nq2.htm



 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM N-Q

QUARTERLY SCHEDULE OF PORTFOLIO HOLDINGS OF REGISTERED MANAGEMENT INVESTMENT COMPANY
 
Investment Company Act file number 811-21153
 
Nuveen Maryland Dividend Advantage Municipal Fund 3
(Exact name of registrant as specified in charter)
 
Nuveen Investments
        333 West Wacker Drive, Chicago, Illinois 60606         
(Address of principal executive offices) (Zip code)
 

Kevin J. McCarthy
Vice President and Secretary
        333 West Wacker Drive, Chicago, Illinois 60606         
(Name and address of agent for service)
 
Registrant's telephone number, including area code:         312-917-7700        
 
Date of fiscal year end:            5/31          
 
Date of reporting period:         2/29/12         
 
Form N-Q is to be used by management investment companies, other than small business investment companies registered on Form N-5 (§§ 239.24 and 274.5 of this chapter), to file reports with the Commission, not later than 60 days after the close of the first and third fiscal quarters, pursuant to rule 30b1-5 under the Investment Company Act of 1940 (17 CFR 270.30b1-5). The Commission may use the information provided on Form N-Q in its regulatory, disclosure review, inspection, and policymaking roles.
 
A registrant is required to disclose the information specified by Form N-Q, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-Q unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to the Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. § 3507.

 
 
 
 
Item 1. Schedule of Investments
 

           
   
Portfolio of Investments (Unaudited) 
      
   
Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) 
      
   
February 29, 2012 
      
           
Principal 
    
Optional Call 
    
Amount (000) 
  
Description (1) 
Provisions (2) 
Ratings (3) 
Value 
   
Consumer Discretionary – 3.8% (2.6% of Total Investments) 
      
$    2,450 
  
Baltimore, Maryland, Senior Lien Convention Center Hotel Revenue Bonds, Series 2006A, 5.250%, 
9/16 at 100.00 
BB+ 
$    2,304,250 
   
9/01/39 – SYNCORA GTY Insured 
      
380 
  
Baltimore, Maryland, Subordinate Lien Convention Center Hotel Revenue Bonds, Series 2006B, 
9/16 at 100.00 
Ba2 
374,897 
   
5.875%, 9/01/39 
      
700 
  
Maryland Economic Development Corporation, Revenue Bonds, Chesapeake Bay Hyatt Conference 
12/16 at 100.00 
N/R 
455,637 
   
Center, Series 2006A, 5.000%, 12/01/31 
      
3,530 
  
Total Consumer Discretionary 
    
3,134,784 
   
Consumer Staples – 5.8% (3.8% of Total Investments) 
      
575 
  
Guam Economic Development & Commerce Authority, Tobacco Settlement Asset-Backed Bonds, 
6/17 at 100.00 
N/R 
522,894 
   
Series 2007A, 5.250%, 6/01/32 
      
20,000 
  
Puerto Rico, The Children’s Trust Fund, Tobacco Settlement Asset-Backed Bonds, Series 2005A, 
5/15 at 11.19 
BBB– 
1,370,400 
   
0.000%, 5/15/50 
      
   
Puerto Rico, The Children’s Trust Fund, Tobacco Settlement Asset-Backed Refunding Bonds, 
      
   
Series 2002: 
      
2,265 
  
5.375%, 5/15/33 
5/12 at 100.00 
BBB 
2,240,787 
560 
  
5.500%, 5/15/39 
5/12 at 100.00 
Baa3 
552,944 
23,400 
  
Total Consumer Staples 
    
4,687,025 
   
Education and Civic Organizations – 12.9% (8.6% of Total Investments) 
      
225 
  
Anne Arundel County, Maryland, Economic Development Revenue Bonds, Community College Project, 
9/12 at 102.00 
A2 
233,474 
   
Series 2002, 5.125%, 9/01/22 
      
625 
  
Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount Saint Mary’s College, 
9/16 at 100.00 
BB+ 
616,944 
   
