Dreyfus
Money Market
Instruments, Inc.
SEMIANNUAL REPORT June 30, 1999
(reg.tm)
<PAGE>
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The Dreyfus
Corporation and the fund's other service providers do not properly process and
calculate date-related information from and after January 1, 2000. The Dreyfus
Corporation is working to avoid Year 2000-related problems in its systems and to
obtain assurances from other service providers that they are taking similar
steps. In addition, issuers of securities in which the fund invests may be
adversely affected by Year 2000-related problems. This could have an impact on
the value of the fund's investments and its share price.
<PAGE>
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statements of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
<PAGE>
The Fund
Dreyfus Money Market
Instruments, Inc.
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Money Market
Instruments, Inc., covering the six-month period from January 1, 1999 through
June 30, 1999. Inside, you'll find valuable information about how the fund was
managed during the period, including a discussion with senior portfolio manager,
Patricia A. Larkin.
After remaining relatively steady during the first quarter of 1999, yields on
money market securities generally rose in the second quarter in response to
expectations that the Federal Reserve Board would raise short-term interest
rates at their June meeting. On June 30, the Federal Reserve raised rates amid
stronger-than-expected global and domestic economic growth. Their objective was
to forestall a potential resurgence of inflationary pressures.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Money Market Instruments, Inc.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
July 15, 1999
<PAGE 2>
DISCUSSION OF FUND PERFORMANCE
Patricia A. Larkin, Senior Portfolio Manager
How did Dreyfus Money Market Instruments, Inc. perform during the period?
For the six-month period ended June 30, 1999, Dreyfus Money Market Instruments,
Inc. produced an annualized yield of 4.14% for both its Money Market and
Government Securities Series. Taking into account the effect of compounding, the
annualized effective yield was 4.22% for both series.(1) Both series provided a
total return of 2.07%,(2) compared to the Lipper Money Market Instrument Funds
and U.S. Treasury Money Market Funds category averages total returns of 2.09%
and 2.00%, respectively, for the same period.(3)
We attribute the fund's yield to the fact that we owned longer-term securities,
while maintaining an average dollar-weighted fund maturity of 90 days or less,
which enabled us to lock in higher returns in an environment characterized, for
all but the end of the period, by declining or stable interest rates.
What is the fund's investment approach?
There are many factors we consider in managing the fund. We closely monitor the
outlook for growth and inflation. We follow overseas developments for any
influence they may have on the domestic economy. The posture of the Federal
Reserve Board (the "Fed") is a key determinant in our decision on how best to
structure the fund.
In addition, we actively manage the average maturity of the fund in an attempt
to take advantage of expected interest rate changes based upon our economic
outlook. If we believe the interest rates will fall, we typically lengthen
average maturity to lock in the then-current rates. Conversely, in a rising rate
environment, we typically shorten maturities to be able to reinvest at
anticipated higher rates in the future.
The Fund
<PAGE 3>
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
As a money market fund, the fund only buys securities rated in one of the two
highest rating categories for debt obligations, or of comparable credit quality.
The fund must also maintain an average dollar-weighted fund maturity of 90 days
or less and may buy only securities with remaining maturities of 13 months or
less.
What other factors influenced the fund's performance?
Last fall, in the wake of Asian market turmoil, the Open Market Committee of the
Fed cut short-term interest rates three times in an attempt to provide liquidity
and improve investor confidence. Since then, there have been concerns that
global and domestic factors might push the United States economy towards
unsustainable growth.
As of June 30, 1999, Asian economies appear to have stabilized. What's more, the
outlook for growth in the major industrialized nations has been improving. The
domestic economy continued to move ahead briskly, evidenced by a strong rebound
in manufacturing output, which shows signs of gaining momentum. Consumer
confidence was at a 30-year high. Employment was strong, with hourly wages
rising. Despite concerns that overly rapid economic growth might lead to
destructive inflationary pressure, the Fed held interest rates steady through
all but the very end of the period. Because we managed the fund at a relatively
longer average maturity, investors have been able to benefit from stable rates
and the Fed's long-held accommodative stance during the reporting period.
What is the fund's current strategy?
