Edgar Filing: WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND

Form N-Q

LOGO

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED

MANAGEMENT INVESTMENT COMPANY

Investment Company Act file number: 811-21269

Wells Fargo Advantage Income Opportunities Fund

(Exact name of registrant as specified in charter)

525 Market Street, 12^th Floor, San Francisco, CA 94105

(Address of principal executive offices) (Zip code)

C. David Messman

Wells Fargo Funds Management, LLC

525 Market Street, 12^th Floor, San Francisco, CA 94105

(Name and address of agent for service)

Registrant’s telephone number, including area code: 800-222-8222

Date of fiscal year end: April 30, 2011

Date of reporting period: January 31, 2012

ITEM 1. SCHEDULE OF INVESTMENTS


WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND		PORTFOLIO OF INVESTMENTS - January 31, 2012 (UNAUDITED)


Security Name						Shares		Value
Common Stocks: 0.08%

Consumer Discretionary : 0.00%

Hotels, Restaurants & Leisure: 0.00%
Trump Entertainment Resorts Incorporated †							2,149	$	8,596

Telecommunication Services : 0.08%

Diversified Telecommunication Services: 0.08%
Fairpoint Communications Incorporated †							134,375		546,907

Total Common Stocks (Cost $3,109,765)									555,503


	Interest Rate			Maturity Date		Principal
Convertible Debentures: 0.43%

Information Technology : 0.43%

Communications Equipment : 0.43%
Lucent Technologies Incorporated Series B		2.88	%		06/15/2025	$	3,225,000		2,946,844

Total Convertible Debentures (Cost $2,307,500)									2,946,844

Corporate Bonds and Notes: 111.25%

Consumer Discretionary : 21.29%

Auto Components : 2.48%
Allison Transmission Incorporated 144A		7.13			05/15/2019		6,075,000		6,112,969
Armored Autogroup Incorporated 144A		9.25			11/01/2018		800,000		668,000
Cooper Tire & Rubber Company		7.63			03/15/2027		4,455,000		4,232,250
Cooper Tire & Rubber Company		8.00			12/15/2019		150,000		156,000
Exide Technologies		8.63			02/01/2018		1,100,000		907,500
Goodyear Tire & Rubber Company		10.50			05/15/2016		4,440,000		4,861,800

									16,938,519

Diversified Consumer Services : 2.75%
Carriage Services Incorporated		7.88			01/15/2015		4,055,000		4,085,413
Service Corporation International		6.75			04/01/2016		1,250,000		1,373,438
Service Corporation International		7.00			05/15/2019		1,125,000		1,215,000
Service Corporation International		7.50			04/01/2027		9,376,000		9,200,200
Service Corporation International		8.00			11/15/2021		880,000		1,012,000
Service Corporation International Series WI		7.00			06/15/2017		1,650,000		1,831,500

									18,717,551

Hotels, Restaurants & Leisure : 5.92%
Ameristar Casinos Incorporated		7.50			04/15/2021		4,477,000		4,768,005
Burger King Corporation		9.88			10/15/2018		1,600,000		1,760,000
Chukchansi Economic Development Authority 144A(s)		4.16			11/15/2012		2,525,000		1,666,500
CityCenter Holdings LLC		7.63			01/15/2016		350,000		367,500
CityCenter Holdings LLC ¥		11.50			01/15/2017		2,232,558		2,383,256
Dineequity Incorporated		9.50			10/30/2018		7,150,000		7,793,500
Greektown Superholdings Incorporated Series A		13.00			07/01/2015		6,662,000		7,128,340
Greektown Superholdings Incorporated Series B		13.00			07/01/2015		1,625,000		1,738,750
NAI Entertainment Holdings LLC 144A		8.25			12/15/2017		2,700,000		2,949,750
Pinnacle Entertainment Incorporated		7.50			06/15/2015		2,880,000		2,937,600
Scientific Games Corporation		9.25			06/15/2019		1,130,000		1,231,700
Speedway Motorsports Incorporated		6.75			02/01/2019		450,000		463,500


PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
Hotels, Restaurants & Leisure (continued)
Speedway Motorsports Incorporated		8.75	%		06/01/2016	$	2,075,000	$	2,261,750
Yonkers Racing Corporation 144A		11.38			07/15/2016		2,750,000		2,935,625

									40,385,776

Household Durables: 0.14%
American Greetings		7.38			12/01/2021		950,000		960,688

Media : 8.02%
Cablevision Systems Corporation		8.63			09/15/2017		2,975,000		3,317,125
CCH II Capital Corporation		13.50			11/30/2016		12,981,015		14,960,620
CCO Holdings LLC		8.13			04/30/2020		746,000		825,263
Cinemark USA Incorporated		7.38			06/15/2021		1,525,000		1,605,063
Cinemark USA Incorporated		8.63			06/15/2019		1,100,000		1,210,000
CSC Holdings LLC		7.88			02/15/2018		1,400,000		1,564,500
CSC Holdings LLC		8.50			04/15/2014		200,000		222,500
DISH DBS Corporation		7.88			09/01/2019		2,260,000		2,604,650
EchoStar DBS Corporation		7.75			05/31/2015		650,000		724,750
Gray Television Incorporated		10.50			06/29/2015		5,225,000		5,420,938
Lamar Media Corporation 144A		5.88			02/01/2022		500,000		500,625
Lamar Media Corporation		7.88			04/15/2018		1,500,000		1,638,750
Lamar Media Corporation Series C		9.75			04/01/2014		925,000		1,049,875
LIN Television Corporation		8.38			04/15/2018		2,225,000		2,258,375
Local TV Finance LLC 144A¥		9.25			06/15/2015		5,450,000		5,395,500
Regal Cinemas Corporation		8.63			07/15/2019		4,575,000		5,021,063
Regal Entertainment Group		9.13			08/15/2018		675,000		739,125
Salem Communications Corporation		9.63			12/15/2016		4,941,000		5,348,633
Sirius XM Radio Incorporated 144A		9.75			09/01/2015		250,000		271,875