Series 2006, 5.625%, 9/01/38 
      
690 
  
Hartford County, Maryland, Economic Development Revenue Bonds, Battelle Memorial Institute, 
4/14 at 100.00 
A+ 
707,167 
   
Series 2004, 5.250%, 4/01/34 
      
165 
  
Maryland Health and Higher Edcuational Facilities Authority, Revenue Bonds, Patterson Park 
7/20 at 100.00 
BBB– 
167,033 
   
Public Charter School Issue, Series 2010, 6.000%, 7/01/40 
      
625 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Goucher College, 
7/14 at 100.00 
A– 
641,431 
   
Series 2004, 5.125%, 7/01/34 
      
1,000 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Johns Hopkins 
7/12 at 100.00 
AA 
1,012,270 
   
University, Series 2002A, 5.000%, 7/01/32 
      
735 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Johns Hopkins 
No Opt. Call 
AA+ 
915,825 
   
University, Series 2004, Trust 1003, 13.763%, 1/01/13 (IF) 
      
925 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Maryland Institute 
6/16 at 100.00 
Baa1 
948,430 
   
College of Art, Series 2006, 5.000%, 6/01/30 
      
625 
  
Maryland Industrial Development Financing Authority, Revenue Bonds, Our Lady of Good Counsel 
5/15 at 100.00 
N/R 
636,656 
   
High School, Series 2005A, 6.000%, 5/01/35 
      
710 
  
Montgomery County Revenue Authority, Maryland, Lease Revenue Bonds, Montgomery College Arts 
5/15 at 100.00 
Aa3 
783,939 
   
Center Project, Series 2005A, 5.000%, 5/01/18 
      
1,000 
  
Morgan State University, Maryland, Student Tuition and Fee Revenue Bonds, Academic Fees and 
7/13 at 100.00 
Aa3 
1,020,000 
   
Auxiliary Facilities, Series 2003A, 5.000%, 7/01/32 – FGIC Insured 
      
800 
  
University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, Series 2006A, 
10/16 at 100.00 
AA+ 
925,672 
   
5.000%, 10/01/22 
      
   
Westminster, Maryland, Educational Facilities Revenue Bonds, McDaniel College, Series 2006: 
      
890 
  
5.000%, 11/01/31 
11/16 at 100.00 
BBB+ 
914,359 
1,000 
  
4.500%, 11/01/36 
11/16 at 100.00 
BBB+ 
951,970 
10,015 
  
Total Education and Civic Organizations 
    
10,475,170 
   
Health Care – 30.4% (20.4% of Total Investments) 
      
700 
  
Maryland Health and Higher Education Facilities Authority, Revenue Bonds, University of 
7/16 at 100.00 
A
728,868 
   
Maryland Medical System Issue, Series 2006A, 5.000%, 7/01/31 
      
445 
  
Maryland Health and Higher Education Facilities Authority, Revenue Bonds, University of 
7/19 at 100.00 
A
474,940 
   
Maryland Medical System Issue, Series 2010, 5.125%, 7/01/39 
      
300 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds Doctors Community 
No Opt. Call 
Baa3 
309,387 
   
Hospital, Refunding Series 2010, 5.750%, 7/01/38 
      
375 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Adventist 
1/22 at 100.00 
Baa2 
416,996 
   
Healthcare, Series 2011A, 6.125%, 1/01/36 
      
335 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Anne Arundel 
7/19 at 100.00 
A– 
350,142 
   
Health System, Series 2010, 5.000%, 7/01/40 
      
1,000 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Anne Arundel 
7/12 at 100.00 
AA– 
1,000,950 
   
Medical Center, Series 1998, 5.125%, 7/01/33 – AGM Insured 
      
775 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Calvert Memorial 
7/14 at 100.00 
A3 
795,522 
   
Hospital, Series 2004, 5.500%, 7/01/36 
      
1,250 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Carroll County 
7/12 at 100.00 
A3 
1,257,688 
   
General Hospital, Series 2002, 5.800%, 7/01/32 
      
1,750 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Carroll Hospital 
7/16 at 100.00 
A3 
1,781,623 
   
