<PAGE>
Dreyfus
Money Market
Instruments, Inc.
Annual Report
December 31, 1996
<PAGE>
Dreyfus Money Market Instruments, Inc.
- -----------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report that Dreyfus Money Market Instruments, Inc.--Money
Market Series provided an annualized yield of 4.62% for the fiscal year ended
December 31, 1996. The annualized yield for the Government Securities Series was
4.49%. After taking into account the effect of compounding, the annualized
effective yield was 4.72% for the Money Market Series and 4.58% for the
Government Securities Series.*
MONEY MARKET OVERVIEW
The money market in 1996 was characterized by considerable volatility.
However, when all was said and done, the changes in prices and yields over the
year were not very great. The three-month U.S. Treasury bill rate, a bellwether
measurement, closed the year yielding 5.18%, only 11 basis points above the rate
when the year began.
The major influences on rates during the year were the market's
expectations of possible action by the Federal Reserve Board; also, the state of
the economy and the market's expectations of how it might behave. Indeed, it was
a year when anticipations and expectations influenced the market as much as the
actual developments themselves.
Early in the year, rates generally rose, especially after strong employment
reports last spring and early summer convinced the money market that the Fed
would need to tighten money rates in order to prevent a recurrence of inflation.
By late summer, however, it became clear that inflation was not an immediate
threat and the Fed acknowledged that by taking no preemptive action.
Furthermore, the economy was a constructive influence, providing continued yet
moderate growth without exerting undue upward pressure on wage levels or general
price indications. Thus in the latter part of the year interest rates simmered
down, though not without short-lived inflation "scares."
To take advantage of this kind of market, we followed a policy for most of
the year of keeping our average maturities somewhat longer than the industry
average. Our maturity structure has been geared to deal with changeable
eventualities, while seeking superior yields.
Interest yields, in the long run, reflect the underlying economy. As 1997
begins, signs of strength continue to be visible, despite the inevitable weak
spots. Thus it would be prudent to plan for some action this year by the Fed to
step, once again, on the economic brakes. Such action could come as early as
midwinter, or later if the economy takes a more measured pace toward expansion.
We will continue to look for opportunities to extend maturities in an
effort to reap better yields, yet not neglect to safeguard the underlying
capital.
Sincerely,
Patricia A. Larkin
Senior Portfolio Manager
January 16, 1997
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 December 31, 1996
Principal
Negotiable Bank Certificates of Deposit--34.0% Amount Value
- ----------------------------------------------------------------------------- ------------ -----------
<S> <C> <C>
Bank of Tokyo-Mitsubishi (Yankee)
5.88%, 3/26/97............................................................ $ 6,000,000 $ 6,000,000
Bayerische Vereinsbank AG (Yankee)
5.20%, 2/24/97............................................................ 7,000,000 7,000,000
Fuji Bank Ltd. (Yankee)
5.52%, 1/10/97............................................................ 4,000,000 4,000,000
Industrial Bank of Japan Ltd. (Yankee)
5.70%, 1/6/97............................................................. 2,000,000 2,000,000
Providian National Bank
5.56%, 6/16/97............................................................ 6,000,000 6,000,000
Sanwa Bank Ltd. (Yankee)
5.65%-5.75%, 1/6/97-3/19/97............................................... 6,000,000 6,000,109
Societe Generale (Yankee)
5.34%, 3/24/97............................................................ 7,000,000 7,000,000
Sumitomo Bank Ltd. (Yankee)
5.60%, 4/22/97............................................................ 6,000,000 6,000,000
-------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $44,000,109)........................................................ $ 44,000,109
=============
Commercial Paper--16.8%
- -----------------------------------------------------------------------------
Merrill Lynch & Co. Inc.
5.48%, 6/30/97............................................................ $ 5,000,000 $ 4,867,500
Paine Webber Group Inc.
5.50%, 6/10/97............................................................ 6,000,000 5,857,333
Salomon Inc.
5.80%, 2/3/97............................................................. 5,000,000 4,974,150
Sears Roebuck Acceptance Corp.
5.76%, 1/28/97............................................................ 6,000,000 5,974,800
-------------
TOTAL COMMERCIAL PAPER
(cost $21,673,783)........................................................ $ 21,673,783
=============
Bank Notes--3.9%
- ------------------------------------------------------------------------------
First National Bank of Boston
5.69%, 2/10/97
(cost $5,000,000)......................................................... $ 5,000,000 $ 5,000,000
=============
Corporate Notes--10.8%
- -----------------------------------------------------------------------------
Bear Stearns Companies Inc.
5.38%, 2/18/97 (a)........................................................ $ 7,000,000 $ 7,000,000
Lehman Brothers Holdings Inc.
