DREYFUS MONEY MARKET INSTRUMENTS INC, 497, 1997-08-29

DREYFUS MONEY MARKET INSTRUMENTS INC
497, 1997-08-29

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FOR USE BY BANKS ONLY

August 25, 1997

DREYFUS GOVERNMENT SECURITIES SERIES
Dreyfus Money Market Instruments, Inc.

Supplement to Prospectus
Dated May 1, 1997 As Revised August 25, 1997

All mutual fund shares involve certain investment risks, including
the possible loss of principal.
008s082597BNK

FOR USE BY BANKS ONLY

May 1, 1997
DREYFUS MONEY MARKET INSTRUMENTS, INC.

Supplement to Prospectus
Dated May 1, 1997 As Revised August 25, 1997

All mutual fund shares involve certain investment risks, including
the possible loss of principal.

060s082597BNK

- ------------------------------------------------------------------------------
PROSPECTUS MAY 1, 1997

AS REVISED AUGUST 25, 1997

DREYFUS GOVERNMENT SECURITIES SERIES
DREYFUS MONEY MARKET INSTRUMENTS, INC.
- ------------------------------------------------------------------------------
DREYFUS GOVERNMENT SECURITIES SERIES (THE "SERIES") IS A SEPARATE
DIVERSIFIED PORTFOLIO OF DREYFUS MONEY MARKET INSTRUMENTS, INC. (THE "FUND"),
AN OPEN-END, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY MARKET MUTUAL
FUND. THE SERIES' INVESTMENT OBJECTIVE IS TO PROVIDE YOU WITH AS HIGH A LEVEL
OF CURRENT INCOME AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE
MAINTENANCE OF LIQUIDITY. THE SERIES PURSUES ITS INVESTMENT OBJECTIVE BY
INVESTING ONLY IN SHORT-TERM SECURITIES ISSUED OR GUARANTEED AS TO PRINCIPAL
AND INTEREST BY THE U.S. GOVERNMENT. THE FUND ALSO OFFERS A MONEY MARKET
SERIES PURSUANT TO A SEPARATE PROSPECTUS WHICH MAY BE OBTAINED BY CALLING
1-800-645-6561.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT CHARGE
OR PENALTY. THE SERIES PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN USE IN
AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN INCOME
ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM SHARES
BY TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE SERIES' PORTFOLIO.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND AND
SERIES THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED
FOR FUTURE REFERENCE.

THE STATEMENT OF ADDITIONAL INFORMATION, DATED MAY 1, 1997, AS
REVISED AUGUST 25, 1997, WHICH MAY BE FURTHER REVISED FROM TIME TO TIME,
PROVIDES A FURTHER DISCUSSION OF CERTAIN AREAS IN THIS PROSPECTUS AND OTHER
MATTERS WHICH MAY BE OF INTEREST TO SOME INVESTORS. IT HAS BEEN FILED WITH
THE SECURITIES AND EXCHANGE COMMISSION AND IS INCORPORATED HEREIN BY
REFERENCE. THE SECURITIES AND EXCHANGE COMMISSION MAINTAINS A WEB SITE
(HTTP://WWW.SEC.GOV) THAT CONTAINS THE STATEMENT OF ADDITIONAL INFORMATION,
MATERIAL INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE FUND.
FOR A FREE COPY OF THE STATEMENT OF ADDITIONAL INFORMATION, WRITE TO THE FUND
AT 144 GLENN CURTISS BOULEVARD, UNIONDALE, NEW YORK 11556-0144, OR CALL
1-800-645-6561. WHEN TELEPHONING, ASK FOR OPERATOR 144.

AN INVESTMENT IN THE SERIES IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE SERIES WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>

TABLE OF CONTENTS
PAGE PAGE
<S> <C> <C> <C>
ANNUAL FUND OPERATING EXPENSES...... 3 SHAREHOLDER SERVICES............... 9
CONDENSED FINANCIAL INFORMATION..... 4 HOW TO REDEEM SHARES............... 12
YIELD INFORMATION................... 5 SHAREHOLDER SERVICES PLAN.......... 14
DESCRIPTION OF THE FUND AND SERIES.. 5 DIVIDENDS, DISTRIBUTIONS AND TAXES. 15
MANAGEMENT OF THE FUND.............. 6 GENERAL INFORMATION................ 16
HOW TO BUY SHARES................... 7 APPENDIX........................... 18

</TABLE>
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
[This Page Intentionally Left Blank]
Page 2

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
Government Securities Series
Management Fees............... .50%
Other Expenses ............... .40%
Total Fund Operating Expenses. .90%
Example: 1 YEAR 3 YEARS 5 YEARS 10 YEARS
You would pay the following expenses on
a $1,000 investment, assuming (1) 5%
annual return and (2) redemption at the
end of each time period: $9 $29 $50 $111
- ----------------------------------------------------------------------------
The amounts listed in the example should not be considered as representative
of past or future expenses and actual expenses may be greater or less than
those indicated. Moreover, while the example assumes a 5% annual return, the
Series' actual performance will vary and may result in an actual return
greater or less than 5%.
- ------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in understanding
the costs and expenses borne by the Series, the payment of which will reduce
investors' annual return. You can purchase shares of the Series without
charge directly from the Fund's distributor; you may be charged a fee if you
effect transactions in shares of the Series through a securities dealer, bank
or other financial institution. See "Management of the Fund" and "Shareholder
Services Plan."
Page 3

CONDENSED FINANCIAL INFORMATION
The information in the following table has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
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 year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>

YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------------------------
1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
PER SHARE DATA:
Net asset value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Investment Operations:
Investment income-net .057 .066 .084 .074 .055 .034 .025 .033 .051 .045
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment
income-net. (.057) (.066) (.084) (.074) (.055) (.034) (.025) (.033) (.051) (.045)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value,
end of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN 5.87% 6.80% 8.71% 7.61% 5.65% 3.45% 2.48% 3.31% 5.18% 4.60%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets. .65% .72% .70% .70% .69% .72% .80% .88% .83% .90%
Ratio of net investment
income to average
net assets. 5.71% 6.56% 8.35% 7.35% 5.51% 3.39% 2.46% 3.24% 5.07% 4.50%
Net Assets, end of year
(000's omitted) $791,651 $658,201 $651,700 $724,202 $706,544 $657,561 $520,708 $465,956 $431,444 $441,769
</TABLE>

Page 4

YIELD INFORMATION
From time to time, the Series advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. The yield of the Series refers to the income
generated by an investment in the Series over a seven-day period (which
period will be stated in the advertisement). This income is then annualized.
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The effective yield is calculated similarly,
but, when annualized, the income earned by an investment in the Series is
assumed to be reinvested. The effective yield will be slightly higher than
the yield because of the compounding effect of this assumed reinvestment. The
Series' yield and effective yield may reflect absorbed expenses pursuant to
any undertaking that may be in effect. See "Management of the Fund."
Yield information is useful in reviewing the Series' performance, but
because yields will fluctuate, under certain conditions such information may
not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time in
advertising or marketing shares of the Series, including data from Lipper
Analytical Services, Inc., IBC's Money Fund Reporttrademark, Bank Rate
Monitortrademark, N. Palm Beach, Fla. 33408, Morningstar, Inc. and other
industry publications.
DESCRIPTION OF THE FUND AND SERIES
INVESTMENT OBJECTIVE
The Series' investment objective is to provide you with as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. It cannot be changed without approval by the
holders of a majority (as defined in the Investment Company Act of 1940, as
amended (the "1940 Act")) of the Series' outstanding voting shares. There can
be no assurance that the Series' investment objective will be achieved.
Securities in which the Series invests may not earn as high a level of
current income as long-term or lower quality securities which generally have
less liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
The Series invests only in short-term securities issued or guaranteed
as to principal and interest by the U.S. Government (whether or not subject
to repurchase agreements). See "Appendix _ Certain Portfolio Securities." In
addition, the Series is permitted to lend portfolio securities. See "Appendix
_ Investment Techniques."
The Series seeks to maintain a net asset value of $1.00 per share for
purchases and redemptions. To do so, the Series uses the amortized cost
method of valuing its securities pursuant to Rule 2a-7 under the 1940 Act,
which Rule includes various maturity, quality and diversification
requirements, certain of which are summarized as follows. In accordance with
Rule 2a-7, the Series is required to maintain a dollar-weighted average
portfolio maturity of 90 days or less, purchase only instruments having
remaining maturities of 13 months or less and invest only in U.S. dollar
denominated securities. For further information regarding the amortized cost
method, see "Determination of Net Asset Value" in the Statement of Additional
Information. There can be no assurance that the Series will be able to
maintain a stable net asset value of $1.00 per share.
INVESTMENT CONSIDERATIONS AND RISKS
The Series attempts to increase yields by trading to take advantage
of short-term market variations. This policy is expected to result in high
portfolio turnover but should not adversely affect the Series since it
usually does not pay brokerage commissions when it purchases short-term debt
obligations. The value of the portfolio securities held by the Series will
vary inversely to changes in prevailing interest rates.
Page 5

Thus, if interest rates have increased from the time a security was purchased,
such security, if sold, might be sold at a price less than its cost.
Similarly, if interest rates have declined from the time a security was
purchased, such security, if sold, might be sold at a price greater than its
purchase cost. In either instance, if the security was purchased at face value
and held to maturity, no gain or loss would be realized.
MANAGEMENT OF THE FUND

INVESTMENT ADVISER _ The Dreyfus Corporation, located at 200 Park Avenue,
New York, New York 10166, was formed in 1947 and serves as the Fund's
investment adviser. The Dreyfus Corporation is a wholly-owned subsidiary of
Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon Bank
Corporation ("Mellon"). As of July 31, 1997, The Dreyfus Corporation managed
or administered approximately $92 billion in assets for approximately 1.7
million investor accounts nationwide.

The Dreyfus Corporation supervises and assists in the overall
management of the Fund's affairs under a Management Agreement with the Fund,
subject to the authority of the Fund's Board in accordance with Maryland law.

Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, including The Dreyfus Corporation, Mellon managed more than
$259 billion in assets as of March 31, 1997, including approximately $88
billion in proprietary mutual fund assets. As of March 31, 1997, Mellon,
through various subsidiaries, provided non-investment services, such as
custodial or administration services, for more than $1.061 trillion in
assets, including approximately $58 billion in mutual fund assets.

For the year ended December 31, 1996, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .50 of 1% of the
value of the Series' average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily assume
certain expenses of the Series, which would have the effect of lowering the
expense ratio of the Series and increasing yield to investors. The Series
will not pay The Dreyfus Corporation at a later time for amounts it may
waive, nor will the Series reimburse The Dreyfus Corporation for any
amounts it may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of
the Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for the Fund. See "Portfolio Transactions" in the
Statement of Additional Information.

The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Series. The
Fund's distributor may use part or all of such payments to pay securities
dealers, banks or other financial institutions in respect of these services.
DISTRIBUTOR _ The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts
02109. The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90
Washington Street, New York, New York 10286, is the Fund's Custodian.

Page 6

HOW TO BUY SHARES
Shares of the Series are sold without a sales charge. You may be
charged a fee if you effect transactions in shares of the Series through a
securities dealer, bank or other financial institution. Stock certificates
are issued only upon your written request. No certificates are issued for
fractional shares. The Fund reserves the right to reject any purchase order.
The minimum initial investment in the Series is $2,500, or $1,000 if
you are a client of a securities dealer, bank or other financial institution
which maintains an omnibus account in the Fund and has made an aggregate
minimum initial purchase for its customers of $2,500. Subsequent investments
must be at least $100. However, the minimum initial investment for
Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only
one participant is $750, with no minimum for subsequent purchases. Individuals
who open an IRA also may open a non-working spousal IRA with a minimum
initial investment of $250. Subsequent investments in a spousal IRA must be
at least $250. The initial investment must be accompanied by the Account
Application. For full-time or part-time employees of The Dreyfus Corporation
or any of its affiliates or subsidiaries, directors of The Dreyfus
Corporation, Board members of a Fund advised by The Dreyfus Corporation,
including members of the Fund's Board, or the spouse or minor child of any of
the foregoing, the minimum initial investment in the Series is $1,000. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries who elect to have a portion of their pay directly
deposited into their Fund accounts, the minimum initial investment is $50.
The Fund reserves the right to offer shares of the Series without regard to
minimum purchase requirements to employees participating in certain qualified
or non-qualified employee benefit plans or other programs where contributions
or account information can be transmitted in a manner and form acceptable to
the Fund. The Fund reserves the right to vary further the initial and
subsequent investment minimum requirements at any time. Shares of the Series
also are offered without regard to the minimum initial investment
requirements through Dreyfus-AUTOMATIC Asset BuilderRegistration Mark,
Dreyfus Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan
pursuant to the Dreyfus Step Program described under "Shareholder Services."
These services enable you to make regularly scheduled investments and may
provide you with a convenient way to invest for long-term financial goals.
You should be aware, however, that periodic investment plans do not guarantee
a profit and will not protect an investor against loss in a declining market.
You may purchase shares of the Series by check or wire, or through
the Dreyfus TeleTransfer Privilege described below. Checks should be made
payable to "The Dreyfus Family of Funds," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments to open new
accounts which are mailed should be sent to The Dreyfus Family of Funds, P.O.
Box 9387, Providence, Rhode Island 02940-9387, together with your Account
Application indicating the name of the series being purchased. For subsequent
investments, your Fund account number should appear on the check and an
investment slip should be enclosed and sent to The Dreyfus Family of Funds,
P.O. Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan
accounts, both initial and subsequent investments should be sent to The
Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence, Rhode Island
02940-6427. Neither initial nor subsequent investments should be made by
third party check. Purchase orders may be delivered in person only to a
Dreyfus Financial Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL
BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information."

your Taxpayer Identification Number ("TIN") should be included instead),
account registration and dealer number, if applicable. If your initial
purchase of shares of the Series is by wire, please call 1-800-645-6561 after
completing your wire payment to obtain your Fund account number. Please
include your Fund account number on the Account Application and promptly mail
the Account Application to the Fund, as no redemption will be permitted until
the Account Application is received. You may obtain further information about
remitting funds in this manner from your bank. All payments should be made in
U.S. dollars and, to avoid fees and delays, should be drawn only on U.S.
banks. A charge will be imposed if the check used for investment in your
account does not clear. The Fund makes available to certain large institutions
the ability to issue purchase instructions through compatible computer
facilities.

Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House member. You must direct the
institution to transmit immediately available funds through the Automated
Clearing House to The Bank of New York with instructions to credit your Fund
account. The instructions must specify your Fund account registration and
your Fund account number PRECEDED BY THE DIGITS "1111."

Shares of the Series are sold on a continuous basis at the net asset
value per share next determined after an order and Federal Funds (monies of
member banks within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received by the Transfer Agent or other agent or
entity subject to the direction of such agents in written or telegraphic
form. If you do not remit Federal Funds, your payment must be converted into
Federal Funds. This usually occurs within one day of receipt of a bank wire
and within two business days of receipt of a check drawn on a member bank of
the Federal Reserve System. Checks drawn on banks which are not members of
the Federal Reserve System may take considerably longer to convert into
Federal Funds. Prior to receipt of Federal Funds, your money will not be
invested.

The Series' net asset value per share is determined twice each
business day: at 12:00 Noon, New York time and as of the close of trading on
the floor of the New York Stock Exchange (currently 4:00 p.m., New York
time), on each day the New York Stock Exchange is open for business. Net
asset value per share is computed by dividing the value of the net assets of
the Series (i.e., the value of its assets less liabilities) by the total
number of shares of the Series outstanding. See "Determination of Net Asset
Value" in the Statement of Additional Information.

If your payments are received in or converted into Federal Funds by
12:00 Noon, New York time, by the Transfer Agent, you will receive the
dividend declared on that day. If your payments are received in or converted
into Federal Funds after 12:00 Noon, New York time, by the Transfer Agent,
your shares will begin to accrue dividends on the following business day.

Qualified institutions may telephone orders for purchase of the
shares of the Series by telephoning the Distributor or its designee toll free
at 1-800-242-8671; in New York City, call 1-718-895-1396; on Long Island,
call 794-5452. A telephone order placed with the Distributor or its designee
in New York will become effective at the price determined at 12:00 Noon, New
York time, and the shares purchased will receive the dividend on the shares
of the Series declared on that day if such order is placed by 12:00 Noon, New
York time, and Federal Funds are received by the Transfer Agent by 4:00 p.m.,
New York time.