									54,679,230

Specialty Retail : 1.36%
Gap Incorporated		5.95			04/12/2021		1,175,000		1,128,006
Limited Brands Incorporated		6.63			04/01/2021		925,000		1,017,500
RadioShack Corporation		6.75			05/15/2019		2,675,000		2,247,000
Rent A Center Incorporated		6.63			11/15/2020		700,000		722,750
Toys R Us Property Company LLC		8.50			12/01/2017		3,900,000		4,177,875

									9,293,131

Textiles, Apparel & Luxury Goods: 0.62%
Oxford Industrial Incorporated		11.38			07/15/2015		3,850,000		4,220,563

Consumer Staples : 1.43%

Beverages: 0.04%
Cott Beverages Incorporated		8.38			11/15/2017		250,000		272,500

Food Products : 1.39%
B&G Foods Incorporated		7.63			01/15/2018		405,000		435,881
Darling International Incorporated		8.50			12/15/2018		250,000		280,000
Dole Food Company Incorporated		13.88			03/15/2014		3,075,000		3,540,094
Smithfield Foods Incorporated		10.00			07/15/2014		4,465,000		5,246,375

									9,502,350

Energy : 16.71.07%

Energy Equipment & Services : 4.22%
Bristow Group Incorporated		7.50			09/15/2017		3,210,000		3,338,400
Dresser Rand Group Incorporated 144A		6.50			05/01/2021		1,825,000		1,884,313


WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND		PORTFOLIO OF INVESTMENTS - January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Energy Equipment & Services (continued)
Gulfmark Offshore Incorporated		7.75	%		07/15/2014	$	3,395,000	$	3,411,975
Hornbeck Offshore Services Incorporated Series B		6.13			12/01/2014		5,325,000		5,331,656
Hornbeck Offshore Services Incorporated Series B		8.00			09/01/2017		4,920,000		5,178,300
Oil States International Incorporated		6.50			06/01/2019		2,954,000		3,138,625
Parker Drilling Company		9.13			04/01/2018		860,000		911,600
PHI Incorporated		8.63			10/15/2018		5,225,000		5,277,250
Pride International Incorporated		8.50			06/15/2019		210,000		268,269

									28,740,388

Oil, Gas & Consumable Fuels : 12.49%
Amerigas Partner Financial Corporation		6.25			08/20/2019		325,000		323,375
Chesapeake Energy Corporation		9.50			02/15/2015		5,085,000		5,720,625
Cloud Peak Energy Resources LLC		8.25			12/15/2017		200,000		216,000
Cloud Peak Energy Resources LLC		8.50			12/15/2019		250,000		273,125
Coffeyville Resources Incorporated 144A		9.00			04/01/2015		1,947,000		2,083,290
Consol Energy Incorporated		8.25			04/01/2020		2,665,000		2,888,194
Crestwood Midstream Partners LP 144A		7.75			04/01/2019		1,350,000		1,360,125
Denbury Resources Incorporated		6.38			08/15/2021		700,000		757,750
Denbury Resources Incorporated		8.25			02/15/2020		850,000		966,875
El Paso Corporation		6.50			09/15/2020		1,155,000		1,262,830
El Paso Corporation		7.00			06/15/2017		875,000		969,287
El Paso Corporation		7.25			06/01/2018		3,224,000		3,594,002
El Paso Corporation		7.42			02/15/2037		1,820,000		2,011,593
El Paso Corporation		7.80			08/01/2031		3,050,000		3,575,442
Encore Acquisition Company		9.50			05/01/2016		700,000		784,875
Energy Transfer Equity LP		7.50			10/15/2020		5,950,000		6,574,750
Ferrellgas Finance Corporation		9.13			10/01/2017		4,660,000		4,893,000
Forest Oil Corporation		7.25			06/15/2019		2,520,000		2,520,000
Forest Oil Corporation		8.50			02/15/2014		1,115,000		1,215,350
Griffin Coal Mining Company Limited (s)		9.50			12/01/2016		652,804		511,635
Holly Corporation		9.88			06/15/2017		4,265,000		4,755,475
Inergy LP		6.88			08/01/2021		824,000		786,920
Inergy LP		7.00			10/01/2018		950,000		923,875
Newfield Exploration Company		6.88			02/01/2020		1,185,000		1,267,950
Penn Virginia Corporation		10.38			06/15/2016		215,000		216,075
Petrohawk Energy Corporation		7.88			06/01/2015		2,045,000		2,167,700
Petrohawk Energy Corporation		10.50			08/01/2014		1,065,000		1,183,481
Pioneer Natural Resource Company		7.50			01/15/2020		3,170,000		3,812,762
Plains Exploration & Production Company		8.63			10/15/2019		6,380,000		7,177,500
Regency Energy Partners		6.88			12/01/2018		475,000		515,375
Sabine Pass LNG LP		7.25			11/30/2013		4,940,000		5,112,900
Sabine Pass LNG LP		7.50			11/30/2016		7,050,000		7,349,625
Ship Finance International Limited		8.50			12/15/2013		2,250,000		2,154,375
Suburban Propane Partners LP		7.38			03/15/2020		575,000		603,750
Susser Holdings LLC		8.50			05/15/2016		2,000,000		2,170,000
Tesoro Corporation		9.75			06/01/2019		2,185,000		2,474,513

