FASB) issued Statement on Financial Accounting Standards
(SFAS) No. 157, "Fair Value Measurements."  This standard establishes a single
authoritative definition of fair value, sets out a framework for measuring fair
value and requires additional disclosures about fair value measurements.  SFAS
No. 157 applies to fair value measurements already required or permitted by
existing standards.  SFAS No. 157 is effective for financial statements issued
for fiscal years beginning after November 15, 2007 and interim periods within
those fiscal years.  The changes to current generally accepted accounting
principles from the application of this Statement relate to the definition of
fair value, the methods used to measure fair value, and the expanded
disclosures about fair value measurements.  As of October 31, 2007, the Fund
does not believe the adoption of SFAS No. 157 will impact the financial
statement amounts, however, additional disclosures may be required about the
criteria used to develop the measurements and the effect of certain of the
measurements on changes in net assets for the period.

NOTE 2 - MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES

The Fund has entered into an investment advisory agreement with Davis-Dinsmore
Management Company ("Davis-Dinsmore"). Pursuant to the investment advisory
agreement, Davis-Dinsmore provides the Fund with investment advice, office
space and facilities.  Under the terms of the investment advisory
agreement, the Fund pays Davis-Dinsmore on the last day of each month an
advisory fee for such month computed at an annual rate of 0.75% of the first
$100,000,000 and 0.50% of the excess over $100,000,000 of the Fund's net asset
value in such month.

The Fund, pursuant to an administrative services agreement with Davis-Dinsmore,
has agreed to pay Davis-Dinsmore for certain accounting and other
administrative services provided to the Fund.  Under the administrative
services agreement, the Fund pays Davis-Dinsmore on the last day of each month
a fee for such month computed at an annual rate of 0.05% of the Fund's net
asset value in such month.

Certain officers and trustees of the Fund are officers and directors of Davis-
Dinsmore.

Page 13


--------------------------------------------------------------------------------
Notes to Financial Statements (continued)---------------------------------------

NOTE 3 - PORTFOLIO ACTIVITY

At October 31, 2007 there were 5,733,016 shares of beneficial interest
outstanding, with a par value of $0.01 per share.  During the years ended
October 31, 2007 and 2006, 107,882 shares and 36,681 shares were issued in
connection with reinvestment of dividends from net investment income, resulting
in an increase in paid-in capital of $2,097,228 and $655,492, respectively.

Purchases and sales of investments, exclusive of corporate short-term notes,
aggregated $99,955,176 and $102,589,828, respectively, for the year ended
October 31, 2007.

A distribution of $2.175 per share, derived from net investment income of
$0.166 and net realized gains on investments of $2.009 was declared on November
19, 2007, payable December 26, 2007 to shareholders of record at the close of
business November 29, 2007.

Page 14


--------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS------------------------------------------------------------
SELECTED DATA FOR A SHARE OF BENEFICIAL INTEREST OUTSTANDING:


                                                             Year Ended October 31,
                                            ---------------------------------------------------
                                               2007       2006      2005      2004      2003
                                            ---------------------------------------------------
                                                                       
Operating Performance:
Net asset value, beginning of year..........$ 22.55    $ 21.05   $ 20.40   $ 20.84   $ 18.55
                                            ---------------------------------------------------
Net investment income.......................   0.80       0.80      0.64      0.70(a)   0.71(a)
  Adjustment for change in
  amortization policy.......................     --         --        --     (0.02)    (0.02)
                                            ---------------------------------------------------
   Net investment income, as adjusted.......   0.80       0.80      0.64      0.68      0.69
                                            ---------------------------------------------------
Net realized and unrealized gain (loss).....   2.37       1.48      0.71      0.08(a)   2.31(a)
  Adjustment for change in
  amortization policy.......................     --         --        --      0.02      0.02
                                            ---------------------------------------------------
    Net realized and unrealized
    gain (loss), as adjusted...............    2.37       1.48      0.71      0.10      2.33
                                            ---------------------------------------------------
  Total from investment operations.........    3.17       2.28      1.35      0.78      3.02
                                            ---------------------------------------------------
Less Distributions:
Dividends from net investment income.......   (0.90)     (0.78)    (0.70)    (0.72)    (0.73)
Distributions from realized gains..........   (0.47)        --        --        --        --
                                            ---------------------------------------------------
  Total distributions......................   (1.37)     (0.78)    (0.70)    (0.72)    (0.73)
                                            ---------------------------------------------------
Capital Share Transactions:
Effect of rights offering..................      --         --        --     (0.50)       --
Capital share repurchases..................      --         --        --        --        --
                                            ---------------------------------------------------
  Total capital share transactions.........      --         --        --     (0.50)       --
                                            ---------------------------------------------------
Net asset value, end of year............... $  24.35  $  22.55  $  21.05  $  20.40   $ 20.84
                                            ===================================================
Market value, end of year.................. $  21.35  $  19.30  $  17.77  $  18.23   $ 19.70

Total Net Asset Value Return (%)(b)........     14.5      11.1       6.7       1.3      16.7
Total Investment Return (%)(c).............     18.3      13.3       1.3      (3.8)     16.7

Ratios/Supplemental Data:
Net assets, end of year (in thousands)..... $139,580  $126,847  $117,622  $113,373   $98,486
Ratio of expenses to average net assets (%)      1.1       1.1       1.2       1.1       1.2
Ratio of net investment income to
  average net assets (%)...................      3.5       3.7       3.1       3.3(d)    3.6(d)
Portfolio turnover rate (%)................       80        58        86        66        87


-----------------
(a) As previously reported.
(b) Assumes valuation of the Fund's shares, and reinvestment of dividends, at
    net asset values.
(c) Assumes valuation of the Fund's shares at market price and reinvestment of
    dividends at actual reinvestment price.
(d) Ratios for 2004 and 2003 reflect ratios adjusted for change in amortization
    policy. Ratios previously reported for 2004 and 2003 were 3.4% and 3.6%,
    respectively.

                 SEE ACCOMPANYING NOTES TO FINANCIAL STATEMENTS

Page 15


--------------------------------------------------------------------------------
Report of Independent Registered------------------------------------------------
Public Accounting Firm


To the Shareholders and Board of Trustees of
     Bancroft Fund Ltd.

