Prospectus excerpt:  Nuveen Arizona Dividend Advantage Municipal Fund (the ÙFundˆ) is a non-diversified, closed-end management investment company. The Fund?s common shares, $0.01 par value, are traded on the NYSE Amex under the symbol ÙNFZ.ˆ See ÙDescription of Outstanding Shares?Common Shares.ˆ The Fund commenced investment operations on January 30, 2001. As of August 31, 2010, the Fund had 1,548,113 common shares outstanding and 424 preferred shares outstanding. Preferred shares previously offered by the Fund are referred to as ÙMuniPreferredˆ÷ shares or auction rate preferred shares (ÙARPSˆ). MTP Shares, as defined below, and any other preferred shares, including MuniPreferred shares, that may then be outstanding are collectively referred to as ÙPreferred Stock.ˆ

The Fund is offering 1,110,000 MuniFund Term Preferred Shares, 2.05% Series 2015 (ÙSeries 2015 MTP Sharesˆ or ÙMTP Sharesˆ), at a purchase price of $10 per share. MTP Shares are being offered by the underwriters listed under ÙUnderwriters.ˆ The Fund has granted the underwriters the right to purchase up to 55,500 additional MTP Shares to cover over-allotments. Unless otherwise specifically stated, the information throughout this prospectus does not take into account the possible issuance to the underwriters of additional MTP Shares pursuant to their right to purchase additional MTP Shares to cover over-allotments. The Fund intends to use the net proceeds from the sale of MTP Shares to refinance and redeem all of the outstanding MuniPreferred shares, and to maintain the Fund?s leveraged capital structure. Certain underwriters and their affiliates, including Morgan Stanley & Co. Incorporated, Banc of America Securities LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Citigroup Global Markets Inc., UBS Securities LLC and Wells Fargo Securities, LLC, currently own or are obligated to repurchase in the future outstanding MuniPreferred shares. In addition, customers of certain underwriters and their affiliates currently own outstanding MuniPreferred shares. Upon the successful completion of this offering, these outstanding MuniPreferred shares may be redeemed or purchased by the Fund with the net proceeds of the offering as set forth in ÙUse of Proceeds.ˆ Although such a redemption or purchase would be done in accordance with the Investment Company Act of 1940, as amended (the Ù1940 Actˆ) in a manner that did not favor these underwriters, affiliates or customers, the underwriters or their affiliates may nonetheless be deemed to obtain a material benefit from the offering of the MTP Shares due to such redemption or purchase including, for certain of the underwriters and their affiliates, potentially substantial financial relief and/or relief related to legal and regulatory matters associated with currently illiquid MuniPreferred shares.

The first issuance date of the MTP Shares upon the closing of this offering is referred to herein as the ÙDate of Original Issue.ˆ MTP Shares will be senior securities that constitute stock of the Fund and are senior, with priority in all respects, to the Fund?s common shares as to payments of dividends and as to distribution of assets upon dissolution, liquidation or winding up of the affairs of the Fund. MTP Shares will have equal priority as to payments of dividends and as to distributions of assets upon dissolution, liquidation or winding up of the affairs of the Fund and will be in parity in all respects with MuniPreferred shares outstanding. The Fund may not issue additional classes of shares that are senior to Preferred Stock as to payments of dividends and as to distribution of assets upon dissolution, liquidation or winding up of the affairs of the Fund.