5.43%, 5/15/97 (a)........................................................ 6,000,000 6,025,675
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc., Money Market Series
- -----------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
Principal
Corporate Notes (continued) Amount Value
- ----------------------------------------------------------------------------- ------------ -----------
<S> <C> <C>
PNC Bank N.A.
5.61%, 5/15/97 (a)........................................................ $ 1,000,000 $ 999,639
-------------
TOTAL CORPORATE NOTES
(cost $14,025,314)........................................................ $ 14,025,314
=============
U.S. Government Agencies--30.9%
- -----------------------------------------------------------------------------
Federal Farm Credit Bank
Floating Rate Notes
5.33%-5.48%, 7/25/97-10/23/98 (a)......................................... $15,000,000 $ 14,992,917
Federal National Mortgage Association
Floating Rate Notes
5.36%-5.46%, 6/20/97-11/21/97 (a)......................................... 25,000,000 24,996,984
-------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $39,989,901)........................................................ $ 39,989,901
=============
Time Deposits--2.3%
- -----------------------------------------------------------------------------
Berliner Handels-und Frankfurter Bank (Grand Cayman)
6.88%, 1/2/97
(cost $2,954,000)......................................................... $ 2,954,000 $ 2,954,000
=============
TOTAL INVESTMENTS
(cost $127,643,107)............................................... 98.7% $127,643,107
======= =============
CASH AND RECEIVABLES (NET)............................................ 1.3% $ 1,700,914
======= =============
NET ASSETS............................................................ 100.0% $129,344,021
======= =============
<FN>
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
(a) Variable interest rates--subject to periodic change.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc., Government Securities Series
- -----------------------------------------------------------------------------
Statement of Investments December 31, 1996
Annualized
Yield on
Date of Principal
U.S. Treasury Bills--24.4% Purchase Amount Value
- ------------------------------------------------------------------ --------- ------------- -------------
<S> <C> <C> <C> <C>
2/6/97......................................................... 4.88% $ 10,000,000 $ 9,953,400
2/20/97........................................................ 5.23 5,000,000 4,964,584
3/6/97......................................................... 5.33 20,000,000 19,820,178
4/3/97......................................................... 5.64 15,000,000 14,795,300
5/1/97......................................................... 5.58 25,000,000 24,560,000
7/24/97........................................................ 5.59 20,000,000 19,399,333
8/21/97........................................................ 5.73 15,000,000 14,475,583
-------------
TOTAL U.S. TREASURY BILLS
(cost $107,968,378)............................................ $107,968,378
=============
U.S. Treasury Notes--30.0%
- ------------------------------------------------------------------
6.875%, 2/28/97................................................ 5.32% $ 40,000,000 $ 40,094,217
6.625%, 3/31/97................................................ 5.57 20,000,000 20,040,518
6.50%, 4/30/97 ................................................ 5.21 25,000,000 25,097,582
5.875%, 7/31/97................................................ 5.20 25,000,000 25,060,985
6%, 8/31/97 ................................................... 5.55 22,000,000 22,052,422
-------------
TOTAL U.S. TREASURY NOTES
(cost $132,345,724)............................................ $132,345,724
=============
Repurchase Agreements--42.2%
- ------------------------------------------------------------------
Lanston (Aubrey G.) & Co., Inc.
dated 12/31/96, due 1/2/97 in the amount of $7,002,644
(fully collateralized by $7,011,000 U.S. Treasury
Notes 6.75%, due 5/31/97, value $7,079,786).................... 6.80%$ 7,000,000 $ 7,000,000
Bear Stearns & Co. Inc.
dated 12/31/96, due 1/2/97 in the amount of $44,016,256
(fully collateralized by $43,500,000 U.S. Treasury
Notes 7.50%, due 1/31/97, value $44,910,795)................... 6.65 44,000,000 44,000,000
Daiwa Securities America Inc.
dated 12/31/96, due 1/2/97 in the amount of $44,016,867
(fully collateralized by $44,652,000 U.S. Treasury
Notes 5.25%, due 12/31/97, value $44,358,971).................. 6.90 44,000,000 44,000,000
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc., Government Securities Series
- -----------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
Annualized
Yield on
Date of Principal
U.S. Treasury Bills--24.4% Purchase Amount Value
- ------------------------------------------------------------------ --------- ------------- -------------
<S> <C> <C> <C> <C>
Nikko Securities Co. International, Inc.
dated 12/31/96, due 1/2/97 in the amount of $44,016,500
(fully collateralized by $43,629,000 U.S. Treasury
Notes 6.625% to 7.375%, due from 3/31/97 to
11/15/97, value $44,491,645)................................... 6.75% $44,000,000 $ 44,000,000
SBC Capital Markets
dated 12/31/96, due 1/2/97 in the amount of $3,405,135
(fully collateralized by $3,617,000 U.S. Treasury
Bills due from 9/18/97 to 10/16/97, value $3,467,350).......... 6.00 3,404,000 3,404,000
UBS Securities Inc.