The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in Series' shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds $1,000,000 ("Eligible Benefit
Plans"). Shares of funds in the Dreyfus Family of Funds then held by Eligible
Benefit Plans will be aggregated to determine the fee payable. The
Distributor reserves the right to cease paying these fees at any time. The
Page 8

Distributor will pay such fees from its own funds, other than amounts
received from the Fund, including past profits or any other source available
to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service ("IRS").
DREYFUS TELETRANSFER PRIVILEGE _You may purchase shares of the Series
(minimum $500, maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account designated
in one of these documents and your Fund account. Only a bank account
maintained in a domestic financial institution which is an Automated Clearing
House member may be so designated. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated.
If you have selected the Dreyfus TeleTransfer Privilege, you may
request a Dreyfus TeleTransfer purchase of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
PROCEDURES FOR MULTIPLE ACCOUNTS _ Special procedures have been designed for
banks and other institutions that wish to open multiple accounts. The
institution may open a single master account by filing one application with
the Transfer Agent, and may open individual sub-accounts at the same time or
at some later date. For further information, please refer to the Statement of
Additional Information.
SHAREHOLDER SERVICES
Fund Exchanges _ You may purchase, in exchange for shares of the Series,
shares of the Fund's other series or shares of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds have different
investment objectives which may be of interest to you. If you desire to use
this service, please call 1-800-645-6561 to determine if it is available and
whether any conditions are imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, shares being exchanged must have a
value of at least the minimum initial investment required for the fund or
series into which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless you check the applicable "No" box on the Account Application,
indicating that you specifically refuse this privilege. The Telephone
Exchange Privilege may be established for an existing account by written
request signed by all shareholders on the account, by a separate signed
Shareholder Services Form, available by calling 1-800-645-6561, or by oral
request from any of the authorized signatories on the account by calling
1-800-645-6561. If you have established the Telephone Exchange Privilege, you
may telephone exchange instructions (including over The Dreyfus
TouchRegistration Mark automated telephone system) by calling 1-800-645-6561.
If you are calling from overseas, call 516-794-5452. See "How to Redeem
Shares_Procedures." Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where available, will
be automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Check Redemption Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, Dreyfus TeleTransfer Privilege and
the dividend/capital gain distribution option (except for Dreyfus Dividend
Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced
Page 9

sales load, if the shares you are exchanging were: (a) purchased with a sales
load, (b) acquired by a previous exchange from shares purchased with a sales
load, or (c) acquired through reinvestment of dividends or distributions paid
with respect to the foregoing categories of shares. To qualify, at the time of
the exchange you must notify the Transfer Agent. Any such qualification is
subject to confirmation of your holdings through a check of appropriate
records. See "Shareholder Services" in the Statement of Additional
Information. No fees currently are charged shareholders directly in connection
with exchanges, although the Fund reserves the right, upon not less than 60
days' written notice, to charge shareholders a nominal administrative fee in
accordance with rules promulgated by the Securities and Exchange Commission.
The Fund reserves the right to reject any exchange request in whole or in
part. The availability of Fund Exchanges may be modified or terminated at any
time upon notice to shareholders. See "Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of the Series, in shares of the Fund's other
series or certain other funds in the Dreyfus Family of Funds of which you are
a shareholder. The amount you designate, which can be expressed either in
terms of a specific dollar or share amount ($100 minimum), will be exchanged
automatically on the first and/or fifteenth of the month according to the
schedule you have selected. Shares will be exchanged at the then-current net
asset value; however, a sales load may be charged with respect to exchanges
into funds sold with a sales load. See "Shareholder Services" in the
Statement of Additional Information. The right to exercise this Privilege may
be modified or cancelled by the Fund or the Transfer Agent. You may modify or
cancel your exercise of this Privilege at any time by mailing written
notification to The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode
Island 02940-9671. The Fund may charge a service fee for the use of this
Privilege. No such fee currently is contemplated. For more information
concerning this Privilege and the funds in the Dreyfus Family of Funds
eligible to participate in this Privilege, or to obtain a Dreyfus
Auto-Exchange Authorization Form, please call toll free 1-800-645-6561. See
"Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-Automatic Asset
Builder permits you to purchase shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. To establish a Dreyfus-Automatic Asset
Builder account, you must file an authorization form with the Transfer Agent.
You may obtain the necessary authorization form by calling
1-800-645-6561. You may cancel your participation in this Privilege or change
the amount of your purchase at any time by mailing written notification to
The Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island
02940-9671, or, if for Dreyfus retirement plan accounts, to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427. The
notification will be effective three business days following receipt. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ Dreyfus Government Direct
Deposit Privilege enables you to purchase shares (minimum of $100 and maximum
of $50,000 per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal government
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Dreyfus Government Direct Deposit,
you must file with the Transfer Agent a completed Direct Deposit Sign-Up Form
for each type of payment that you desire to include in this Privilege. The
appropriate form may be obtained by calling 1-800-645-6561. Death or legal
incapacity will terminate your participation in this Privilege. You may elect
at any time to terminate your participation by notifying in writing the
appropriate Federal agency. Further, the Fund may terminate your
participation upon 30 days' notice to you.
Page 10

DREYFUS PAYROLL SAVINGS PLAN _ Dreyfus Payroll Savings Plan permits you to
purchase shares of the Series (minimum of $100 per transaction) automatically
on a regular basis. Depending upon your employer's direct deposit program,
you may have part or all of your paycheck transferred to your existing
Dreyfus account electronically through the Automated Clearing House system at
each pay period. To establish a Dreyfus Payroll Savings Plan account, you
must file an authorization form with your employer's payroll department. Your
employer must complete the reverse side of the form and return it to The
Dreyfus Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may change the amount of purchase or cancel the authorization only by
written notification to your employer. It is the sole responsibility of your
employer, not the Distributor, The Dreyfus Corporation, the Fund, the
Transfer Agent or any other person, to arrange for transactions under the
Dreyfus Payroll Savings Plan. The Fund may modify or terminate this Privilege
at any time or charge a service fee. No such fee currently is contemplated.
Shares of the Series held under Keogh Plans, IRAs or other retirement plans
are not eligible for this Privilege.
DREYFUS STEP PROGRAM _ Dreyfus Step Program enables you to purchase shares
of the Series without regard to the Series' minimum initial investment
requirements through Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan. To establish a
Dreyfus Step Program account, you must supply the necessary information on
the Account Application and file the required authorization form(s) with the
Transfer Agent. For more information concerning this Program, or to request
the necessary authorization form(s), please call toll free 1-800-782-6620.
You may terminate your participation in this Program at any time by
discontinuing your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus
Government Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the
case may be, as provided under the terms of such Privilege(s). The Fund may
modify or terminate this Program at any time. Investors who wish to purchase
shares of the Series through the Dreyfus Step Program in conjunction with a
Dreyfus-sponsored retirement plan may do so only for IRAs, SEP-IRAs and IRA
"Rollover Accounts."
DREYFUS DIVIDEND OPTIONS _ Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Series in shares of another fund in the Dreyfus Family of Funds
of which you are a shareholder. Shares of the other fund will be purchased at
the then-current net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load, you may qualify for share price
s which do not include the sales load or which reflect a reduced sales load.
If you are investing in a fund that charges a contingent deferred sales
charge, the shares purchased will be subject on redemption to the contingent
deferred sales charge, if any, applicable to the purchased shares. See
"Shareholder Services" in the Statement of Additional Information. Dreyfus
Dividend ACH permits you to transfer electronically dividends or dividends and
capital gain distributions, if any, from the Series to a designated bank
account. Only an account maintained at a domestic financial institution which
is an Automated Clearing House member may be so designated. Banks may charge
a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply to Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares of the Series held under Keogh Plans, IRAs
or other retirement plans are not eligible for Dreyfus Dividend Sweep.
Page 11

QUARTERLY DISTRIBUTION PLAN _ The Quarterly Distribution Plan permits you to
receive quarterly payments from the Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter.
You may open a Quarterly Distribution Plan by submitting a request to
the Transfer Agent. The Quarterly Distribution Plan may be ended at any time
by you, the Fund or the Transfer Agent. Shares of the Series for which
certificates have been issued must be presented before redemption under the
Quarterly Distribution Plan.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares of the Series for which
certificates have been issued may not be redeemed through the Automatic
Withdrawal Plan.
RETIREMENT PLANS _ The Series offers a variety of pension and profit-sharing
plans, including Keogh Plans, IRAs, SEP-IRAs and IRA "Rollover Accounts,"
401(k) Salary Reduction Plans and 403(b)(7) Plans. Plan support services also
are available. You can obtain details on the various plans by calling the
following numbers toll free: for Keogh Plans, please call 1-800-358-5566; for
IRAs and IRA "Rollover Accounts," please call 1-800-645-6561; or for SEP-IRAs,
401(k) Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent, as described below.
When a request is received in proper form, the Fund will redeem the shares at
the next determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks and other financial institutions may charge their clients a
fee for effecting redemptions of Series shares. Any certificates representing
Series shares being redeemed must be submitted with the redemption request.
If you own shares in both series of the Fund, any redemption request must
clearly state from which series you wish to redeem the shares. The value of
the shares redeemed may be more or less than their original cost, depending
upon the Series' then-current net asset value.

If a request for redemption is received in proper form by the
Transfer Agent by 12:00 Noon, New York time, the proceeds of the redemption,
if transfer by wire is requested, will be transmitted in Federal Funds
ordinarily on the same day and the shares will not receive the dividend
declared on that day. If the request is received later that day by the
Transfer Agent, the shares will receive the dividend declared on that day,
and the proceeds of redemption, if wire transfer is requested, will be
transmitted in Federal Funds ordinarily on the next business day.

The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent or the Distributor or its
designee, as the case may be, of a redemption request in proper form, except
as provided by the rules of the Securities and Exchange Commission. HOWEVER,
IF YOU HAVE PURCHASED SHARES OF THE SERIES BY CHECK, BY DREYFUS TELETRANSFER
PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, YOUR
REDEMPTION WILL BE EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE TRANSMITTED
TO YOU PROMPTLY UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS
TELETRANSFER PURCHASE OR DREYFUS-AUTOMATIC ASSET BUILDER ORDER, WHICH MAY
TAKE UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELE-
Page 12

PHONE OR PURSUANT TO THE DREYFUS TELETRANSFER PRIVILEGE, FOR A PERIOD OF EIGHT
BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE PURCHASE CHECK, THE
DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC ASSET BUILDER ORDER
AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT APPLY IF
YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE A
SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION REQUEST.
PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH SHARES WILL
ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL OTHER RIGHTS
OF BENEFICIAL OWNERSHIP. Shares of the Series will not be redeemed until the
Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account in either series
at its option upon not less than 45 days' written notice if your account's
net asset value is $500 or less and remains so during the notice period.
PROCEDURES

You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or through the Telephone Redemption Privilege
which is granted automatically unless you specifically refuse it by checking
the applicable "No" box on the Account Application. The Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or by oral request from any of the authorized
signatories on the account by calling 1-800-645-6561. You also may redeem
shares through the Check Redemption Privilege, the Wire Redemption Privilege,
or the Dreyfus TELETRANSFER Privilege, if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities. The Fund reserves the
right to refuse any request made by wire or telephone, including requests
made shortly after a change of address, and may limit the amount involved or
the number of such requests. The Fund may modify or terminate any redemption
Privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated. Shares of the Series held under Keogh
Plans, IRAs or other retirement plans, and shares for which certificates have
been issued, are not eligible for the Check Redemption, Wire Redemption,
Telephone Redemption or Dreyfus TELETRANSFER Privilege.

The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephonic (including over The
Dreyfus TouchRegistration Mark automated telephone system) instructions from
any person representing himself or herself to be you, and reasonably believed
by the Transfer Agent to be genuine. The Fund will require the Transfer Agent
to employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Transfer Agent or the Fund may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following instructions reasonably
believed to be genuine.

During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Series shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
shares by written request mailed to The Dreyfus Family of Funds, P.O. Box
9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement plan
accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427, Providence,
Rhode Island 02940-6427. Redemption requests may be delivered in person only
to a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND
AND WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the
nearest Dreyfus Financial Center, please call one of the telephone numbers
listed under "General Information." Redemption requests must be signed by
each shareholder, including each owner of a joint account, and each signature
must be guaranteed. The Transfer Agent has
Page 13

adopted standards and procedures pursuant to which signature-guarantees in
proper form generally will be accepted from domestic banks, brokers, dealers,
credit unions, national securities exchanges, registered securities
associations, clearing agencies and savings associations, as well as those
participants in the New York Stock Exchange Medallion Signature Program, the
Securities Transfer Agents Medallion Program ("STAMP") and the Stock Exchanges
Medallion Program. If you have any questions with respect to
signature-guarantees, please call one of the telephone numbers listed under
"General Information."
Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $500 or more. Redemption Checks should not be used to
close your account. The Redemption Checks are free, but the Transfer Agent
will impose a fee for stopping payment of a Redemption Check upon your
request or if the Transfer Agent cannot honor a Redemption Check because of
insufficient funds or other valid reason. You should date your Redemption
Checks with the current date when you write them. Please do not postdate your
Redemption Check. If you do, the Transfer Agent will honor, upon presentment,
even if presented before the date of the check, all postdated Redemption
Checks which are dated within six months of presentment for payment, if they
are otherwise in good order. If you hold shares in a Dreyfus-sponsored IRA
account, you may be permitted to make withdrawals from your IRA account using
checks furnished to you by The Dreyfus Trust Company.
WIRE REDEMPTION PRIVILEGE _ You may request by wire or telephone that
redemption proceeds (minimum $1,000 ) be wired to your account at a bank
which is a member of the Federal Reserve System, or a correspondent bank if
your bank is not a member. You also may direct that redemption proceeds be
paid by check (maximum $150,000 per day) made out to the owners of record and
mailed to your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired within any
30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.

TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
DREYFUS TELETRANSFER PRIVILEGE _ You may request by telephone that redemption
proceeds (minimum $500 per day) be transferred between your Fund account and
your bank account. Only a bank account maintained in a domestic financial
institution which is an Automated Clearing House member may be designated.
Redemption proceeds will be on deposit in your account at an Automated
Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $250,000 within any 30-day period.

If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by calling 1-800-645-6561
or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
The Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1%
of the value of the Series' average daily net assets for certain allocated
expenses of providing personal services and/or maintaining shareholder
accounts. The services provided
Page 14

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.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from the Series' net
investment income on each day the New York Stock Exchange is open for
business. The Series' earnings for Saturdays, Sundays and holidays are
declared as dividends on the preceding business day. Dividends usually are
paid on the last business day of each month, and are automatically reinvested
in additional shares of the Series at net asset value or, at your option,
paid in cash. If you redeem all shares in your account at any time during the
month, all dividends to which you are entitled are paid to you along with the
proceeds of the redemption. If you are an omnibus accountholder and indicate
in a partial redemption request that a portion of any accrued dividends to
which such account is entitled belongs to an underlying account-holder who
has redeemed all shares in his or her account, such portion of the accrued
dividends will be paid to you along with the proceeds of the redemption.
Distributions from net realized securities gains, if any, generally are
declared and paid once a year, but the Fund may make distributions on a more
frequent basis to comply with the distribution requirements of the Internal
Revenue Code of 1986, as amended (the "Code"), in all events in a manner
consistent with the provisions of the 1940 Act. The Fund will not make
distributions from net realized securities gains unless capital loss
carryovers, if any, have been utilized or have expired. You may choose
whether to receive distributions in cash or to reinvest in additional shares
of the Series at net asset value. All expenses are accrued daily and deducted
before declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from any net realized short-term securities gains of the Series
and all or a portion of any gains realized from the sale or other disposition
of certain market discount bonds, paid by the Series will be taxable to U.S.
shareholders as ordinary income whether received in cash or reinvested in
additional shares of the Series. No dividend paid by the Fund will qualify
for the dividends received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains of the Series will
be taxable as long-term capital gains, regardless of how long shareholders
have held their Series shares and whether such distributions are received in
cash or reinvested in additional Series shares. The Code provides that the
net capital gain of an individual generally will not be subject to Federal
income tax at a rate in excess of 28%. Dividends and distributions may be
subject to certain state and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by the Series to a foreign investor generally are
subject to U.S. nonresident withholding taxes at the rate of 30%, unless the
foreign investor claims the benefit of a lower rate specified in a tax
treaty. Distributions from net realized long-term securities gains paid by
the Series to a foreign investor generally will not be subject to U.S.
nonresident withholding tax. However, such distributions may be subject to
backup withholding, as described below, unless the foreign investor certifies
his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions will
be mailed to you annually. You also will receive periodic summaries of your
account which will include information as to income dividends and
distributions from securities gains, if any, paid during the year. Dividends
and distributions attributable to interest from direct obligations of the
United States and paid by the Series to individuals currently are not subject
to tax in most states. Dividends and distributions attributable to interest
from other securities in which the Series may invest may be subject to state
tax. The Fund intends to provide shareholders with a statement which sets
forth the percentage of dividends and distributions paid by the Series that
is attributable to interest income from direct obligations of the United
States.
Page 15

The exchange of shares of one fund or series for shares of another
fund or series is treated for Federal income tax purposes as a sale of the
shares given in exchange by the shareholder and, therefore, an exchanging
shareholder may realize a taxable gain or loss.
Federal regulations generally require the Series to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains paid to a shareholder if
such shareholder fails to certify either that the TIN furnished in connection
with opening an account is correct, or that such shareholder has not received
notice from the IRS of being subject to backup withholding as a result of a
failure to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Series to institute
backup withholding if the IRS determines a shareholder's TIN is incorrect or
if a shareholder has failed to properly report taxable dividend and interest
income on a Federal income tax return.
A TIN is either the Social Security number or employer identification
number of the record owner of the account. Any tax withheld as a result of
backup withholding does not constitute an additional tax imposed on the
record owner of the account, and may be claimed as a credit on the record
owner's Federal income tax return.
Management believes that the Series has qualified for the fiscal year
ended December 31, 1996 as a "regulated investment company" under the Code.
The Series intends to continue to so qualify, if such qualification is in the
best interests of its shareholders. Such qualification relieves the Series of
any liability for Federal income taxes to the extent its earnings are
distributed in accordance with applicable provisions of the Code. The Series
is subject to a nondeductible 4% excise tax, measured with respect to certain
undistributed amounts of taxable investment income and capital gains, if any.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on December 30, 1974 and
began offering shares of the Money Market Series on April 28, 1975. On April
23, 1979, shareholders of the Fund authorized the issuance and sale of shares
of the Series. The Fund is authorized to issue 15 billion shares of Common
Stock (10 billion in the Series and 5 billion in the Money Market Series),
par value $.01 per share. Each share has one vote.
The Fund is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for
certain matters under the1940 Act and for other purposes. A shareholder of
one series is not deemed to be a shareholder of any other series. For certain
matters Fund shareholders vote together as a group; as to others they vote
separately by series.
To date, two series of shares have been authorized. All consideration
received by the Fund for shares of one of the series and all assets in which
such consideration is invested, belong to that series (subject only to the
rights of creditors of the Fund) and will be subject to the liabilities
related thereto. The income attributable to, and the expenses of, one series
are treated separately from those of the other series.
Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Board members or
the appointment of auditors. However, pursuant to the Fund's By-Laws, the
holders of at least 10% of the shares outstanding and entitled to vote may
require the Fund to hold a special meeting of shareholders for purposes of
removing a Board member from office and the holders of at least 25% of such
shares may require the Fund to hold a special meeting of shareholders for any
other purpose. Fund shareholders may remove a Board member by the affirmative
vote of a majority of the Fund's outstanding voting shares. In addition, the
Fund's Board will call a meeting of shareholders for the purpose of electing
Board members if, at any time, less than a majority of the Board members then
holding office have been elected by shareholders.
Page 16

The Transfer Agent maintains a record of your ownership and sends you
confirmations and statements of your account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561. In New York City, call 1-718-895-1206; outside the U.S. and
Canada, call 516-794-5452.
Page 17

APPENDIX
INVESTMENT TECHNIQUES
LENDING PORTFOLIO SECURITIES _ The Series may lend securities from its
portfolio to brokers, dealers and other financial institutions needing to
borrow securities to complete certain transactions. The Series continues to
be entitled to payments in amounts equal to the interest or other
distributions payable on the loaned securities which affords the Series an
opportunity to earn interest on the amount of the loan and on the loaned
securities' collateral. Loans of portfolio securities may not exceed 20% of
the value of the Series' total assets, and the Series will receive collateral
consisting of cash or U.S. Treasury securities which will be maintained at
all times in an amount equal to at least 100% of the current market value of
the loaned securities. Such loans are terminable by the Fund at any time upon
specified notice. The Series might experience risk of loss if the institution
with which it has engaged in a portfolio loan transaction breaches its
agreement with the Fund.
BORROWING _ The Series may borrow money from banks for temporary or
emergency (not leveraging) purposes in an amount up to 15% of the value of
its total assets (including the amount borrowed) valued at the lesser of cost
or market, less liabilities (not including the amount borrowed) at the time
the borrowing is made. While borrowings exceed 5% of the value of the Series'
total assets, the Series will not make any additional investments.
CERTAIN PORTFOLIO SECURITIES
U.S. TREASURY SECURITIES _ Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. The Series may invest in Treasury Bills, Treasury Notes and
Treasury Bonds.
REPURCHASE AGREEMENTS _ In a repurchase agreement, a Series buys, and the
seller agrees to repurchase, a security at a mutually agreed upon time and
price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a default
or insolvency of the other party to the agreement, including possible delays
or restrictions upon the Series' ability to dispose of the underlying
securities. The Series may enter into repurchase agreements with certain banks
or non-bank dealers.
ILLIQUID SECURITIES _ The Series may invest up to 10% of the value of its
net assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the Series' investment
objective. Such securities may include repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
Series is subject to a risk that should the Series desire to sell them when a
ready buyer is not available at a price the Fund deems representative of their
value, the value of the Series' net assets could be adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 18