									85,174,399

Financials : 24.93%

Capital Markets : 2.02%
ETRADE Financial Corporation*		12.50			11/30/2017		9,741,000		11,275,208
Oppenheimer Holdings Incorporated		8.75			04/15/2018		2,500,000		2,503,125

									13,778,333

Commercial Banks : 2.96%
CIT Group Incorporated 144A		5.25			04/01/2014		7,275,000		7,402,313
CIT Group Incorporated 144A		7.00			05/04/2015		1,575,000		1,582,875
CIT Group Incorporated		7.00			05/01/2016		2,615,111		2,615,111


PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
Commercial Banks (continued)
CIT Group Incorporated		7.00	%		05/01/2017	$	3,375,000	$	3,379,219
Emigrant Bancorp Incorporated 144A(i)		6.25			06/15/2014		5,725,000		5,166,698

									20,146,216

Consumer Finance : 11.82%
American General Finance Corporation		5.40			12/01/2015		2,800,000		2,222,500
American General Finance Corporation		5.75			09/15/2016		2,325,000		1,749,563
American General Finance Corporation		6.50			09/15/2017		550,000		398,750
Calpine Construction Finance Corporation 144A		8.00			06/01/2016		2,700,000		2,909,250
Clearwire Communications Finance Corporation 144A		12.00			12/01/2015		2,280,000		2,148,900
Clearwire Communications Finance Corporation 144A		12.00			12/01/2015		3,140,000		2,959,450
Ford Motor Credit Company LLC		7.00			10/01/2013		500,000		534,966
Ford Motor Credit Company LLC		8.00			12/15/2016		200,000		236,812
General Motors Financial Company 144A		6.75			06/01/2018		1,850,000		1,924,000
GMAC LLC		6.75			12/01/2014		2,344,000		2,443,620
GMAC LLC		6.88			08/28/2012		2,862,000		2,904,930
GMAC LLC		7.50			12/31/2013		6,855,000		7,214,888
Homer City Funding LLC		8.73			10/01/2026		2,881,936		2,622,562
International Lease Finance Corporation		6.38			03/25/2013		865,000		876,894
International Lease Finance Corporation 144A		6.75			09/01/2016		300,000		322,875
International Lease Finance Corporation		8.63			09/15/2015		1,700,000		1,833,875
JBS USA Finance Incorporated		11.63			05/01/2014		8,465,000		9,724,169
Level 3 Financing Incorporated		10.00			02/01/2018		4,555,000		4,862,463
Nielsen Finance LLC Company		11.50			05/01/2016		1,170,000		1,342,575
Nielson Finance LLC Company		7.75			10/15/2018		10,570,000		11,772,338
Springleaf Finance Corporation		6.90			12/15/2017		5,950,000		4,611,250
Sprint Capital Corporation		6.88			11/15/2028		13,075,000		9,691,844
Sprint Capital Corporation		8.75			03/15/2032		6,270,000		5,266,800

									80,575,274

Diversified Financial Services : 5.43%
Ally Financial Incorporated		8.30			02/12/2015		8,820,000		9,729,518
Dolphin Subsidiary II Incorporated 144A		7.25			10/15/2021		4,225,000		4,700,313
Hub International Holdings Incorporated 144A		10.25			06/15/2015		6,650,000		6,724,813
Nuveen Investments Incorporated		5.50			09/15/2015		5,800,000		5,249,000
Nuveen Investments Incorporated		10.50			11/15/2015		4,445,000		4,633,913
Nuveen Investments Incorporated 144A		10.50			11/15/2015		4,825,000		4,981,813
USI Holdings Corporation 144A		9.75			05/15/2015		1,055,000		1,033,900

									37,053,270

REITs : 2.70%
Dupont Fabros Technology Incorporated		8.50			12/15/2017		11,580,000		12,709,050
Host Hotels & Resorts LP		9.00			05/15/2017		490,000		543,900
Omega Healthcare Investors Incorporated		6.75			10/15/2022		3,375,000		3,577,500
Ventas Incorporated		9.00			05/01/2012		1,560,000		1,582,575

									18,413,025

Health Care : 4.59%

Health Care Equipment & Supplies : 0.88%
Biomet Incorporated ¥		10.38			10/15/2017		1,215,000		1,318,275
Biomet Incorporated		11.63			10/15/2017		3,485,000		3,789,938
Fresenius Medical Care Incorporated		6.88			07/15/2017		700,000		753,375

									5,861,588


WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND		PORTFOLIO OF INVESTMENTS - January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Health Care Providers & Services : 3.48%
Apria Healthcare Group Incorporated		11.25	%		11/01/2014	$	1,340,000	$	1,398,625
Aviv Healthcare Incorporated		7.75			02/15/2019		3,725,000		3,734,313
Centene Corporation		5.75			06/01/2017		1,925,000		1,963,500
Community Health Systems Incorporated Series WI		8.88			07/15/2015		765,000		795,600
Emergency Medical Services Corporation		8.13			06/01/2019		800,000		816,000
HCA Incorporated		6.50			02/15/2020		3,675,000		3,895,500
HCA Incorporated		7.50			02/15/2022		700,000		749,000
HCA Incorporated		8.50			04/15/2019		375,000		416,250
Health Management Associates		6.13			04/15/2016		475,000		490,438
Health Management Associates 144A		7.38			01/15/2020		475,000		489,250
HealthSouth Corporation		7.25			10/01/2018		750,000		774,375
HealthSouth Corporation		7.75			09/15/2022		750,000		781,875
MPT Operating Partnership LP		6.88			05/01/2021		3,175,000		3,294,063
Sabra Health Care LP		8.13			11/01/2018		2,850,000		2,999,625
United Surgical Partners International Incorporated		8.88			05/01/2017		1,050,000		1,099,875