You should consider your investment goals, time horizons and risk tolerance before investing in MTP Shares. An investment in MTP Shares is not appropriate for all investors and is not intended to be a complete investment program. MTP Shares are designed as an intermediate-term investment to help achieve the after-tax income and capital preservation goals of investors, and not as a trading vehicle. MTP Shares may be an appropriate investment for you if you are seeking: Current income exempt from regular federal and Arizona income taxes; Consistent monthly dividends; Return of your capital investment after a limited term of 5 years; A security that benefits from significant over-collateralization and related protective provisions; Municipal market exposure through the Fund (rather than a single municipal issuer) that diversifies credit risk by investing in many securities and various essential-service sectors; Potential for daily liquidity and transparency afforded by NYSE Amex listing, once the MTP Shares begin trading on such exchange as anticipated; and An intermediate-term fixed income investment with potentially less price volatility than longer-dated fixed income securities. However, keep in mind that you will need to assume the risks associated with an investment in MTP Shares and the Fund. See ÙRisks.ˆ

MTP Shares pay a dividend at a fixed rate of 2.05% per annum of the $10 liquidation preference per share (the ÙFixed Dividend Rateˆ). The Fixed Dividend Rate is subject to adjustment in certain circumstances (but will not in any event be lower than the 2.05% Fixed Dividend Rate). See ÙDescription of MTP Shares?Dividends and Dividend Periods?Fixed Dividend Rate,ˆ Ù?Adjustments to Fixed Dividend Rate?Ratingsˆ and Ù?Default Period.ˆ

The holders of MTP Shares will be entitled to receive cumulative cash dividends and distributions on each such share, when, as and if declared by, or under authority granted by, the Board of Trustees, out of funds legally available for payment. Dividends on the MTP Shares will be payable monthly. The first dividend period for the MTP Shares will commence on the Date of Original Issue of MTP Shares and end on November 30, 2010 and each subsequent dividend period will be a calendar month (or the portion thereof occurring prior to the redemption of such MTP Shares) (each dividend period a ÙDividend Periodˆ). Dividends will be paid on the first Business Day of the month next following a Dividend Period and upon redemption of the MTP Shares, except that dividends paid with respect to any Dividend Period consisting of the month of December in any year will be paid on the last Business Day of December (each payment date a ÙDividend Payment Dateˆ). Except for the first Dividend Period, dividends with respect to any monthly Dividend Period will be declared and paid to holders of record of MTP Shares as their names shall appear on the registration books of the Fund at the close of business on the 15th day of such monthly Dividend Period (or if such day is not a Business Day, the next preceding Business Day). Dividends with respect to the first Dividend Period of the Series 2015 MTP Shares will be declared and paid to holders of record of such MTP Shares as their names appear on the registration books of the Fund at the close of business on November 29, 2010. See ÙDescription of MTP Shares?Dividends and Dividend Periods.ˆ

On account of the foregoing provisions, only the holders of MTP Shares on the record date for a Dividend Period will be entitled to receive dividends and distributions payable with respect to such Dividend Period, and holders of MTP Shares who sell shares before such a record date and purchasers of MTP Shares who purchase shares after such a record date should take the effect of the foregoing provisions into account in evaluating the price to be received or paid for such MTP Shares.

The Fund is required to provide for the mandatory redemption of all outstanding Series 2015 MTP Shares on November 1, 2015 at a redemption price equal to $10 per share plus an amount equal to accumulated but unpaid dividends thereon (whether or not earned or declared but excluding interest thereon) to (but excluding) the redemption date (the ÙTerm Redemption Priceˆ). No amendment, alteration or repeal of the obligations of the Fund to redeem all of the Series 2015 MTP Shares on November 1, 2015 can be effected without the prior unanimous vote or consent of the holders of Series 2015 MTP Shares. See ÙDescription of MTP Shares?Redemption.ˆ

Mandatory Redemption for Asset Coverage and Effective Leverage Ratio Asset Coverage. If the Fund fails to have Asset Coverage (as defined below) of at least 225% as of the close of business on any Business Day on which such Asset Coverage is required to be calculated and such failure is not cured as of the close of business on the date that is 30 calendar days following such Business Day (the ÙAsset Coverage Cure Dateˆ), the Fund will redeem within 30 calendar days of the Asset Coverage Cure Date shares of Preferred Stock equal to the lesser of (i) the minimum number of shares of Preferred Stock that will result in the Fund having Asset Coverage of at least 230% and (ii) the maximum number of shares of Preferred Stock that can be redeemed out of monies expected to be legally available; and, at the Fund?s sole option, the Fund may redeem a number of shares of Preferred Stock (including shares of Preferred Stock required to be redeemed) that will result in the Fund having Asset Coverage of up to and including 285%. The Preferred Stock to be redeemed may include at the Fund?s sole option any number or proportion of MTP Shares. If MTP Shares are to be redeemed in such an event, they will be redeemed at a redemption price equal to their $10 liquidation preference per share plus accumulated but unpaid dividends thereon (whether or not declared, but excluding interest thereon) to (but excluding) the date fixed for such redemption (the ÙMandatory Redemption Priceˆ).