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Page 19

Government
Securities Series
Dreyfus Money Market Instruments, Inc.
Prospectus

Registration Mark

Copy Rights 1997 Dreyfus Service Corporation
008p082597
Page 20

- ------------------------------------------------------------------------------
PROSPECTUS MAY 1, 1997

AS REVISED AUGUST 25, 1997

DREYFUS MONEY MARKET INSTRUMENTS, INC.
- ------------------------------------------------------------------------------
DREYFUS MONEY MARKET INSTRUMENTS, INC. (THE "FUND") IS AN OPEN-END,
DIVERSIFIED, MANAGEMENT INVESTMENT COMPANY, KNOWN AS A MONEY MARKET MUTUAL
FUND. THE FUND'S INVESTMENT OBJECTIVE IS TO PROVIDE YOU WITH AS HIGH A LEVEL
OF CURRENT INCOME AS IS CONSISTENT WITH THE PRESERVATION OF CAPITAL AND THE
MAINTENANCE OF LIQUIDITY.
THE FUND PERMITS YOU TO INVEST IN TWO SEPARATE PORTFOLIOS, THE
MONEY MARKET SERIES AND THE GOVERNMENT SECURITIES SERIES. THE MONEY MARKET
SERIES INVESTS IN SHORT-TERM MONEY MARKET INSTRUMENTS CONSISTING OF
SECURITIES ISSUED OR GUARANTEED BY THE U.S. GOVERNMENT OR ITS AGENCIES OR
INSTRUMENTALITIES, BANK OBLIGATIONS, REPURCHASE AGREEMENTS AND HIGH GRADE
COMMERCIAL PAPER. THE GOVERNMENT SECURITIES SERIES INVESTS ONLY IN SHORT-TERM
SECURITIES ISSUED OR GUARANTEED AS TO PRINCIPAL AND INTEREST BY THE U.S.
GOVERNMENT.
YOU CAN INVEST, REINVEST OR REDEEM SHARES AT ANY TIME WITHOUT
CHARGE OR PENALTY. THE FUND PROVIDES FREE REDEMPTION CHECKS, WHICH YOU CAN
USE IN AMOUNTS OF $500 OR MORE FOR CASH OR TO PAY BILLS. YOU CONTINUE TO EARN
INCOME ON THE AMOUNT OF THE CHECK UNTIL IT CLEARS. YOU CAN PURCHASE OR REDEEM
SHARES BY TELEPHONE USING DREYFUS TELETRANSFER.
THE DREYFUS CORPORATION PROFESSIONALLY MANAGES THE FUND'S
PORTFOLIOS.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND
THAT YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.

AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT EACH SERIES WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE.
MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY.
TABLE OF CONTENTS
Page Page
Annual Fund Operating Expenses. 3 Shareholder Services.............. 11
Condensed Financial Information 4 How to Redeem Shares.............. 14
Yield Information.............. 5 Shareholder Services Plan......... 17
Description of the Fund........ 5 Dividends, Distributions and Taxes 17
Management of the Fund......... 7 General Information............... 18
How to Buy Shares.............. 8 Appendix.......................... 20
- ------------------------------------------------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
[This Page Intentionally Left Blank]
Page 2

ANNUAL FUND OPERATING EXPENSES
(as a percentage of average daily net assets)
MONEY GOVERNMENT
MARKET SECURITIES
SERIES SERIES
___________ _____________
Management Fees .................................. .50% .50%
Other Expenses.................................... .43% .40%
Total Fund Operating Expenses..................... .93% .90%
Example:
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period:
1 YEAR.. $ 9 $ 9
3 YEARS. $ 30 $ 29
5 YEARS. $ 51 $ 50
10 YEARS $114 $111
- ------------------------------------------------------------------------------
The amounts listed in the example should not be considered as
representative of past or future expenses and actual expenses may be greater
or less than those indicated. Moreover, while the example assumes a 5% annual
return, each series' actual performance will vary and may result in an actual
return greater or less than 5%.
- ------------------------------------------------------------------------------
The purpose of the foregoing table is to assist you in
understanding the costs and expenses borne by each series, the payment of
which will reduce investors' annual return. You can purchase shares of either
series without charge directly from the Fund's distributor; you may be
charged a fee if you effect transactions in shares of either series through a
securities dealer, bank or other financial institution. See "Management of
the Fund" and "Shareholder Services Plan."
Page 3

CONDENSED FINANCIAL INFORMATION
The information in the following tables has been audited by Ernst &
Young LLP, the Fund's independent auditors, whose report thereon appears in
the Statement of Additional Information. Further financial data and related
notes are included in the Statement of Additional Information, available upon
request.
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 year indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>

Money Market Series
-------------------------------------------------------------------------------------------------
Year Ended December 31,
--------------------------------------------------------------------------------------------------
PER SHARE DATA: 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
-------- ------- ------- ------- ------- ------- -------- ------- ------- -------
Net asset value,
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Investment Operations:
Investment income-net..... .061 .069 .086 .076 .058 .035 .026 .034 .053 .046
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment
income-net (.061) (.069) (.086) (.076) (.058) (.035) (.026) (.034) (.053) (.046)
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of year.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN........ 6.24% 7.12% 9.00% 7.88% 5.95% 3.51% 2.64% 3.42% 5.46% 4.73%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets .67% .71% .74% .74% .72% .75% .83% .88% .84% .93%
Ratio of net investment income
to average net assets....... 6.07% 6.86% 8.65% 7.62% 5.83% 3.48% 2.62% 3.35% 5.33% 4.63%
Net Assets, end of year
(000's omitted) $503,167 $381,379 $357,660 $334,432 $282,356 $242,326 $207,537 $170,548 $144,172 $129,344

Government Securities Series
-------------------------------------------------------------------------------------------------
Year Ended December 31,
-------------------------------------------------------------------------------------------------
PER SHARE DATA: 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value,
beginning of year $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
-------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Investment Operations:
Investment income-net......... .057 .066 .084 .074 .055 .034 .025 .033 .051 .045
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment
income-net (.057) (.066) (.084) (.074) (.055) (.034) (.025) (.033) (.051) (.045)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net asset value, end of year.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN......... 5.87% 6.80% 8.71% 7.61% 5.65% 3.45% 2.48% 3.31% 5.18% 4.60%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets .65% .72% .70% .70% .69% .72% .80% .88% .83% .90%
Ratio of net investment income
to average net assets..... 5.71% 6.56% 8.35% 7.35% 5.51% 3.39% 2.46% 3.24% 5.07% 4.50%
Net Assets, end of year
(000's omitted) $791,651 $658,201 $651,700 $724,202 $706,544 $657,561 $520,708 $465,956 $431,444 $441,769
</TABLE>

Page 4

YIELD INFORMATION
From time to time, each series advertises its yield and effective
yield. Both yield figures are based on historical earnings and are not
intended to indicate future performance. It can be expected that these yields
will fluctuate substantially. The yield of a series refers to the income
generated by an investment in the series over a seven-day period (which
period will be stated in the advertisement). This income is then annualized.
That is, the amount of income generated by the investment during that week is
assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The effective yield is calculated similarly,
but, when annualized, the income earned by an investment in the series is
assumed to be reinvested. The effective yield will be slightly higher than
the yield because of the compounding effect of this assumed reinvestment.
Each series' yield and effective yield may reflect absorbed expenses pursuant
to any undertakings that may be in effect. See "Management of the Fund."
Yield information is useful in reviewing the Fund's performance,
but because yields will fluctuate, under certain conditions such information
may not provide a basis for comparison with domestic bank deposits, other
investments which pay a fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield.
Comparative performance information may be used from time to time
in advertising or marketing the Fund's shares, including data from Lipper
Analytical Services, Inc., IBC's Money Fund Reporttrademark, Bank Rate
Monitortrademark, N. Palm Beach, Fla. 33408, Morningstar, Inc. and other
industry publications.
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE
The Fund's investment objective is to provide you with as high a
level of current income as is consistent with the preservation of capital and
the maintenance of liquidity. It cannot be changed, as to a series, without
approval by the holders of a majority (as defined in the Investment Company
Act of 1940, as amended (the "1940 Act")) of such series' outstanding voting
shares. There can be no assurance that the series' investment objective will
be achieved. Each series pursues this objective in the manner described
below. Securities in which the series invest may not earn as high a level of
current income as long-term or lower quality securities which generally have
less liquidity, greater market risk and more fluctuation in market value.
MANAGEMENT POLICIES
Each series seeks to maintain a net asset value of $1.00 per share
for purchases and redemptions. To do so, the Fund uses the amortized cost
method of valuing each series' securities pursuant to Rule 2a-7 under the
1940 Act, which Rule includes various maturity, quality and diversification
requirements, certain of which are summarized below.
In accordance with Rule 2a-7, each series is required to maintain a
dollar-weighted average portfolio maturity of 90 days or less, purchase only
instruments having remaining maturities of 13 months or less and invest only
in U.S. dollar denominated securities determined in accordance with
procedures established by the Fund's Board to present minimal credit risks
and, with respect to the Money Market Series, which are rated in one of the
two highest rating categories for debt obligations by at least two nationally
recognized statistical rating organizations (or one rating organization if
the instrument was rated by only one such organization), or, if unrated, are
of comparable quality as determined in accordance with procedures established
by the Fund's Board. The nationally recognized statistical rating
organizations currently rating instruments of the type the Money Market
Series may purchase are Moody's Investors Service, Inc., Standard & Poor's
Ratings Group,
Page 5

Duff & Phelps Credit Rating Co., Fitch Investors Service, L.P., IBCA Limited
and IBCA Inc. and Thomson BankWatch, Inc., and their rating criteria are
described in the "Appendix" to the Statement of Additional Information. For
further information regarding the amortized cost method of valuing securities,
see "Determination of Net Asset Value" in the Statement of Additional
Information. There can be no assurance that the series will be able to
maintain a stable net asset value of $1.00 per share.
THE MONEY MARKET SERIES _ The Money Market Series invests in short-term
money market obligations, including securities issued or guaranteed by the
U.S. Government or its agencies or instrumentalities, certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks, and domestic and foreign branches of foreign banks,
repurchase agreements, and high grade domestic and foreign commercial paper
and other short-term corporate obligations, including those with floating or
variable rates of interest. The Money Market Series may invest in U.S. dollar
denominated obligations issued or guaranteed by one or more foreign
governments or any of their political subdivisions, agencies or
instrumentalities, including obligations of supranational entities. See
"Appendix_Certain Portfolio Securities." Generally, at least 25% of the
value of the Money Market Series' total assets will be invested in bank
obligations. See "Investment Considerations and Risks" below.
THE GOVERNMENT SECURITIES SERIES _ The Government Securities Series invests
only in short-term securities issued or guaranteed as to principal and
interest by the U.S. Government (whether or not subject to repurchase
agreements). See "Appendix _ Certain Portfolio Securities." In addition, the
Government Securities Series is permitted to lend portfolio securities. See
"Appendix_Investment Techniques."
INVESTMENT CONSIDERATIONS AND RISKS
GENERAL _ Each series attempts to increase yields by trading to take
advantage of short-term market variations. This policy is expected to result
in high portfolio turnover but should not adversely affect the series since
it usually does not pay brokerage commissions when it purchases short-term
debt obligations. The value of the portfolio securities held by the series
will vary inversely to changes in prevailing interest rates. Thus, if
interest rates have increased from the time a security was purchased, such
security, if sold, might be sold at a price less than its cost. Similarly, if
interest rates have declined from the time a security was purchased, such
security, if sold, might be sold at a price greater than its purchase cost.
In either instance, if the security was purchased at face value and held to
maturity, no gain or loss would be realized.
FOREIGN SECURITIES _ Since the Money Market Series' portfolio may contain
securities issued by foreign governments, or any of their political
subdivisions, agencies or instrumentalities, and by foreign subsidiaries and
foreign branches of domestic banks, domestic and foreign branches of foreign
banks, and commercial paper issued by foreign issuers, the Money Market
Series may be subject to additional investment risks with respect to such
securities that are different in some respects from those incurred by a fund
which invests only in debt obligations in U.S. domestic issuers, although
such obligations may be higher yielding when compared to the securities of
U.S. domestic issuers. Such risks include possible adverse political and
economic developments, seizure or nationalization of foreign deposits and
adoption of governmental restrictions which might adversely affect or
restrict the payment of principal and interest on these securities to
investors located outside the country of the issuer.
BANK SECURITIES _ To the extent the Money Market Series' investments are
concentrated in the banking industry, the series will have correspondingly
greater exposure to the risk factors which are characteristic of such
investments. Sustained increases in interest rates can adversely affect the
availability or liquidity and cost of capital funds for a bank's lending
activities, and a deterioration in general economic conditions
Page 6
could increase the exposure to credit losses. In addition, the value of and
the investment return on the Money Market Series' shares could be affected by
economic or regulatory developments in or related to the banking industry,
which industry also is subject to the effects of competition within the
banking industry as well as with other types of financial institutions. The
Money Market Series, however, will seek to minimize its exposure to such risks
by investing only in debt securities which are determined to be of high
quality.
SIMULTANEOUS INVESTMENTS _ Investment decisions for the Fund are made
independently from those of other investment companies advised by The Dreyfus
Corporation. If, however, such other investment companies desire to invest
in, or dispose of, the same securities as the Fund, available investments or
opportunities for sales will be allocated equitably to each investment
company. In some cases, this procedure may adversely affect the price paid or
received by the Fund or the size of the position obtained for or disposed of
by the Fund.
MANAGEMENT OF THE FUND

For the year ended December 31, 1996, the Fund paid The Dreyfus
Corporation a monthly management fee at the annual rate of .50 of 1% of the
value of each series' average daily net assets. From time to time, The
Dreyfus Corporation may waive receipt of its fees and/or voluntarily assume
certain expenses of either series of the Fund, which would have the effect of
lowering the expense ratio of that series and increasing yield to investors.
The Fund will not pay The Dreyfus Corporation at a later time for any amounts
it may waive, nor will the Fund reimburse The Dreyfus Corporation for any
amounts it may assume.
In allocating brokerage transactions, The Dreyfus Corporation seeks
to obtain the best execution of orders at the most favorable net price.
Subject to this determination, The Dreyfus Corporation may consider, among
other things, the receipt of research services and/or the sale of shares of
the Fund or other funds managed, advised or administered by The Dreyfus
Corporation as factors in the selection of broker-dealers to execute
portfolio transactions for the Fund. See "Portfolio Transactions" in the
Statement of Additional Information.
Page 7

The Dreyfus Corporation may pay the Fund's distributor for
shareholder services from The Dreyfus Corporation's own assets, including
past profits but not including the management fee paid by the Fund. The
Fund's distributor may use part or all of such payments to pay securities
dealers, banks or other financial institutions in respect of these services.
DISTRIBUTOR _ The Fund's distributor is Premier Mutual Fund Services, Inc.
(the "Distributor"), located at 60 State Street, Boston, Massachusetts 02109.
The Distributor's ultimate parent is Boston Institutional Group, Inc.
TRANSFER AND DIVIDEND DISBURSING AGENT AND CUSTODIAN _ Dreyfus Transfer,
Inc., a wholly-owned subsidiary of The Dreyfus Corporation, P.O. Box 9671,
Providence, Rhode Island 02940-9671, is the Fund's Transfer and Dividend
Disbursing Agent (the "Transfer Agent"). The Bank of New York, 90 Washington
Street, New York, New York 10286, is the Fund's Custodian.

HOW TO BUY SHARES
Shares of each series are sold without a sales charge. You may be
charged a fee if you effect transactions in shares of either series through a
securities dealer, bank or other financial institution. Stock certificates
are issued only upon your written request. No certificates are issued for
fractional shares. The Fund reserves the right to reject any purchase order.
The minimum initial investment in the Money Market Series is
$50,000, unless you are a client of a securities dealer, bank or other
financial institution which maintains an omnibus account in the Fund and has
made an aggregate minimum initial purchase for its customers of $50,000. The
minimum initial investment in the Government Securities Series is $2,500, or
$1,000 if you are a client of a securities dealer, bank or other financial
institution which maintains an omnibus account in the Fund and has made an
aggregate minimum initial purchase for its customers of $2,500. Subsequent
investments in either series must be at least $100. However, the minimum
initial investment in the Government Securities Series for Dreyfus-sponsored
Keogh Plans, IRAs, SEP-IRAs and 403(b)(7) Plans with only one participant is
$750, with no minimum for subsequent purchases. Individuals who open an IRA
also may open a non-working spousal IRA with a minimum initial investment of
$250. Subsequent investments in a spousal IRA must be at least $250. The
initial investment must be accompanied by the Account Application. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries, directors of The Dreyfus Corporation, Board
members of a fund advised by The Dreyfus Corporation, including members of
the Fund's Board, or the spouse or minor child of any of the foregoing, the
minimum initial investment in the Government Securities Series is $1,000. For
full-time or part-time employees of The Dreyfus Corporation or any of its
affiliates or subsidiaries who elect to have a portion of their pay directly
deposited into their Fund accounts, the minimum initial investment in the
Government Securities Series is $50. The Fund reserves the right to offer
shares of the Government Securities Series without regard to minimum purchase
requirements to employees participating in certain qualified or non-qualified
employee benefit plans or other programs where contributions or account
information can be transmitted in a manner and form acceptable to the Fund.
The Fund reserves the right to vary further the initial and subsequent
investment minimum requirements at any time. Shares of each series also are
offered without regard to the minimum initial investment requirements through
Dreyfus-AUTOMATIC Asset BuilderRegistration Mark, Dreyfus Government Direct
Deposit Privilege or Dreyfus Payroll Savings Plan pursuant to the Dreyfus
Step Program described under "Shareholder Services." These services enable
you to make regularly scheduled investments and may
Page 8

provide you with a convenient way to invest for long-term financial goals. You
should be aware, however, that periodic investment plans do not guarantee a
profit and will not protect an investor against loss in a declining market.
You may purchase Fund shares by check or wire, or through the
Dreyfus TELETRANSFER Privilege described below. Checks should be made payable
to "The Dreyfus Family of Funds," or, if for Dreyfus retirement plan
accounts, to "The Dreyfus Trust Company, Custodian." Payments to open new
accounts which are mailed should be sent to The Dreyfus Family of Funds, P.O.
Box 9387, Providence, Rhode Island 02940-9387, together with your Account
Application indicating the name of the series being purchased. For subsequent
investments, your Fund account number should appear on the check and an invest
ment slip should be enclosed and sent to The Dreyfus Family of Funds, P.O.
Box 105, Newark, New Jersey 07101-0105. For Dreyfus retirement plan accounts,
both initial and subsequent investments should be sent to The Dreyfus Trust
Company, Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427.
Neither initial nor subsequent investments should be made by third party
check. Purchase orders may be delivered in person only to a Dreyfus Financial
Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY
UPON RECEIPT THEREBY. For the location of the nearest Dreyfus Financial
Center, please call one of the telephone numbers listed under "General
Information."