									23,698,289

Pharmaceuticals : 0.25%
Mylan Incorporated 144A		6.00			11/15/2018		650,000		671,125
Mylan Incorporated 144A		7.63			07/15/2017		650,000		714,188
Mylan Incorporated 144A		7.88			07/15/2020		300,000		333,000

									1,718,313

Industrials : 7.94%

Aerospace & Defense : 1.55%
Alliant Techsystems Incorporated		6.75			04/01/2016		4,470,000		4,592,925
GeoEye Incorporated		9.63			10/01/2015		1,140,000		1,265,400
Hexcel Corporation		6.75			02/01/2015		1,089,000		1,098,529
L-3 Communications Holdings Incorporated		6.38			10/15/2015		2,740,000		2,808,500
Transdigm Incorporated		7.75			12/15/2018		750,000		821,250

									10,586,604

Commercial Services & Supplies : 2.72%
Casella Waste Systems Incorporated		11.00			07/15/2014		4,385,000		4,779,650
Corrections Corporation of America		7.75			06/01/2017		2,110,000		2,290,669
Crown Cork & Seal Company Incorporated		7.50			12/15/2096		1,225,000		1,053,500
Geo Group Incorporated		7.75			10/15/2017		2,955,000		3,161,850
Interface Incorporated		7.63			12/01/2018		300,000		323,250
Iron Mountain Incorporated		8.38			08/15/2021		3,520,000		3,845,600
KAR Holdings Incorporated ±		4.43			05/01/2014		2,225,000		2,216,656
Mac-Gray Corporation		7.63			08/15/2015		850,000		871,250

									18,542,425

Machinery : 1.04%
Cleaver-Brooks Incorporated 144A		12.25			05/01/2016		1,440,000		1,454,400
Columbus McKinnon Corporation		7.88			02/01/2019		1,575,000		1,622,250
CPM Holdings Incorporated		10.63			09/01/2014		3,025,000		3,244,313
Titan International Incorporated		7.88			10/01/2017		700,000		739,375

									7,060,338

Professional Services : 0.80%
Affinia Group Incorporated 144A		10.75			08/15/2016		207,000		227,700
Interactive Data Corporation		10.25			08/01/2018		2,535,000		2,807,513


PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
Professional Services (continued)
NCO Group Incorporated		11.88	%		11/15/2014	$	2,450,000	$	2,413,250

									5,448,463

Road & Rail : 1.68%
Kansas City Southern		8.00			06/01/2015		8,285,000		8,782,100
RailAmerica Incorporated		9.25			07/01/2017		2,428,000		2,701,150

									11,483,250

Transportation Infrastructure: 0.15%
Overseas Shipholding Group		7.50			02/15/2024		1,725,000		1,047,938

Information Technology : 9.53%

Communications Equipment : 1.54%
Allbritton Communications Company		8.00			05/15/2018		2,574,000		2,657,655
EchoStar DBS Corporation		7.13			02/01/2016		910,000		998,725
Intelsat Jackson Holdings Limited		9.50			06/15/2016		2,225,000		2,336,250
Lucent Technologies Incorporated		6.45			03/15/2029		3,100,000		2,340,500
Seagate Technology Holdings		6.80			10/01/2016		1,275,000		1,392,938
Seagate Technology Holdings 144A		7.00			11/01/2021		725,000		775,750

									10,501,818

Computers & Peripherals : 0.51%
Seagate HDD Cayman		6.88			05/01/2020		650,000		695,500
Seagate HDD Cayman		7.75			12/15/2018		2,500,000		2,768,750

									3,464,250

Electronic Equipment, Instruments & Components : 2.96%
CDW Financial Corporation		12.54			10/12/2017		1,600,000		1,732,000
Jabil Circuit Incorporated		8.25			03/15/2018		13,532,000		15,764,780
Viasystem Group Incorporated 144A		12.00			01/15/2015		2,530,000		2,707,100

									20,203,880

Internet Software & Services : 0.37%
Equinix Incorporated		7.00			07/15/2021		125,000		135,625
Equinix Incorporated		8.13			03/01/2018		2,125,000		2,358,750

									2,494,375

IT Services : 4.15%
Audatex North American Incorporated 144A		6.75			06/15/2018		475,000		483,313
Fidelity National Information Services 144A		7.63			07/15/2017		325,000		354,250
Fidelity National Information Services		7.63			07/15/2017		550,000		602,250
Fidelity National Information Services		7.88			07/15/2020		2,450,000		2,756,250
First Data Corporation 144A		7.38			06/15/2019		1,325,000		1,321,688
First Data Corporation		11.25			03/31/2016		10,125,000		8,783,438
SunGard Data Systems Incorporated		7.38			11/15/2018		1,100,000		1,160,500
SunGard Data Systems Incorporated		7.63			11/15/2020		550,000		584,375
SunGard Data Systems Incorporated		10.25			08/15/2015		7,439,750		7,700,141
TW Telecommunications Holdings Incorporated		8.00			03/01/2018		1,272,000		1,376,940
Unisys Corporation		12.50			01/15/2016		1,065,000		1,136,888
Unisys Corporation 144A		12.75			10/15/2014		1,068,000		1,204,170
Unisys Corporation 144A		14.25			09/15/2015		751,000		850,508

