<PAGE>
Dreyfus
Money Market
Instruments, Inc.
Semi-Annual
Report
June 30, 1996
<PAGE>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
Dreyfus Money Market Instruments, Inc. completed its latest
semi-annual fiscal period June 30, 1996. During this period interest rates
initially declined, and then began a rise that has lasted through the end of
the reporting period.
We are pleased to report that the Fund's Money Market Series
provided an annualized yield of 4.67% to its shareholders for this six-month
reporting period. After taking into account the effect of compounding the
annualized effective yield was 4.77%.* The Fund's Government Securities
Series provided an annualized yield of 4.50% and an annualized effective
yield of 4.60% after compounding for the same period.*
THE ECONOMY
The U.S. economy is rebounding in 1996 following its midcycle
growth slowdown of last year. Yet overall corporate profit growth is slowing
this year. Although actual inflation remains steady, faster economic growth
has reignited fears of higher future inflation. This has pushed bond yields
higher and built expectations of a Federal Reserve Board tightening in coming
months.
Economic growth has accelerated since year-end. The first quarter's
2.3% real Gross Domestic Product growth brought with it a demand rebound that
depleted inventories. Even stronger second quarter growth is apparent, led by
manufacturers' attempts to rebuild inventories. In addition, steady job
creation continues to support growth in consumer incomes and spending. As
yet, there are few indications of economic cooling. Some previously strong
capital goods sectors may now be slowing, but overall economic growth is
broadening to more industries. Despite better economic performance this year
than last, profit growth may have peaked last year.
Non-oil price inflation has remained tame this year, although
surging oil prices boosted overall inflation temporarily this spring.
Nevertheless, signs of a faster economic pace have reignited fears of higher
future inflation, especially coming from upward pressure on wages as the
labor market tightens. Thus, bond yields have risen substantially this year.
Short-term market rates are also higher in expectation of Federal Reserve
tightening in coming months. So far, long-term rates have risen much more than
short-term rates, forcing the yield curve to steepen. A steep yield curve is
usually supportive of sustained growth in the real economy.
As we look forward, the question arises whether the higher interest
rates already in place and those in prospect will effectively cool the
economy. At present, however, any advance signs of an eventual cooling off in
the economy are hard to discern. The preoccupation at present is with the
economy's impressive strength, and the problems such growth could create.
THE MONEY MARKET AND THE PORTFOLIOS
During the latest six months, the money markets generally have
reflected the underlying economic conditions described in the preceding
section.
<PAGE>
At the end of January, shortly after the latest semi-annual fiscal
period began, the Federal Reserve Board, still concerned about slack in the
economy, lowered interest rates by one quarter of one percent. The Federal
Funds rate was set at 5-1/4% and the discount rate at 5%.
As the previous year ended and a new one began, we had prepared
each Series for the possibility of lower rates by extending average
maturities.
After the Fed's January 31 action, economic statistics began to
indicate that business activity was accelerating. By springtime this was
beginning to change the course of interest rates. Short-term yields started
firming. In recognition of this market trend, we began gradually to shorten
average maturities as opportunities arose. To make the Series' returns as
attractive as possible, we tried to maintain maturities that were a bit
longer than the market average. However, in the face of rising concern about
a possible revival of inflation, average maturities were reduced as the year
proceeded.
Currently, the market clearly expects another change in course by
the Federal Reserve. The central bank has not revised its interest rate
targets since late January. Accordingly, we have been positioning the
portfolio for the possibility of higher rates.
The political season is now getting underway with a vengeance, with
the two major party conventions scheduled for August, followed by the
election campaign itself. This also must be factored into the interest rate
equation. Recent history demonstrates, however, that political nominating
conventions in past years have not dissuaded the Federal Reserve from taking
any action it deems necessary to manage the money supply and interest rates.
We appreciate the opportunity to manage money on your behalf and
will continue our best efforts to bring you rewarding returns.