Wire payments may be made to The Bank of New York if your bank
account is in a commercial bank that is a member of the Federal Reserve
System or any other bank having a correspondent bank in New York City.
Immediately available funds may be transmitted by wire for the Money Market
Series to The Bank of New York, DDA #8900051841/Dreyfus Money Market
Instruments/Money Market Series, or for the Government Securities Series to
The Bank of New York, DDA #8900051728/Dreyfus Money Market
Instruments/Government Securities Series, for purchase of Fund shares in your
name. The wire must include your Fund account number (for new accounts, your
Taxpayer Identification Number ("TIN") should be included instead), account
registration and dealer number, if applicable. If your initial purchase of
Fund shares is by wire, please call 1-800-645-6561 after completing your wire
payment to obtain your Fund account number. Please include your Fund account
number on the Account Application and promptly mail the Account Application
to the Fund, as no redemption will be permitted until the Account Application
is received. You may obtain further information about remitting funds in this
manner from your bank. All payments should be made in U.S. dollars and, to
avoid fees and delays, should be drawn only on U.S. banks. A charge will be
imposed if any check used for investment in your account does not clear. The
Fund makes available to certain large institutions the ability to issue
purchase instructions through compatible computer facilities.

Each series' shares are sold on a continuous basis at the net asset
value per share next determined after an order and Federal Funds (monies of
member banks within the Federal Reserve System which are held on deposit at a
Federal Reserve Bank) are received by the Transfer Agent or other agent or
entity under the direction of such agents in written or telegraphic form. If
you do not remit Federal Funds, your payment must be converted into Federal
Funds. This usually occurs within one day of receipt of a bank wire and
within two business days of receipt of a check drawn on a member bank of the
Federal Reserve System.
Page 9

Checks drawn on banks which are not members of the Federal Reserve System may
take considerably longer to convert into Federal Funds. Prior to receipt of
Federal Funds, your money will not be invested.

The net asset value per share of each series is determined twice
each business day at 12:00 Noon, New York time, and as of the close of
trading on the floor of the New York Stock Exchange (currently 4:00 p.m., New
York time), on each day the New York Stock Exchange or, with respect to the
Money Market Series, the Transfer Agent is open for business. Net asset value
per share is computed by dividing the value of the net assets of each series
(i.e., the value of its assets less liabilities) by the total number of
shares of such series outstanding. See "Determination of Net Asset Value" in
the Statement of Additional Information.

Qualified institutions may telephone orders for purchase of either
series' shares by telephoning the Distributor or its designee toll free at
1-800-346-3621; in New York City, call 1-718-895-1650; on Long Island, call
794-5452. A telephone order placed with the Distributor or its designee in
New York will become effective at the price determined at 12:00 Noon, New
York time, and the shares purchased will receive the dividend on such series'
shares declared on that day if such order is placed by 12:00 Noon, New York
time, and Federal Funds are received by the Transfer Agent by 4:00 p.m., New
York time.

The Distributor may pay dealers a fee of up to .5% of the amount
invested through such dealers in series' shares by employees participating in
qualified or non-qualified employee benefit plans or other programs where (i)
the employers or affiliated employers maintaining such plans or programs have
a minimum of 250 employees eligible for participation in such plans or
programs, or (ii) such plan's or program's aggregate investment in the
Dreyfus Family of Funds or certain other products made available by the
Distributor to such plans or programs exceeds $1,000,000 ("Eligible Benefit
Plans"). Shares of funds in the Dreyfus Family of Funds then held by Eligible
Benefit Plans will be aggregated to determine the fee payable. The
Distributor reserves the right to cease paying these fees at any time. The
Distributor will pay such fees from its own funds, other than amounts
received from the Fund, including past profits or any other source available
to it.
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Distributions and Taxes" and
the Account Application for further information concerning this requirement.
Failure to furnish a certified TIN to the Fund could subject you to a $50
penalty imposed by the Internal Revenue Service (the "IRS").
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase shares of either series
(minimum $500, maximum $150,000 per day) by telephone if you have checked the
appropriate box and supplied the necessary information on the Account
Application or have filed a Shareholder Services Form with the Transfer
Agent. The proceeds will be transferred between the bank account designated
in one of these documents and your Fund account. Only a bank account
maintained in a domestic financial institution which is an Automated Clearing
House member may be so designated. The Fund may modify or terminate this
Privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of shares by telephoning
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
PROCEDURES FOR MULTIPLE ACCOUNTS _ Special procedures have been designed for
banks and other institutions that wish to open multiple accounts. The
institution may open a single master account by filing
Page 10

one application with the Transfer Agent, and may open individual sub-accounts
at the same time or at some later date. For further information, please refer
to the Statement of Additional Information.
SHAREHOLDER SERVICES
FUND EXCHANGES _ You may purchase, in exchange for shares of a series,
shares of the Fund's other series or shares of certain other funds managed or
administered by The Dreyfus Corporation, to the extent such shares are
offered for sale in your state of residence. These funds have different
investment objectives which may be of interest to you. If you desire to use
this service, please call 1-800-645-6561 to determine if it is available and
whether any conditions are imposed on its use.
To request an exchange, you must give exchange instructions to the
Transfer Agent in writing or by telephone. Before any exchange, you must
obtain and should review a copy of the current prospectus of the fund into
which the exchange is being made. Prospectuses may be obtained by calling
1-800-645-6561. Except in the case of personal retirement plans, the shares
being exchanged must have a current value of at least $500; furthermore, when
establishing a new account by exchange, the shares being exchanged must have
a value of at least the minimum initial investment required for the fund or
series into which the exchange is being made. The ability to issue exchange
instructions by telephone is given to all Fund shareholders automatically,
unless you check the applicable "No" box on the Account Application,
indicating that you specifically refuse this Privilege. The Telephone
Exchange Privilege may be established for an existing account by written
request signed by all shareholders on the account, by a separate signed
Shareholder Services Form, available by calling 1-800-645-6561, or by oral
request from any of the authorized signatories on the account, by calling
1-800-645-6561. If you have established the Telephone Exchange Privilege, you
may telephone exchange instructions (including over The Dreyfus
TouchRegistration Mark automated telephone system) by calling 1-800-645-6561.
If you are calling from overseas, call 516-794-5452. See "How to Redeem
Shares _ Procedures." Upon an exchange into a new account, the following
shareholder services and privileges, as applicable and where available, will
be automatically carried over to the fund into which the exchange is made:
Telephone Exchange Privilege, Check Redemption Privilege, Wire Redemption
Privilege, Telephone Redemption Privilege, Dreyfus TELETRANSFER Privilege and
the dividend/capital gain distribution option (except for Dreyfus Dividend
Sweep) selected by the investor.
Shares will be exchanged at the next determined net asset value;
however, a sales load may be charged with respect to exchanges into funds
sold with a sales load. If you are exchanging into a fund that charges a
sales load, you may qualify for share prices which do not include the sales
load or which reflect a reduced sales load, if the shares you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or distributions paid with respect to the foregoing categories
of shares. To qualify, at the time of the exchange you must notify the
Transfer Agent. Any such qualification is subject to confirmation of your
holdings through a check of appropriate records. See "Shareholder Services"
in the Statement of Additional Information. No fees currently are charged
shareholders directly in connection with exchanges, although the Fund
reserves the right, upon not less than 60 days' written notice, to charge
shareholders a nominal administrative fee in accordance with rules
promulgated by the Securities and Exchange Commission. The Fund reserves the
right to reject any exchange request in whole or in part. The availability of
Fund Exchanges may be modified or terminated at any time upon notice to
shareholders. See "Dividends, Distributions and Taxes."
DREYFUS AUTO-EXCHANGE PRIVILEGE _ Dreyfus Auto-Exchange Privilege enables
you to invest regularly (on a semi-monthly, monthly, quarterly or annual
basis), in exchange for shares of either series of the Fund,
Page 11

in shares of the Fund's other series or certain other funds in the Dreyfus
Family of Funds of which you are a shareholder. The amount you designate,
which can be expressed either in terms of a specific dollar or share amount
($100 minimum), will be exchanged automatically on the first and/or fifteenth
of the month according to the schedule you have selected. Shares will be
exchanged at the then-current net asset value; however, a sales load may be
charged with respect to exchanges into funds sold with a sales load. See
"Shareholder Services" in the Statement of Additional Information. The right
to exercise this Privilege may be modified or cancelled by the Fund or the
Transfer Agent. You may modify or cancel your exercise of this Privilege at
any time by mailing written notification to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671. The Fund may charge a service
fee for the use of this Privilege. No such fee currently is contemplated. For
more information concerning this Privilege and the funds in the Dreyfus
Family of Funds eligible to participate in this Privilege, or to obtain a
Dreyfus Auto-Exchange Authorization Form, please call toll free
1-800-645-6561. See "Dividends, Distributions and Taxes."
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark _ Dreyfus-AUTOMATIC Asset
Builder permits you to purchase shares (minimum of $100 and maximum of
$150,000 per transaction) at regular intervals selected by you. Fund shares
are purchased by transferring funds from the bank account designated by you.
At your option, the bank account designated by you will be debited in the
specified amount, and Fund shares will be purchased, once a month, on either
the first or fifteenth day, or twice a month, on both days. Only an account
maintained at a domestic financial institution which is an Automated Clearing
House member may be so designated. To establish a Dreyfus-AUTOMATIC Asset
Builder account, you must file an authorization form with the Transfer Agent.
You may obtain the necessary authorization form by calling 1-800-645-6561.
You may cancel your participation in this Privilege or change the amount of
your purchase at any time by mailing written notification to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671, or, if
for Dreyfus retirement plan accounts, to The Dreyfus Trust Company,
Custodian, P.O. Box 6427, Providence, Rhode Island 02940-6427. The
notification will be effective three business days following receipt. The
Fund may modify or terminate this Privilege at any time or charge a service
fee. No such fee currently is contemplated.
DREYFUS GOVERNMENT DIRECT DEPOSIT PRIVILEGE _ Dreyfus Government Direct
Deposit Privilege enables you to purchase shares (minimum of $100 and maximum
of $50,000 per transaction) by having Federal salary, Social Security, or
certain veterans', military or other payments from the Federal government
automatically deposited into your Fund account. You may deposit as much of
such payments as you elect. To enroll in Dreyfus Government Direct Deposit,
you must file with the Transfer Agent a completed Direct Deposit Sign-Up Form
for each type of payment that you desire to include in the Privilege. The
appropriate form may be obtained by calling 1-800-645-6561. Death or legal
incapacity will terminate your participation in this Privilege. You may elect
at any time to terminate your participation by notifying in writing the
appropriate Federal agency. Further, the Fund may terminate your
participation upon 30 days' notice to you.
DREYFUS PAYROLL SAVINGS PLAN _ Dreyfus Payroll Savings Plan permits you to
purchase shares (minimum of $100 per transaction) automatically on a regular
basis. Depending upon your employer's direct deposit program, you may have
part or all of your paycheck transferred to your existing Dreyfus account
electronically through the Automated Clearing House system at each pay
period. To establish a Dreyfus Payroll Savings Plan account, you must file an
authorization form with your employer's payroll department. Your employer
must complete the reverse side of the form and return it to The Dreyfus
Family of Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. You may
obtain the necessary authorization
Page 12

form by calling 1-800-645-6561. You may change the amount of purchase or
cancel the authorization only by written notification to your employer. It is
the sole responsibility of your employer, not the Distributor, The Dreyfus
Corporation, the Fund, the Transfer Agent or any other person, to arrange for
transactions under the Dreyfus Payroll Savings Plan. The Fund may modify or
terminate this Privilege at any time or charge a service fee. No such fee
currently is contemplated. Shares of the Government Securities Series held
under Keogh Plans, IRAs or other retirement plans are not eligible for this
Privilege.
DREYFUS STEP PROGRAM _ Dreyfus Step Program enables you to purchase Fund
shares without regard to the Fund's minimum initial investment requirements
through Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government Direct Deposit
Privilege or Dreyfus Payroll Savings Plan. To establish a Dreyfus Step
Program account, you must supply the necessary information on the Account
Application and file the required authorization form(s) with the Transfer
Agent. For more information concerning this Program, or to request the
necessary authorization form(s), please call toll free 1-800-782-6620. You
may terminate your participation in this Program at any time by discontinuing
your participation in Dreyfus-AUTOMATIC Asset Builder, Dreyfus Government
Direct Deposit Privilege or Dreyfus Payroll Savings Plan, as the case may be,
as provided under the terms of such Privilege(s). The Fund may modify or
terminate this Program at any time. Investors who wish to purchase shares of
the Government Securities Series through the Dreyfus Step Program in
conjunction with a Dreyfus-sponsored retirement plan may do so only for IRAs,
SEP-IRAs and IRA "Rollover Accounts."
DREYFUS DIVIDEND OPTIONS _ Dreyfus Dividend Sweep enables you to invest
automatically dividends or dividends and capital gain distributions, if any,
paid by the Fund in shares of another fund in the Dreyfus Family of Funds of
which you are a shareholder. Shares of the other fund will be purchased at
the then-current net asset value; however, a sales load may be charged with
respect to investments in shares of a fund sold with a sales load. If you are
investing in a fund that charges a sales load, you may qualify for share price
s which do not include the sales load or which reflect a reduced sales load.
If you are investing in a fund that charges a contingent deferred sales
charge, the shares purchased will be subject on redemption to the contingent
deferred sales charge, if any, applicable to the purchased shares. See
"Shareholder Services" in the Statement of Additional Information. Dreyfus
Dividend ACH permits you to transfer electronically dividends or dividends and
capital gain distributions, if any, from the Fund to a designated bank
account. Only an account maintained at a domestic financial institution which
is an Automated Clearing House member may be so designated. Banks may charge
a fee for this service.
For more information concerning these privileges or to request a
Dividend Options Form, please call toll free 1-800-645-6561. You may cancel
these privileges by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of these privileges is effective three business
days following receipt. These privileges are available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply to Dreyfus Dividend Sweep. The Fund may modify or
terminate these privileges at any time or charge a service fee. No such fee
currently is contemplated. Shares of the Government Securities Series held
under Keogh Plans, IRAs or other retirement plans are not eligible for
Dreyfus Dividend Sweep.
QUARTERLY DISTRIBUTION PLAN _ The Quarterly Distribution Plan permits you to
receive quarterly payments from the Fund consisting of proceeds from the
redemption of shares purchased for your account through the automatic
reinvestment of dividends declared on your account during the preceding
calendar quarter.
Page 13

You may open a Quarterly Distribution Plan by submitting a request
to the Transfer Agent. The Quarterly Distribution Plan may be ended at any
time by you, the Fund or the Transfer Agent. Shares for which certificates
have been issued must be presented before redemption under the Quarterly
Distribution Plan.
AUTOMATIC WITHDRAWAL PLAN _ The Automatic Withdrawal Plan permits you to
request withdrawal of a specified dollar amount (minimum of $50) on either a
monthly or quarterly basis if you have a $5,000 minimum account. An
application for the Automatic Withdrawal Plan can be obtained by calling
1-800-645-6561. The Automatic Withdrawal Plan may be ended at any time by
you, the Fund or the Transfer Agent. Shares for which certificates have been
issued may not be redeemed through the Automatic Withdrawal Plan.
RETIREMENT PLANS _ The Government Securities Series offers a variety of
pension and profit-sharing plans, including Keogh Plans, IRAs, SEP-IRAs and
IRA "Rollover Accounts," 401(k) Salary Reduction Plans and 403(b)(7) Plans.
Plan support services also are available. You can obtain details on the
various plans by calling the following numbers toll free: for Keogh Plans,
please call 1-800-358-5566; for IRAs and IRA "Rollover Accounts," please call
1-800-645-6561; or for SEP-IRAs, 401(k) Salary Reduction Plans and 403(b)(7)
Plans, please call 1-800-322-7880.
HOW TO REDEEM SHARES
GENERAL
You may request redemption of your shares at any time. Redemption
requests should be transmitted to the Transfer Agent as described below. When
a request is received in proper form, the Fund will redeem the shares at the
next determined net asset value.
The Fund imposes no charges when shares are redeemed. Securities
dealers, banks or other financial institutions may charge their clients a fee
for effecting redemption of Fund shares. Any certificates representing Fund
shares being redeemed must be submitted with the redemption request. If you
own shares in both series, any redemption request must clearly state from
which series you wish to redeem the shares. The value of the shares redeemed
may be more or less than their original cost, depending upon the series'
then-current net asset value.

The Fund ordinarily will make payment for all shares redeemed
within seven days after receipt by the Transfer Agent or the Distributor or
its designee, as the case may be, of a redemption request in proper form,
except as provided by the rules of the Securities and Exchange Commission.
HOWEVER, IF YOU HAVE PURCHASED FUND SHARES BY CHECK, BY DREYFUS TELETRANSFER
PRIVILEGE OR THROUGH DREYFUS-AUTOMATIC ASSET BUILDER AND SUBSEQUENTLY SUBMIT
A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, YOUR REDEMPTION WILL BE
EFFECTIVE AND THE REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY
UPON BANK CLEARANCE OF YOUR PURCHASE CHECK, DREYFUS TELETRANSFER PURCHASE OR
DREYFUS-AUTOMATIC ASSET BUILDERRegistration Mark ORDER, WHICH MAY TAKE UP TO
EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR REDEMPTION
CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT REQUESTS TO
REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS TELETRANSFER
PRIVILEGE, FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY THE TRANSFER
AGENT OF
Page 14

THE PURCHASE CHECK, THE DREYFUS TELETRANSFER PURCHASE OR THE DREYFUS-AUTOMATIC
ASSET BUILDER ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE
PROCEDURES WILL NOT APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF
YOU OTHERWISE HAVE A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE
REDEMPTION REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS
ON SUCH SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO
EXERCISE ALL OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be
redeemed until the Transfer Agent has received your Account
Application.
The Fund reserves the right to redeem your account in either series
at its option upon not less than 45 days' written notice if your account's
net asset value is $500 or less and remains so during the notice period.
PROCEDURES

You may redeem shares by using the regular redemption procedure
through the Transfer Agent, or through the Telephone Redemption Privilege
which is granted automatically unless you specifically refuse it by checking
the applicable "No" box on the Account Application. The Telephone Redemption
Privilege may be established for an existing account by a separate signed
Shareholder Services Form or by oral request from any of the authorized
signatories on the account by calling 1-800-645-6561. You also may redeem
shares through the Check Redemption Privilege, the Wire Redemption Privilege,
or the Dreyfus TELETRANSFER Privilege, if you have checked the appropriate
box and supplied the necessary information on the Account Application or have
filed a Shareholder Services Form with the Transfer Agent. The Fund makes
available to certain large institutions the ability to issue redemption
instructions through compatible computer facilities. The Fund reserves the
right to refuse any request made by wire or telephone, including requests
made shortly after a change of address, and may limit the amount involved or
the number of such requests. The Fund may modify or terminate any redemption
Privilege at any time or charge a service fee upon notice to shareholders. No
such fee currently is contemplated. Shares of the Government Securities
Series held under Keogh Plans, IRAs or other retirement plans, and shares for
which certificates have been issued, are not eligible for the Check
Redemption, Wire Redemption, Telephone Redemption or Dreyfus TELETRANSFER
Privilege.