									28,314,711


WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND		PORTFOLIO OF INVESTMENTS - January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Materials : 3.42%

Chemicals : 1.07%
Huntsman International LLC		5.50	%		06/30/2016	$	2,855,000	$	2,826,450
Lyondell Chemical Company		11.00			05/01/2018		2,399,231		2,627,158
Solutia Incorporated		7.88			03/15/2020		1,450,000		1,703,750
Solutia Incorporated		8.75			11/01/2017		150,000		169,875

									7,327,233

Containers & Packaging : 0.77%
Crown Americas LLC		7.63			05/15/2017		950,000		1,045,000
Graham Packaging Company Incorporated		9.88			10/15/2014		3,550,000		3,621,000
Owens Brockway Glass Container Incorporated		7.38			05/15/2016		515,000		576,800

									5,242,800

Metals & Mining : 0.89%
Freeport-McMoRan Copper & Gold Incorporated		8.38			04/01/2017		5,725,000		6,039,875
Indalex Holdings Corporation (s)		11.50			02/01/2014		5,985,000		22,444

									6,062,319

Paper & Forest Products : 0.69%
Clearwater Paper Corporation		10.63			06/15/2016		1,175,000		1,316,000
Georgia-Pacific Corporation		8.88			05/15/2031		2,430,000		3,375,982

									4,691,982

Telecommunication Services : 13.37%

Diversified Telecommunication Services : 6.77%
Avaya Incorporated		9.75			11/01/2015		2,300,000		2,202,250
Citizens Communications Company		7.88			01/15/2027		4,205,000		3,605,788
FairPoint Communications Incorporated 144A		10.88			04/01/2017		2,550,000		2,856,000
Frontier Communications Corporation		8.13			10/01/2018		1,980,000		1,975,050
Frontier Communications Corporation		8.25			04/15/2017		2,380,000		2,397,850
Frontier Communications Corporation		8.50			04/15/2020		1,000,000		990,000
GCI Incorporated		6.75			06/01/2021		1,350,000		1,356,750
GCI Incorporated		8.63			11/15/2019		4,175,000		4,498,563
Intelsat Jackson Holdings Company		7.25			10/15/2020		1,700,000		1,774,375
Qwest Corporation		7.50			06/15/2023		3,260,000		3,260,000
Qwest Corporation		7.63			08/03/2021		440,000		451,371
SBA Telecommunications Incorporated		8.00			08/15/2016		1,090,000		1,179,925
SBA Telecommunications Incorporated		8.25			08/15/2019		485,000		528,650
Syniverse Holdings Incorporated		9.13			01/15/2019		7,775,000		8,377,563
U.S. West Communications Incorporated		7.13			11/15/2043		1,810,000		1,778,325
U.S. West Communications Incorporated		7.25			09/15/2025		2,755,000		2,967,006
Windstream Corporation		7.88			11/01/2017		5,380,000		5,944,900

									46,144,366

Wireless Telecommunication Services : 6.60%
CC Holdings LLC 144A		7.75			05/01/2017		650,000		706,063
Cricket Communications Incorporated		7.75			05/15/2016		3,355,000		3,556,300
Cricket Communications Incorporated		7.75			10/15/2020		3,200,000		3,048,000
Crown Castle International Corporation		7.13			11/01/2019		165,000		179,438
Crown Castle International Corporation		9.00			01/15/2015		650,000		708,500
Intelsat Limited 144A		7.25			04/01/2019		3,025,000		3,161,125
Intelsat Limited 144A		7.50			04/01/2021		2,214,000		2,324,700
Intelsat Limited		11.25			06/15/2016		7,090,000		7,515,400
iPCS Incorporated ¥		3.68			05/01/2014		2,607,559		2,385,916
MetroPCS Communications Incorporated		6.63			11/15/2020		6,175,000		6,128,688


PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND


Security Name	Interest Rate			Maturity Date		Principal		Value
Wireless Telecommunication Services (continued)
MetroPCS Communications Incorporated		7.88	%		09/01/2018	$	1,050,000	$	1,107,750
Sprint Nextel Corporation 144A		9.00			11/15/2018		750,000		808,125
Sprint Nextel Corporation 144A		11.50			11/15/2021		1,200,000		1,242,000
Sprint Nextel Corporation Series D		7.38			08/01/2015		6,360,000		6,153,300
Sprint Nextel Corporation Series F		5.95			03/15/2014		6,065,000		6,004,350

									45,029,655

Utilities : 8.04%

Electric Utilities : 4.33%
Aquila Incorporated Step Bond		11.88			07/01/2012		14,996,000		15,635,055
Energy Future Holdings Corporation		10.00			12/01/2020		150,000		161,625
Ipalco Enterprises Incorporated		5.00			05/01/2018		1,750,000		1,725,938
Mirant Mid-Atlantic LLC Series C		10.06			12/30/2028		7,560,525		7,711,735
Otter Tail Corporation		9.00			12/15/2016		3,985,000		4,263,950

									29,498,303

Gas Utilities : 0.22%
AmeriGas Finance LLC		6.75			05/20/2020		225,000		225,000
AmeriGas Finance LLC		7.00			05/20/2022		225,000		225,563
AmeriGas Partners LP		6.50			05/20/2021		1,050,000		1,042,125