We have audited the accompanying statement of assets and liabilities, including
the portfolio of investments of Bancroft Fund Ltd. (the "Fund") as of October
31, 2007, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period
then ended, and the financial highlights for each of the three years in the
period then ended.  These financial statements and financial highlights are
the responsibility of the Fund's management.  Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.  The financial highlights for each of the years in the two year
period ended October 31, 2004 have been audited by other auditors, whose report
dated November 19, 2004 expressed an unqualified opinion thereon.

We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material
misstatement. The Fund is not required to have, nor were we engaged to perform
an audit of the Fund's internal control over financial reporting.  Our audits
included consideration of internal control over financial reporting as a basis
for designing audit procedures that are appropriate in the circumstances, but
not for the purpose of expressing an opinion on the effectiveness of the Fund's
internal control over financial reporting.  Accordingly, we express no such
opinion.   An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  Our
procedures included confirmation of securities owned as of October 31, 2007, by
correspondence with the custodian and brokers.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Bancroft Fund Ltd. as of October 31, 2007, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended and its financial highlights for each of the three years
in the period then ended, in conformity with accounting principles generally
accepted in the United States of America.


TAIT, WELLER & BAKER LLP

Philadelphia, Pennsylvania
December 5, 2007

Page 16

--------------------------------------------------------------------------------
Board Approval of Advisory Agreement--------------------------------------------

In October 2007, the independent trustees of Bancroft renewed the Advisory
Agreement with Davis-Dinsmore Management Company (the "Advisory Agreement").
The following are the material factors and conclusions that formed the basis
for the renewal of the agreement.
--------------------------------------------------------------------------------
The nature and extent of the advisory services provided by Davis-Dinsmore -
The Board of the Fund (the "Board") and the independent trustees reviewed the
services to be provided by Davis-Dinsmore under the Advisory Agreement.  The
Board noted that under the Advisory Agreement, Davis-Dinsmore would supervise
all aspects of the Fund's operations including the investment and reinvestment
of cash, securities or other properties comprising the Fund's assets.  In this
regard, the Board noted that under the Advisory Agreement it is Davis-
Dinsmore's responsibility to, among other things, (a) supervise all aspects of
the operations of the Fund; (b) obtain and evaluate pertinent information about
significant developments and economic, statistical and financial data,
domestic, foreign or otherwise, whether affecting the economy generally or any
industry or the Fund or any issuer of securities held or to be purchased by the
Fund; (c) determine which issuers and securities shall be represented in the
Fund's investment portfolio and regularly report thereon to the Board; (d)
place orders for the purchase and sale of securities for the Fund; and (e)
take, on behalf of the Fund, such other action as may be necessary or
appropriate in connection with the above.

Based on such review, both the Board and the independent trustees concluded
that the range of services to be provided by Davis-Dinsmore under the Advisory
Agreement was appropriate and that Davis-Dinsmore currently is providing
services in accordance with the terms of the Advisory Agreement.

The quality of services provided by Davis-Dinsmore - In reviewing the
qualifications of Davis-Dinsmore to provide investment advisory services, both
the Board and the independent trustees reviewed the credentials and experience
of Davis-Dinsmore's investment personnel who will provide investment advisory
services to the Fund, and considered Davis-Dinsmore's (i) portfolio and product
review process, particularly its adherence to the Fund's investment mandate,
(ii) compliance function and its culture of compliance, (iii) use of
technology, including the use, from time to time, of direct satellite links to
issuer interviews and conferences, (iv) investment research operations (which
involves meetings with issuers and analysts, investment seminars and field
trips to issuers, and the review of: (a) financial newspapers, industry
literature, publications and periodicals, (b) research materials prepared by
others, (c) issuer annual reports and prospectuses, and (d) issuer press
releases) and trading operations (which involves computerized execution of
orders), and (v) focus on providing quality services while keeping the Fund's
fees and expenses as low as possible.  The Board and the independent trustees
also took into consideration the presentations made by Davis-Dinsmore at prior
Board meetings pertaining to its management of the Fund.

Based on the review of these and other factors, both the Board and the
independent trustees determined and concluded that the quality of services to
be provided by Davis-Dinsmore was appropriate and that Davis-Dinsmore currently
is providing satisfactory services to the Fund in accordance with the terms of
the Advisory Agreement.

The performance of the Fund relative to comparable funds - Both the Board and
the independent trustees reviewed the performance of the Fund (at net asset
value) during the past one, three, five and ten years ended September 30, 2007
against the performance of other closed-end funds categorized to be in the
Fund's peer group by Lipper, Inc.  Both the Board and the independent trustees
noted that the Fund's performance for the three, five and ten year periods was
below the average performance of all closed-end funds in the peer group, but
was above the average performance of such funds for the one year period.  In
evaluating the Fund's performance against other funds in its peer group, the
Board and the independent trustees took into account the fact that many of the
Fund's competitors engage in leverage, which has increased their returns, but
that the Fund does not engage in leverage.

Page 17

--------------------------------------------------------------------------------
Board Approval of Advisory Agreement (continued)--------------------------------

In addition, the Board and the independent trustees recognized that many of the
Fund's competitors have a higher percentage of their assets invested in
securities with lower credit quality than does the Fund, and that such
securities have performed better than higher quality securities in recent
years.  The Board and the independent trustees also noted that portfolio
manager's investment approach is to make equity investments utilizing
convertible securities to provide a total return similar to that of equity
securities, but with lower volatility and higher income.  The Board and the
independent trustees recognized that only three of the funds in the Fund's peer
group followed a similar investment approach.  Because of the differences in
how funds in the Fund's peer group are managed, the Board and the independent
trustees concluded that they should consider the performance of the Fund
against appropriate indices as a more relevant factor in assessing the
performance of the Fund.

The performance of the Fund relative to indices - Both the Board and the
independent trustees reviewed the performance of the Fund (at net asset value)
during the past one, three, five and ten years ended September 30, 2007 against
the performance of the Merrill Lynch All Convertibles Index and Merrill Lynch
Investment Grade Convertibles Index.  Both the Board and the independent
trustees noted that, for the one, five and ten year periods, the Fund's
performance was below the Merrill Lynch All Convertibles Index but was above
such Index for the three year period.  The Board and the independent trustees
also considered the fact that currently a majority of the securities held by
the Fund have an investment grade rating or are of comparable quality to
securities with investment grade ratings, and noted that, for the one, three,
five and ten year periods, the Fund's performance was above the Merrill Lynch
Investment Grade Convertibles Index.