Center, Series 2006, 5.000%, 7/01/40 
      
1,070 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Civista Medical 
7/14 at 100.00 
N/R 
936,485 
   
Center, Series 2005, 5.000%, 7/01/37 – RAAI Insured 
      
885 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Doctors Community 
7/17 at 100.00 
Baa3 
888,230 
   
Hospital, Series 2007A, 5.000%, 7/01/29 
      
700 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Frederick Memorial 
7/12 at 100.00 
Baa1 
700,441 
   
Hospital, Series 2002, 5.125%, 7/01/35 
      
640 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Greater Baltimore 
7/12 at 100.00 
A
640,320 
   
Medical Center, Series 2001, 5.000%, 7/01/34 
      
1,000 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Kennedy Krieger 
7/13 at 100.00 
Baa3 
1,009,610 
   
Institute, Series 2003, 5.500%, 7/01/33 
      
595 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, LifeBridge Health 
7/17 at 100.00 
AA– 
637,644 
   
System, Series 2008, 5.000%, 7/01/28 – AGC Insured 
      
400 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, LifeBridge Health 
7/21 at 100.00 
A
457,284 
   
System, Series 2011, 6.000%, 7/01/41 
      
900 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, MedStar Health, 
8/14 at 100.00 
A2 
955,395 
   
Series 2004, 5.375%, 8/15/24 
      
1,690 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, MedStar Health, 
5/16 at 100.00 
AA+ 
1,774,635 
   
Series 2007, 5.250%, 5/15/46 – BHAC Insured 
      
650 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Mercy Medical 
7/12 at 100.00 
BBB 
650,494 
   
Center Issue, Series 2001, 5.625%, 7/01/31 
      
   
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Mercy Medical 
      
   
Center Issue, Series 2007A: 
      
525 
  
5.000%, 7/01/37 
7/17 at 100.00 
BBB 
512,799 
1,185 
  
5.500%, 7/01/42 
7/17 at 100.00 
BBB 
1,203,225 
850 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Peninsula Regional 
7/16 at 100.00 
A
872,763 
   
Medical Center, Series 2006, 5.000%, 7/01/36 
      
1,000 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, The Johns Hopkins 
5/20 at 100.00 
AA– 
1,079,150 
   
Health System Obligated Group Issue, Series 2010, 5.000%, 5/15/40 
      
1,845 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Union Hospital of 
7/12 at 100.00 
A3 
1,857,712 
   
Cecil County, Series 2002, 5.625%, 7/01/32 
      
   
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Washington County 
      
   
Hospital, Series 2008: 
      
1,220 
  
5.750%, 1/01/38 
1/18 at 100.00 
BBB– 
1,276,742 
500 
  
6.000%, 1/01/43 
1/18 at 100.00 
BBB– 
530,070 
95 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Western Maryland 
7/16 at 100.00 
BBB 
99,149 
   
Health, Series 2006A, 5.000%, 7/01/34 – NPFG Insured 
      
775 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Refunding Bonds, 
1/13 at 101.00 
Baa2 
791,655 
   
Adventist Healthcare, Series 2003A, 5.750%, 1/01/25 
      
900 
  
Prince George’s County, Maryland, Revenue Bonds, Dimensions Health Corporation, Series 1994, 
7/12 at 100.00 
B3 
825,831 
   
5.300%, 7/01/24 
      
24,355 
  
Total Health Care 
    
24,815,750 
   
Housing/Multifamily – 7.4% (5.0% of Total Investments) 
      
980 
  
Maryland Community Development Administration, Housing Revenue Bonds, Series 2002B, 4.950%, 
7/12 at 100.00 
Aa2 
981,568 
   
7/01/32 (Alternative Minimum Tax) 
      
1,250 
  
Maryland Economic Development Corporation, Senior Lien Student Housing Revenue Bonds, 
10/13 at 100.00 
B3 
919,600 
   
University of Maryland – Baltimore, Series 2003A, 5.625%, 10/01/23 
      
   
Maryland Economic Development Corporation, Student Housing Revenue Bonds, Sheppard Pratt 
      
   
University Village, Series 2001: 
      