									1,492,688

Independent Power Producers & Energy Traders : 3.49%
Calpine Corporation 144A		7.25			10/15/2017		9,469,000		9,895,105
NRG Energy Incorporated		7.38			01/15/2017		6,050,000		6,254,188
NRG Energy Incorporated		8.50			06/15/2019		3,675,000		3,693,375
RRI Energy Incorporated		7.63			06/15/2014		1,020,000		1,020,000
RRI Energy Incorporated		9.24			07/02/2017		2,287,916		2,196,399
RRI Energy Incorporated		9.68			07/02/2026		780,000		733,200

									23,792,267

Total Corporate Bonds and Notes (Cost $731,742,681)									758,559,068


	Dividend Yield					Shares
Preferred Stocks: 0.17%

Financials : 0.17%

Consumer Finance: 0.17%
GMAC Capital Trust		8.125					53,000		1,176,070

Total Preferred Stocks (Cost $1,325,000)									1,176,070


	Interest Rate			Maturity Date		Principal
Term Loans: 11.81%
Advantage Sales & Marketing Incorporated		9.25			06/18/2018	$	900,000		884,250
Capital Automotive LP		5.00			03/10/2017		7,286,051		7,235,996
CCM Merger Incorporated		7.00			03/01/2017		8,397,018		8,331,941
Coinmach Corporation		3.41			11/20/2014		6,589,648		6,015,426
Fairpoint Communications Incorporated		6.50			01/22/2016		6,788,901		5,710,484
Federal Mogul Corporation <		2.22			12/28/2015		1,038,700		990,878
Federal Mogul Corporation <		2.23			12/29/2014		1,261,928		1,203,829
First Data Corporation B1		3.03			09/24/2014		2,867,975		2,719,787
First Data Corporation B2		3.03			09/24/2014		5,354,373		5,077,712
First Data Corporation B3		3.03			09/24/2014		1,485,523		1,408,766


WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND		PORTFOLIO OF INVESTMENTS - January 31, 2012 (UNAUDITED)


Security Name	Interest Rate			Maturity Date		Principal		Value
Term Loans (continued)
Gray Television Incorporated		3.80	%		12/31/2014	$	1,800,564	$	1,773,555
HHI Holdings Limited		7.00			03/21/2017		2,233,125		2,216,377
Level 3 Financing Incorporated		2.75			03/13/2014		1,300,000		1,263,028
Local TV Finance LLC		2.28			05/07/2013		2,720,910		2,680,096
Merisant Company		7.50			01/08/2014		1,429,623		1,408,179
NCO Group Incorporated		8.00			11/15/2013		2,425,222		2,405,529
Newsday LLC		10.50			08/01/2013		5,920,000		6,090,200
Panolam Industries International		8.25			12/31/2013		428,747		403,738
Springleaf Finance Corporation		5.50			05/05/2017		1,350,000		1,253,813
Texas Competitive Electric Holdings		3.80			10/10/2014		29,662,911		20,074,375
Texas Competitive Electric Holdings		4.80			10/10/2017		675,000		415,969
Wash Multifamily Laundry Systems LLC		7.00			08/28/2014		989,770		980,496

Total Term Loans (Cost $86,021,163)									80,544,424

Yankee Corporate Bonds and Notes: 2.42%

Consumer Discretionary : 0.27%

Media : 0.27%
Videotron Limited		6.38			12/15/2015		100,000		102,125
Videotron Limited		9.13			04/15/2018		1,525,000		1,692,750

									1,794,875

Energy : 0.55%

Oil, Gas & Consumable Fuels: 0.55%
Griffin Coal Mining Company Limited 144A(s)		9.50			12/01/2016		4,769,384		3,738,005

Diversified Financial Services: 0.00%
Preferred Term Securities XII Limited ±(s)(i)		1.97			12/24/2033		1,540,000		462

Materials : 1.03%

Metals & Mining : 0.67%
Novelis Incorporated		7.25			02/15/2015		630,000		627,877
Novelis Incorporated		8.38			12/15/2017		1,100,000		1,207,250
Novelis Incorporated		8.75			12/15/2020		2,425,000		2,709,938

									4,545,065

Paper & Forest Products : 0.36%
PE Paper Escrow 144A		12.00			08/01/2014		715,000		775,775
Sappi Limited 144A		7.50			06/15/2032		2,155,000		1,702,450

									2,478,225

Telecommunication Services : 0.57%

Wireless Telecommunication Services : 0.57%
Digicel Group Limited 144A		12.00			04/01/2014		870,000		980,925
Telesat Canada Incorporated		11.00			11/01/2015		690,000		738,271
Wind Acquisition Finance SA 144A		11.75			07/15/2017		2,205,000		2,182,950

									3,902,146

Total Yankee Corporate Bonds and Notes (Cost $15,697,120)									16,458,778


PORTFOLIO OF INVESTMENTS — January 31, 2012 (UNAUDITED)		WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND


Security Name			Yield			Shares		Value
Short-Term Investments: 7.14%

Investment Companies : 7.14%
Wells Fargo Advantage Cash Investment Money Market Fund, Institutional Class ##(l)(u)				0.02	%		48,700,700	$	48,700,700

Total Short-Term Investments (Cost $48,700,700)									48,700,700


Total Investments in Securities (Cost $888,903,929)*	133.30	%							908,941,387

Other Assets and Liabilities, Net	(33.30	)							(227,050,506	)

Total Net Assets	100.00	%						$	681,890,881

†	Non-income earning security.

144A

Security that may be resold to “qualified institutional buyers” under Rule 144A or security offered pursuant to Section 4(2) of the Securities Act of 1933, as amended.

¥	A payment-in-kind (PIK) security is a security in which the issuer may make interest or dividend payments in cash or additional securities. These additional securities generally have the same terms as the original holdings.