Sincerely,
Patricia A. Larkin
Senior Portfolio Manager
July 18, 1996
New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc., Money Market Series
- ------------------------------------------------------------------------------
Statement of Investments June 30, 1996 (Unaudited)
Principal
Negotiable Bank Certificates of Deposit--27.9% Amount Value
- --------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Bayerische Vereinsbank AG (Yankee)
5.20%, 2/24/97................................................... $ 7,000,000 $ 7,000,000
Fuji Bank Ltd. (Yankee)
5.49%, 8/22/96................................................... 2,000,000 2,000,000
Industrial Bank of Japan Ltd. (Yankee)
5.70%, 1/6/97.................................................... 6,000,000 6,000,000
Mitsubishi Bank Ltd. (London)
5.24%, 8/30/96................................................... 4,000,000 4,000,065
Societe Generale (Yankee)
5.34%, 3/24/97................................................... 7,000,000 7,000,000
Sumitomo Bank Ltd. (Yankee)
5.66%, 10/15/96.................................................. 6,000,000 6,000,000
Union Bank California, N.A.
5.68%, 12/17/96.................................................. 6,000,000 6,000,000
------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $38,000,065)............................................... $ 38,000,065
------------
------------
Bankers' Acceptances--4.3%
- ---------------------------------------------------------------------
Dai-Ichi Kangyo Bank Ltd. (Yankee)
5.54%, 9/24/96
(cost $5,923,642)................................................ $ 6,000,000 $ 5,923,642
------------
------------
Commercial Paper--13.8%
- ---------------------------------------------------------------------
Abbey National North America
5.20%, 7/26/96................................................... $ 3,000,000 $ 2,989,438
General Motors Acceptance Corp.
5.60%, 12/27/96.................................................. 6,000,000 5,839,795
Lehman Brothers Holdings Inc.
5.45%, 7/10/96................................................... 6,000,000 5,991,855
UBS Finance (DE) Inc.
5.55%, 7/1/96.................................................... 4,000,000 4,000,000
------------
TOTAL COMMERCIAL PAPER
(cost $18,821,088)............................................... $ 18,821,088
------------
------------
Bank Notes--5.9%
- ---------------------------------------------------------------------
PNC Bank N.A.
5.50%, 9/18/96 .................................................. $ 5,000,000 $ 5,000,806
Society National Bank, Cleveland
5.92%, 5/21/97 (a)............................................... 3,000,000 3,000,000
------------
TOTAL BANK NOTES
(cost $8,000,806)................................................ $ 8,000,806
------------
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc., Money Market Series
- ------------------------------------------------------------------------------
Statement of Investments (continued) June 30, 1996 (Unaudited)
Principal
Corporate Notes--10.3% Amount Value
- --------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Bear Stearns Companies Inc.
5.38%, 2/18/97 (a)............................................... $ 7,000,000 $ 7,000,000
Merrill Lynch & Co. Inc.
5.56%, 7/2/96 (a)................................................ 6,000,000 5,999,997
PNC Bank N.A.
5.49%, 5/15/97 (a)............................................... 1,000,000 999,143
------------
TOTAL CORPORATE NOTES
(cost $13,999,140)............................................... $ 13,999,140
------------
------------
U.S Government Agencies--29.3%
- ---------------------------------------------------------------------
Federal Farm Credit Bank
Floating Rate Notes
5.33%-5.48%, 11/7/96-10/23/98 (a)................................ $ 20,000,000 $ 19,987,911
Federal National Mortgage Association
Floating Rate Notes
5.46%, 6/20/97 (a)............................................... 20,000,000 19,998,191
------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $39,986,102)............................................... $ 39,986,102
------------
------------
Time Deposits--2.7%
- ---------------------------------------------------------------------
Republic National Bank of New York (London)
5.38%, 7/1/96
(cost $3,681,000)................................................ $ 3,681,000 $ 3,681,000
------------
------------
Repurchase Agreements--4.4%
- ---------------------------------------------------------------------
Lanston (Aubrey G.) & Co., Inc.