20 
  
5.875%, 7/01/21 – ACA Insured 
7/12 at 100.50 
N/R 
19,751 
150 
  
6.000%, 7/01/33 – ACA Insured 
7/12 at 100.50 
N/R 
140,247 
475 
  
Maryland Economic Development Corporation, Student Housing Revenue Refunding Bonds, 
6/16 at 100.00 
AA– 
486,381 
   
University of Maryland College Park Projects, Series 2006, 5.000%, 6/01/33 – CIFG Insured 
      
   
Montgomery County Housing Opportunities Commission, Maryland, Multifamily Housing 
      
   
Development Bonds, Series 2002B: 
      
515 
  
5.100%, 7/01/33 (Alternative Minimum Tax) 
7/12 at 100.00 
Aaa 
516,009 
3,000 
  
5.200%, 7/01/44 (Alternative Minimum Tax) 
7/12 at 100.00 
Aaa 
3,004,350 
6,390 
  
Total Housing/Multifamily 
    
6,067,906 
   
Housing/Single Family – 8.5% (5.7% of Total Investments) 
      
1,470 
  
Maryland Community Development Administration Department of Housing and Community 
9/18 at 100.00 
Aa2 
1,554,569 
   
Development, Residential Revenue Bonds, Series 2008C, 5.375%, 9/01/39 
      
505 
  
Maryland Community Development Administration Department of Housing and Community 
3/20 at 100.00 
Aa2 
542,865 
   
Development, Residential Revenue Bonds, Series 2010B, 5.250%, 9/01/35 
      
1,160 
  
Maryland Community Development Administration, Department of Housing and Community 
9/14 at 100.00 
Aa2 
1,170,116 
   
Development, Residential Revenue Bonds, Series 2005,4.900%, 9/01/36 (Alternative 
      
   
Minimum Tax) (UB) 
      
   
Maryland Community Development Administration, Department of Housing and Community 
      
   
Development, Residential Revenue Bonds, Series 2006: 
      
1,200 
  
4.875%, 9/01/26 (Alternative Minimum Tax) (UB) 
3/16 at 100.00 
Aa2 
1,230,240 
595 
  
4.900%, 9/01/26 (Alternative Minimum Tax) (UB) 
9/15 at 100.00 
Aa2 
608,405 
815 
  
4.900%, 9/01/31 (Alternative Minimum Tax) (UB) 
9/16 at 100.00 
Aa2 
833,998 
   
Maryland Community Development Administration, Department of Housing and Community 
      
   
Development, Residential Revenue Bonds, Series 2007: 
      
350 
  
5.000%, 9/01/27 (Alternative Minimum Tax) (UB) 
3/17 at 100.00 
Aa2 
361,644 
620 
  
4.850%, 9/01/37 (Alternative Minimum Tax) (UB) 
3/17 at 100.00 
Aa2 
627,552 
6,715 
  
Total Housing/Single Family 
    
6,929,389 
   
Industrials – 2.7% (1.8% of Total Investments) 
      
1,590 
  
Maryland Economic Development Corporation, Economic Development Revenue Bonds, 
6/20 at 100.00 
Baa3 
1,681,838 
   
Transportation Facilities Project, Series 2010A, 5.750%, 6/01/35 
      
510 
  
Maryland Economic Development Corporation, Solid Waste Disposal Revenue Bonds, Waste 
4/12 at 101.00 
BBB 
516,849 
   
Management Inc., Series 2002, 4.600%, 4/01/16 (Alternative Minimum Tax) 
      
2,100 
  
Total Industrials 
    
2,198,687 
   
Long-Term Care – 5.9% (4.0% of Total Investments) 
      
1,050 
  
Baltimore County, Maryland, Revenue Bonds, Oak Crest Village, Series 2007A, 5.000%, 1/01/37 
1/17 at 100.00 
BBB+ 
1,059,135 
380 
  
Gaithersburg, Maryland, Economic Development Revenue Bonds, Asbury Methodist Homes Inc., 
1/20 at 100.00 
N/R 
420,713 
   