±	Variable rate investment.

(s)

Security is currently in default with regards to scheduled interest and/or principal payments. The Fund has stopped accruing interest on this security.

(i)

Illiquid security.

±	Variable rate investment.

<	All or a portion of the position represents an unfunded loan commitment.

##	All or a portion of this security has been segregated for when-issued securities or unfunded loans.

(l)

Investment in an affiliate.

(u)

Rate shown is the 7-day annualized yield at period end.

*	Cost for federal income tax purposes is $884,728,517 and net unrealized appreciation (depreciation) consists of:


Gross unrealized appreciation	$	45,919,490
Gross unrealized depreciation		(21,706,620	)

Net unrealized appreciation	$	24,212,870

WELLS FARGO ADVANTAGE INCOME OPPORTUNITIES FUND

NOTES TO PORTFOLIO OF INVESTMENTS – JANUARY 31, 2012 (UNAUDITED)

The following notes are to be read in conjunction with the Portfolio of Investments for Wells Fargo Advantage Income Opportunities Fund (the “Fund”).

Securities valuation

Investments in equity securities are valued each business day as of the close of regular trading on the New York Stock Exchange, which is usually 4:00 p.m. (Eastern Time). Securities which are traded on a national or foreign securities exchange are valued at the last reported sales price, except that securities listed on The Nasdaq Stock Market, Inc. (“Nasdaq”) are valued at the Nasdaq Official Closing Price (“NOCP”), and if no NOCP is available, then at the last reported sales price. If no sales price is shown on the Nasdaq, the bid price will be used. In the absence of any sale of securities listed on the Nasdaq, and in the case of other securities (including U.S. Government obligations, but excluding debt securities maturing in 60 days or less), the price will be deemed “stale” and the valuations will be determined in accordance with the Fund’s Fair Value Procedures.

Fixed income securities with maturities exceeding 60 days are valued based on evaluated prices received from an independent pricing service approved by the Board of Trustees which may utilize both transaction data and market information such as yield, prices of securities of comparable quality, coupon rate, maturity, type of issue, trading characteristics and other market data. If valuations are not available from the pricing service or values received are deemed not representative of market value, values will be obtained from a third party broker-dealer or determined based on the Fund’s Fair Value Procedures.

Debt securities of sufficient credit quality with original maturities of 60 days or less generally are valued at amortized cost which approximates fair value. The amortized cost method involves valuing a security at its cost, plus accretion of discount or minus amortization of premium over the period until maturity.

Investments in open-end mutual funds and non-registered investment companies are generally valued at net asset value.

Investments which are not valued using any of the methods discussed above, are valued at their fair value, as determined by procedures established in good faith and approved by the Board of Trustees.

When-issued transactions

The Fund may purchase securities on a forward commitment or ‘when-issued’ basis. The Fund records a when-issued transaction on the trade date and will segregate assets to cover its obligation by confirming the availability of qualifying assets having a value sufficient to make payment for the securities purchased. Securities purchased on a when-issued basis are marked-to-market daily and the Fund begins earning interest on the settlement date. Losses may arise due to changes in the market value of the underlying securities or if the counterparty does not perform under the contract.

Term loans

The Fund may invest in term loans. The loans are marked-to-market daily and the Fund begins earning interest when the loans are funded. The loans pay interest at rates which are periodically reset by reference to a base lending rate plus a spread. The Fund assumes the credit risk of the borrower and there could be potential loss to the Fund in the event of default by the borrower.

As of January 31, 2012, the Fund had unfunded loan commitments of $1,867,906.

Fair valuation measurements

Fair value measurements of investments are determined within a framework that has established a fair value hierarchy based upon the various data inputs utilized in determining the value of the Fund’s investments. The three-level hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to significant unobservable inputs (Level 3). The Fund’s investments are classified within the fair value hierarchy based on the lowest level of input that is significant to the fair value measurement. The inputs are summarized into three broad levels as follows:


Level 1 –		quoted prices in active markets for identical securities
Level 2 –		other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.)
Level 3 –		significant unobservable inputs (including the Fund’s own assumptions in determining the fair value of investments)

The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

As of January 31, 2012, the inputs used in valuing the Fund’s assets, which are carried at fair value, were as follows:


Investments in Securities	Quoted Prices (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Equity securities
Common stocks	$	546,907	$	0	$	8,596	$	555,503
Preferred stocks		1,176,070		0		0		1,176,070
Convertible debentures		0		2,946,844		0		2,946,844
Corporate bonds and notes		0		747,917,734		10,641,334		758,559,068
Term loans		0		63,502,168		17,042,256		80,544,424
Yankee corporate bonds		0		16,458,316		462		16,458,778
Short-term investments
Investment companies		48,700,700		0		0		48,700,700

	$	50,423,677	$	830,825,062	$	27,692,648	$	908,941,387

Transfers in and transfers out are recognized at the end of the reporting period. For the nine months ended January 31, 2012, the Fund did not have any significant transfers into/out of Level 1 and Level 2.

