First Response! Duke has returned!

Wow, this was the last thing I was expecting to find in my inbox right now:

"I am writing to you to give you an update on the status of your application
to the English Department Graduate Program at Duke University. The first
thing you should know is that we (an Admissions Committee of six that
reaches out to the entire Graduate faculty) LOVE your application.
Unfortunately, we do not as of yet have a fellowship to offer you, so we
have done the only thing we can do in the interim. We have asked the
Graduate School to place you on its official "waitlist."

Let me explain a bit further. For the sake of basic democratic equity and
simple decency, the English Department at Duke does not admit anyone to its
Ph.D. Program without "full funding." This year we received 436
applications for a very few places, which means we are required to proceed
very carefully. But the limitation placed on us does not translate in any
way to our being "luke warm" on you--in fact, we would be delighted to have
you join us should that come to pass, and we apologize for making you wait.


One more thing, which involves formal procedures here at Duke. If our
request to place you on the Graduate School waitlist is approved, you will
automatically receive an email from the Graduate School. The Graduate
School's notification email is a legal document standardized across all
departments, and it is, for that reason, a bit formal, even cold. Sorry
about that!

In the meantime, please accept our congratulations on the great strength of
your file, and let's stay in contact. I will call soon, but don't hesitate
to email or call us first:"

What to think of this?? Is it good? Is it bad? Is it good and bad? I feel excited and disappointed and pleased and jittery. I guess it's good to know that if I do eventually get in I'll be fully funded...

I'm baffled! And nervous! And eager!