The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephonic instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, and reasonably believed by
the Transfer Agent to be genuine. The Fund will require the Transfer Agent to
employ reasonable procedures, such as requiring a form of personal
identification, to confirm that instructions are genuine and, if it does not
follow such procedures, the Transfer Agent or the Fund may be liable for any
losses due to unauthorized or fraudulent instructions. Neither the Fund nor
the Transfer Agent will be liable for following telephone instructions
reasonably believed to be genuine.

During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION _ Under the regular redemption procedure, you may redeem
your shares by written request mailed to The Dreyfus Family of Funds, P.O.
Box 9671, Providence, Rhode Island 02940-9671, or, if for Dreyfus retirement
plan accounts, to The Dreyfus Trust Company, Custodian, P.O. Box 6427,
Providence, Rhode Island 02940-6427. Redemption requests may be delivered in
person only to
Page 15

a Dreyfus Financial Center. THESE REQUESTS WILL BE FORWARDED TO THE FUND AND
WILL BE PROCESSED ONLY UPON RECEIPT THEREBY. For the location of the nearest
Dreyfus Financial Center, please call one of the telephone numbers listed
under "General Information." Redemption requests must be signed by each
shareholder, including each owner of a joint account, and each signature must
be guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Signature Program, the Securities Transfer Agents Medallion
Program ("STAMP"), and the Stock Exchanges Medallion Program. If you have any
questions with respect to signature-guarantees, please call one of the
telephone numbers listed under "General Information."

Redemption proceeds of at least $1,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.
CHECK REDEMPTION PRIVILEGE _ You may write Redemption Checks drawn on your
Fund account. Redemption checks may be made payable to the order of any
person in the amount of $500 or more. Redemption checks should not be used to
close your account. Redemption Checks are free, but the Transfer Agent will
impose a fee for stopping payment of a Redemption Check upon your request or
if the Transfer Agent cannot honor a Redemption Check because of insufficient
funds or other valid reason. You should date your Redemption Checks with the
current date when you write them. Please do not postdate your Redemption
Check. If you do, the Transfer Agent will honor, upon presentment, even if
presented before the date of the check, all postdated Redemption Checks which
are dated within six months of presentment for payment, if they are otherwise
in good order. If you hold shares in a Dreyfus-sponsored IRA account, you may
be permitted to make withdrawals from your IRA account using checks furnished
to you by The Dreyfus Trust Company.
WIRE REDEMPTION PRIVILEGE _ You may request by wire or telephone that
redemption proceeds (minimum $1,000) be wired to your account at a bank which
is a member of the Federal Reserve System, or a correspondent bank if your
bank is not a member. You also may direct that redemption proceeds be paid by
check (maximum $150,000 per day) made out to the owners of record and mailed
to your address. Redemption proceeds of less than $1,000 will be paid
automatically by check. Holders of jointly registered Fund or bank accounts
may have redemption proceeds of not more than $250,000 wired within any
30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Statement of Additional Information sets forth instructions for transmitting
redemption requests by wire.
TELEPHONE REDEMPTION PRIVILEGE _ You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452. The
Telephone Redemption Privilege is granted automatically unless you refuse it.
DREYFUS TELETRANSFER PRIVILEGE _ You may request by telephone that
redemption proceeds (minimum $500 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an Automated Clearing House member may be
designated. Redemption proceeds will be on deposit in your account at an
Automated Clearing House member bank ordinarily two days after receipt of the
redemption request or, at your request, paid by check (maximum $150,000 per
day) and mailed to your address. Holders of jointly registered Fund or bank
Page 16

accounts may redeem through the Dreyfus TELETRANSFER Privilege for transfer
to their bank account not more than $250,000 within any 30-day period.

If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of shares by telephoning
1-800-645-6561 or, if you are calling from overseas, call 516-794-5452.
SHAREHOLDER SERVICES PLAN
The Fund has adopted a Shareholder Services Plan pursuant to which
the Fund reimburses Dreyfus Service Corporation, a wholly-owned subsidiary of
The Dreyfus Corporation, an amount not to exceed an annual rate of .25 of 1%
of the value of each series' 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.
DIVIDENDS, DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from each series' net
investment income on each day the New York Stock Exchange or, with respect to
the Money Market Series, the Transfer Agent is open for business. Each
series' earnings for Saturdays, Sunday and holidays are declared as dividends
on the preceding business day. Dividends usually are paid on the last
business day of each month, and are automatically reinvested in additional
shares of the series from which they were paid at net asset value or, at your
option, paid in cash. If you redeem all shares in your account at any time
during the month, all dividends to which you are entitled are paid to you
along with the proceeds of the redemption. If you are an omnibus
accountholder and indicate in a partial redemption request that a portion of
any accrued dividends to which such account is entitled belongs to an
underlying accountholder who has redeemed all shares in his or her account,
such portion of the accrued dividends will be paid to you along with the
proceeds of the redemption. Distributions from net realized securities gains,
if any, generally are declared and paid by each series once a year, but the
Fund may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended
(the "Code"), in all events in a manner consistent with the provisions of the
1940 Act. The Fund will not make distributions from net realized securities
gains unless capital loss carryovers, if any, have been utilized or have
expired. You may choose whether to receive distributions in cash or to
reinvest in additional shares of the series from which distributions were
paid at net asset value. All expenses are accrued daily and deducted before
the declaration of dividends to investors.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a series will be taxable to U.S. shareholders
as ordinary income whether received in cash or reinvested in additional
shares of the series. No dividend paid by the Fund will qualify for the
dividends received deduction allowable to certain U.S. corporations.
Distributions from net realized long-term securities gains of the Fund will be
taxable as long-term capital gains regardless of how long shareholders have
held their shares and whether such distributions are received in cash or
reinvested in additional shares. The Code provides that the net capital gain
of an individual generally will not be subject to Federal income tax at a
rate in excess of 28%. Dividends and distributions may be subject to state
and local taxes.
Dividends derived from net investment income, together with
distributions from net realized short-term securities gains and all or a
portion of any gains realized from the sale or other disposition of certain
market discount bonds, paid by a series to a foreign investor generally are
subject to U.S. nonresident withholding tax-
Page 17

es at the rate of 30%, unless the foreign investor claims the benefit of a
lower rate specified in a tax treaty. Distributions from net realized long-
term securities gains paid by the Fund to a foreign investor generally will
not be subject to U.S. nonresident withholding tax. However, such
distributions may be subject to backup withholding, as described below,
unless the foreign investor certifies his non-U.S. residency status.
Notice as to the tax status of your dividends and distributions
will be mailed to you annually. You also will receive periodic summaries of
your account which will include information as to dividends and distributions
from securities gains, if any, paid during the year. Dividends and
distributions attributable to interest from direct obligations of the United
States and paid by a series to individuals currently are not subject to tax
in most states. Dividends and distributions attributable to interest from
other securities in which the series may invest may be subject to state tax.
The Fund intends to provide shareholders with a statement which sets forth
the percentage of dividends and distributions paid by the series that is
attributable to interest income from direct obligations of the United States.
The exchange of shares of one fund or series for shares of another
fund or series is treated for Federal income tax purposes as a sale of the
shares given in exchange by the shareholder and, therefore, an exchanging
shareholder may realize a taxable gain or loss.
Federal regulations generally require the Fund to withhold ("backup
withholding") and remit to the U.S. Treasury 31% of dividends and
distributions from net realized securities gains paid to a shareholder if
such shareholder fails to certify either that the TIN furnished in connection
with opening an account is correct, or that such shareholder has not received
notice from the IRS of being subject to backup withholding as a result of a
failure to properly report taxable dividend or interest income on a Federal
income tax return. Furthermore, the IRS may notify the Fund to institute
backup withholding if the IRS determines a shareholder's TIN is incorrect or
if a shareholder has failed to properly report taxable dividend and interest
income on a Federal income tax return.
A TIN is either the Social Security number or employer
identification number of the record owner of the account. Any tax withheld as
a result of backup withholding does not constitute an additional tax imposed
on the record owner of the account, and may be claimed as a credit on the
record owner's Federal income tax return.
Management believes that each series of the Fund has qualified for
the fiscal year ended December 31, 1996 as a "regulated investment company"
under the Code. Each series of the Fund intends to continue to so qualify, if
such qualification is in the best interests of its shareholders. Such
qualification relieves the series of any liability for Federal income taxes
to the extent its earnings are distributed in accordance with applicable
provisions of the Code. Each series is subject to a non-deductible 4% excise
tax, measured with respect to certain undistributed amounts of taxable
investment income and capital gains, if any.
You should consult your tax adviser regarding specific questions as
to Federal, state or local taxes.
GENERAL INFORMATION
The Fund was incorporated under Maryland law on December 30, 1974
and began offering shares of the Money Market Series on April 28, 1975. On
April 23, 1979, shareholders of the Fund authorized the issuance and sale of
shares of the Government Securities Series. The Fund is authorized to issue
15 billion shares of Common Stock (5 billion in the Money Market Series and
10 billion in the Government Securities Series), par value $.01 per share.
Each share has one vote.
The Fund is a "series fund," which is a mutual fund divided into
separate portfolios, each of which is treated as a separate entity for
certain matters under the 1940 Act and for other purposes. A shareholder of
Page 18

one series is not deemed to be a shareholder of any other series. For certain
matters Fund shareholders vote together as a group; as to others they vote
separately by series.
To date, two series of shares have been authorized. All
consideration received by the Fund for shares of one of the series and all
assets in which such consideration is invested, belong to that series
(subject only to the rights of creditors of the Fund) and will be subject to
the liabilities related thereto. The income attributable to, and the expenses
of, one series are treated separately from those of the other series.
Unless otherwise required by the 1940 Act, ordinarily it will not
be necessary for the Fund to hold annual meetings of shareholders. As a
result, Fund shareholders may not consider each year the election of Board
members or the appointment of auditors. However, pursuant to the Fund's
By-Laws, the holders of at least 10% of the shares outstanding and entitled
to vote may require the Fund to hold a special meeting of shareholders for
purposes of removing a Board member from office and the holders of at least
25% of such shares may require the Fund to hold a special meeting of
shareholders for any other purpose. Fund shareholders may remove a Board
member by the affirmative vote of a majority of the Fund's outstanding voting
shares. In addition, the Board will call a meeting of shareholders for the
purpose of electing Board members if, at any time, less than a majority of
the Board members then holding office have been elected by shareholders.
The Transfer Agent maintains a record of your ownership and sends
you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144
Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll
free 1-800-645-6561. In New York City, call 1-718-895-1206; outside the U.S.
and Canada, call 516-794-5452.
Page 19

APPENDIX
INVESTMENT TECHNIQUES
LENDING PORTFOLIO SECURITIES _ The Government Securities Series may lend
securities from its portfolio to brokers, dealers and other financial
institutions needing to borrow securities to complete certain transactions.
The Government Securities Series continues to be entitled to payments in
amounts equal to the interest or other distributions payable on the loaned
securities which affords the series an opportunity to earn interest on the
amount of the loan and on the loaned securities' collateral. Loans of
portfolio securities may not exceed 20% of the value of the Government
Securities Series' total assets, and the series will receive collateral
consisting of cash or U.S. Treasury securities which will be maintained at
all times in an amount equal to at least 100% of the current market value of
the loaned securities. Such loans are terminable by the Fund at any time upon
specified notice. The Government Securities Series might experience risk of
loss if the institution with which it has engaged in a portfolio loan
transaction breaches its agreement with the Fund.
BORROWING _ Each series may borrow money from banks for temporary or
emergency (not leveraging) purposes in an amount up to 15% of the value of
its total assets (including the amount borrowed) valued at the lesser of cost
or market, less liabilities (not including the amount borrowed) at the time
the borrowing is made. While borrowings exceed 5% of the series' total
assets, the series will not make any additional investments.
CERTAIN PORTFOLIO SECURITIES
U.S. GOVERNMENT SECURITIES _ Securities issued or guaranteed by the U.S.
Government or its agencies or instrumentalities include U.S. Treasury
securities, which differ in their interest rates, maturities and times of
issuance. The Money Market Series and the Government Securities Series may
invest in Treasury Bills, Treasury Notes and Treasury Bonds. In addition, the
Money Market Series may invest in obligations issued or guaranteed by U.S.
Government agencies and instrumentalities. Some obligations issued or
guaranteed by U.S. Government agencies and instrumentalities are supported by
the full faith and credit of the U.S. Treasury; others by the right of the
issuer to borrow from the Treasury; others by discretionary authority of the
U.S. Government to purchase certain obligations of the agency or
instrumentality; and others only by the credit of the agency or
instrumentality. These securities bear fixed, floating or variable rates of
interest. While the U.S. Government currently provides financial support to
such U.S. Government-sponsored agencies or instrumentalities, no assurance
can be given that it will always do so, since it is not so obligated by law.
REPURCHASE AGREEMENTS _ In a repurchase agreement, a series buys, and the
seller agrees to repurchase, a security at a mutually agreed upon time and
price (usually within seven days). The repurchase agreement thereby
determines the yield during the purchaser's holding period, while the
seller's obligation to repurchase is secured by the value of the underlying
security. Repurchase agreements could involve risks in the event of a default
or insolvency of the other party to the agreement, including possible delays
or restrictions upon the series' ability to dispose of the underlying
securities. The series may enter into repurchase agreements with certain banks
or non-bank dealers.
BANK OBLIGATIONS _ The Money Market Series may purchase certificates of
deposit, time deposits, bankers' acceptances and other short-term obligations
issued by domestic banks, foreign subsidiaries or foreign branches of
domestic banks, domestic and foreign branches of foreign banks, domestic
savings and loan associations and other banking institutions. With respect to
such securities issued by foreign subsidiaries or foreign branches of
domestic banks, and domestic and foreign branches of foreign banks, the Money
Market Series may be subject to additional investment risks that are
different in some respects
Page 20

from those incurred by a fund which invests only in debt obligations of U.S.
domestic issuers. See "Description of the Fund _ Investment Considerations and
Risks _ Foreign Securities."
Certificates of deposit are negotiable certificates evidencing the
obligation of a bank to repay funds deposited with it for a specified period
of time.
Time deposits are non-negotiable deposits maintained in a banking
institution for a specified period of time (in no event longer than seven
days) at a stated interest rate.
Bankers' acceptances are credit instruments evidencing the obligation
of a bank to pay a draft drawn on it by a customer. These instruments reflect
the obligation both of the bank and the drawer to pay the face amount of the
instrument upon maturity. The other short-term obligations may include
uninsured, direct obligations bearing fixed, floating or variable interest
rates.
COMMERCIAL PAPER _ The Money Market Series may purchase commercial paper
consisting of short-term, unsecured promissory notes issued to finance
short-term credit needs. The commercial paper purchased by the Money Market
Series will consist only of direct obligations issued by domestic and foreign
entities. The other corporate obligations in which the Money Market Series
may invest consist of high quality, U.S. dollar denominated short-term bonds
and notes (including variable amount master demand notes) issued by domestic a
nd foreign corporations, including banks.
FLOATING AND VARIABLE RATE OBLIGATIONS _ The Money Market Series may
purchase floating and variable rated demand notes and bonds, which are
obligations ordinarily having stated maturities in excess of 13 months, but
which permit the holder to demand payment of principal any time, or at
specified intervals not exceeding 13 months, in each case upon not more than
30 days' notice. Variable rate demand notes include master demand notes which
are obligations that permit the Money Market Series to invest fluctuating
amounts, at varying rates of interest, pursuant to direct arrangements
between the Money Market Series, as lender, and the borrower. These
obligations permit daily changes in the amounts borrowed. Because these
obligations are direct lending arrangements between the lender and borrower,
it is not contemplated that such instruments generally will be traded, and
there generally is no established secondary market for these obligations,
although they are redeemable at face value, plus accrued interest.
Accordingly, where these obligations are not secured by letters of credit or
other credit support arrangements, the Money Market Series' right to redeem
is dependent on the ability of the borrower to pay principal and interest on
demand.
ILLIQUID SECURITIES _ Each series may invest up to 10% of the value of its
net assets in securities as to which a liquid trading market does not exist,
provided such investments are consistent with the series' investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale, and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities, the
series is subject to a risk that should the series' desire to sell them when
a ready buyer is not available at a price the Fund deems representative of
their value, the value of the series' net assets could be adversely affected.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
Page 21

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Page 22

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Page 23

Money Market
Instruments, Inc.
Prospectus

Registration Mark

Copy Rights 1997 Dreyfus Service Corporation
060p082597
Page 24

____________________________________________________________________________

DREYFUS MONEY MARKET INSTRUMENTS, INC.
PART B
(STATEMENT OF ADDITIONAL INFORMATION)
MAY 1, 1997

AS REVISED AUGUST 25, 1997

____________________________________________________________________________

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
Dreyfus Money Market Instruments, Inc. (the "Fund"), dated May 1, 1997, As
Revised August 25, 1997, or, depending on your investment, the current
Prospectus of the Government Securities Series of the Fund, dated May 1,
1997, As Revised August 25, 1997, as each may be further revised from time
to time. To obtain a copy of either Prospectus, please write to the Fund at
144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call the
following numbers:

Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. and Canada -- Call 516-794-5452

The Dreyfus Corporation (the "Manager") serves as the Fund's investment
adviser.

Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.

TABLE OF CONTENTS
Page

Investment Objective and Management Policies B-2
Management of the Fund B-6
Management Agreement B-11
Purchase of Shares B-13
Shareholder Services Plan B-14
Redemption of Shares B-15
Shareholder Services B-17
Portfolio Transactions B-20
Determination of Net Asset Value B-21
Dividends, Distributions and Taxes B-22
Yield Information B-22
Information About the Fund B-22
Transfer and Dividend Disbursing Agent, Custodian,
Counsel and Independent Auditors B-23
Appendix B-24
Financial Statements B-27
Report of Independent Auditors B-37
INVESTMENT OBJECTIVE AND MANAGEMENT POLICIES

The following information supplements and should be read in conjunction
with the sections in the Fund's Prospectus entitled "Description of the
Fund" and "Appendix" or the sections in the Government Securities Series'
Prospectus entitled "Description of the Fund and Series" and "Appendix ."