Effective Leverage Ratio. If the Effective Leverage Ratio (as defined below) of the Fund exceeds 50% as of the close of business on any Business Day on which such ratio is required to be calculated and such failure is not cured as of the close of business on the date that is 30 calendar days following such Business Day (the ÙEffective Leverage Ratio Cure Dateˆ), the Fund will within 30 calendar days following the Effective Leverage Ratio Cure Date cause the Fund to have an Effective Leverage Ratio that does not exceed 50% by (A) engaging in transactions involving or relating to the floating rate securities not owned by the Fund and/or the inverse floating rate securities owned by the Fund, including the purchase, sale or retirement thereof, (B) redeeming a sufficient number of shares of Preferred Stock, which at the Fund?s sole option may include any number or proportion of MTP Shares, in accordance with the terms of such Preferred Stock, or (C) engaging in any combination of the actions contemplated by (A) and (B) above. Any MTP Shares so redeemed will be redeemed at a price per share equal to the Mandatory Redemption Price. See ÙPortfolio Composition?Municipal Securities?Inverse Floating Rate Securitiesˆ and Ù?Floating Rate Securities.ˆ

Optional Redemption

As of November 1, 2011, Series 2015 MTP Shares will be subject to optional redemption (in whole or from time to time, in part) at the sole option of the Fund out of monies legally available therefor, at the redemption price per share equal to the sum of the $10 liquidation preference per share plus (i) an initial premium of 1.00% of the liquidation preference (with such premium declining by 0.5% every six months so that by November 1, 2012 there will cease to be a premium) and (ii) an amount equal to accumulated but unpaid dividends thereon (whether or not earned or declared but excluding interest thereon) to (but excluding) the date fixed for such redemption. See ÙDescription of MTP Shares?Redemption? Optional Redemption.ˆ The period from the Date of Original Issue to the date that the MTP Shares are subject to such optional redemption is referred to herein as the ÙNon-Call Period.ˆ In addition to the optional redemption described above, the MTP Shares will also be subject to optional redemption on any Business Day during a Rating Downgrade Period with respect to such MTP Shares at the redemption price per share equal to the sum of the $10 liquidation preference per share (without any additional premium) plus an amount equal to accumulated but unpaid dividends thereon (whether or not earned or declared, but excluding interest thereon) to (but excluding) the date fixed for redemption. A ÙRating Downgrade Periodˆ means any period during which the MTP Shares are rated A+ or lower by Standard & Poor?s Financial Services, LLC, a subsidiary of The McGraw-Hill Companies, Inc. (ÙS&Pˆ), A1 or lower by Moody?s Investors Service, Inc. (ÙMoody?sˆ) and A+ or lower by Fitch Ratings, Inc. (ÙFitchˆ). See ÙDescription of MTP Shares?Redemption.ˆ

Because under normal circumstances the Fund will invest substantially all of its assets in municipal securities that pay interest exempt from regular federal and Arizona income taxes, the dividends designated by the Fund as exempt-interest dividends received by a holder of MTP Shares will be similarly exempt. The dividends received by a holder of MTP Shares may be subject to other state and local taxes. A portion of the income from the Fund?s portfolio securities, and in turn the exempt-interest dividends paid to holders of MTP Shares, may be subject to the federal alternative minimum tax, so MTP Shares may not be a suitable investment if you are subject to this tax. Taxable income or gain earned by the Fund will be allocated proportionately to holders of Preferred Stock and common shares, based on the percentage of total Preferred Stock dividends relative to common share dividends.