Series 2009B, 6.000%, 1/01/23 
      
1,500 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Charlestown 
1/21 at 100.00 
N/R 
1,679,715 
   
Community Issue, Series 2010, 6.250%, 1/01/45 
      
400 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Edenwald, Series 
7/16 at 100.00 
N/R 
399,032 
   
2006A, 5.400%, 1/01/31 
      
   
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, King Farm 
      
   
Presbyterian Community, Series 2007A: 
      
280 
  
5.000%, 1/01/17 
No Opt. Call 
N/R 
273,986 
520 
  
5.250%, 1/01/27 
1/17 at 100.00 
N/R 
463,434 
540 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Mercy Ridge 
7/17 at 100.00 
A– 
543,893 
   
Retirement Community, Series 2007, 4.750%, 7/01/34 
      
4,670 
  
Total Long-Term Care 
    
4,839,908 
   
Tax Obligation/General – 8.8% (5.9% of Total Investments) 
      
380 
  
Carroll County, Maryland, Consolidated Public Improvement Bonds, Series 2005A, 5.000%, 12/01/16 
12/15 at 100.00 
AA+ 
444,159 
710 
  
Frederick, Maryland, General Obligation Bonds, Series 2005, 5.000%, 8/01/16 – NPFG Insured 
8/15 at 100.00 
AA 
818,666 
1,000 
  
Maryland National Capital Park Planning Commission, Prince George’s County, General Obligation 
1/14 at 100.00 
AAA 
1,081,110 
   
Bonds, Park Acquisition and Development, Series 2004EE-2, 5.000%, 1/15/17 
      
1,850 
  
Montgomery County, Maryland, Consolidated General Obligation Public Improvement Bonds, Series 
No Opt. Call 
AAA 
2,128,962 
   
2005A, 5.000%, 7/01/15 
      
1,440 
  
Montgomery County, Maryland, Consolidated General Obligation Public Improvement Bonds, Series 
No Opt. Call 
AAA 
1,705,781 
   
2006A, 5.000%, 5/01/16 
      
1,000 
  
St. Mary’s County, Maryland, General Obligation Hospital Bonds, Series 2002, 5.000%, 10/01/12 
No Opt. Call 
AA 
1,029,110 
6,380 
  
Total Tax Obligation/General 
    
7,207,788 
   
Tax Obligation/Limited – 33.0% (22.1% of Total Investments) 
      
185 
  
Anne Arundel County, Maryland, Special Obligation Bonds, National Business Park – North 
7/18 at 102.00 
N/R 
191,640 
   
Project, Series 2010, 6.100%, 7/01/40 
      
130 
  
Frederick County, Maryland, Lake Linganore Village Community Development Special Obligation 
7/12 at 100.00 
N/R 
130,601 
   
Bonds, Series 2001A, 5.600%, 7/01/20 – RAAI Insured 
      
   
Fredrick County, Maryland, Special Obligation Bonds, Urbana Community Development Authority, 
      
   
Series 2010A: 
      
1,150 
  
5.000%, 7/01/30 
7/20 at 100.00 
A– 
1,245,646 
305 
  
5.000%, 7/01/40 
7/20 at 100.00 
A– 
319,268 
450 
  
Hyattsville, Maryland, Special Obligation Bonds, University Town Center Project, Series 2004, 
7/14 at 102.00 
N/R 
450,815 
   
5.750%, 7/01/34 
      
5,000 
  
Maryland Department of Transportation, Consolidated Transportation Revenue Bonds, Series 2002, 
No Opt. Call 
AAA 
5,967,200 
   
5.500%, 2/01/16 
      
450 
  
Maryland Economic Development Corporation, Lease Revenue Bonds, Montgomery County Town 
9/12 at 100.00 
AA+ 
461,705 
   
Square Parking Garage, Series 2002A, 5.000%, 9/15/13 
      
2,935 
  
Maryland Economic Development Corporation, Lease Revenue Bonds, Montgomery County Wayne 
9/12 at 100.00 
AA+ 
3,010,136 
   