Portfolio Securities

Bank Obligations. (Money Market Series only.) Domestic commercial
banks organized under Federal law are supervised and examined by the
Comptroller of the Currency and are required to be members of the Federal
Reserve System and to have their deposits insured by the Federal Deposit
Insurance Corporation (the "FDIC"). Domestic banks organized under state
law are supervised and examined by state banking authorities but are members
of the Federal Reserve System only if they elect to join. In addition,
state banks whose certificates of deposit ("CDs") may be purchased by the
Money Market Series are insured by the FDIC (although such insurance may not
be of material benefit to the Money Market Series, depending upon the
principal amount of the CDs of each bank held by the Money Market Series)
and are subject to Federal examination and to a substantial body of Federal
law and regulation.

As a result of Federal and state laws and regulations, domestic banks
are, among other things, required to maintain specified levels of reserves,
limited in the amounts which they can loan to a single borrower and subject
to other regulations designed to promote financial soundness. However, not
all of such laws and regulations apply to the foreign branches of domestic
banks.

Obligations of foreign subsidiaries or foreign branches of domestic
banks, and domestic and foreign branches of foreign banks, such as CDs and
time deposits ("TDs"), may be general obligations of the parent banks in
addition to the issuing branches or may be limited by the terms of a
specific obligation and governmental regulation. Such obligations are
subject to different risks than are those of domestic banks. These risks
include foreign economic and political developments, foreign governmental
restrictions that may adversely affect payment of principal and interest on
the obligations, foreign exchange controls and foreign withholding and other
taxes on interest income. Foreign branches and subsidiaries are not
necessarily subject to the same or similar regulatory requirements as apply
to domestic banks, such as mandatory reserve requirements, loan limitations,
and accounting, auditing and financial recordkeeping requirements. In
addition, less information may be publicly available about a foreign branch
of a domestic bank or about a foreign bank than about a domestic bank.

Obligations of United States branches of these foreign banks may be
general obligations of the parent banks in addition to the issuing branches,
or may be limited by the terms of a specific obligation or by Federal or
state regulation as well as governmental action in the country in which the
foreign bank has its head office. A domestic branch of a foreign bank with
assets in excess of $1 billion may or may not be subject to reserve
requirements imposed by the Federal Reserve System or by the state in which
the branch is located if the branch is licensed in that state.

In addition, Federal branches licensed by the Comptroller of the
Currency and branches licensed by certain states ("State Branches") may be
required to: (1) pledge to the regulator, by depositing assets with a
designated bank within the state, a certain percentage of their assets as
fixed from time to time by the appropriate regulatory authority; and (2)
maintain assets within the state in an amount equal to a specified
percentage of the aggregate amount of liabilities of the foreign bank
payable at or through all of its agencies or branches within the state. The
deposits of Federal and State Branches generally must be insured by the FDIC
if such branches take deposits of less than $100,000.

In view of the foregoing factors associated with the purchase of CDs
and TDs issued by foreign subsidiaries or foreign branches of domestic banks
or by foreign branches or domestic branches of foreign banks, the Manager
carefully evaluates such investments on a case-by-case basis.

Foreign Government Obligations. (Money Market Series only.) The Money
Market Series may invest in obligations issued or guaranteed by one or more
foreign governments or any of their political subdivisions, agencies or
instrumentalities that are determined by the Manager to be of comparable
quality to the other obligations in which the Money Market Series may
invest. Such securities also include debt obligations of supranational
entities. Supranational entities include international organizations
designated or supported by governmental entities to promote economic
reconstruction or development and international banking institutions and
related government agencies. Examples include the International Bank for
Reconstruction and Development (the World Bank), the European Coal and Steel
Community, the Asian Development Bank and the InterAmerican Development
Bank.

Repurchase Agreements. The Fund's custodian or sub-custodian will have
custody of, and will hold in a segregated account, securities acquired by
the series under a repurchase agreement. Repurchase agreements are
considered by the staff of the Securities and Exchange Commission to be
loans by the series which enters into them. In an attempt to reduce the
risk of incurring a loss on a repurchase agreement, the series will enter
into repurchase agreements only with domestic banks with total assets in
excess of $1 billion, or primary government securities dealers reporting to
the Federal Reserve Bank of New York, with respect to securities of the type
in which the series may invest or government securities regardless of their
remaining maturities, and will require that additional securities be
deposited with it if the value of the securities purchased should decrease
below resale price.

Illiquid Securities. Where a substantial market of qualified
institutional buyers develops for certain restricted securities purchased by
the series pursuant to Rule 144A under the Securities Act of 1933, as
amended, the Fund intends to treat such securities as liquid securities in
accordance with procedures approved by the Fund's Board. Because it is not
possible to predict with assurance how the market for restricted securities
pursuant to Rule 144A will develop, the Fund's Board has directed the
Manager to monitor carefully the series' investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, a series' investing in such securities may
have the effect of increasing the level of illiquidity in the series'
portfolio during such period.

Management Policies

Lending Portfolio Securities. (Government Securities Series only). In
connection with its securities lending transactions, the Government
Securities Series may return to the borrower or a third party which is
unaffiliated with the Fund, and which is acting as a "placing broker," a
part of the interest earned from the investment of collateral received for
securities loaned.

The Securities and Exchange Commission currently requires that the
following conditions must be met whenever portfolio securities are loaned:
(1) the series must receive at least 100% cash collateral from the borrower;
(2) the borrower must increase such collateral whenever the market value of
the securities rises above the level of such collateral; (3) the series must
be able to terminate the loan at any time; (4) the series must receive
reasonable interest on the loan, as well as any interest or other
distributions payable on the loaned securities, and any increase in market
value; and (5) the series may pay only reasonable custodian fees in
connection with the loan.

Forward Commitments. (Money Market Series only.) Securities purchased
on a forward commitment or when-issued basis are subject to changes in value
(generally changing in the same way, i.e., appreciating when interest rates
decline and depreciating when interest rates rise) based upon the public's
perception of the creditworthiness of the issuer and changes, real or
anticipated, in the level of interest rates. Securities purchased on a
forward commitment or when-issued basis may expose the Money Market Series
to risks because they may experience such fluctuations prior to their actual
delivery. Purchasing securities on a when-issued basis can involve the
additional risk that the yield available in the market when the delivery
takes place actually may be higher than that obtained in the transaction
itself. Purchasing securities on a forward commitment or when-issued basis
when the Money Market Series is fully or almost fully invested may result in
greater potential fluctuation in the value of the Money Market Series net
assets and its net asset value per share.

Investment Restrictions

The Fund has adopted investment restrictions numbered 1 through 10,
with respect to each series, and investment restrictions numbered 12 and 13,
with respect to the Money Market Series only, as fundamental policies, which
cannot be changed, as to a series, without approval by the holders of a
majority (as defined in the Investment Company Act of 1940, as amended (the
"1940 Act")) of the outstanding voting shares of such series. Investment
restriction number 11 is not a fundamental policy and may be changed, as to
a series, by vote of a majority of the Fund's Board members at any time.
Neither series may:

1. Purchase common stocks, preferred stocks, warrants, other equity
securities, corporate bonds or debentures, state bonds, municipal bonds or
industrial revenue bonds.

2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes, in an amount up to 15% of the value of a series' total
assets (including the amount borrowed) based on the lesser of cost or
market, less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the value of the series'
total assets, the series will not make any additional investments.

3. Pledge, hypothecate, mortgage or otherwise encumber its assets
except in an amount up to 15% of the value of its total assets but only to
secure borrowings for temporary or emergency purposes.

4. Sell securities short or purchase securities on margin.

5. Write or purchase put or call options.

6. Underwrite the securities of other issuers.

7. Purchase or sell real estate, real estate investment trust
securities, commodities, or oil and gas interests.

8. Make loans to others, except through the purchase of debt
obligations and through repurchase agreements referred to in each Prospectus
and in this Statement of Additional Information. However, the Government
Securities Series may lend securities to brokers, dealers and other
institutional investors, but only when the borrower deposits collateral
consisting of cash or U.S. Treasury securities with the Government
Securities Series and agrees to maintain such collateral so that it amounts
at all times to at least 100% of the value of the securities loaned. Such
loans will not be made if, as a result, the aggregate value of the
securities loaned exceeds 20% of the value of the Government Securities
Series' total assets.

9. Invest in companies for the purpose of exercising control.

10. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.

11. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are illiquid if,
in the aggregate, more than 10% of the value of the series' net assets would
be so invested.

The following investment restrictions numbered 12 and 13, which are
fundamental polices, apply only to the Money Market Series. The Money
Market Series may not:

12. Invest more than 15% of its assets in the obligations of any one
bank, or invest more than 5% of its assets in the commercial paper of any
one issuer. Notwithstanding the foregoing, to the extent required by the
rules of the Securities and Exchange Commission, the Money Market Series
will not invest more than 5% of its assets in the obligations of any one
bank.

13. Invest less than 25% of its assets in obligations issued by banks
or invest more than 25% of its assets in the securities of issuers in any
other industry, provided that there shall be no limitation on the purchase
of obligations issued or guaranteed by the U.S. Government, its agencies or
instrumentalities. Notwithstanding the foregoing, if at some future date
available yields on bank securities are significantly lower than yields on
other securities in which the Money Market Series may invest, the Money
Market Series may invest less than 25% of its assets in bank obligations.

If a percentage restriction is adhered to at the time of investment, a
later increase or decrease in percentage resulting from a change in values
or assets will not constitute a violation of such restriction.

The Fund may make commitments more restrictive than the restrictions
listed above so as to permit the sale of Fund shares in certain states.
Should the Fund determine that a commitment is no longer in the best
interests of a series and its shareholders, the Fund reserves the right to
revoke the commitment by terminating the sale of such series' shares in the
state involved.

MANAGEMENT OF THE FUND

Board members and officers of the Fund, together with information as to
their principal business occupations during at least the last five years,
are shown below. Each Board member who is deemed to be an "interested
person" of the Fund, as defined in the 1940 Act, is indicated by an
asterisk.

Board Members of the Fund

JOSEPH S. DiMARTINO, Chairman of the Board. Since January 1995, Chairman of
the Board of various funds in the Dreyfus Family of Funds. He is also
Chairman of the Board of Directors of the Noel Group, Inc., a venture
capital company; and a director of The Muscular Dystrophy Association,
HealthPlan Services Corporation, Belding Heminway Company, Inc., a
manufacturer and marketer of industrial threads and buttons, Curtis
Industries, Inc., a national distributor of security products,
chemicals and automotive and other hardware, and Staffing Resources,
Inc. For more than five years prior to January 1995, he was President
and a director and, until August 1994, Chief Operating Officer of the
Manager and Executive Vice President and a director of Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager and, until August
24, 1994, the Fund's distributor. From August 1994 to December 31,
1994, he was a director of Mellon Bank Corporation. Mr. DiMartino is
53 years old and his address is 200 Park Avenue, New York, New York
10166.

*DAVID P. FELDMAN, Board Member. Trustee of Corporate Property Investors, a
real estate investment company, and a director of several mutual funds
in the 59 Wall Street Mutual Funds Group, and of the Jeffrey Company, a
private investment company. From July 1961 to his retirement in April
1997, he was employed by AT&T Investment Management Corporation, most
recently serving as Chairman and Chief Executive Officer. Mr. Feldman
is 57 years old and his address is One Oak Way, Berkeley Heights, New
Jersey 07922.

JOHN M. FRASER, JR., Board Member. President of Fraser Associates, a
service company for planning and arranging corporate meetings and other
events. From September 1975 to June 1978, he was Executive Vice
President of Flagship Cruises, Ltd. Prior thereto, he was Senior Vice
President and Resident Director of the Swedish-American Line for the
United States and Canada. Mr. Fraser is 75 years old and his address
is 133 East 64th Street, New York, New York 10021.

ROBERT R. GLAUBER, Board Member. Research Fellow, Center for Business and
Government at the John F. Kennedy School of Government, Harvard
University since January 1992. He was Under Secretary of the Treasury
for Finance at the U.S. Treasury Department from May 1989 to January
1992. For more than five years prior thereto, he was a Professor of
Finance at the Graduate School of Business Administration of Harvard
University and, from 1985 to 1989, Chairman of its Advanced Management
Program. He is also a director of Mid Ocean Reinsurance Co., Ltd.,
Cooke & Bieler, investment counselors, NASD Regulation, Inc. and the
Federal Reserve Bank of Boston. Mr. Glauber is 58 years old and his
address is 79 John F. Kennedy Street, Cambridge, Massachusetts 02138.

JAMES F. HENRY, Board Member. President of the CPR Institute for Dispute
Resolution, a non-profit organization principally engaged in the
development of alternatives to business litigation. He was of counsel
to the law firm of Lovejoy, Wasson & Ashton from October 1975 to
December 1976 and from October 1979 to June 1983, and was a partner of
that firm from January 1977 to September 1979. He was President and a
director of the Edna McConnell Clark Foundation, a philanthropic
organization from September 1971 to December 1976. Mr. Henry is 66
years old and his address is c/o CPR Institute for Dispute Resolution,
366 Madison Avenue, New York, New York 10017.

ROSALIND GERSTEN JACOBS, Board Member. Director of Merchandise and
Marketing, Corporate Property Investors, a real estate investment
company. From 1974 to 1976, she was owner and manager of a merchandise
and marketing consulting firm. Prior to 1974, she was a Vice President
of Macy's, New York. Mrs. Jacobs is 71 years old and her address is
c/o Corporate Property Investors, 305 East 47th Street, New York, New
York 10017.

IRVING KRISTOL, Board Member. John M. Olin Distinguished Fellow of the
American Enterprise Institute for Public Policy Research, co-editor of
The Public Interest magazine, and an author or co-editor of several
books. From May 1981 to December 1994, he was a consultant to the
Manager on economic matters; from 1969 to 1988, he was Professor of
Social Thought at the Graduate School of Business Administration, New
York University; from September 1969 to August 1979, he was Henry R.
Luce Professor of Urban Values at New York University; from 1975 to
1990, he was a director of Lincoln National Corporation, an insurance
company; and from 1977 to 1990, he was a director of Warner-Lambert
Company, a pharmaceutical and consumer products company. Mr. Kristol
is 77 years old and his address is c/o The Public Interest, 1112 16th
Street, N.W., Suite 530, Washington, D.C. 20036.

DR. PAUL A. MARKS, Board Member. President and Chief Executive Officer of
Memorial Sloan-Kettering Cancer Center. He was Vice President for
Health Sciences and director of the Cancer Center at Columbia
University from 1973 to 1980, and Professor of Medicine and of Human
Genetics and Development at Columbia University from 1968 to 1982. He
is also a director of Pfizer, Inc., a pharmaceutical company, Life
Technologies, Inc., a life science company providing products for cell
and molecular biology and microbiology, and Tulerik, Inc., a
biotechnology company, and a general partner of LINC Venture Lease
Partners II, L.P., a limited partnership engaged in leasing. Dr. Marks
is 70 years old and his address is c/o Memorial Sloan-Kettering Cancer
Center, 1275 York Avenue, New York, New York 10021.

DR. MARTIN PERETZ, Board Member. Editor-in-Chief of The New Republic
magazine and a lecturer in Social Studies at Harvard University where
he has been a member of the faculty since 1965. He is a trustee of The
Center for Blood Research at the Harvard Medical School and the Academy
for Liberal Education, an accrediting agency for colleges and
universities certified by the U.S. Department of Education; and a
director of Leukosite Inc., a biopharmaceutical company. From 1988 to
1989, he was a director of Bank Leumi Trust Company of New York; and
from 1988 to 1991, he was a director of Carmel Container Corporation.
Dr. Peretz is 57 years old and his address is c/o The New Republic,
1220 19th Street, N.W., Washington, D.C. 20036.

BERT W. WASSERMAN, Board Member. Financial Consultant. From January 1990
to March 1995, Executive Vice President and Chief Financial Officer,
and from January 1990 to March 1993 a director, of Time Warner Inc.;
from 1981 to 1990, he was a member of the office of the President and a
director of Warner Communications Inc. He is also a director of The
New Germany Fund, Mountasia Entertainment International, Inc., the
Lillian Vernon Corporation, Winstar Communications, Inc. and
International Telecommunications Corp. Mr. Wasserman is 64 years old
and his address is 126 East 57th Street, Suite 12 North, New York, New
York 10022-3613.

For as long as the Fund's plan described in the section captioned
"Shareholder Services Plan" remains in effect, the Board members of the Fund
who are not "interested persons" of the Fund, as defined in the 1940 Act,
will be selected and nominated by the Board members who are not "interested
persons" of the Fund.

The Fund typically pays its Board members an annual retainer and a per
meeting fee and reimburses them for their expenses. The Chairman of the
Board receives an additional 25% of such compensation. Emeritus Board
members are entitled to receive an annual retainer and a per meeting fee of
one-half the amount paid to them as Board members. The aggregate amount of
compensation paid to each Board member by the Fund and by all other funds in
the Dreyfus Family of Funds for which such person is a Board member (the
number of which is set forth in parenthesis next to each Board member's
total compensation) for the year ended December 31, 1996, were as follows:

Total
Compensation from
Aggregate Fund and Fund
Name of Board Compensation from Complex Paid to
Member Fund* Board Members

Joseph S. DiMartino $8,750 $517,075 (93)

David P. Feldman $7,000 $122,257 (37)

John M. Fraser, Jr. $7,000 $ 73,563 (14)

Robert R. Glauber $7,000 $103,549 (20)

James F. Henry $7,000 $ 59,973 (10)

Rosalind Gersten Jacobs $6,500 $ 93,900 (20)

Irving Kristol $7,000 $ 59,973 (10)

Dr. Paul A. Marks $6,500 $ 55,223 (10)

Dr. Martin Peretz $7,000 $ 59,973 (10)

Bert W. Wasserman $7,000 $ 59,973 (10)
_______________________
* Amount does not include reimbursed expenses for attending Board
meetings, which amounted to $2,212 for all Board members as a group.

Officers of the Fund

MARIE E. CONNOLLY, President and Treasurer. President, Chief Executive
Officer and director of the Distributor and an officer of other
investment companies advised or administered by the Manager. From
December 1991 to July 1994, she was President and Chief Compliance
Officer of Funds Distributor, Inc., the ultimate parent of which is
Boston Institutional Group, Inc. She is 39 years old.

JOHN E. PELLETIER, Vice President and Secretary. Senior Vice President,
General Counsel and Secretary of the Distributor and an officer of
other investment companies advised or administered by the Manager.
From February 1992 to July 1994, he served as Counsel for The Boston
Company Advisors, Inc. He is 32 years old.