dated 6/28/96, due 7/1/96 in the amount of
$6,002,700 (fully collateralized by $6,241,000
U.S. Treasury Bills due 12/26/96, value $6,079,088)
(cost $6,000,000)................................................ $ 6,000,000 $ 6,000,000
------------
------------
TOTAL INVESTMENTS
(cost $134,411,843).................................... 98.6% $134,411,843
------ ------------
------ ------------
CASH AND RECEIVABLES (NET)................................. 1.4% $ 1,898,163
------ ------------
------ ------------
NET ASSETS................................................. 100.0% $136,310,006
------ ------------
------ ------------
</TABLE>
Note to Statement of Investments;
- ------------------------------------------------------------------------------
(a) Variable interest rates are subject to change periodically.
See independent accountants' review report and notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc., Government Securities Series
- ------------------------------------------------------------------------------
Statement of Investments June 30, 1996 (Unaudited)
Annualized
Yield on
Date of Principal
U.S. Treasury Bills--38.7% Purchase Amount Value
- -------------------------------------------------------------- ---------- ------------ ------------
<S> <C> <C> <C>
7/25/96................................................... 5.72% $ 35,000,000 $ 34,873,467
8/22/96................................................... 5.87 35,000,000 34,719,597
10/17/96.................................................. 5.58 20,000,000 19,682,600
11/14/96.................................................. 5.46 10,000,000 9,804,500
2/6/97.................................................... 4.88 10,000,000 9,715,222
3/6/97.................................................... 5.33 20,000,000 19,303,189
4/3/97.................................................... 5.64 15,000,000 14,385,900
5/1/97.................................................... 5.58 25,000,000 23,885,333
------------
TOTAL U.S. TREASURY BILLS
(cost $166,369,808)....................................... $166,369,808
------------
------------
U.S. Treasury Notes--15.1%
- --------------------------------------------------------------
7.875%, 7/15/96........................................... 5.11% $ 10,000,000 $ 10,010,111
6.250%, 8/31/96........................................... 5.19 10,000,000 10,009,783
4.375%, 11/15/96.......................................... 5.37 25,000,000 24,896,245
6.625%, 3/31/97........................................... 5.57 20,000,000 20,124,286
------------
TOTAL U.S. TREASURY NOTES
(cost $65,040,425)........................................ $ 65,040,425
------------
------------
Repurchase Agreements--45.2%
- --------------------------------------------------------------
Barclays De Zoette Wedd Securities, Inc.
dated 6/28/96, due 7/1/96 in the amount of $5,261,191
(fully collateralized by $5,210,000 U.S. Treasury
Notes, 6.875%, due 3/31/97, value $5,343,996)............. 5.00% $ 5,259,000 $ 5,259,000
Daiwa Securities America Inc.
dated 6/28/96, due 7/1/96 in the amount of $50,220,007
(fully collateralized by $50,000,000 U.S. Treasury
Notes, 6.875%, due 10/31/96, value $50,813,519)........... 5.50 50,197,000 50,197,000
Goldman, Sachs & Co.
dated 6/28/96, due 7/1/96 in the amount of $52,023,292
(fully collateralized by $52,395,000 U.S. Treasury
Notes, 6.75%, due 5/31/97, value $53,133,371)............. 5.38 52,000,000 52,000,000
Lanston (Aubrey G.) & Co., Inc.
dated 6/28/96, due 7/1/96 in the amount of $60,027,250
(fully collateralized by $62,312,000 U.S. Treasury
Bills, due 12/26/96, value $60,722,213)................... 5.45 60,000,000 60,000,000
Nomura Securities International, Inc.