Throughout the reporting period, as the economy showed robust growth, bond and
money markets anticipated a tightening of monetary policy by the Fed. Such
tightening was signaled by Chairman Alan Greenspan's mid-May announcement of a
shift in policy towards a bias to increase rates. The bias changed, in fact,
just prior to the end of the
<PAGE 4>
reporting period, when the Fed raised the target Federal Funds rates by
one-quarter of a point to five percent, with an accompanying return to a neutral
stance on future Federal Funds rate movement. An initial relief rally has been
replaced by a cautious "wait and see" market view.
Over the reporting period, the fund benefited from our commitment of a longer
maturity structure. When rates did not rise as quickly as markets expected,
longer maturities enhanced return. However, over the past few months, we have
taken a somewhat less aggressive stance, slowly reducing the average maturity of
our investments. In an uncertain market with the potential for further
tightening, we have adopted this approach, while still seeking opportunities to
capture additional yield as such opportunities arise.
July 15, 1999
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. AN INVESTMENT IN THE FUND IS NOT INSURED OR GUARANTEED BY THE FDIC
OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS TO PRESERVE THE VALUE
OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE MONEY BY INVESTING
IN THE FUND.
(2) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS.
(3) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
<PAGE 5>
<TABLE>
<CAPTION>
STATEMENT OF INVESTMENTS--
Money Market Series
June 30, 1999 (Unaudited)
Principal
<S> <C> <C>
NEGOTIABLE BANK CERTIFICATES OF DEPOSIT--13.8% Amount ($) Value ($)
- --------------------------------------------------------------------------------
Bayerische Landesbank Girozentrale (Yankee)
5.16%, 7/23/1999 5,000,000 5,001,284
Branch Bank and Trust Co.
5.04%, 1/10/2000 4,500,000 4,499,314
Deutsche Bank AG (Yankee)
4.95%, 4/10/2000 5,000,000 (a) 4,998,292
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $14,498,890) 14,498,890
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COMMERCIAL PAPER--46.3%
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Associates First Capital Corp.
5.60%, 7/1/1999 3,000,000 3,000,000
Countrywide Home Loans, Inc.
5.00%, 8/20/1999 5,000,000 4,965,625
Daimler Chrysler NA Holdings
4.90%, 7/29/1999 5,000,000 4,981,217
Den Norske Bank ASA
4.91%, 7/14/1999 5,000,000 4,991,342
Finova Capital Corp.
5.06%, 10/22/1999 5,000,000 4,922,940
Ford Motor Credit Corp.
5.72%, 7/1/1999 3,000,000 3,000,000
Hertz Corp.
4.94%, 7/23/1999 5,000,000 4,985,211
Monsanto Co.
4.94%, 10/19/1999 5,000,000 4,926,361
Paine Webber Group Inc.
5.08%, 7/6/1999 5,000,000 4,996,563
Lehman Brothers Holdings, Inc.
5.40%, 8/5/1999 5,000,000 4,974,431
UBS Finance, Inc.
5.60%, 7/1/1999 3,000,000 3,000,000
TOTAL COMMERCIAL PAPER
(cost $48,743,690) 48,743,690
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CORPORATE NOTES--14.2%
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Bear Stearns Companies, Inc.
5.09%, 2/22/2000 5,000,000 (a) 5,001,759
CIT Group Holdings, Inc.
4.87%, 9/21/1999 5,000,000 (a) 4,999,671
<PAGE 6>
Principal
CORPORATE NOTES (CONTINUED) Amount ($) Value ($)
- --------------------------------------------------------------------------------
GTE Corporation
5.20%, 6/12/2000 5,000,000 (a) 4,996,948
TOTAL CORPORATE NOTES
(cost $14,998,378) 14,998,378
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SHORT-TERM BANK NOTES--19.0%
- -------------------------------------------------------------------------------------------------------------------------------
First Tennessee Bank
4.93%, 4/19/2000 5,000,000 (a) 4,998,431
Key Bank N.A.
4.97%, 10/15/1999 5,000,000 (a) 5,000,575
Lasalle National Bank
4.91%, 10/12/1999 5,000,000 5,000,000
Societe Generale N.A. Inc.