DOUGLAS C. CONROY, Vice President and Assistant Secretary. Supervisor of
Treasury Services and Administration of Funds Distributor, Inc. and an
officer of other investment companies advised or administered by the
Manager. From April 1993 to January 1995, he was a Senior Fund
Accountant for Investors Bank & Trust Company. From December 1991 to
March 1993, he was employed as a Fund Accountant at The Boston Company,
Inc. He is 28 years old.

MARK A. KARPE, Vice President and Assistant Secretary. Senior Paralegal of
the Distributor and an officer of other investment companies advised or
administered by the Manager. Prior to August 1993, he was employed as
an Associate Examiner at the National Association of Securities
Dealers, Inc. He is 28 years old.

ELIZABETH A. KEELEY, Vice President and Assistant Secretary. Assistant Vice
President of the Distributor since September 1995 and an officer of
other investment companies advised or administered by the Manager. She
is 27 years old.

RICHARD INGRAM, Vice President and Assistant Treasurer. Senior Vice
President and Director of Client Services and Treasury Operations of
Funds Distributor, Inc. and an officer of other investment companies
advised or administered by the Manager. From March 1994 to November
1995, he was Vice President and Division Manager for First Data
Investor Services Group. From 1989 to 1995, he was Vice President,
Assistant Treasurer and Tax Director - Mutual Funds of The Boston
Company, Inc. He is 41 years old.

MARY A. NELSON, Vice President and Assistant Treasurer. Vice President and
Manager of Treasury Services and Administration of Funds Distributor,
Inc. and an officer of other investment companies advised or
administered by the Manager. From September 1989 to July 1994, she was
an Assistant Vice President and Client Manager for The Boston Company,
Inc. She is 33 years old.

MICHAEL S. PETRUCELLI, Vice President and Assistant Treasurer. Director of
Strategic Client Initiatives for Funds Distributor, Inc. and an officer
of other investment companies advised or administered by the Manager.
From December 1989 through November 1996, he was employed with GE
Investments where he held various financial, business development and
compliance positions. He also served as Treasurer of the GE Funds and
as Director of GE Investment Services. He is 35 years old.

JOSEPH F. TOWER, III, Vice President and Assistant Treasurer. Senior Vice
President, Treasurer and Chief Financial Officer of the Distributor and
an officer of other investment companies advised or administered by the
Manager. From July 1988 to August 1994, he was employed by The Boston
Company, Inc. where he held various management positions in the
Corporate Finance and Treasury areas. He is 34 years old.

The address of each officer of the Fund is 200 Park Avenue, New York,
New York 10166.

The Fund's Board members and officers, as a group, owned less than 1%
of the Fund's shares outstanding on April 15, 1997.

The following are known by the Fund to own of record 5% or more of the
outstanding voting securities of the Money Market Series as of April 15,
1997: Landau Family Foundation, Chicago, Illinois - 6.03%.

MANAGEMENT AGREEMENT

The following information supplements and should be read in conjunction
with the section in each Prospectus entitled "Management of the Fund."

The Manager provides management services pursuant to the Management
Agreement (the "Agreement") dated August 24, 1994 with the Fund. As to each
series, the Agreement is subject to annual approval by (i) the Fund's Board
or (ii) vote of a majority (as defined in the 1940 Act) of the outstanding
voting securities of such series, provided that in either event the
continuance also is approved by a majority of the Board members who are not
"interested persons" (as defined in the 1940 Act) of the Fund or the
Manager, by vote cast in person at a meeting called for the purpose of
voting on such approval. Shareholders of each series approved the Agreement
on August 2, 1994. The Fund's Board, including a majority of the Board
members who are not "interested persons" of any party to the Agreement, last
approved the Agreement at a meeting held on September 9, 1996. As to each
series, the Agreement is terminable without penalty on 60 days' notice, by
the Fund's Board or by vote of a majority of the outstanding voting
securities of such series or, on 90 days' notice, by the Manager. The
Agreement will terminate automatically, as to the relevant series, in the
event of its assignment (as defined in the 1940 Act).

The following persons are officers and/or directors of the Manager: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a director; Lawrence S.
Kash, Vice Chairman--Distribution and a director; William T. Sandalls, Jr.,
Senior Vice President and Chief Financial Officer; Mark N. Jacobs, Vice
President, General Counsel and Secretary; Patrice M. Kozlowski, Vice
President--Corporate Communications; Mary Beth Leibig, Vice President--Human
Resources; Jeffrey N. Nachman, Vice President--Mutual Fund Accounting;
Andrew S. Wasser, Vice President--Information Systems; Elvira Oslapas,
Assistant Secretary; and Mandell L. Berman, Burton C. Borgelt and Frank V.
Cahouet, directors.

The Manager manages the Fund's portfolio of investments in accordance
with the stated policies of the Fund, subject to the approval of the Fund's
Board. The Manager is responsible for investment decisions, and provides
the Fund with portfolio managers who are authorized by the Board to execute
purchases and sales of securities. The Fund's portfolio managers are
Bernard W. Kiernan, Jr., Patricia A. Larkin and Thomas Riordan. The Manager
also maintains a research department with a professional staff of portfolio
managers and securities analysts who provide research services for the Fund
and for other funds advised by the Manager. All purchases and sales of
securities for each series are reported for the Board's review at the
meeting subsequent to such transactions.

The Manager maintains office facilities on behalf of the Fund, and
furnishes statistical and research data, clerical help, accounting, data
processing, bookkeeping and internal auditing and certain other required
services to the Fund. The Manager may make such advertising and promotional
expenditures, using its own resources, as it from time to time deems
appropriate.

All expenses incurred in the operation of the Fund are borne by the
Fund, except to the extent specifically assumed by the Manager. The
expenses borne by the Fund include: taxes, interest, brokerage fees and
commissions, if any, fees of Board members who are not officers, directors,
employees, or holders of 5% or more of the outstanding voting securities of
the Manager, Securities and Exchange Commission fees, state Blue Sky
qualification fees, advisory fees, charges of registrars and custodians,
transfer and dividend disbursing agents' fees, outside auditing and legal
expenses, costs of independent pricing services, costs of maintaining the
Fund's existence, all costs of insurance obtained other than under a blanket
policy covering one or more other investment companies managed by the
Manager, costs attributable to investor services (including, allocable
telephone and personnel expenses), costs of shareholders' reports and
meetings, costs of preparing and printing prospectuses for regulatory
purposes and for distribution to existing shareholders and any extraordinary
expenses. Expenses attributable to a particular series are charged against
the assets of that series; other expenses of the Fund are allocated between
the series on the basis determined by the Board, including, but not limited
to, proportionately in relation to the net assets of each series.

As compensation for the Manager's services, the Fund has agreed to pay
the Manager a monthly management fee at the annual rate of .50 of 1% of the
value of each series' average daily net assets. All expenses are accrued
daily and deducted before declaration of dividends to investors. The
management fees paid by the Money Market Series to the Manager for the
fiscal years ended December 31, 1994, 1995 and 1996 amounted to $897,079,
$772,469 and $688,144, respectively. The management fees paid by the
Government Securities Series to the Manager for the fiscal years ended
December 31, 1994, 1995 and 1996 amounted to $2,445,817, $2,294,425 and
$2,192,157, respectively.

The Manager has agreed that if in any fiscal year the aggregate
expenses of the Fund, excluding taxes, brokerage commissions, interest and
(with the prior written consent of the necessary state securities
commissions) extraordinary expenses, but including the management fee,
exceed 1% of the average value of the net assets of either series for the
fiscal year, the Fund may deduct from the management fees charged to the
series, or the Manager will bear, such excess amount.

The aggregate of the fees payable to the Manager is not subject to
reduction as the value of a series' net assets increases.

PURCHASE OF SHARES

The following information supplements and should be read in conjunction
with the section in each Prospectus entitled "How to Buy Shares."

The Distributor. The Distributor serves as the Fund's distributor on a
best efforts basis pursuant to an agreement which is renewable annually.
The Distributor also acts as distributor for the other funds in the Dreyfus
Family of Funds and for certain other investment companies. In some states,
certain financial institutions effecting transactions in Fund shares may be
required to register as dealers pursuant to state law.

Using Federal Funds. Dreyfus Transfer, Inc., the Fund's transfer and
dividend disbursing agent (the "Transfer Agent"), or the Fund may attempt to
notify the investor upon receipt of checks drawn on banks that are not
members of the Federal Reserve System as to the possible delay in conversion
into Federal Funds and may attempt to arrange for a better means of
transmitting the money. If the investor is a customer of a securities
dealer, bank or other financial institution and his order to purchase Fund
shares is paid for other than in Federal Funds, the securities dealer, bank
or other financial institution, acting on behalf of its customer, will
complete the conversion into, or itself advance, Federal Funds generally on
the business day following receipt of the customer order. The order is
effective only when so converted and received by the Transfer Agent. An
order for the purchase of Fund shares placed by an investor with a
sufficient Federal Funds or cash balance in his brokerage account with a
securities dealer, bank or other financial institution will become effective
on the day that the order, including Federal Funds, is received by the
Transfer Agent.

Procedures for Multiple Accounts. The Transfer Agent will provide each
institution with a written confirmation for each transaction in a
sub-account. Duplicate confirmations may be transmitted to the beneficial
owner of the sub-account at no additional charge. Upon receipt of funds for
investments by interbank wire, the Transfer Agent or First Interstate Bank
of California will promptly confirm the receipt of the investment by
telephone or return wire to the transmitting bank, if the investor so
requests.

The Transfer Agent also will provide each institution with a monthly
statement setting forth, for each sub-account, the share balance, income
earned for the month, income earned for the year to date and the total
current value of the account.

Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made at any time. Purchase orders received by 4:00 p.m., New York
time, on any business day that the Transfer Agent and the New York Stock
Exchange are open for business will be credited to the shareholder's Fund
account on the next bank business day following such purchase order.
Purchase orders made after 4:00 p.m., New York time, on any business day the
Transfer Agent and the New York Stock Exchange are open for business, or
orders made on Saturday, Sunday or any Fund holiday (e.g., when the New York
Stock Exchange is not open for business), will be credited to the
shareholder's Fund account on the second bank business day following such
purchase order. To qualify to use Dreyfus TeleTransfer, the initial payment
for purchase of Fund shares must be drawn on, and redemption proceeds paid
to, the same bank and account as are designated on the Account Application
or Shareholder Services Form on file. If the proceeds of a particular
redemption are to be wired to an account at any other bank, the request must
be in writing and signature-guaranteed. See "Redemption of Shares--Dreyfus
TeleTransfer Privilege."

Transactions Through Securities Dealers. Fund shares may be purchased
and redeemed through securities dealers which may charge a fee for such
services. Some dealers will place the Fund's shares in an account with
their firm. Dealers also may require the following: that the customer not
take physical delivery of stock certificates; the customer not request
redemption checks to be issued in the customer's name; fractional shares not
be purchased; monthly income distributions be taken in cash; or other
conditions.

There is no sales or service charge by the Fund or the Distributor
although investment dealers, banks and other financial institutions may make
reasonable charges to investors for their services. The services provided
and the applicable fees are established by each dealer or other institution
acting independently of the Fund. The Fund has been given to understand
that these fees may be charged for customer services including, but not
limited to, same-day investment of client funds; same-day access to client
funds; advice to customers about the status of their accounts, yield
currently being paid or income earned to date; provision of periodic account
statements showing security and money market positions; other services
available from the dealer, bank or other institution; and assistance with
inquiries related to their investment. Any such fees will be deducted
monthly from the investor's account, which on smaller accounts could
constitute a substantial portion of distributions. Small, inactive,
long-term accounts involving monthly service charges may not be in the best
interest of investors. Investors should be aware that they may purchase
shares of the Fund directly from the Fund without imposition of any
maintenance or service charges, other than those already described herein.

Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the old Account Application is still applicable.

SHAREHOLDER SERVICES PLAN

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services
Plan."

The Fund has adopted a Shareholder Services Plan (the "Plan") pursuant
to which the Fund reimburses Dreyfus Service Corporation 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
relating to the maintenance of shareholder accounts.

A quarterly report of the amounts expended under the Plan, and the
purposes for which such expenditures were incurred, must be made to the
Board for its review. In addition, the Plan provides that material
amendments of the Plan must be approved by the Board, and by the Board
members who are not "interested persons" (as defined in the 1940 Act) of the
Fund and have no direct or indirect financial interest in the operation of
the Plan, by vote cast in person at a meeting called for the purpose of
considering such amendments. The Plan is subject to annual approval by such
vote of the Board members cast in person at a meeting called for the purpose
of voting on the Plan. The Plan was last so approved on September 9, 1996.
The Plan is terminable at any time by vote of a majority of the Board
members who are not "interested persons" and have no direct or indirect
financial interest in the operation of the Plan.

The fees paid by the Money Market Series and the Government Securities
Series pursuant to the Plan for the fiscal year ended December 31, 1996
amounted to $253,686 and $1,096,079, respectively.

REDEMPTION OF SHARES

The following information supplements and should be read in conjunction
with the section in each Prospectus entitled "How to Redeem Shares."

Check Redemption Privilege. An investor may indicate on the Account
Application, Shareholder Services Form or by later written request that the
Fund provide Redemption Checks ("Checks") drawn on the investor's Fund
account. Checks will be sent only to the registered owner(s) of the account
and only to the address of record. The Account Application, Shareholder
Services Form or later written request must be manually signed by the
registered owner(s). Checks may be made payable to the order of any person
in an amount of $500 or more. When a Check is presented to the Transfer
Agent for payment, the Transfer Agent, as the investor's agent, will cause
the Fund to redeem a sufficient number of shares in the investor's account
to cover the amount of the Check. Dividends are earned until the Check
clears. After clearance, a copy of the Check will be returned to the
investor. Shareholders generally will be subject to the same rules and
regulations that apply to checking accounts, although the election of this
Privilege creates only a shareholder-transfer agent relationship with the
Transfer Agent.

If the amount of the Check is greater than the value of the shares in
the investor's account, the Check will be returned marked insufficient
funds. Checks should not be used to close an account.

Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire or telephone redemption
instructions from any person representing himself or herself to be the
investor and reasonably believed by the Transfer Agent to be genuine.
Ordinarily, the Fund will initiate payment for shares redeemed pursuant to
this Privilege on the same business day if the redemption request is
received by the Transfer Agent in proper form prior to 12:00 Noon, New York
time, on such day; otherwise, the Fund will initiate payment on the next
business day. Redemption proceeds ($1,000 minimum) will be transferred by
Federal Reserve wire only to the commercial bank account specified by the
investor on the Account Application or Shareholder Services Form, or to a
correspondent bank if the investor's bank is not a member of the Federal
Reserve System. Fees ordinarily are imposed by such bank and borne by the
investor. Immediate notification by the correspondent bank to the
investor's bank is necessary to avoid a delay in crediting the funds to the
investor's bank account.

Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:

Transfer Agent's
Transmittal Code Answer Back Sign

144295 144295 TSSG PREP

Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at
1-800-654-7171, toll free. Investors should advise the operator that the
above transmittal code must be used and should also inform the operator of
the Transfer Agent's answer back sign.

To change the commercial bank or account designated to receive
redemption proceeds, a written request must be sent to the Transfer Agent.
This request must be signed by each shareholder, with each signature
guaranteed as described below under "Stock Certificates; Signatures."

Dreyfus TeleTransfer Privilege. Investors should be aware that if they
have selected the Dreyfus TeleTransfer Privilege, any request for a wire
redemption will be effected as a Dreyfus TeleTransfer transaction through
the Automated Clearing House (ACH) system unless more prompt transmittal
specifically is requested. Redemption proceeds will be on deposit in the
investor's account at an ACH member bank ordinarily two business days after
receipt of the redemption request. See "Purchase of Shares--Dreyfus
TeleTransfer Privilege."

Stock Certificates; Signatures. Any certificate representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each owner of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations, as well as from participants in the New York Stock
Exchange Medallion Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. Guarantees must be
signed by an authorized signatory of the guarantor and "Signature-
Guaranteed" must appear with the signature. The Transfer Agent may request
additional documentation from corporations, executors, administrators,
trustees or guardians, and may accept other suitable verification
arrangements from foreign investors, such as consular verification. For
more information with respect to signature-guarantees, please call one of
the telephone numbers listed on the cover.

Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record, limited in amount
during any 90-day period to the lesser of $250,000 or 1% of the value of the
relevant series' net assets at the beginning of such period. Such
commitment is irrevocable without the prior approval of the Securities and
Exchange Commission. In the case of requests for redemption in excess of
such amount, the Fund's Board reserves the right to make payments in whole
or part in securities (which may be non marketable securities) or other
assets of the relevant series in case of an emergency or any time a cash
distribution would impair the liquidity of such series to the detriment of
the existing shareholders. In such event, the securities would be valued in
the same manner as the series' portfolio is valued. If the recipient sold
such securities, brokerage charges might be incurred.

Suspension of Redemptions. The right of redemption may be suspended or
the date of payment postponed (a) during any periods when the New York Stock
Exchange is closed (other than customary weekend and holiday closings), (b)
when trading in the markets the Fund ordinarily utilizes is restricted, or
when an emergency exists as determined by the Securities and Exchange
Commission so that disposal of the Fund's investments or determination of
its net asset value is not reasonably practicable, or (c) for such other
periods as the Securities and Exchange Commission by order may permit to
protect the Fund's shareholders.

SHAREHOLDER SERVICES

The following information supplements and should be read in conjunction
with the section in each Prospectus entitled "Shareholder Services."

Fund Exchanges. Shares of other funds purchased by exchange will be
purchased on the basis of relative net asset value per share as follows:

A. Exchanges for shares of funds that are offered without a
sales load will be made without a sales load.

B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and
the applicable sales load will be deducted.

C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.

D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a sales
load, and additional shares acquired through reinvestment of
dividends or distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect to
any reduced loads, the difference will be deducted.

To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.

To request an exchange, an investor must give exchange instructions to
the Transfer Agent in writing or by telephone. The ability to issue
exchange instructions by telephone is given to all Fund shareholders
automatically, unless the investor checks the applicable "No" box on the
Account Application, indicating that the investor specifically refuses this
privilege. By using the Telephone Exchange Privilege, the investor
authorizes the Transfer Agent to act on telephonic instructions (including
over The Dreyfus Touchr automated telephone system) from any person
representing himself or herself to be the investor, and reasonably believed
by the Transfer Agent to be genuine. Telephone exchanges may be subject to
limitations as to the amount involved or the number of telephone exchanges
permitted. Shares issued in certificate form are not eligible for telephone
exchanges.

To establish a personal retirement plan by exchange, shares of the fund
being exchanged must have a value of at least the minimum initial investment
required for the fund into which the exchange is being made. For
Dreyfus-sponsored Keogh Plans, IRAs and IRAs set up under a Simplified
Employee Pension Plan ("SEP-IRAs") with only one participant, the minimum
initial investment is $750. To exchange shares held in corporate plans,
403(b)(7) Plans and SEP-IRAs with more than one participant, the minimum
initial investment is $100 if the plan has at least $2,500 invested among
the funds in the Dreyfus Family of Funds. To exchange shares held in
personal retirement plans, the shares exchanged must have a current value of
at least $100.

