Nuveen Dividend Advantage Municipal Fund 2 Announces Pricing and Placement of Private Offering of VRDP Shares

Business Wire, August 5, 2008

CHICAGO -- Nuveen Investments:

* $196 Million Offering Available only to Qualified Institutional Buyers

* Part of Plan to Redeem all the Fund's Outstanding ARPS

The Nuveen Dividend Advantage Municipal Fund 2, a diversified closed-end management investment company registered under the Investment Company Act of 1940 (AMEX: NXZ) today announced it has priced and placed with investors the private offering of $196 million of its Variable Rate Demand Preferred (VRDP) shares. The VRDP was offered only to qualified institutional buyers, as defined pursuant to Rule 144A under the Securities Act of 1933. The offering is expected to close on August 7, 2008.

Proceeds from the offering are expected to be used, in conjunction with proceeds from the creation of tender option bond (TOB) trusts by the fund, to redeem all of the fund's outstanding auction-rate preferred shares (ARPS) totaling $222 million. The fund intends to announce a formal redemption notice for the ARPS in the coming days.

The VRDP shares will include a liquidity feature that allows holders of VRDP to have their shares purchased by a liquidity provider in the event that sell orders have not been matched with purchase orders in a remarketing. The liquidity feature is provided by Deutsche Bank AG, acting through its New York Branch. VRDP dividends will be set weekly at a rate established by a remarketing agent. Conditions to the fund's issuance of VRDP will include the receipt of both short-term and long-term credit ratings for the VRDP that are in the highest rating category from two nationally recognized statistical rating organizations.

This notice is being provided pursuant to Regulation FD (fair disclosure) to ensure that the fund's common and preferred shareholders have been informed of the fund's intention to issue VRDP and to redeem its outstanding ARPS. The completion of the VRDP offering is subject to the normal conditions of closing, and there is no certainty that the redemption of ARPS will occur as scheduled.

No VRDP shares or TOBs have been registered under the Securities Act of 1933 (the Securities Act) or any state securities laws. Unless so registered, no VRDP shares or TOBs may be offered or sold in the United States except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws. This press release is neither an offer to sell nor a solicitation of an offer to buy any of these securities.

FORWARD LOOKING STATEMENTS

Certain statements made in this release are forward-looking statements. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements due to numerous factors. These include, but are not limited to:

* market developments;

* legal and regulatory developments; and

* other additional risks and uncertainties.

Nuveen and the closed-end funds managed by Nuveen and its affiliates undertake no responsibility to update publicly or revise any forward-looking statements.