4.95%, 4/20/2000 5,000,000 (a) 4,997,992
TOTAL SHORT-TERM BANK NOTES
(cost $19,996,998) 19,996,998
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TIME DEPOSITS--6.0%
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Chase Manhattan Bank NA (Nassau)
4.75%, 7/1/1999 3,266,000 3,266,000
Republic National Bank of NY (London)
5.12%, 7/1/1999 3,000,000 3,000,000
TOTAL TIME DEPOSITS
(cost $6,266,000) 6,266,000
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TOTAL INVESTMENTS
(cost $104,503,956) 99.3% 104,503,956
CASH AND RECEIVABLES (NET) .7% 726,122
NET ASSETS 100.0% 105,230,078
</TABLE>
(A) VARIABLE INTEREST RATE--SUBJECT TO PERIODIC CHANGE.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
<PAGE 7>
STATEMENT OF INVESTMENTS--
Government Securities Series
June 30, 1999 (Unaudited)
Annualized
Yield on
Date of Principal
<TABLE>
<CAPTION>
<S> <C> <C> <C>
U.S. TREASURY NOTES--55.3% Purchase (%) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------------------------------------------
6.375%, 7/15/1999 5.35 50,000,000 50,015,358
5.875%, 7/31/1999 4.52 36,000,000 36,027,273
5.875%, 8/31/1999 4.71 30,000,000 30,049,473
5.625%, 12/31/1999 4.58 15,000,000 15,064,453
5.875%, 2/15/2000 4.78 28,000,000 28,179,331
5.50%, 3/31/2000 4.66 25,000,000 25,113,739
5.50%, 5/31/2000 4.88 25,000,000 25,089,772
5.875%, 6/30/2000 5.23 7,000,000 7,034,904
TOTAL U.S. TREASURY NOTES
(cost $216,574,303) 216,574,303
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REPURCHASE AGREEMENTS--43.3%
- --------------------------------------------------------------------------------
Bear Stearns & Co.
dated 6/30/1999, due 7/1/1999 in the amount of
$50,006,667 (fully collateralized by
$52,921,000 U.S. Treasury Strips,
due 2/15/2000-5/15/2000, value $50,431,930) 4.80 50,000,000 50,000,000
CIBC Oppenheimer Corp.
dated 6/30/1999, due 7/1/1999 in the amount of
$32,004,222 (fully collateralized by
$26,669,000 U.S. Treasury Bill,
due 11/26/1999, and $6,165,000 U.S. Treasury Notes,
6.375%, due 5/15/2000, value $32,409,475) 4.75 32,000,000 32,000,000
<PAGE 8>
Annualized
Yield on
Date of Principal
REPURCHASE AGREEMENTS (CONTINUED) Purchase (%) Amount ($) Value ($)
- ---------------------------------------------------------------------------------------------------------------------------------
C.S. First Boston Corp.
dated 6/30/1999, due 7/1/1999 in the amount of
$41,005,467 (fully collateralized by
$41,409,000 U.S. Treasury Notes, 5.875%,
due 11/15/1999, value $41,829,560) 4.80 41,000,000 41,000,000
Goldman Sachs & Co.
dated 6/30/1999, due 7/1/1999 in the amount of
$6,252,391 (fully collateralized by
$6,710,000 U.S. Treasury Bills, due 6/22/2000,
value $6,381,035) 2.25 6,252,000 6,252,000
Morgan (J.P.) & Co. Inc.