The Fund has elected to be treated, and intends to continue to qualify each year, as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended (the ÙCodeˆ), and generally does not expect to be subject to federal income tax.

It is a condition of the underwriters? obligation to purchase MTP Shares that MTP Shares will be rated, as of the Date of Original Issue, at certain minimum levels by Rating Agencies (as defined in this prospectus) designated by the Fund?s Board of Trustees. There can be no assurance that such ratings will be maintained at the level originally assigned through the term of the MTP Shares. The ratings may be changed, suspended or withdrawn in the Rating Agencies? discretion. The Fund, however, will use commercially reasonable efforts to cause at least one Rating Agency (as defined in this prospectus) to publish a credit rating with respect to MTP Shares for so long as MTP Shares are outstanding. The Fixed Dividend Rate will be subject to an increase in the event that the ratings of the MTP Shares by the Rating Agencies are each downgraded below such minimum levels or if no Rating Agency is then rating the shares. See ÙDescription of MTP Shares?Dividends and Dividend Periods?Adjustment to Fixed Dividend Rate?Ratings.ˆ The Board of Trustees of the Fund has the right to terminate the designation of any of the Rating Agencies for purposes of the MTP Shares, provided that at least one Rating Agency continues to maintain a rating with respect to the MTP Shares. In such event, any rating of such terminated Rating Agency, to the extent it would have been taken into account in any of the provisions of the MTP Shares which are described in this prospectus or included in the Statement, will be disregarded, and only the ratings of the then-designated Rating Agencies will be taken into account.

On August 31, 2010 S&P published a Request for Comment concerning its new proposal (the ÙS&P Proposalˆ) to change its methods and assumptions for rating certain Ùmarket value securities,ˆ including those issued by registered closed-end funds such as the MTP Shares to be issued by the Fund. The S&P Proposal has defined Ùmarket value securitiesˆ as those whose source of repayment is liquidation proceeds generated from open market sales of assets (in the Fund?s case, portfolio securities), rather than cash flow generated by assets held to maturity. S&P has requested comments on the S&P Proposal and the comment period ends October 29, 2010. S&P stated that after the comment period expires, it will review the comments and publish updated criteria methodology and assumptions, which would be applicable to all outstanding S&P ratings of market value securities. The updated criteria, if adopted by S&P, may be the same as proposed or may differ based upon comments received by S&P. Under the current S&P Proposal, when rating market value securities (including MTP Shares) issued by the Fund, S&P would substantially increase the reductions in value, or Ùhaircuts,ˆ applied to the Fund?s portfolio securities compared with its present methodology. Due to these increased haircuts, any market value securities issued by the Fund (including MTP Shares) in the future may be ineligible for a AAA rating from S&P. In addition, any market value securities (including the MTP Shares offered hereby) that had a rating of AAA from S&P prior to the adoption of the proposed criteria may be unable to maintain such rating after the adoption of such criteria, if adopted as proposed. In the event that S&P downgrades the MTP Shares, the Fixed Dividend Rate would not change. However, if each of the other Rating Agencies also downgrades the MTP Shares, the Fixed Dividend Rate would increase. See ÙDescription of MTP Shares?Dividends and Dividend Periods?Adjustments to Fixed Dividend Rate?Ratings.ˆ Nevertheless, a downgrade by S&P could adversely affect the market pricing and liquidity of the MTP Shares. There can be no assurance S&P will or will not take any action with respect to the S&P Proposal or that any such action would not result in a downgrade of MTP Shares. Further, there can be no assurance that any other Rating Agency will not also alter its rating criteria resulting in downgrades of ratings, which could further adversely affect the market pricing and liquidity of MTP Shares.