dated 6/28/96, due 7/1/96 in the amount of $27,012,094
(fully collateralized by $26,675,000 U.S. Treasury
Notes, 6.125%, due 12/31/96, value $27,566,945)........... 5.38 27,000,000 27,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(cost $194,456,000)....................................... $194,456,000
------------
------------
TOTAL INVESTMENTS (cost $425,866,233).............. 99.0% $425,866,233
------ ------------
------ ------------
CASH AND RECEIVABLES (NET)......................... 1.0% $ 4,502,869
------ ------------
------ ------------
NET ASSETS......................................... 100.0% $430,369,102
------ ------------
------ ------------
</TABLE>
See independent accountants' review report and notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
Money Government
Market Securities
Series Series
------------ ------------
<S> <C> <C>
ASSETS:
Investments in securities, at value (including repurchase agreements
of $6,000,000 and $194,456,000 for the Money Market Series and
the Government Securities Series)--Note 2(a,b).................. $134,411,843 $425,866,233
Cash.............................................................. 892,452 3,663,030
Interest receivable............................................... 1,107,592 1,132,576
Prepaid expenses.................................................. 41,050 74,087
------------ ------------
136,452,937 430,735,926
------------ ------------
LIABILITIES:
Due to The Dreyfus Corporation and affiliates..................... 70,208 218,939
Accrued expenses.................................................. 72,723 147,885
------------ ------------
142,931 366,824
------------ ------------
NET ASSETS............................................................ $136,310,006 $430,369,102
------------ ------------
------------ ------------
REPRESENTED BY:
Paid-in capital................................................... $136,328,520 $430,379,309
Accumulated net realized (loss) on investments.................... (18,514) (10,207)
------------ ------------
NET ASSETS, at value.................................................. $136,310,006 $430,369,102
------------ ------------
------------ ------------
Shares of Common Stock outstanding:
Money Market Series
(5 billion shares of $.01 par value Common Stock authorized).... 136,312,020
------------
------------
Government Securities Series
(10 billion shares of $.01 par value Common Stock authorized)... 430,379,309
------------
------------
NET ASSET VALUE, offering and redemption price per share:
Money Market Series
($136,310,006 / 136,312,020 shares)............................. $1.00
-----
-----
Government Securities Series
($430,369,102 / 430,379,309 shares)............................. $1.00
------
------
</TABLE>
See independent accountants' review report and notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
Statement of Operations six months ended June 30, 1996 (Unaudited)
Money Government
Market Securities
Series Series
---------- -----------
<S> <C> <C>
INVESTMENT INCOME:
Interest Income......................................................... $3,917,081 $11,778,634
---------- -----------
Expenses--Note 2(c):
Management fee--Note 3(a)............................................. $ 350,568 $ 1,086,878
Shareholder servicing costs--Note 3(b)................................ 220,218 731,977
Custodian fees........................................................ 18,786 66,703
Registration fees..................................................... 14,785 16,891
Directors' fees and expenses--Note 3(c)............................... 10,053 30,360
Professional fees..................................................... 8,250 22,676
Prospectus and shareholders' reports.................................. 5,536 6,131
Miscellaneous......................................................... 6,975 491
---------- -----------
Total Expenses.................................................. 635,171 1,962,107
---------- -----------
INVESTMENT INCOME--NET...................................................... 3,281,910 9,816,527
NET REALIZED (LOSS) ON INVESTMENTS--Note 2(b)............................... (18,514) (10,207)
---------- -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $3,263,396 $ 9,806,320
---------- -----------
---------- -----------
</TABLE>
See independent accountants' review report and notes to financial statements.