dated 12/31/96, due 1/2/97 in the amount of $44,016,378
(fully collateralized by $44,272,000 U.S. Treasury
Notes 6.50%, due 4/30/97, value $44,881,428)................... 6.70 44,000,000 44,000,000
-------------
TOTAL REPURCHASE AGREEMENTS
(cost $186,404,000)............................................ $186,404,000
=============
TOTAL INVESTMENTS
(cost $426,718,102)..................................... 96.6% $426,718,102
====== =============
CASH AND RECEIVABLES (NET) ................................. 3.4% $ 15,050,429
====== =============
NET ASSETS.................................................100.0% $441,768,531
====== =============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc.
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996
Money Government
Market Securities
Series Series
------------ -----------------
<S> <C> <C> <C>
ASSETS: Investments in securities, at value (including repurchase
agreements of $186,404,000 for the Government
Securities Series)--Note 2(a,b)................. $127,643,107 $426,718,102
Cash............................................. 351,083 12,807,391
Interest receivable.............................. 1,464,615 2,647,425
Prepaid expenses and other assets................ 16,468 24,897
------------- -------------
129,475,273 442,197,815
------------- -------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 47,530 319,829
Accrued expenses................................. 83,722 109,455
------------- -------------
131,252 429,284
------------- -------------
NET ASSETS..................................................................... $129,344,021 $441,768,531
============= =============
REPRESENTED BY: Paid-in capital.................................. $129,362,401 $441,775,787
Accumulated net realized gain (loss) on investments (18,380) (7,256)
------------- -------------
NET ASSETS..................................................................... $129,344,021 $441,768,531
============= =============
NET ASSET VALUE PER SHARE
----------------------------
Money Government
Market Securities
Series Series
------------ -------------
Net Assets..................................................................... $129,344,021 $441,768,531
Shares Outstanding............................................................. 129,345,901 441,775,787
NET ASSET VALUE PER SHARE...................................................... $1.00 $1.00
------ --------
------ --------
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
Statement of Operations year Ended December 31, 1996
Money Government
Market Securities
Series Series
------------- --------------
INVESTMENT INCOME
<S> <C> <C>
INCOME Interest Income.................................. $7,657,486 $23,681,032
---------- ------------
EXPENSES--Note 2(c): Management fee--Note 3(a)......................... $ 688,144 $ 2,192,157
Shareholder servicing costs--Note 3(b)........... 462,195 1,490,319
Custodian fees................................... 38,212 116,353
Registration fees................................ 24,221 28,811
Professional fees................................ 19,591 51,064
Directors' fees and expenses--Note 3(c)........... 18,319 56,965
Prospectus and shareholders' reports............. 16,440 11,644
Miscellaneous.................................... 12,815 1,134
---------- ------------
Total Expenses.............................. 1,279,937 3,948,447
---------- ------------
INVESTMENT INCOME--NET.......................................................... 6,377,549 19,732,585
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 2(b).............................. (18,380) (7,256)
---------- ------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $6,359,169 $19,725,329
========== ============
</TABLE>
See notes to financial statements.
[co...............]
<PAGE>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Money Market Series Government Securities Series
------------------------------ -------------------------------
Year Ended December 31, Year Ended December 31,
------------------------------ -------------------------------
1996 1995 1996 1995
------------- ------------- ------------- -------------
OPERATIONS:
<S> <C> <C> <C> <C>
Investment income--net....................... $ 6,377,549 $ 8,232,793 $ 19,732,585 $ 23,244,165
Net realized gain (loss) on investments...... (18,380) 88,254 (7,256) 6,504
-------------- -------------- -------------- --------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ 6,359,169 8,321,047 19,725,329 23,250,669
-------------- -------------- -------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net........................ (6,377,549) (8,232,793) (19,732,585) (23,244,165)
Net realized gain on investments............. (1,686) -- (6,324) --
-------------- -------------- -------------- --------------
Total Dividends............................ (6,379,235) (8,232,793) (19,738,909) (23,244,165)
-------------- -------------- -------------- --------------
CAPITAL STOCKTRANSACTIONS:
($1.00 per share):
Net proceeds from shares sold................ 315,705,868 324,551,779 1,516,154,559 1,238,511,882
Dividends reinvested......................... 4,720,481 6,132,624 13,459,323 16,345,565
Cost of shares redeemed...................... (335,234,637) (357,148,554) (1,519,275,272) (1,289,375,994)
-------------- -------------- -------------- --------------
Increase (Decrease) in Net Assets from
Capital Stock Transactions............... (14,808,288) (26,464,151) 10,338,610 (34,518,547)
-------------- -------------- -------------- --------------
Total Increase (Decrease) in
Net Assets............................ (14,828,354) (26,375,897) 10,325,030 (34,512,043)
NET ASSETS:
Beginning of Period.......................... 144,172,375 170,548,272 431,443,501 465,955,544
-------------- -------------- -------------- --------------