The following is a reconciliation of assets in which significant unobservable inputs (Level 3) were used in determining fair value:


	Common stocks		Corporate bonds and notes			Term Loans			Yankee corporate bonds and notes		Total
Balance as of April 30, 2011	$	0	$	12,165,050		$	6,408,149		$	462	$	18,573,661
Accrued discounts (premiums)		0		3,754			2,609			0		6,363
Realized gains (losses)		0		(8,467	)		10,515			0		2,048
Change in unrealized gains (losses)		0		(1,188,927	)		(57,615	)		0		(1,246,542	)
Purchases		0		0			0			0		0
Sales		0		(330,076	)		(2,739,102	)		0		(3,069,178	)
Transfers into Level 3		8,596		0			14,825,879			0		14,834,475
Transfers out of Level 3		0		0			(1,408,179	)		0		(1,408,179	)

Balance as of January 31, 2012	$	8,596	$	10,641,334		$	17,042,256		$	462	$	27,692,648

Change in unrealized gains (losses) relating to securities still held at January 31, 2012	$	0	($	1,168,515	)	($	13,957	)	$	0	($	1,182,472	)

The following is a list of common abbreviations for terms and entities which may have appeared in the portfolio of investments.

ACB — Agricultural Credit Bank

ADR — American Depository Receipt

ADS — American Depository Shares

AGC-ICC — Assured Guaranty Corporation - Insured Custody Certificates

AGM — Assured Guaranty Municipal

AMBAC — American Municipal Bond Assurance Corporation

AMT — Alternative Minimum Tax

AUD — Australian Dollar

BAN — Bond Anticipation Notes

BHAC — Berkshire Hathaway Assurance Corporation

BRL — Brazil Real

CAB — Capital Appreciation Bond

CAD — Canadian Dollar

CCAB — Convertible Capital Appreciation Bond

CDA — Community Development Authority

CDO — Collateralized Debt Obligation

CHF — Swiss Franc

COP — Certificate of Participation

CR — Custody Receipts

DKK — Danish Krone

DRIVER — Derivative Inverse Tax-Exempt Receipts

DW&P — Department of Water & Power

DWR — Department of Water Resources

ECFA — Educational & Cultural Facilities Authority

EDA — Economic Development Authority

EDFA — Economic Development Finance Authority

ETF — Exchange-Traded Fund

EUR — Euro

FFCB — Federal Farm Credit Bank

FGIC — Financial Guaranty Insurance Corporation

FHA — Federal Housing Authority

FHLB — Federal Home Loan Bank

FHLMC — Federal Home Loan Mortgage Corporation

FNMA — Federal National Mortgage Association

FSA — Farm Service Agency

GBP — Great British Pound

GDR — Global Depository Receipt

GNMA — Government National Mortgage Association

GO — General Obligation

HCFR — Healthcare Facilities Revenue

HEFA — Health & Educational Facilities Authority

HEFAR — Higher Education Facilities Authority Revenue

HFA — Housing Finance Authority

HFFA — Health Facilities Financing Authority

HKD — Hong Kong Dollar

HUF — Hungarian Forint

IBC — Insured Bond Certificate

IDA — Industrial Development Authority

IDAG — Industrial Development Agency

IDR — Industrial Development Revenue

IEP — Irish Pound

JPY — Japanese Yen

KRW — Republic of Korea Won

LIBOR — London Interbank Offered Rate

LLC — Limited Liability Company

LLP — Limited Liability Partnership

LOC — Letter of Credit

LP — Limited Partnership

MBIA — Municipal Bond Insurance Association

MFHR — Multi-Family Housing Revenue

MSTR — Municipal Securities Trust Receipts

MTN — Medium Term Note

MUD — Municipal Utility District

MXN — Mexican Peso

MYR — Malaysian Ringgit

NATL-RE — National Public Finance Guarantee Corporation

NOK — Norwegian Krone

NZD — New Zealand Dollar

PCFA — Pollution Control Finance Authority

PCR — Pollution Control Revenue

PFA — Public Finance Authority

PFFA — Public Facilities Financing Authority

PFOTER — Puttable Floating Option Tax-Exempt Receipts

plc — Public Limited Company

PLN — Polish Zloty

PUTTER — Puttable Tax-Exempt Receipts

R&D — Research & Development

RDA — Redevelopment Authority

RDFA — Redevelopment Finance Authority

REIT — Real Estate Investment Trust

ROC — Reset Option Certificates

SAVRS — Select Auction Variable Rate Securities

SBA — Small Business Authority

SEK — Swedish Krona

SFHR — Single Family Housing Revenue

SFMR — Single Family Mortgage Revenue

SGD — Singapore Dollar

SKK — Slovakian Koruna

SPDR — Standard & Poor’s Depositary Receipts

TAN — Tax Anticipation Notes

TBA — To Be Announced

TIPS — Treasury Inflation-Protected Securities

TRAN — Tax Revenue Anticipation Notes

TCR — Transferable Custody Receipts

TRY — Turkish Lira

TTFA — Transportation Trust Fund Authority

TVA — Tennessee Valley Authority

XLCA — XL Capital Assurance

ZAR — South African Rand

ITEM 2. CONTROLS AND PROCEDURES

(a) The President and Treasurer have concluded that the Wells Fargo Advantage Income Opportunities Fund (the “Trust”) disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) provide reasonable assurances that material information relating to the Trust is made known to them by the appropriate persons based on their evaluation of these controls and procedures as of a date within 90 days of the filing of this report.

(b) There were no significant changes in the Trust’s internal controls over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) that occurred during the registrant’s last fiscal quarter that has materially affected or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Wells Fargo Advantage Income Opportunities Fund

By:		/s/ Karla M. Rabusch

		Karla M. Rabusch
		President

Date: March 26, 2012

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Wells Fargo Advantage Income Opportunities Fund

By:		/s/ Karla M. Rabusch

		Karla M. Rabusch
		President

Date: March 26, 2012

By:		/s/ Kasey L. Phillips

		Kasey L. Phillips
		Treasurer

Date: March 26, 2012