Based on this review and taking into account all of the other factors that the
Board and the independent trustees considered in determining whether to
continue the Advisory Agreement, the Board and the independent trustees
concluded that no changes should be made to the Fund's investment objective or
policies, or the portfolio management team.

Meetings with the Fund's portfolio manager and investment personnel - Both the
Board and the independent trustees noted that they meet regularly with the
Fund's portfolio manager and investment personnel, and believe that such
individuals are competent and able to carry out their responsibilities under
the Advisory Agreement.

Overall performance of Davis-Dinsmore - After considering the overall
performance of Davis-Dinsmore in providing investment advisory and
administrative services to the Fund, both the Board and the independent
trustees concluded that such performance was satisfactory.

Fees relative to those of clients of Davis-Dinsmore with comparable investment
strategies - Both the Board and the independent trustees noted that the Fund
and Ellsworth Fund Ltd. (collectively, the "Funds") are the only clients of
Davis-Dinsmore, and that the advisory fee rates for the Funds are the same.
Both the Board and the independent trustees concluded that, because the fee
rates are the same for the Funds, the current advisory fee rate of the Fund was
fair as compared to the rate for Ellsworth Fund Ltd.

Fees relative to those of comparable funds with other advisors - After
reviewing the advisory fee rate for the Fund against the advisory fee rates for
funds advised by other advisors in the Fund's peer group both the Board and the
independent trustees determined that the Fund's advisory fee rate was at
approximately the median of the funds in its peer group, and concluded that the
current advisory fee rate of the Fund was fair and reasonable.

Page 18

--------------------------------------------------------------------------------
Board Approval of Advisory Agreement (continued)--------------------------------

Expense limitations and fee waivers - Both the Board and the independent
trustees noted that, although there are no contractual expense limitations or
fee waivers in effect for the Fund, Davis-Dinsmore is very diligent in its
efforts to keep expenses of the Fund as low as possible.  Both the Board and
the independent trustees also noted that the cost of compliance with regulatory
initiatives was increasing.  Both the Board and the independent trustees
concluded that the current level of expenses for the Fund were fair and
reasonable.

Breakpoints and economies of scale - Both the Board and the independent
trustees reviewed the structure of the Fund's advisory fee under the Advisory
Agreement, and noted that the fee includes one breakpoint when the Fund's
assets reach $100 million.  Both the Board and the independent trustees noted
that breakpoints had become effective for the Fund as a result of the Fund's
rights offering that occurred during the 2004 fiscal year, which resulted in
lower management fee expenses as a percentage of assets.  Both the Board and
the independent trustees concluded that the Fund's fee levels under the
Advisory Agreement therefore reflect economies of scale and that it was not
necessary to implement any further changes to the structure of the advisory fee
for the Fund.

Profitability of Davis-Dinsmore - Both the Board and the independent trustees
reviewed information concerning the profitability and financial condition of
Davis-Dinsmore.  In particular, the Board reviewed Davis-Dinsmore's financial
statements including its statement of income and retained earnings, statement
of cash flows, and audited balance sheet.  The Board also reviewed Davis-
Dinsmore's costs in providing services to the Funds.  The Board noted that
Davis-Dinsmore's sole source of revenue was fees from the Funds for providing
advisory and administrative services to the Funds.  The Board and the
independent trustees noted that Davis-Dinsmore's operations remain profitable
and that increasing the success of the Funds will positively impact Davis-
Dinsmore's profitability.

Based on the review of the profitability of Davis-Dinsmore and its financial
condition, both the Board and the independent trustees concluded that the
compensation to be paid by the Fund to Davis-Dinsmore under the Advisory
Agreement was not excessive.

Benefits of soft dollars to Davis-Dinsmore - Both the Board and the independent
trustees discussed the fact that there are no third-party soft dollar
arrangements in effect with respect to the Fund.  Both the Board and the
independent trustees recognized that Davis-Dinsmore does receive proprietary
research from brokers with whom it executes portfolio transactions on behalf of
the Fund.  This research is used by Davis-Dinsmore in making investment
decisions for the Fund.  Both the Board and the independent trustees also
considered representations made by Davis-Dinsmore that portfolio transactions
received best execution.  Because such research ultimately benefits the Fund,
the Board and the independent trustees concluded that it was appropriate to
receive proprietary research.

Davis-Dinsmore's financial soundness in light of the Fund's needs - Both the
Board and the independent trustees considered whether Davis-Dinsmore is
financially sound and has the resources necessary to perform its obligations
under the Advisory Agreement, and concluded that Davis-Dinsmore has the
financial resources necessary to fulfill its obligations under the Advisory
Agreement.

Historical relationship between the Fund and Davis-Dinsmore - In determining
whether to continue the Advisory Agreement for the Fund, both the Board and the
independent trustees also considered the prior relationship among Davis-
Dinsmore and the Fund, as well as the independent trustees' knowledge of Davis-
Dinsmore's operations, and concluded that it was beneficial to maintain the
current relationship, in part, because of such knowledge.  Both the Board and
the independent trustees also reviewed the general nature of the non-investment
advisory services currently performed by Davis-Dinsmore, such as administrative
services, and the fees received by Davis-Dinsmore for performing such services.
In addition to reviewing such services, both the Board and the independent
trustees also considered the organizational structure employed by Davis-
Dinsmore to provide those services.

Page 19

--------------------------------------------------------------------------------
Board Approval of Advisory Agreement (continued)--------------------------------

Based on the review of these and other factors, both the Board and the
independent trustees concluded that Davis-Dinsmore was qualified to provide
non-investment advisory services to the Fund, including administrative
services, and that Davis-Dinsmore currently is providing satisfactory non-
investment advisory services to the Fund.