<PAGE>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Money Market Series Government Securities Series
------------------------------- -----------------------------------
Year Ended Six Months Ended Year Ended Six Months Ended
December 31, June 30, 1996 December 31, June 30, 1996
1995 (Unaudited) 1995 (Unaudited)
------------- ------------- --------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income--net.................... $ 8,232,793 $ 3,281,910 $ 23,244,165 $ 9,816,527
Net realized gain (loss) on investments... 88,254 (18,514) 6,504 (10,207)
------------- ------------- --------------- -------------
Net Increase In Net Assets
Resulting From Operations........... 8,321,047 3,263,396 23,250,669 9,806,320
------------- ------------- --------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net.................... (8,232,793) (3,281,910) (23,244,165) (9,816,527)
Net realized gain on investments.......... -- (1,686) -- (6,324)
------------- ------------- --------------- -------------
Total Dividends......................... (8,232,793) (3,283,596) (23,244,165) (9,822,851)
------------- ------------- --------------- -------------
CAPITAL STOCK TRANSACTIONS
($1.00 per share):
Net proceeds from shares sold............. 324,551,779 168,529,952 1,238,511,882 730,919,020
Dividends reinvested...................... 6,132,624 2,422,447 16,345,565 6,741,481
Cost of shares redeemed................... (357,148,554) (178,794,568) (1,289,375,994) (738,718,369)
------------- ------------- --------------- -------------
(Decrease) In Net Assets From
Capital Stock Transactions.......... (26,464,151) (7,842,169) (34,518,547) (1,057,868)
------------- ------------- --------------- -------------
Total (Decrease) In Net Assets.... (26,375,897) (7,862,369) (34,512,043) (1,074,399)
NET ASSETS:
Beginning of period....................... 170,548,272 144,172,375 465,955,544 431,443,501
------------- ------------- --------------- -------------
End of period............................. $ 144,172,375 $ 136,310,006 $ 431,443,501 $ 430,369,102
------------- ------------- --------------- -------------
------------- ------------- --------------- -------------
</TABLE>
See independent accountants' review report and notes to financial statements.
<PAGE>
Dreyfus Money Market Instruments, Inc., Money Market Series
- ------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Series' financial statements.
<TABLE>
<CAPTION>
Year Ended December 31, Six Months Ended
--------------------------------------------------------- June 30, 1996
PER SHARE DATA: 1991 1992 1993 1994 1995 (Unaudited)
----- ----- ----- ----- ----- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Investment Operations;
Investment income--net................ .058 .035 .026 .034 .053 .023
----- ----- ----- ----- ----- -----
Distributions;
Dividends from investment
income--net......................... (.058) (.035) (.026) (.034) (.053) (.023)
----- ----- ----- ----- ----- -----
Net asset value, end of period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL INVESTMENT RETURN................... 5.95% 3.51% 2.64% 3.42% 5.46% 4.71%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.......................... .72% .75% .83% .88% .84% .90%*
Ratio of net investment income to
average net assets.................. 5.83% 3.48% 2.62% 3.35% 5.33% 4.67%*
Net Assets, end of period
(000's Omitted)..................... $282,356 $242,326 $207,537 $170,548 $144,172 $136,310
<FN>
- ---------------------
* Annualized.
</TABLE>
See independent acccountants' review report and notes to financial statements.
<PAGE>
Dreyfus Money Market Instruments, Inc., Government Securities Series
- ------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Series' financial statements.
<TABLE>
<CAPTION>
Year Ended December 31, Six Months Ended
--------------------------------------------------------- June 30, 1996
PER SHARE DATA: 1991 1992 1993 1994 1995 (Unaudited)
----- ----- ----- ----- ----- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Investment Operations;
Investment income--net................ .055 .034 .025 .033 .051 .023
----- ----- ----- ----- ----- -----
Distributions;
Dividends from investment
income--net......................... (.055) (.034) (.025) (.033) (.051) (.023)
----- ----- ----- ----- ----- -----
Net asset value, end of period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL INVESTMENT RETURN................... 5.65% 3.45% 2.48% 3.31% 5.18% 4.55%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.......................... .69% .72% .80% .88% .83% .90%*
Ratio of net investment income to
average net assets.................. 5.51% 3.39% 2.46% 3.24% 5.07% 4.50%*
Net Assets, end of period
(000's Omitted)..................... $706,544 $657,561 $520,708 $465,956 $431,444 $430,369
<FN>
- ---------------------
* Annualized.
</TABLE>
See independent acccountants' review report and notes to financial statements.
<PAGE>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--General:
Dreyfus Money Market Instruments, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 ("Act") as a diversified open-end
management investment company and operates as a series company issuing two
classes of Common Stock: the Money Market Series and the Government
Securities Series. The Fund accounts separately for the assets, liabilities
and operations of each series. The Fund's investment objective is to provide
investors with as high a level of current income as is consistent with the
preservation of capital and the maintenance of liquidity. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services,
Inc. acts as the distributor of the Fund's shares, which are sold to the
public without a sales charge.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00 for each series; the Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable it to do
so. There is no assurance, however, that the Fund will be able to maintain a
stable net asset value of $1.00.