dated 6/30/1999, due 7/1/1999 in the amount of
$40,005,278 (fully collateralized by
$40,597,000 U.S. Treasury Notes, 5.50%,
due 5/31/2000, value $40,792,706) 4.75 40,000,000 40,000,000
</TABLE>
<TABLE>
<CAPTION>
TOTAL REPURCHASE AGREEMENTS
(cost $169,252,000) 169,252,000
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TOTAL INVESTMENTS (cost $385,826,303) 98.6% 385,826,303
CASH AND RECEIVABLES ( NET) 1.4% 5,448,703
NET ASSETS 100.0% 391,275,006
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
<PAGE 9>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1999 (Unaudited)
Money Government
Market Securities
Series Series
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
ASSETS ($):
Investments in securities--See Statement of Investments
(including repurchase agreements of $169,252,000
<S> <C> <C>
for the Government Securities Series)--Note 2(b) 104,503,956 385,826,303
Cash 250,624 1,696,481
Interest receivable 644,720 4,046,722
Prepaid expenses 14,799 --
105,414,099 391,569,506
- --------------------------------------------------------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 141,201 201,424
Accrued expenses and other liabilities 42,820 93,076
184,021 294,500
- --------------------------------------------------------------------------------------------------------------------------------
NET ASSETS ($) 105,230,078 391,275,006
- --------------------------------------------------------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 105,259,688 391,341,300
Accumulated net realized gain (loss) on investments (29,610) (66,294)
- --------------------------------------------------------------------------------
NET ASSETS ($) 105,230,078 391,275,006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE
Money Government
Market Securities
Series Series
- --------------------------------------------------------------------------------
Net Assets 105,230,078 391,275,006
Shares Outstanding 105,243,188 391,341,300
NET ASSET VALUE PER SHARE 1.00 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE 10>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1999 (Unaudited)
Money Government
Market Securities
Series Series
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 2,680,510 10,193,250
EXPENSES--NOTE 2:
Management fee--Note 3(a) 264,314 1,051,885
Shareholder servicing costs--Note 3(b) 159,168 300,225
Registration fees 23,083 16,410
Professional fees 19,115 25,873
Custodian fees 11,654 35,934
Prospectus and shareholders' reports 8,407 16,533
Directors' fees and expenses--Note 3(c) 5,855 31,051
Miscellaneous -- 2,102
TOTAL EXPENSES 491,596 1,480,013
INVESTMENT INCOME--NET 2,188,914 8,713,237
- --------------------------------------------------------------------------------
NET REALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 2(B) ($): (795) (66,047)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,188,119 8,647,190
</TABLE>
<TABLE>
<CAPTION>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
<PAGE 11>
STATEMENT OF CHANGES IN NET ASSETS
Money Market Series Government Securities Series
--------------------------------
Six Months Ended Six Months Ended
June 30, 1999 Year Ended June 30, 1999 Year Ended
(Unaudited) December 31, 1998 (Unaudited) December 31, 1998
- --------------------------------------------------------------------------------------------------------------------------------
OPERATIONS:
Investment income--
<S> <C> <C> <C> <C>
net 2,188,914 5,316,204 8,713,237 20,107,437
Net realized gain
(loss) on investments (795) (6,557) (66,047) 36,250
NET INCREASE (DECREASE)
IN NET ASSETS
RESULTING FROM
OPERATIONS 2,188,119 5,309,647 8,647,190 20,143,687
DIVIDENDS TO
SHAREHOLDERS
FROM ($):
Investment income--
net (2,188,914) (5,316,204) (8,713,237) (20,107,437)
Net realized gain on
investments -- -- -- (36,250)
TOTAL DIVIDENDS (2,188,914) (5,316,204) (8,713,237) (20,143,687)
CAPITAL STOCK
TRANSACTIONS
($1.00 per share) ($):
Net proceeds from
shares sold 152,170,434 270,802,602 672,817,949 1,295,087,820
Dividends reinvested 1,399,834 3,521,681 4,818,158 11,359,817
Cost of shares
redeemed (158,974,789) (282,449,373) (713,953,786) (1,259,780,722)
INCREASE (DECREASE)
IN NET ASSETS
FROM CAPITAL STOCK
TRANSACTIONS (5,404,521) (8,125,090) (36,317,679) 46,666,915
TOTAL INCREASE
(DECREASE) IN
NET ASSETS (5,405,316) (8,131,647) (36,383,726) 46,666,915
NET ASSETS ($):
Beginning of Period 110,635,394 118,767,041 427,658,732 380,991,817
END OF PERIOD 105,230,078 110,635,394 391,275,006 427,658,732
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE 12>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS-- Money Market Series
The following tables describe the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
- --------------------------------------------------------------------------------
Six Months Ended
June 30, 1999 Year Ended December 31,
------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .017 .047 .047 .046 .053 .034
Distributions:
Dividends from investment
income--net (.017) (.047) (.047) (.046) (.053) (.034)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 4.17((+)) 4.76 4.76 4.73 5.46 3.42
- --------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .93((+)) .94 1.00 .93 .84 .88
Ratio of net investment income
to average net assets 4.14((+)) 4.66 4.66 4.63 5.33 3.35
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- -- .01 -- -- --
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 105,230 110,635 118,767 129,344 144,172 170,548
</TABLE>
<TABLE>
<CAPTION>
((+)) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
<PAGE 13>
FINANCIAL HIGHLIGHTS-- Government Securities Series
Six Months Ended