Other factors and current trends - Both the Board and the independent trustees
considered the culture of compliance and high ethical standards at Davis-
Dinsmore, and the efforts historically and currently undertaken by Davis-
Dinsmore to engage in best practices.  Both the Board and the independent
trustees noted Davis-Dinsmore's historical adherence to compliance procedures,
as well as the Fund's investment objectives, policies and restrictions.  Both
the Board and the independent trustees concluded that this commitment to adhere
to the highest ethical standards was an important factor in their determination
that they should approve the continuance of the Advisory Agreement for the
Fund.
------------------------------------------------------------------------------
After considering all of the above factors and based on informed business
judgment, the Board determined that the Advisory Agreement is in the best
interests of the Fund and its shareholders and that the compensation to Davis-
Dinsmore under the Advisory Agreement is fair and reasonable. As a result, the
Board continued the Advisory Agreement.

Page 20

--------------------------------------------------------------------------------
Miscellaneous Notes-------------------------------------------------------------

Automatic Dividend Investment and Cash Payment Plan

The Fund has an Automatic Dividend Investment and Cash Payment Plan (the
"Plan"). Any shareholder may elect to join the Plan by sending an application
to American Stock Transfer & Trust Company, P.O. Box 922, Wall Street Station,
NY 10269-0560 (the "Plan Agent").  You may also obtain additional information
about the Plan as well as the Plan application by calling the Plan Agent toll
free at (800) 937-5449.  If your shares are held by a broker or other nominee,
you should instruct the nominee to join the Plan on your behalf.  Some brokers
may require that your shares be taken out of the broker's "street name" and re-
registered in your own name.  Shareholders should also contact their broker to
determine whether shares acquired through participation in the Plan can be
transferred to another broker, and thereafter, whether the shareholder can
continue to participate in the Plan.

Under the Plan, all cash dividends and distributions are automatically invested
in additional Fund shares.  Depending on the circumstances, shares may either
be issued by the Fund at net asset value or acquired through open market
purchases at the current market price.  When shares are acquired through open
market purchases, the Plan Agent will combine your dividends with those of
other Plan participants and purchase shares in the market, thereby taking
advantage of the lower commissions on larger purchases.  There is no other
charge for this service.  When shares are issued, the Fund will issue shares at
the market price.

All dividends and distributions made by the Fund (including capital gain
dividends and dividends   designated as qualified dividend income, which are
eligible for taxation at lower rates) remain taxable to Plan participants,
regardless of whether such dividends and distributions are reinvested in
additional shares of the Fund through open market purchases or through the
issuance of new shares.  Plan participants will be treated as receiving the
cash used to purchase shares on the open market and, in the case of any
dividend or distribution made in the form of newly issued shares, will be
treated as receiving an amount equal to the fair market value of such shares as
of the reinvestment date.  Accordingly, a shareholder may incur a tax liability
even though such shareholder has not received a cash distribution with which to
pay the tax.

Plan participants may also voluntarily send cash payments of $100 to $10,000
per month to the Plan Agent, to be combined with other Plan monies, for
purchase of additional Fund shares in the open  market.  You pay only a bank
service charge of $1.25 per transaction, plus your proportionate share of the
brokerage commission.  All shares and fractional shares purchased will be held
by the Plan Agent in your dividend reinvestment account.  You may deposit with
the Plan Agent any share certificates of the Fund you hold, for a one-time fee
of $7.50.

At any time, a Plan participant may instruct the Plan Agent to liquidate all or
any portion of such Plan participant's account.  To do so, a Plan participant
must deliver written notice to the Plan Agent prior to the record date of any
dividend or distribution requesting either liquidation or a share certificate.
The Plan Agent will combine all liquidation requests it receives from Plan
participants on a particular day and will then sell shares of the Fund that are
subject to liquidation requests in the open market.  The amount of proceeds a
Plan participant will receive shall be determined by the average sales price
per share, after deducting brokerage commissions, of all shares sold by the
Plan Agent for all Plan participants who have given the Plan Agent
liquidation requests.

The Plan Agent or the Fund may terminate the Plan for any reason at any time by
sending written notice addressed to the Plan participant's address as shown on
the Plan Agent's records.  Following the date of termination, the Plan Agent
shall send the Plan participant either the proceeds of liquidation, or a share
certificate or certificates for the full shares held by the Plan Agent in the
Plan participant's account. Additionally, a check will be sent for the value of
any fractional interest in the Plan  participant's account based on the market
price of the Fund's shares on that date.

Page 21

--------------------------------------------------------------------------------
Miscellaneous Notes (continued)-------------------------------------------------

Notice of Privacy Policy
The Fund has adopted a privacy policy in order to protect the confidentiality
of nonpublic personal information that we have about you.  We receive personal
information, such as your name, address and account balances, when transactions
occur in Fund shares registered in your name.

We may disclose this information to companies that perform services for the
Fund, such as the Fund's transfer agent or proxy solicitors.  These companies
may only use this information in connection with the services they provide to
the Fund, and not for any other purpose.  We will not otherwise disclose any
nonpublic personal information about our shareholders or former shareholders to
anyone else, except as required by law.