NOTE 2--Significant Accounting Policies:
(a) Portfolio valuation: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Directors to represent the fair
value of the Fund's investments.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represents
amortized cost.
The Fund may enter into repurchase agreements with financial
institutions, deemed to be creditworthy by the Fund's Manager, subject to the
seller's agreement to repurchase and the Fund's agreement to resell such
securities at a mutually agreed upon price. Securities purchased subject to
repurchase agreements are deposited with the Fund's custodian and, pursuant
to the terms of the repurchase agreement, must have an aggregate market value
greater than or equal to the repurchase price plus accrued interest at all
times. If the value of the underlying securities falls below the value of the
repurchase price plus accrued interest, the Fund will require the seller to
deposit additional collateral by the next business day. If the request for
additional collateral is not met, or the seller defaults on its repurchase
obligation, the Fund maintains the right to sell the underlying securities at
market value and may claim any resulting loss against the seller.
(c) Expenses: Expenses directly attributable to each series are charged
to that series' operations; expenses which are applicable to both series are
allocated between them.
(d) Dividends to shareholders: It is the policy of the Fund, with respect
to both series, to declare dividends from investment income-net on each
business day; such dividends are paid monthly. Dividends from net realized
capital gain, with respect to both series, are normally declared and paid
annually, but each series may make distributions on a more frequent basis to
comply with the distribution requirements
<PAGE>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
of the Internal Revenue Code. However, to the extent that a net realized
capital gain of either series can be reduced by a capital loss carryover of
that series, if any, such gain will not be distributed.
(e) Federal income taxes: It is the policy of each series to continue to
qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
At June 30, 1996, the cost of investments of each series for Federal
income tax purposes was substantially the same as the cost for financial
reporting purposes (see the Statement of Investments).
NOTE 3 -- Management Fee And Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee for each series is computed at the annual rate of .50 of
1% of the value of the average daily net assets of each series and is payable
monthly.
The Agreement provides for an expense reimbursement from the Manager
should the aggregate expenses of either series, exclusive of taxes, interest
on borrowings, brokerage commissions and extraordinary expenses, exceed 1% of
the value of such series' average daily net assets for any full year. No
expense reimbursement was required pursuant to the Agreement for the six
months ended June 30, 1996.
(b) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an
amount not to exceed an annual rate of .25 of 1% of the value of the Fund's
average daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the six months ended June 30, 1996, the Money Market Series and the
Government Securities Series were charged an aggregate of $125,943 and
$541,979, respectively, pursuant to the Shareholder Services Plan.
The Fund compensates Dreyfus Transfer, Inc., a wholly-owned subsidiary of
the Manager, under a transfer agency agreement for providing personnel and
facilities to perform transfer agency services for the Fund. With respect to
the Money Market Series and the Government Securities Series, such
compensation amounted to $55,112 and $121,080, respectively, during the six
months ended June 30, 1996.
(c) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $4,500 and an attendance fee of $500
per meeting. The Chairman of the Board receives an additional 25% of such
compensation.
<PAGE>
Dreyfus Money Market Instruments, Inc.
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Review Report of Ernst & Young LLP, Independent Accountants
Shareholders and Board of Directors
Dreyfus Money Market Instruments, Inc.
We have reviewed the accompanying statement of assets and
liabilities, including the statement of investments, of Dreyfus Money Market
Instruments, Inc. (comprising, respectively, the Money Market Series and the
Government Securities Series) as of June 30, 1996, and the related statements
of operations and changes in net assets and financial highlights for the six
month period ended June 30, 1996. These financial statements and financial
highlights are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
December 31, 1995 and financial highlights for each of the five years in the
period ended December 31, 1995 and in our report dated February 1, 1996, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
ERNST & YOUNG LLP
New York, New York
August 1, 1996
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Dreyfus Money Market
Instruments, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 008/060SA966