Avenue Parking Project, Series 2002A, 5.250%, 9/15/16 
      
   
Maryland Stadium Authority, Lease Revenue Bonds, Montgomery County Conference Center 
      
   
Facilities, Series 2003: 
      
1,465 
  
5.000%, 6/15/21 
6/13 at 100.00 
AA+ 
1,543,260 
1,620 
  
5.000%, 6/15/23 
6/13 at 100.00 
AA+ 
1,703,090 
1,410 
  
Prince George’s County, Maryland, Special Obligation Bonds, National Harbor Project, Series 
7/15 at 100.00 
N/R 
1,378,924 
   
2005, 5.200%, 7/01/34 
      
542 
  
Prince George’s County, Maryland, Special Tax District Bonds, Victoria Falls Project, Series 
7/13 at 100.00 
N/R 
522,195 
   
2005, 5.250%, 7/01/35 
      
1,200 
  
Puerto Rico Highway and Transportation Authority, Highway Revenue Bonds, Series 2007N, 5.250%, 
No Opt. Call 
Baa1 
1,306,392 
   
7/01/31 – AMBAC Insured 
      
1,605 
  
Puerto Rico Infrastructure Financing Authority, Special Tax Revenue Bonds, Series 2005C, 
No Opt. Call 
BBB+ 
1,804,855 
   
5.500%, 7/01/26 – AMBAC Insured 
      
   
Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Bonds, 
      
   
Series 2002G: 
      
1,000 
  
5.250%, 7/01/17 
7/12 at 100.00 
Baa1 
1,008,330 
1,205 
  
5.250%, 7/01/20 
7/12 at 100.00 
Baa1 
1,211,230 
1,275 
  
5.250%, 7/01/21 
7/12 at 100.00 
Baa1 
1,280,980 
1,500 
  
Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, First Subordinate Series 
8/19 at 100.00 
A+ 
1,678,830 
   
2009A, 5.750%, 8/01/37 
      
   
Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue Bonds, Series 2007A: 
      
7,000 
  
0.000%, 8/01/40 – NPFG Insured 
No Opt. Call 
Aa2 
1,495,830 
210 
  
0.000%, 8/01/47 – AMBAC Insured 
No Opt. Call 
Aa2 
29,373 
125 
  
Puerto Rico, Highway Revenue Bonds, Highway and Transportation Authority, Series 2003AA, 
No Opt. Call 
A3 
143,975 
   
5.500%, 7/01/19 – NPFG Insured 
      
30,762 
  
Total Tax Obligation/Limited 
    
26,884,275 
   
Transportation – 3.0% (2.0% of Total Investments) 
      
2,210 
  
Maryland Transportation Authority, Revenue Bonds, Transportation Facilities Projects, Series 
7/17 at 100.00 
AA– 
2,460,481 
   
2007, 5.000%, 7/01/30 – AGM Insured (UB) 
      
   
U.S. Guaranteed – 20.3% (13.6% of Total Investments) (4) 
      
1,000 
  
Annapolis, Maryland, General Obligation Public Improvement Refunding Bonds, Series 2002, 
4/12 at 101.00 
AA (4) 
1,013,780 
   
4.375%, 4/01/17 (Pre-refunded 4/01/12) 
      
1,000 
  
Baltimore Board of School Commissioners, Maryland, Revenue Bonds, City Public School System, 
5/13 at 100.00 
AA+ (4) 
1,056,110 
   
Series 2003A, 5.000%, 5/01/15 (Pre-refunded 5/01/13) 
      
255 
  
Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 2006C, 5.000%, 7/01/31 
7/16 at 100.00 
AA (4) 
302,920 
   
(Pre-refunded 7/01/16) – AMBAC Insured 
      
2,200 
  
Maryland Economic Development Corporation, Lease Revenue Bonds, Department of Transportation 
6/12 at 100.50 
Aaa 
2,236,630 
   
Headquarters Building, Series 2002, 4.750%, 6/01/22 (Pre-refunded 6/01/12) 
      
285 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Helix Health, 
No Opt. Call 
N/R (4) 
320,485 
   