Access to nonpublic information about you is restricted to our employees and
service providers who need that information in order to provide services to
you.  We maintain physical, electronic and procedural safeguards that comply
with federal standards to guard your nonpublic personal information.
--------------------------------------------------------------------------------
For More Information About Portfolio Holdings
In addition to the semi-annual and annual reports that the Fund delivers to
shareholders and makes available through the Fund's public website, the Fund
files a complete schedule of portfolio holdings with the Securities and
Exchange Commission (SEC) for the Fund's first and third fiscal quarters on
Form N-Q.  The Fund does not deliver the schedule of portfolio holdings for the
first and third fiscal quarters to shareholders, however the schedule is posted
to the Fund's public website, www.bancroftfund.com. You may obtain the Form N-Q
filings by accessing the SEC's website at www.sec.gov. You may also review and
copy them at the SEC's Public Reference Room in Washington, DC.  Information on
the operation of the SEC's Public Reference Room may be obtained by calling the
SEC at (800) SEC-0330.
--------------------------------------------------------------------------------
Proxy Voting Policies and Procedures / Proxy Voting Record
The Fund's policies and procedures with respect to the voting of proxies
relating to the Fund's portfolio securities is available without charge, upon
request, by calling (973) 631-1177, or at our website at www.bancroftfund.com.
This information is also available on the SEC's website at www.sec.gov.  In
addition, information on how the Fund voted such proxies relating to portfolio
securities during the most recent twelve-month period ended June 30 is
available without charge at the above sources.
--------------------------------------------------------------------------------
The Fund is a member of the Closed-End Fund Association, a non-profit national
trade association (www.cefa.com). Thomas H. Dinsmore is on the Executive Board
and is the president of the association. The association is solely responsible
for the content of its website.
--------------------------------------------------------------------------------
Disclosure of Portfolio Holdings to Broker-Dealers
From time to time, brokers with whom the Fund's Adviser, Davis-Dinsmore
Management Company, has a pre-existing relationship may request that Davis-
Dinsmore disclose Fund portfolio holdings to such broker in advance of the
public disclosure of such portfolio holdings.  Davis-Dinsmore may make such
disclosure under the following conditions: (i) the specific purpose of the
disclosure is to assist Davis-Dinsmore in identifying potential investment
opportunities for the Fund; (ii) prior to the receipt of nonpublic portfolio
holdings, the broker, by means of e-mail or other written communication, shall
agree to keep the nonpublic portfolio holdings confidential and not to use the
information for the broker's own benefit, except in connection with the above
described purpose for which it was disclosed; (iii) Davis-Dinsmore shall keep
written records of its agreement with each broker to which it distributes
nonpublic portfolio holdings; and (iv) Davis-Dinsmore will secure a new
agreement with a broker any time the broker directs the nonpublic portfolio
holdings to be sent to a new recipient.

Page 22

--------------------------------------------------------------------------------
------------------------------------TRUSTEES------------------------------------

Each trustee is also a trustee of Ellsworth Fund Ltd.(Ellsworth)(a closed-end
management investment company). Davis-Dinsmore Management Company (Davis-
Dinsmore) is the Fund's investment adviser and is also the investment adviser to
Ellsworth. Because of this connection, the Fund and Ellsworth make up a Fund
Complex. Therefore, each trustee oversees two investment companies in the Fund
Complex.
--------------------------------------------------------------------------------
Personal                        Principal Occupation(s) During Past Five Years;
Information                     Other Directorship(s)
--------------------------------------------------------------------------------

INDEPENDENT TRUSTEES

Gordon F. Ahalt                 Retired. Trustee of Ellsworth and Helix Energy
  65 Madison Avenue             Solutions Group Inc. (an energy services
  Suite 550                     company).
  Morristown, NJ 07960
  Term expires 2010
  Trustee since 1982
  Age 79

--------------------------------------------------------------------------------

Elizabeth C. Bogan, Ph.D.       Senior Lecturer in Economics at Princeton
  65 Madison Avenue             University; Trustee of Ellsworth.
  Suite 550
  Morristown, NJ 07960
  Term expires 2009
  Trustee since 1990
  Age 63

--------------------------------------------------------------------------------

Daniel D. Harding               Since 2003, Senior Adviser with Harding Loevner
  65 Madison Avenue             Management LP (an investment advisory firm).
  Suite 550                     Prior to 2003, co-founder and Chief Investment
  Morristown, NJ 07960          Officer at Harding Loevner Management LP;
  Term expires 2008             Trustee of Ellsworth.
  Trustee since 2007
  Age 55

--------------------------------------------------------------------------------

Nicolas W. Platt                Since August 2006, Managing Director, Rodman &
  65 Madison Avenue             Renshaw, LLC (a full-service investment bank).
  Suite 550                     Prior to August 2006, President of CNC-US (an
  Morristown, NJ 07960          international consulting company). Prior to
  Term expires 2010             January 2003, Senior Partner of Platt &
  Trustee since 1997            Rickenbach (a public relations firm). Prior to
  Age 54                        May 2001, with WPP Group, UK and its public
                                relations subsidiaries, Ogilvy Public Relations,
                                Burson-Marsteller and Robinson Lehr Montgomery;
                                Trustee of Ellsworth.

--------------------------------------------------------------------------------

INTERESTED TRUSTEES

Thomas H. Dinsmore, C.F.A. *    Chairman and Chief Executive Officer of the
  65 Madison Avenue             Fund, Ellsworth and Davis-Dinsmore; Trustee of
  Suite 550                     Ellsworth and director of Davis-Dinsmore.
  Morristown, NJ 07960
  Term expires 2008
  Trustee since 1985
  Chairman of the Board
  since 1996
  Age 54

--------------------------------------------------------------------------------

Jane D. O'Keeffe *              President of the Fund, Ellsworth and
  65 Madison Avenue             Davis-Dinsmore; Trustee of Ellsworth and
  Suite 550                     director of Davis-Dinsmore.
  Morristown, NJ 07960
  Term expires 2010
  Trustee since 1995
  Age 52

--------------------------------------------------------------------------------
* Mr. Dinsmore and Ms. O'Keeffe are considered interested persons because they
    are officers and directors of Davis-Dinsmore. They are brother and sister.


PAGE 23

--------------------------------------------------------------------------------
-------------------------------PRINCIPAL OFFICERS-------------------------------

The business address of each officer is 65 Madison Avenue, Suite 550,
Morristown, NJ 07960. Officers are elected by and serve at the pleasure of the
Board of Trustees. Each officer holds office until the annual meeting to be
held in 2008, and thereafter until his or her respective successor is duly
elected and qualified.

--------------------------------------------------------------------------------
Personal
Information                     Principal Occupation(s) During Past Five Years
--------------------------------------------------------------------------------

Thomas H. Dinsmore, C.F.A.      Chairman and Chief Executive Officer of the
  Trustee, Chairman             Fund, Ellsworth and Davis-Dinsmore; Trustee of
  and Chief Executive Officer   Ellsworth and director of Davis-Dinsmore.
  Officer since 1986
  Age 54

--------------------------------------------------------------------------------

Jane D. O'Keeffe                President of the Fund, Ellsworth and
  Trustee and President         and Davis-Dinsmore; Trustee of Ellsworth and
  Officer since 1994            director of Davis-Dinsmore.
  Age 52

--------------------------------------------------------------------------------

Gary I. Levine                  Executive Vice President and Chief Financial
  Executive Vice President,     Officer of the Fund, Ellsworth and Davis-
  Chief Financial Officer and   Dinsmore since 2004. Secretary of the Fund,
  Secretary                     Ellsworth and Davis-Dinsmore since 2003.
  Officer since 1986            Treasurer of Davis-Dinsmore since 1997. Vice
  Age 50                        President of the Fund, Ellsworth and Davis-
                                Dinsmore from 2002 until 2004. Treasurer of the
                                Fund and Ellsworth from 1993 until 2004.