Dreyfus Auto-Exchange Privilege. Dreyfus Auto-Exchange Privilege
permits an investor to purchase, in exchange for shares of the Fund, shares
of certain other funds in the Dreyfus Family of Funds. This Privilege is
available only for existing accounts. Shares will be exchanged on the basis
of relative net asset value set forth above under "Fund Exchanges."
Enrollment in or modification or cancellation of this Privilege is effective
three business days following notification by the investor. An investor
will be notified if his account falls below the amount designated to be
exchanged under this Privilege. In this case, an investor's account will
fall to zero unless additional investments are made in excess of the
designated amount prior to the next Auto-Exchange transaction. Shares held
under IRA and other retirement plans are eligible for this Privilege.
Exchanges of IRA shares may be made between IRA accounts and from regular
accounts to IRA accounts, but not from IRA accounts to regular accounts.
With respect to all other retirement accounts, exchanges may be made only
among those accounts.

Fund Exchanges and the Dreyfus Auto-Exchange Privilege are available to
shareholders resident in any state in which shares of the fund being
acquired may legally be sold. Shares may be exchanged only between accounts
having identical names and other identifying designations.

Shareholder Services Forms and prospectuses of the other funds in the
Dreyfus Family of Funds may be obtained by calling 1-800-645-6561. The Fund
reserves the right to reject any exchange request in whole or in part. The
Fund Exchanges service or Dreyfus Auto-Exchange Privilege may be modified or
terminated at any time upon notice to shareholders.

Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest automatically their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of another fund in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
other funds purchased pursuant to this privilege will be purchased on the
basis of relative net asset value per share as follows:

A. Dividends and distributions paid by a fund may be
invested without imposition of a sales load in shares of
other funds that are offered without a sales load.

B. Dividends and distributions paid by a fund which
does not charge a sales load may be invested in shares
of other funds sold with a sales load, and the
applicable sales load will be deducted.

C. Dividends and distributions paid by a fund which
charges a sales load may be invested in shares of other
funds sold with a sales load (referred to herein as
"Offered Shares"), provided that, if the sales load
applicable to the Offered Shares exceeds the maximum
sales load charged by the fund from which dividends or
distributions are being swept, without giving effect to
any reduced loads, the difference will be deducted.

D. Dividends and distributions paid by a fund may be
invested in shares of other funds that impose a
contingent deferred sales charge ("CDSC") and the
applicable CDSC, if any, will be imposed upon redemption
of such shares.

Corporate Pension/Profit-Sharing and Personal Retirement Plans. The
Government Securities Series of the Fund makes available to corporations a
variety of prototype pension and profit-sharing plans including a 401(k)
Salary Reduction Plan. In addition, the Government Securities Series of the
Fund makes available Keogh Plans, IRAs, including SEP-IRAs and IRA "Rollover
Accounts," and 403(b)(7) Plans. Plan support services also are available.
Investors can obtain details on the various plans by calling the following
numbers toll free: for Keogh Plans, please call 1-800-358-5566; for IRAs and
IRA "Rollover Accounts," please call 1-800-645-6561; or for SEP-IRAs, 401(k)
Salary Reduction Plans and 403(b)(7) Plans, please call 1-800-322-7880.

Investors who wish to purchase shares of the Government Securities
Series in conjunction with a Keogh Plan, a 403(b)(7) Plan or an IRA,
including a SEP-IRA, may request from the Distributor forms for adoption of
such plans.

The entity acting as custodian for Keogh Plans, 403(b)(7) Plans or IRAs
may charge a fee, payment of which could require the liquidation of shares.
All fees charged are described in the appropriate form.

Shares may be purchased in connection with these plans only by direct
remittance to the entity acting as custodian. Such purchases will be
effective when payments received by the Transfer Agent are converted into
Federal Funds. Purchases for these plans may not be made in advance of
receipt of funds.

The minimum initial investment for corporate plans, Payroll Deduction
Plans, 403(b)(7) Plans, and SEP-IRAs, with more than one participant, is
$2,500, with no minimum on subsequent purchases. The minimum initial
investment for Dreyfus-sponsored Keogh Plans, IRAs, SEP-IRAs and 403(b)(7)
Plans with only one participant, is normally $750, with no minimum on
subsequent purchases. Individuals who open an IRA also may open a
non-working spousal IRA with a minimum investment of $250.

The investor should read the prototype retirement plan and the
appropriate form of custodial agreement for further details as to
eligibility, service fees and tax implications, and should consult a tax
adviser.

PORTFOLIO TRANSACTIONS

Portfolio securities ordinarily are purchased from the issuer or from
an underwriter or a market maker for the securities. Usually no brokerage
commissions are paid by the Fund for such purchases. Purchases from
underwriters of portfolio securities include a concession paid by the issuer
to the underwriter and the purchase price paid to market makers for the
securities may include the spread between the bid and asked price. No
brokerage commissions have been paid by the Fund to date.

Transactions are allocated to various dealers by the Fund's portfolio
managers in their best judgment. The primary consideration is prompt and
effective execution of orders at the most favorable price. Subject to that
primary consideration, dealers may be selected for research, statistical or
other services to enable the Manager to supplement its own research and
analysis with the views and information of other securities firms.

Research services furnished by brokers through which the Fund effects
securities transactions may be used by the Manager in advising other funds
it advises and, conversely, research services furnished to the Manager by
brokers in connection with other funds the Manager advises may be used by
the Manager in advising the Fund. Although it is not possible to place a
dollar value on these services, it is the opinion of the Manager that the
receipt and study of such services should not reduce the overall expenses of
its research department.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should be read in conjunction
with the section in each Prospectus entitled "How to Buy Shares."

Amortized Cost Pricing. The valuation of the Fund's portfolio
securities is based upon their amortized cost which does not take into
account unrealized gains or losses. This involves valuing an instrument at
its cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. While this method provides certainty
in valuation, it may result in periods during which value, as determined by
amortized cost, is higher or lower than the price the Fund would receive if
it sold the instrument.

The Fund's Board has established, as a particular responsibility within
the overall duty of care owed to the Fund's investors, procedures reasonably
designed to stabilize the Fund's price per share as computed for the purpose
of purchases and redemptions at $1.00. Such procedures include review of
the Fund's portfolio holdings by the Board, at such intervals as it may deem
appropriate, to determine whether the Fund's net asset value calculated by
using available market quotations or market equivalents deviates from $1.00
per share based on amortized cost. In such review, investments for which
market quotations are readily available will be valued at the most recent
bid price or yield equivalent for such securities or for securities of
comparable maturity, quality and type, as obtained from one or more of the
major market makers for the securities to be valued. Other investments and
assets will be valued at fair value as determined in good faith by the
Board.

The extent of any deviation between the Fund's net asset value based
upon available market quotations or market equivalents and $1.00 per share
based on amortized cost will be examined by the Fund's Board. If such
deviation exceeds 1/2 of 1%, the Board will consider promptly what action,
if any, will be initiated. In the event the Board determines that a
deviation exists which may result in material dilution or other unfair
results to investors or existing shareholders, it has agreed to take such
corrective action as it regards as necessary and appropriate, including:
selling portfolio instruments prior to maturity to realize capital gains or
losses or to shorten average portfolio maturity; withholding dividends or
paying distributions from capital or capital gains; redeeming shares in
kind; or establishing a net asset value per share by using available market
quotations.

New York Stock Exchange and Transfer Agent Closings. The holidays (as
observed) on which the New York Stock Exchange and the Transfer Agent are
closed currently are: New Year's Day, Presidents' Day, Memorial Day,
Independence Day, Labor Day, Thanksgiving and Christmas. In addition, the
New York Stock Exchange is closed on Good Friday.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The following information supplements and should be read in conjunction
with the section in Fund's Prospectus entitled "Dividends, Distributions and
Taxes.

Ordinarily, gains and losses realized from portfolio transactions will
be treated as capital gain or loss. However, all or a portion of any gains
realized from the sale or other disposition of certain market discount bonds
will be treated as ordinary income under Section 1276 of the Internal
Revenue Code of 1986, as amended.

YIELD INFORMATION

The following information supplements and should be read in conjunction
with the section in each Prospectus entitled "Yield Information."

For the seven-day period ended December 31, 1996, the Money Market
Series' yield was 4.58% and its effective yield was 4.68%. For the
seven-day period ended December 31, 1996, the Government Securities Series'
yield was 4.59% and its effective yield was 4.69%. Yield is computed in
accordance with a standardized method which involves determining the net
change in the value of a hypothetical pre-existing Fund account having a
balance of one share at the beginning of a seven calendar day period for
which yield is to be quoted, dividing the net change by the value of the
account at the beginning of the period to obtain the base period return, and
annualizing the results (i.e., multiplying the base period return by 365/7).
The net change in the value of the account reflects the value of additional
shares purchased with dividends declared on the original share and any such
additional shares and fees that may be charged to shareholder accounts, in
proportion to the length of the base period and the Fund's average account
size, but does not include realized gains and losses or unrealized
appreciation and depreciation. Effective yield is computed by adding 1 to
the base period return (calculated as described above), raising that sum to
a power equal to 365 divided by 7, and subtracting 1 from the result.

Yields will fluctuate and are not necessarily representative of future
results. Investors should remember that yield is a function of the type and
quality of the instruments in the portfolio, portfolio maturity and
operating expenses. An investor's principal in the Fund is not guaranteed.
See "Determination of Net Asset Value" for a discussion of the manner in
which the Fund's price per share is determined.

INFORMATION ABOUT THE FUND

The following information supplements and should be read in conjunction
with the section in each Prospectus entitled "General Information."

Each share has one vote and, when issued and paid for in accordance
with the terms of the offering, is fully paid and non-assessable. Shares
have no pre-emptive, subscription, or conversion rights and are freely
transferable.

Rule 18f-2 under the 1940 Act provides that any matter required to be
submitted under the provisions of the 1940 Act or applicable state law or
otherwise, to the holders of the outstanding voting securities of an
investment company, such as the Fund, will not be deemed to have been
effectively acted upon unless approved by the holders of a majority of the
outstanding shares of each series affected by such matter. Rule 18f-2
further provides that a series shall be deemed to be affected by a matter
unless it is clear that the interests of each series in the matter are
identical or that the matter does not affect any interest of such series.
However, the Rule exempts the selection of independent accountants and the
election of Board members from the separate voting requirements of the Rule.

The Fund sends annual and semi-annual financial statements to all its
shareholders.

TRANSFER AND DIVIDEND DISBURSING AGENT, CUSTODIAN,
COUNSEL AND INDEPENDENT AUDITORS

Dreyfus Transfer, Inc., a wholly-owned subsidiary of the Manager, P.O.
Box 9671, Providence, Rhode Island 02940-9671, is the Fund's transfer and
dividend disbursing agent. Under a transfer agency agreement with the Fund,
the Transfer Agent arranges for the maintenance of shareholder account
records for the Fund, the handling of certain communications between
shareholders and the Fund and the payment of dividends and distributions
payable by the Fund. For these services, the Transfer Agent receives a
monthly fee computed on the basis of the number of shareholder accounts it
maintains for the Fund during the month, and is reimbursed for certain out-
of-pocket expenses. For the fiscal year ended December 31, 1996, the Fund
paid the Transfer Agent $377,926.

The Bank of New York, 90 Washington Street, New York, New York 10286,
is the Fund's custodian.

Stroock & Stroock & Lavan LLP, 180 Maiden Lane, New York, New York
10038-4982, as counsel for the Fund, has rendered its opinion as to certain
legal matters regarding the due authorization and valid issuance of the
shares being sold pursuant to the Fund's Prospectus.

Ernst & Young LLP, 787 Seventh Avenue, New York, New York 10019,
independent auditors, have been selected as auditors of the Fund.

APPENDIX

Description of the two highest commercial paper, bond and other short-
and long-term rating categories assigned by Standard & Poor's Ratings Group
("S&P"), Moody's Investors Service, Inc. ("Moody's"), Fitch Investors
Service, L.P. ("Fitch"), Duff & Phelps Credit Rating Co. ("Duff"), IBCA
Limited and IBCA, Inc. ("IBCA") and Thomson BankWatch, Inc. ("BankWatch"):

Commercial Paper and Short-Term Ratings

The designation A-1 by S&P indicates that the degree of safety
regarding timely payment is either overwhelming or very strong. Capacity
for timely payment on issues with an A-2 designation is strong. However,
the relative degree of safety is not as high as for issues designated A-1.
Those issues determined to possess overwhelming safety characteristics are
denoted with a plus sign (+) designation.

The rating Prime-1 (P-1) is the highest commercial paper rating
assigned by Moody's. Issuers of P-1 paper must have a superior capacity for
repayment of short-term promissory obligations, and ordinarily will be
evidenced by leading market positions in well established industries, high
rates of return on funds employed, conservative capitalization structures
with moderate reliance on debt and ample asset protection, broad margins in
earnings coverage of fixed financial charges and high internal cash
generation, and well established access to a range of financial markets and
assured sources of alternate liquidity. Issues rated Prime-2 (P-2) have a
strong capacity for repayment of short-term promissory obligations. This
ordinarily will be evidenced by many of the characteristics cited above but
to a lesser degree. Earnings trends and coverage ratios, while sound, will
be more subject to variation. Capitalization characteristics, while still
appropriate, may be more affected by external conditions. Ample alternate
liquidity is maintained.

The rating Fitch-1 (Highest Grade) is the highest commercial paper
rating assigned by Fitch. Paper rated Fitch-1 is regarded as having the
strongest degree of assurance for timely payment. The rating Fitch-2 (Very
Good Grade) is the second highest commercial paper rating assigned by Fitch
which reflects an assurance of timely payment only slightly less in degree
than the strongest issues.

The rating Duff-1 is the highest commercial paper rating assigned by
Duff. Paper rated Duff-1 is regarded as having very high certainty of
timely payment with excellent liquidity factors which are supported by ample
asset protection. Risk factors are minor. Paper rated Duff-2 is regarded
as having good certainty of timely payment, good access to capital markets
and sound liquidity factors and company fundamentals. Risk factors are
small.

The designation A1 by IBCA indicates that the obligation is supported
by a very strong capacity for timely repayment. Those obligations rated A1+
are supported by the highest capacity for timely repayment. Obligations
rated A2 are supported by a strong capacity for timely repayment, although
such capacity may be susceptible to adverse changes in business, economic or
financial conditions.

The rating TBW-1 is the highest short-term obligation rating assigned
by BankWatch. Obligations rated TBW-1 are regarded as having the strongest
capacity for timely repayment. Obligations rated TBW-2 are supported by a
strong capacity for timely repayment, although the degree of safety is not
as high as for issues rated TBW-1.

Bond and Long-Term Ratings

Bonds rated AAA are considered by S&P to be the highest grade
obligations and possess an extremely strong capacity to pay principal and
interest. Bonds rated AA by S&P are judged by S&P to have a very strong
capacity to pay principal and interest, and in the majority of instances,
differ only in small degree from issues rated AAA. The rating AA may be
modified by the addition of a plus or minus sign to show relative standing
within the rating category.

Bonds rated Aaa are judged by Moody's to be of the best quality. Bonds
rated Aa by Moody's are judged by Moody's to be of high quality by all
standards. Together with the Aaa group, they comprise what are generally
known as high-grade bonds. Bonds rated Aa are rated lower than Aaa bonds
because margins of protection may not be as large or fluctuations of
protective elements may be of greater amplitude or there may be other
elements present which make the long-term risks appear somewhat larger.
Moody's applies the numerical modifiers 1, 2 and 3 in the Aa rating
category. The modifier 1 indicates a ranking for the security in the higher
end of this rating category, the modifier 2 indicates a mid-range ranking
and the modifier 3 indicates a ranking in the lower end of the rating
category.

Bonds rated AAA by Fitch are judged by Fitch to be strictly high-grade,
broadly marketable and suitable for investment by trustees and fiduciary
institutions and liable to but slight market fluctuation other than through
changes in the money rate. The prime feature of an AAA bond is a showing of
earnings several times or many times interest requirements, with such
stability of applicable earnings that safety is beyond reasonable question
whatever changes occur in conditions. Bonds rated AA by Fitch are judged by
Fitch to be of safety virtually beyond question and are readily salable,
whose merits are not unlike those of the AAA class, but whose margin of
safety is less strikingly broad. The issue may be the obligation of a small
company, strongly secured but influenced as to rating by the lesser
financial power of the enterprise and more local type of market.

Bonds rated AAA by Duff are considered to be of the highest credit
quality. The risk factors are negligible, being only slightly more than
U.S. Treasury debt. Bonds rated AA are considered to be of high credit
quality with strong protection factors. Risk is modest but may vary
slightly from time to time because of economic conditions.

Obligations rated AAA by IBCA have the lowest expectation of investment
risk. Capacity for timely repayment of principal and interest is
substantial, such that adverse changes in business, economic or financial
conditions are unlikely to increase investment risk significantly.
Obligations rated AA by IBCA have a very low expectation of investment risk.
Capacity for timely repayment of principal and interest is substantial.
Adverse changes in business, economic or financial conditions may increase
investment risk albeit not very significantly.

IBCA also assigns a rating to certain international and U.S. banks. An
IBCA bank rating represents IBCA's current assessment of the strength of the
bank and whether such bank would receive support should it experience
difficulties. In its assessment of a bank, IBCA uses a dual rating system
comprised of Legal Ratings and Individual Ratings. In addition, IBCA
assigns banks long- and short-term ratings as used in the corporate ratings
discussed above. Legal Ratings, which range in gradations from 1 through 5,
address the question of whether the bank would receive support provided by
central banks or shareholders if it experienced difficulties, and such
ratings are considered by IBCA to be a prime factor in its assessment of
credit risk. Individual Ratings, which range in gradations from A through
E, represent IBCA's assessment of a bank's economic merits and address the
question of how the bank would be viewed if it were entirely independent and
could not rely on support from state authorities or its owners.

In addition to ratings of short-term obligations, BankWatch assigns a
rating to each issuer it rates, in gradations of A through E. BankWatch
examines all segments of the organization including, were applicable, the
holding company, member banks or associations, and other subsidiaries. In
those instances where financial disclosure is incomplete or untimely, a
qualified rating (QR) is assigned to the institution. BankWatch also
assigns, in the case of foreign banks, a country rating which represents an
assessment of the overall political and economic stability of the country in
which the bank is domiciled.

<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>

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
Reference is made to page 4 of the Fund's Prospectus dated may 1, 1997.

See notes to financial statements.

<PAGE>

Dreyfus Money Market Instruments, Inc., Government Securities Series
- -----------------------------------------------------------------------------
Financial Highlights (continued)

Reference is made to page 4 of the Fund's Prospectus dated may 1, 1997.

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