Series 1997, 5.000%, 7/01/17 – AMBAC Insured (ETM) 
      
725 
  
Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, LifeBridge Health 
7/14 at 100.00 
A2 (4) 
804,032 
   
System, Series 2004A, 5.125%, 7/01/34 (Pre-refunded 7/01/14) 
      
585 
  
Maryland Transportation Authority, Revenue Refunding Bonds, Transportation Facilities 
No Opt. Call 
AAA 
667,029 
   
Projects, First Series 1978, 6.800%, 7/01/16 – AMBAC Insured (ETM) 
      
4,860 
  
Prince George’s County Housing Authority, Maryland, GNMA Collateralized Mortgage Revenue 
11/12 at 100.00 
N/R (4) 
5,011,778 
   
Bonds, Fairview and Hillside Projects, Series 2002A, 4.700%, 11/20/22 (Pre-refunded 11/20/12) 
      
1,000 
  
Puerto Rico Public Finance Corporation, Commonwealth Appropriation Bonds, Series 1998A, 
No Opt. Call 
Aaa 
1,207,730 
   
5.125%, 6/01/24 – AMBAC Insured 
      
575 
  
Puerto Rico, Highway Revenue Bonds, Highway and Transportation Authority, Series 2003AA, 
No Opt. Call 
A3 (4) 
741,187 
   
5.500%, 7/01/19 – NPFG Insured 
      
2,000 
  
University of Maryland, Auxiliary Facility and Tuition Revenue Bonds, Series 2002A, 5.125%, 
4/12 at 100.00 
AA+ (4) 
2,008,920 
   
4/01/22 (Pre-refunded 4/01/12) 
      
1,000 
  
Washington Suburban Sanitary District, Montgomery and Prince George’s Counties, Maryland, 
6/15 at 100.00 
AAA 
1,145,368 
   
Sewerage Disposal Bonds, Series 2005, 5.000%, 6/01/16 (Pre-refunded 6/01/15) 
      
15,485 
  
Total U.S. Guaranteed 
    
16,515,969 
   
Utilities – 1.5% (1.0% of Total Investments) 
      
1,250 
  
Maryland Energy Financing Administration, Revenue Bonds, AES Warrior Run Project, Series 1995, 
5/12 at 100.00 
N/R 
1,257,625 
   
7.400%, 9/01/19 (Alternative Minimum Tax) 
      
   
Water and Sewer – 5.2% (3.5% of Total Investments) 
      
2,590 
  
Baltimore, Maryland, Revenue Refunding Bonds, Wastewater Projects, Series 2002A, 5.125%, 
7/12 at 100.00 
AA 
2,622,867 
   
7/01/42 – NPFG Insured 
      
345 
  
Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 2006C, 5.000%, 7/01/31 – 
7/16 at 100.00 
AA 
382,146 
   
AMBAC Insured 
      
660 
  
Baltimore, Maryland, Wastewater Project Revenue Bonds, Series 2007D, 5.000%, 7/01/32 – 
7/17 at 100.00 
AA 
724,818 
   
AMBAC Insured 
      
430 
  
Maryland Water Quality Financing Administration, Revolving Loan Fund Revenue Bonds, Series 
No Opt. Call 
AAA 
497,659 
   
2005A, 5.000%, 9/01/15 
      
4,025 
  
Total Water and Sewer 
    
4,227,490 
$ 141,287 
  
Total Investments (cost $115,190,817) – 149.2% 
    
121,702,247 
   
Floating Rate Obligations – (5.2)% 
    
(4,255,000) 
   
MuniFund Term Preferred Shares, at Liquidation Value – (46.3)% (5) 
    
(37,766,000) 
   
Other Assets Less Liabilities – 2.3% 
    
1,872,892 
   
Net Assets Applicable to Common Shares – 100% 
    
$    81,554,139 
 

 
 
 
 
Fair Value Measurements
 
Fair value is defined as the price that the Fund would receive upon selling an investment or transferring a liability in an orderly transaction to an independent buyer in the principal or most advantageous market for the investment. A three-tier hierarchy is used to maximize the use of observable market data and minimize the use of unobservable inputs and to establish classification of fair value measurements for disclosure purposes. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability. Observable inputs are based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Unobservable inputs are based on the best information available in the circumstances. The three-tier hierarchy of inputs is summarized in the three broad levels listed below:
 
Level 1 – Quoted prices in active markets for identical securities.
 