--------------------------------------------------------------------------------

H. Tucker Lake, Jr.             Vice President of the Fund and Ellsworth since
  Vice President                2002, and of Davis-Dinsmore since 1997. Vice
  Officer since 1994            President, Trading, of the Fund and Ellsworth
  Age 60                        from 1994 to 2002.

--------------------------------------------------------------------------------

Germaine M. Ortiz               Vice President of the Fund, Ellsworth and
  Vice President                Davis-Dinsmore.
  Officer since 1996
  Age 38

--------------------------------------------------------------------------------

Mercedes A. Pierre              Vice President and Chief Compliance Officer
  Vice President and            of the Fund, Ellsworth and Davis-Dinsmore since
  Chief Compliance Officer      2004, and Assistant Treasurer from 1998 to 2004.
  Officer since 1998
  Age 46

--------------------------------------------------------------------------------

Joshua P. Lake, C.T.P.          Treasurer of the Fund and Ellsworth since 2004.
  Treasurer and Assistant       Assistant Secretary of the Fund, Ellsworth and
  Secretary                     Davis-Dinsmore since 2002. Assistant Treasurer
  Officer since 2002            of Davis-Dinsmore, also since 2002.
  Age 31

--------------------------------------------------------------------------------
Mr. Dinsmore and Ms. O'Keeffe are brother and sister, and cousins of Mr. H.
Tucker Lake and Mr. Joshua P. Lake. In addtion, Mr. H. Tucker Lake is the father
of Mr. Joshua P. Lake. Mr. Levine's wife is the first cousin of Ms. Ortiz.

PAGE 24



                                          

BOARD OF TRUSTEES                            INTERNET
GORDON F. AHALT                              www.bancroftfund.com
ELIZABETH C. BOGAN, Ph.D.                    email: info@bancroftfund.com
THOMAS H. DINSMORE, C.F.A.
DANIEL D. HARDING                            INVESTMENT ADVISER
JANE D. O'KEEFFE                             Davis-Dinsmore Management Company
NICOLAS W. PLATT                             65 Madison Avenue, Suite 550
                                             Morristown, NJ 07960
OFFICERS                                     (973) 631-1177
THOMAS H. DINSMORE, C.F.A.
Chairman of the Board                        SHAREHOLDER SERVICES AND TRANSFER AGENT
  and Chief Executive Officer                American Stock Transfer & Trust Company
                                             59 Maiden Lane
JANE D. O'KEEFFE                             New York, NY 10038
President                                    (800) 937-5449
                                             www.amstock.com
GARY I. LEVINE
Executive Vice President,                    BENEFICIAL SHARE LISTING
  Chief Financial Officer and Secretary      American Stock Exchange Symbol: BCV

H. TUCKER LAKE, JR.                          LEGAL COUNSEL
Vice President                               Ballard Spahr Andrews & Ingersoll, LLP

GERMAINE M. ORTIZ                            INDEPENDENT ACCOUNTANTS
Vice President                               Tait, Weller & Baker LLP

MERCEDES A. PIERRE
Vice President and
  Chief Compliance Officer

JOSHUA P. LAKE, C.T.P.
Treasurer and Assistant Secretary

JAMES A. DINSMORE
Assistant Vice President

JOANN VENEZIA
Assistant Vice President and
  Assistant Secretary


--------------------------------------------------------------------------------
Pursuant to Section 23 of the Investment Company Act of 1940, notice is hereby
given that the Fund may in the future purchase its own shares from time to time,
at such times, and in such amounts, as may be deemed advantageous to the Fund.
Nothing herein shall be considered a commitment to purchase such shares.


                               BANCROFT FUND LTD.
                          65 MADISON AVENUE, SUITE 550
                          MORRISTOWN, NEW JERSEY 07960
                              www.bancroftfund.com


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                                 --------------
                                     LISTED
                                 --------------
                                     BCV(TM)


ITEM 2. CODE OF ETHICS.

The Board of Trustees of the Fund has adopted a code of ethics that applies to
the Fund's principal executive officer and principal financial officer. See
attached Exhibit EX-99.CODE ETH.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees determined that Trustee Daniel D. Harding, who is
"independent" as such term is used in Form N-CSR, possesses the attributes
required to be considered an audit committee financial expert under applicable
federal securities laws.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Set forth in the table below are the aggregate fees billed to the Fund
by Tait, Weller & Baker LLP ("Tait Weller") for services rendered to the Fund
during the Fund's last two fiscal years ended October 31, 2007 and 2006.

  Fiscal YE      Audit     Audit-Related                  All Other
 October 31      Fees        Fees (1)     Tax Fees (2)      Fees
-------------   -------    -------------  ------------    ---------
    2006        $31,000     $     0         $2,600           $0
    2007        $32,000     $     0         $2,700           $0

(1) All Audit-Related Fees were pre-approved by the Fund's Audit Committee.
    No Audit-Related Fees were approved by the Fund's Audit Committee pursuant
    to section 2.01(c)(7)(i)(C) of Regulation S-X, which waives the
    pre-approval requirement for certain de minimus fees.

(2) "Tax Fees" include those fees billed by Tait Weller in connection with
    their review of the Fund's income tax returns for fiscal years 2006
    and 2007.  All Tax Fees were pre-approved by the Fund's Audit Committee.
    No Tax Fees were approved by the Fund's Audit Committee pursuant to
    section 2.01(c)(7)(i)(C) of Regulation S-X, which waives the pre-approval
    requirement for certain de minimus fees.

Non-Audit Services

     During each of the last two fiscal years ended October 31, 2006 and
October 31, 2007, Tait Weller did not provide any non-audit services
to the Fund, with the exception of the services for which the Fund paid the
Tax Fees noted above. Tait Weller did not provide any non-audit services to
the Fund's investment adviser, Davis-Dinsmore Management Company
("Davis-Dinsmore") or its affiliates or otherwise bill the Fund or Davis-
Dinsmore or its affiliates for any such non-audit services.