June 30, 1999 Year Ended December 31,
--------------------------------------------
(Unaudited) 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
<S> <C> <C> <C> <C> <C> <C>
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .021 .047 .046 .045 .051 .033
Distributions:
Dividends from investment
income--net (.021) (.047) (.046) (.045) (.051) (.033)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
- ---------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 4.17((+)) 4.83 4.72 4.60 5.18 3.31
- ---------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .70((+)) .69 .87 .90 .83 .88
Ratio of net investment income
to average net assets 4.14((+)) 4.71 4.62 4.50 5.07 3.24
- --------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 391,275 427,659 380,992 441,769 431,444 465,956
</TABLE>
((+)) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
<PAGE 14>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--General:
Dreyfus Money Market Instruments, Inc. (the "fund") is registered under the
Investment Company Act of 1940, as amended (the "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 (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. is 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 fund's policy to maintain a continuous net asset value per share of
$1.00 for each series; the fund has adopted certain investment, portfolio
valuation and dividend and distribution policies to enable it to do so. There is
no assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00 for each series.
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 in securities 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 The Fund
<PAGE 15>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
from securities transactions are recorded on the identified cost basis. Interest
income is recognized on the accrual basis. Cost of investments represents
amortized cost. Under the terms of the custody agreement, the Government
Securities Series received net earnings credits of $1,597 during the period
ended June 30, 1999 based on available cash balances left on deposit. Income
earned under this arrangement is included in interest income. Under the terms of
the custody agreement, the Money Market Series receives net earnings credits
based on available cash balances left on deposit.
The fund may enter into repurchase agreements with financial institutions,
deemed to be creditworthy by the fund' s Manager, subject to the seller's
agreement to repurchase and the fund's agreement to resell such securities at a
mutually agreed upon price. Securities purchased subject to repurchase
agreements are deposited with the fund's custodian and, pursuant to the terms of
the repurchase agreement, must have an aggregate market value greater than or
equal to the repurchase price plus accrued interest at all times. If the value
of the underlying securities falls below the value of the repurchase price plus
accrued interest, the fund will require the seller to deposit additional
collateral by the next business day. If the request for additional collateral is
not met, or the seller defaults on its repurchase obligation, the fund maintains
the right to sell the underlying securities at market value and may claim any
resulting loss against the seller.
(c) Expenses: Expenses directly attributable to each series are charged to that
series' operations; expenses which are applicable to both series are allocated
between them.
(d) Dividends to shareholders: It is the policy of the fund, with respect to
both series, to declare dividends from investment income-net on each business
day; such dividends are paid monthly. Dividends from net realized capital gain,
with respect to both series, are normally declared and paid annually, but each
series may make distributions on a more frequent basis to comply with the
distribution requirements of the Internal Revenue Code of 1986, as amended (the
" Code" ).
<PAGE 16>
However, to the 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 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
$29,000 availablefor Federal income tax purposes to be applied against future
net securities profits, if any, realized subsequent to December 31, 1998. If not
applied, $18,000 of the carryover expires in fiscal 2004, $4,000 expires in
fiscal 2005 and $7,000 expires in fiscal 2006.
At June 30, 1999, 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 Statements 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 for the period ended June 30, 1999 pursuant to the Agreement.
The Fund
<PAGE 17>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
(b) Under the 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 certain allocated expenses of providing personal services and/or
maintaining shareholder accounts. The services provided may include personal
services relating to shareholder accounts, such as answering shareholder
inquiries regarding the fund and providing reports and other information, and
services related to the maintenance of shareholder accounts. During the period
ended June 30, 1999, the Money Market Series and the Government Securities
Series were charged $102,132 and $204,197, 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. During the period
ended June 30, 1999, the Money Market Series and the Government Securities
Series, were charged $49,796 and $141,998, respectively, pursuant to the
transfer agency agreement.
(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 18>
NOTES
<PAGE 19>
For More Information
Dreyfus
Money Market
Instruments, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 1999 Dreyfus Service Corporation 008/060SA996