Level 2 – Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
 
Level 3 – Significant unobservable inputs (including management's assumptions in determining the fair value of investments).
 
The inputs or methodologies used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of the Fund's fair value measurements as of February 29, 2012:
 
                         
   
Level 1
    
Level 2
    
Level 3
    
Total
  
Investments: 
                        
Municipal Bonds 
   $ —     $ 121,702,247     $ —     $ 121,702,247  
 
 
The following is a reconciliation of the Fund's Level 3 investments held at the beginning and end of the measurement period:
 
       
   
Level 3
  
   
Municipal Bonds
  
Balance at the beginning of period 
   $ 606,465  
Gains (losses): 
        
Net realized gains (losses) 
     —  
Net change in unrealized appreciation (depreciation) 
     218,377  
Purchases at cost 
     —  
Sales at proceeds 
     —  
Net discounts (premiums) 
     989  
Transfers in to 
     —  
Transfers out of 
     (825,831 ) 
Balance at the end of period 
   $ —  
 
During the period ended February 29, 2012, the Fund recognized no significant transfers to or from Level 1 or Level 2. Transfers in and/or out of Level 3 are shown using end of period values.
 
Income Tax Information
 
The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to timing differences in recognizing taxable market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate securities reflected as financing transactions, if any. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts on the Statement of Assets and Liabilities presented in the annual report, based on their federal tax basis treatment; temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset value of the Fund.
 
At February 29, 2012, the cost of investments was $111,221,625.
       
Gross unrealized appreciation and gross unrealized depreciation of investments at February 29, 2012, 
      
were as follows: 
      
       
Gross unrealized: 
      
Appreciation 
   $ 7,652,767  
Depreciation 
     (1,427,157 ) 
Net unrealized appreciation (depreciation) of investments 
   $ 6,225,610  
 

     
(1) 
  
All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares 
   
unless otherwise noted. 
(2) 
  
Optional Call Provisions: Dates (month and year) and prices of the earliest optional call or redemption. There 
   
may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be 
   
subject to periodic principal paydowns. 
(3) 
  
Ratings: Using the highest of Standard & Poor’s Group ("Standard & Poor's"), Moody’s Investors Service, Inc. 
   
("Moody's") or Fitch, Inc. ("Fitch") rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB 
   
by Fitch are considered to be below investment grade. Holdings designated N/R are not rated by any of 
   
these national rating agencies. 
(4) 
  
Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, 
   
which ensure the timely payment of principal and interest. Certain bonds backed by U.S. Government or 
   
agency securities are regarded as having an implied rating equal to the rating of such securities. 
(5) 
  
MuniFund Term Preferred Shares, at Liquidation Value as a percentage of Total Investments is 31.0%. 
N/R 
  
Not rated. 
(ETM) 
  
Escrowed to maturity. 
(IF) 
  
Inverse floating rate investment. 
(UB) 
  
Underlying bond of an inverse floating rate trust reflected as a financing transaction. 
 
 

 
 
 
 
Item 2. Controls and Procedures.

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

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

 
 
 
 
 
SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
(Registrant)  Nuveen Maryland Dividend Advantage Municipal Fund 3 
 
By (Signature and Title)     /s/ Kevin J. McCarthy                    
                                                   Kevin J. McCarthy
                                                   Vice President and Secretary
 
Date         April 27, 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.
 
By (Signature and Title)     /s/ Gifford R. Zimmerman                    
                                                    Gifford R. Zimmerman
                                                  Chief Administrative Officer (principal executive officer) 
 
Date         April 27, 2012        
 
By (Signature and Title)     /s/ Stephen D. Foy                              
                                                   Stephen D. Foy
                                                  Vice President and Controller (principal financial officer) 
 
Date         April 27, 2012