Audit Committee Pre-Approval Policies and Procedures

     The Audit Committee pre-approves all audit and permissible non-audit
services that are proposed to be provided to the Fund by its independent
registered public accountants before they are provided to the Fund.  Such
pre-approval also includes the proposed fees to be charged by the independent
registered public accountants for such services.  The Audit Committee may
delegate the pre-approval of audit and permissible non-audit services and
related fees to one or more members of the Audit Committee who are
"independent," as such term is used in Form N-CSR.  Any such member's decision
to pre-approve audit and/or non-audit services and related fees shall be
presented to the full Audit Committee, solely for informational purposes, at
their next scheduled meeting.

     The Audit Committee also pre-approves non-audit services to be provided by
the Fund's independent registered public accountants to the Fund's investment
adviser if the engagement relates directly to the operations and financial
reporting of the Fund and if the Fund's independent auditors are the same as,
or affiliated with, the investment adviser's auditors.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

(a) The Fund has a designated Audit Committee in accordance with
Section 3(a)(58)(A) of the Securities and Exchange Act of 1934 (the "Exchange
Act") and the members of such committee are:

ELIZABETH C. BOGAN, PH.D.

DANIEL D. HARDING

GORDON F. AHALT

(b) Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

The Schedule of Investments in securities of unaffiliated issuers is included as
part of the report to shareholders, filed under Item 1 of this Form.

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


                                Bancroft Fund Ltd.
                                Ellsworth Fund Ltd.
                        Davis-Dinsmore Management Company
                             Proxy Voting Guidelines

                            (Adopted April 16, 2007)

These proxy voting guidelines have been adopted by the Boards of Trustees of
Bancroft Fund Ltd. and Ellsworth Fund Ltd. (collectively, the "Funds"), as well
as by the Board of Directors of Davis-Dinsmore Management Company ("Davis-
Dinsmore").

The Boards of Trustees of the Funds have delegated to Davis-Dinsmore
responsibility for voting proxies received by the Funds in their capacities as
shareholders of various companies.  The Boards recognize that, due to the
nature of the Funds' investments, the Funds do not frequently receive proxies.

Davis-Dinsmore exercises its voting responsibility with the overall goal of
maximizing the value of the Funds' investments.  The portfolio managers at
Davis-Dinsmore oversee the voting policies and decisions for the Funds.  In
evaluating voting issues, the portfolio managers may consider information from
many sources, including management of a company presenting a proposal,
shareholder groups, research analysts, and independent proxy research services.

Set forth below are the proxy voting guidelines:

A.	Matters Related to the Board of Directors

      1.	The Funds generally will support the election of nominees recommended
by management for election as directors.  In determining whether to support a
particular nominee, Davis-Dinsmore will consider whether the election of that
nominee will cause a company to have less than a majority of independent
directors.

      2.	The Funds generally will support proposals to de-classify boards of
directors if fewer than 66 2/3% of the directors are independent, and will
generally vote against proposals to classify boards of directors.

      3.	The Funds generally will withhold a vote in favor of a director who
has served on a committee which has approved excessive compensation
arrangements or proposed equity-based compensation plans that unduly dilute the
ownership interests of stockholders.

B.	Matters Related to Independent Auditors

      1.	The Funds generally will vote in favor of independent accountants
approved by the company.  Prior to such vote, however, Davis-Dinsmore will take
into consideration whether non-audit fees make up more than 50 to 75% of the
total fees paid by the company to the independent auditors, and the nature of
the non-audit services provided.

C.	Corporate Governance Matters

	1.	Except as provided in Section E.1, as a general rule, the Funds will
vote against proposals recommended by management of a company that are being
made primarily to implement anti-takeover measures, and will vote in favor of
proposals to eliminate policies that are primarily intended to act as anti-
takeover measures.

	2.	Subject to the other provisions of these guidelines, including
without limitation provision C.1. above, the Funds generally will vote in
accordance with management's recommendations regarding routine matters,
including the following:

          a.	Fixing number of directors;

          b.	Stock splits; and

          c.	Change of state of incorporation for specific corporate
purposes.

D.	Matters Related to Equity-Based Compensation Plans

	1.	The Fund generally will vote in favor of broad-based stock option
plans for executives, employees or directors which would not increase the
aggregate number of shares of stock available for grant under all currently
active plans to over 10% of the total number of shares outstanding.

	2.	The Funds generally will vote in favor of employee stock purchase
plans and employee stock ownership plans permitting purchase of company stock
at 85% or more of fair market value.

E.	Contested Matters

	1.	Contested situations will be evaluated on a case by case basis by the
portfolio manager or analyst at Davis-Dinsmore principally responsible for the
particular portfolio security.

F.	Miscellaneous Matters

        1.	The Funds may in their discretion abstain from voting shares that
have been recently sold.

        2.	The Funds generally will abstain from voting on issues relating to
social and/or political responsibility.

        3.	Proposals that are not covered by the above-stated guidelines will be
evaluated on a case by case basis by the portfolio manager or analyst at Davis-
Dinsmore principally responsible for the particular portfolio security.


G.	Material Conflicts of Interest

       1.	Conflicts of interest may arise from time to time between Davis-
Dinsmore and the Funds.  Examples of conflicts of interests include:

         a.	Davis-Dinsmore may manage a pension plan, administer employee
benefit plans, or provide services to a company whose management is
soliciting proxies;

         b.	Davis-Dinsmore or its officers or directors may have a business
or personal relationship with corporate directors, candidates for
directorships, or participants in proxy contests;

         c.	Davis-Dinsmore may hold a position in a security contrary to
shareholder interests.

       2.	If a conflict of interest arises with respect to a proxy voting
matter, the portfolio manager will promptly notify the Funds' Audit Committee
and counsel for independent trustees and the proxies will be voted in
accordance with direction received from the Audit Committee.

H.	Amendments

       1.	Any proposed material amendment to these Guidelines shall be
submitted for review and approval to:

         a.	the Funds' Board of Trustees, including a majority of the
disinterested trustees; and

         b.	the Adviser's Board of Directors.