End of Period................................ $ 129,344,021 $ 144,172,375 $ 441,768,531 $ 431,443,501
============== ============== ============== ==============
</TABLE>
<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,
------------------------------------------------------
PER SHARE DATA: 1996 1995 1994 1993 1992
------- ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............... $1.00 $1.00 $1.00 $1.00 $1.00
------ ----- ----- ----- -----
Investment Operations:
Investment income--net.............................. .046 .053 .034 .026 .035
------ ----- ----- ----- -----
Distributions:
Dividends from investment income--net............... (.046) (.053) (.034) (.026) (.035)
------ ----- ----- ----- -----
Net asset value, end of period..................... $1.00 $1.00 $1.00 $1.00 $1.00
====== ===== ===== ===== =====
TOTAL INVESTMENT RETURN............................... 4.73% 5.46% 3.42% 2.64% 3.51%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ .93% .84% .88% .83% .75%
Ratio of net investment income
to average net assets........................... 4.63% 5.33% 3.35% 2.62% 3.48%
Net Assets, end of period (000's Omitted).......... $129,344 $144,172 $170,548 $207,537 $242,326
</TABLE>
See 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 invest ment 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,
------------------------------------------------------
PER SHARE DATA: 1996 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
------- ------ ------ ------ ------
Net asset value, beginning of period............... $1.00 $1.00 $1.00 $1.00 $1.00
------ ----- ----- ----- -----
Investment Operations:
Investment income--net.............................. .045 .051 .033 .025 .034
------ ----- ----- ----- -----
Distributions:
Dividends from investment income--net............... (.045) (.051) (.033) (.025) (.034)
------ ----- ----- ----- -----
Net asset value, end of period..................... $1.00 $1.00 $1.00 $1.00 $1.00
====== ===== ===== ===== =====
TOTAL INVESTMENT RETURN............................... 4.60% 5.18% 3.31% 2.48% 3.45%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ .90% .83% .88% .80% .72%
Ratio of net investment income
to average net assets........................... 4.50% 5.07% 3.24% 2.46% 3.39%
Net Assets, end of period (000's Omitted).......... $441,769 $431,444 $465,956 $520,708 $657,561
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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. The Fund is
authorized to issue 5 billion shares of $.01 par value Common Stock for the
Money Market Series and 10 billion shares of $.01 par value Common Stock for the
Government Securities Series.
It is the Series' 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 per share of $1.00.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
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 custodians 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 of the Internal Revenue Code. However, to the
<PAGE>
Dreyfus Money Market Instruments, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
extent that a net realized capital gain of either series can be reduced by a
capital loss carryover of that series, 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.
The Money Market Series has an unused capital loss carryover of approximately
$18,000 available for Federal income tax purposes to be applied against future
net securities profits, if any, realized subsequent to December 31, 1996. If not
applied, the carryover expires in 2004.
The Government Securities Series has an unused capital loss carryover of
approximately $11,000 available for Federal income tax purposes to be applied
against future net securities profits, if any, realized subsequent to December
31, 1996. If not applied, the carryover expires in 2004.
At December 31, 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 that if in any full fiscal year the aggregate expenses
of either series, exclusive of taxes, brokerage commissions, interest on
borrowings and extraordinary expenses, exceed 1% of the value of such series'
average daily net assets, the Fund may deduct from payments to be made to the
Manager, or the Manager will bear the amount of such excess. No expense
reimbursement was required pursuant to the Agreement for the period ended
December 31, 1996.
(B) Pursuant to the Fund's Shareholder Services Plan, each series 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 each series' average
daily net assets for servicing shareholder accounts. The services provided may
include personal services and/or maintaining 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 period ended December 31, 1996, the Money Market Series and
the Government Securities Series were charged an aggregate of $253,686 and
$1,096,079, 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 $125,528 and $252,398, respectively, during the period ended
December 31, 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.
- -------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Directors
Dreyfus Money Market Instruments, Inc.
We have audited 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 December 31, 1996, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and financial highlights for
each of the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective series constituting Dreyfus Money Market Instruments, Inc. at
December 31, 1996, the results of their operations for the year then ended, the
changes in their net assets for each of the two years in the period then ended,
and the financial highlights for each of the indicated years, in conformity with
generally accepted accounting principles.
ERNST & Young
New York, New York
February 5, 1997
<PAGE>
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. 008/060AR9612