If the Fund fails to maintain at least 225% Ùasset coverageˆ as of the close of business on each Business Day, the MTP Shares may become subject to mandatory redemption as provided above. ÙAsset coverageˆ for Preferred Stock is calculated pursuant to Section 18(h) of the 1940 Act, as in effect on the date of the Statement, and is determined on the basis of values calculated as of a time within 48 hours (only including Business Days) preceding each daily determination (ÙAsset Coverageˆ). See ÙDescription of MTP Shares?Asset Coverage.ˆ

The Fund estimates that on the Date of Original Issue, the Asset Coverage, based on the composition of its portfolio as of July 31, 2010, and after giving effect to (i) the issuance of MTP Shares offered hereby ($11,100,000), and (ii) $491,500 of underwriting discounts and commissions and estimated offering costs for such MTP Shares, assuming the redemption of $10,600,000 liquidation preference of MuniPreferred shares, will be 298%. The Fund?s net investment income coverage?calculated by dividing the Fund?s net investment income by the distributions from net investment income to preferred shareholders?has averaged approximately 1,019% from January 30, 2001 through July 31, 2010. Net investment income coverage has varied significantly year over year since the Fund?s inception, and there is no assurance that historical coverage levels can be maintained.

If the Fund?s Effective Leverage Ratio exceeds 50% as of the close of business on any Business Day, the MTP Shares may become subject to mandatory redemption as provided above.

The ÙEffective Leverage Ratioˆ on any date means the quotient of the sum of (A) the aggregate liquidation preference of the Fund?s Ùsenior securitiesˆ (as that term is defined in the 1940 Act) that are stock, excluding, without duplication, (1) any such senior securities for which the Fund has issued a notice of redemption and either has delivered Deposit Securities to the paying agent for such Preferred Stock or otherwise has adequate Deposit Securities on hand for the purpose of such redemption and (2) the Fund?s outstanding Preferred Stock that is to be redeemed with net proceeds from the sale of the MTP Shares, for which the Fund has delivered Deposit Securities to the paying agent for such Preferred Stock or otherwise has adequate Deposit Securities on hand for the purpose of such redemption; (B) the aggregate principal amount of the Fund?s Ùsenior securities representing indebtednessˆ (as that term is defined in the 1940 Act); and (C) the aggregate principal amount of floating rate securities not owned by the Fund that correspond to the associated inverse floating rate securities owned by the Fund; divided by the sum of (A) the market value (determined in accordance with the Fund?s valuation procedures) of the Fund?s total assets (including amounts attributable to senior securities), less the amount of the Fund?s accrued liabilities (other than liabilities for the aggregate principal amount of senior securities representing indebtedness, including floating rate securities); and (B) the aggregate principal amount of floating rate securities not owned by the Fund that correspond to the associated inverse floating rate securities owned by the Fund.

Except as otherwise provided in the Fund?s Declaration of Trust or as otherwise required by law, (i) each holder of MTP Shares shall be entitled to one vote for each MTP Share held by such holder on each matter submitted to a vote of shareholders of the Fund and (ii) the holders of outstanding Preferred Stock and of common shares shall vote together as a single class; provided that holders of Preferred Stock, voting separately as a class, shall elect at least two of the Fund?s trustees and will elect a majority of the Fund?s trustees to the extent the Fund fails to pay dividends on any Preferred Stock in an amount equal to two full years of dividends on that stock. See ÙDescription of MTP Shares?Voting Rights.ˆ

The liquidation preference of MTP Shares will be $10 per share (the ÙLiquidation Preferenceˆ). In the event of any liquidation, dissolution or winding up of the affairs of the Fund, whether voluntary or involuntary, the holders of MTP Shares will be entitled to receive a liquidation distribution per share equal to the Liquidation Preference plus an amount equal to all unpaid dividends and distributions accumulated to (but excluding) the date fixed for distribution or payment (whether or not earned or declared by the Fund, but excluding interest thereon). See ÙDescription of MTP Shares?Liquidation Rights.ˆ