       2.	Non-material amendments to these Guidelines may be made by the Chair
of the Funds, upon consultation with counsel to the Funds and the Funds' Chief
Compliance Officer, and will be reported to the Funds' Board of Trustees at
their next scheduled in-person meeting.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

(a) (1) Mr. Thomas H. Dinsmore, Chairman and Chief Executive Officer, serves as
the Portfolio Manager of the Registrant. He has served in that capacity since
1996. This information is as of December 26, 2007.  Mr. Dinsmore usually
receives investment recommendations from a team of research analysts prior to
making investment decisions about transactions in the portfolio.

(2) The following table provides information relating to other (non-registrant)
accounts where this portfolio manager is primarily responsible for day-to-day
management as of October 31, 2007. The portfolio manager does not manage such
accounts or assets with performance-based advisory fees, or other pooled
investment vehicles.

                                                            
                    Registered Investment     Other Pooled           Other
Portfolio Manager   Companies                 Investment Vehicles    Accounts
------------------  ---------------------     --------------------   --------
Thomas H. Dinsmore  Number:  1                        n/a               n/a

                    Assets:  $122,239,958             n/a               n/a


Mr. Dinsmore is the Portfolio Manager of one other account, Ellsworth Fund Ltd.
(Ellsworth), a registered investment company with total net assets of
$122,239,958 as of October 31, 2007.  Mr. Dinsmore is Chairman and Chief
Executive Officer of Ellsworth. This information is as of October 31, 2007.
The Registrant and Ellsworth have similar investment objectives and strategies.
As a result, material conflicts of interest may arise between the two funds if
a security is not available in a sufficient amount to fill open orders for both
funds.  To deal with these situations, the investment adviser for the
Registrant and Ellsworth has adopted Trade Allocation Procedures (the
"Allocation Procedures").  The Allocation Procedures set forth a method to
allocate a partially filled order among the funds.  Pursuant to the method, the
amount of shares that each fund purchases is allocated pro rata based on the
dollar amount of each fund's intended trade or, if the order is subject to a
minimum lot size, as closely as possibly to pro rata.

The Allocation Procedures permit the adviser to allocate an order in a way that
is different from the method set forth above if (i) each fund is treated fairly
and equitably and neither fund is given preferential treatment, and (ii) the
allocation is reviewed by the adviser's chief compliance officer.

(3) This information is as of October 31, 2007. The Portfolio Manager is
compensated by Davis-Dinsmore Management Company, the Adviser, through a three-
component plan, consisting of a fixed base salary, annual cash bonus, and
benefit retirement plan. His compensation is reviewed and approved by the
Adviser's Board of Directors annually. His compensation may be adjusted from
year to year based on the perception of the Adviser's Board of Directors of the
portfolio manager's overall performance and his management responsibilities.
His compensation is not based on (i) a formula specifically tied to the
performance of the Registrant or Ellsworth, including performance against an
index, or (ii) the value of assets held in the Registrant's portfolio.

(4) As of October 31, 2007, Mr. Dinsmore's beneficial ownership in the
Registrant's shares was in the range of $100,001-$500,000.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.

During the period covered by this report, there were no purchases made by or
on behalf of the registrant or any "affiliated purchaser," as defined in Rule
10b-18(a)(3) under the Exchange Act (17 CFR 240.10b-18(a)(3)), of shares or
other units of any class of the registrant's equity securities that is
registered by the registrant pursuant to Section 12 of the Exchange Act
(15 U.S.C. 781).

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which shareholders may
recommend nominees to the Registrant's board of trustees since those procedures
were last disclosed in response to the requirements of Item 22(b)(15) of
Schedule 14A (17 CFR 240.14a-101), or this Item 10 of Form N-CSR.

ITEM 11. CONTROLS AND PROCEDURES.

Conclusions of principal officers concerning controls and procedures

(a) As of November 28, 2007, an evaluation was performed under the supervision
and with the participation of the officers of Bancroft Fund Ltd. (the
"Registrant"), including the Principal Executive Officer ("PEO") and Principal
Financial Officer ("PFO"), to assess the effectiveness of the Registrant's
disclosure controls and procedures, as that term is defined in Rule 30a-3(c)
under the Investment Company Act of 1940 (the "Act"), as amended. Based on that
evaluation, the Registrant's officers, including the PEO and PFO, concluded
that, as of November 28, 2007, the Registrant's disclosure controls
and procedures were reasonably designed so as to ensure: (1) that information
required to be disclosed by the Registrant on Form N-CSR is recorded, processed,
summarized and reported within the time periods specified by the rules and forms
of the Securities and Exchange Commission; and (2) that material information
relating to the Registrant is made known to the PEO and PFO as appropriate to
allow timely decisions regarding required disclosure.

(b) There have been no changes in the Registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the Act
(17 CFR 270.30a-3(d)) that occurred during the Registrant's second fiscal
quarter of the period covered by this report that has materially affected, or is
reasonably likely to materially affect, the Registrant's internal control over
financial reporting.

ITEM 12. EXHIBITS

(a)(1) A code of ethics that applies to the Fund's principal executive officer
and principal financial officer is attached hereto.

(a)(2) Certifications of the principal executive officer and the principal
financial officer pursuant to Rule 30a-2(a) under the Investment Company Act
of 1940 are attached hereto.

(a)(3) There were no written solicitations to purchase securities under Rule
23c-1 under the Investment Company Act of 1940 during the period covered by the
report.

(b) Certifications of the principal executive officer and the principal
financial officer, as required by Rule 30a-2(b) under the Investment Company Act
of 1940 are attached hereto.


SIGNATURES

  Pursuant to the requirements of the Securities and 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.

Bancroft Fund Ltd.

By: /s/Thomas H. Dinsmore
    Thomas H. Dinsmore
    Chairman of the Board and
    Chief Executive Officer
    (Principal Executive Officer)

Date: December 26, 2007

  Pursuant to the requirements of the Securities and 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/Thomas H. Dinsmore
    Thomas H. Dinsmore
    Chairman of the Board and
    Chief Executive Officer
    (Principal Executive Officer)

Date: December 26, 2007

By: /s/Gary I. Levine
    Gary I. Levine
    Chief Financial Officer
    (Principal Financial Officer)

Date: December 26, 2007