THE DREYFUS THIRD CENTURY FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
You will be interested to know of a recent change in the portfolio
management of The Dreyfus Third Century Fund, Inc. Eric Steedman, who has
been a member of the Fund's staff since January, 1995, is now a portfolio
manager of the Fund with respect to the Fund's areas of special concern. Mr.
Steedman replaces Diane Coffey, who has left Dreyfus for another position. He
shares the management duties with Maceo Sloan, Chairman and CEO of NCM
Capital Management Group, Inc., sub-advisor to the Fund. Mr. Sloan remains
primarily responsible for selection of the Fund's portfolio securities based
on traditional financial concerns.
Prior to joining the Dreyfus staff, Mr. Steedman was employed by the
Council on Economic Priorities, a New York City-based nonprofit public
interest research organization. A graduate of Carleton University, Ottawa,
Canada, he received his Master of Philosophy degree from the University of
Glasgow, Scotland.
We have great confidence in the ability of Eric Steedman and Maceo Sloan
to manage the Fund's portfolio in a rewarding fashion, while upholding the
Fund's policy of selecting investments that contribute to the enhancement of
the quality of life in America.
Sincerely,
[Stephen E. Canter signature logo]
Stephen E. Canter
Chief Investment Officer
The Dreyfus Corporation
THE DREYFUS THIRD CENTURY FUND, INC.
LETTER TO SHAREHOLDERS
Dear Shareholder:
The Dreyfus Third Century Fund, Inc. performed well for the 12-month
period ended May 31, 1996, providing a total return of 33.63%,* compared to
28.41% for the Standard & Poor's 500 Composite Stock Price Index.** The
Fund's total return for the six-month period ended May 31, 1996 was
12.24%,*compared to 11.78% for the S&P 500.**
THE ECONOMY
As you are probably aware, last year's market was dominated by the
actions of Alan Greenspan and the Federal Reserve Board. The Fed and its Open
Market Committee authorized a series of cuts in interest rates from mid 1995
to early 1996, to support the apparently weakening economy. In recent months,
however, both the Fed and the fixed-income markets became concerned that an
accelerating economic growth rate was threatening to revive inflation. By May
31, the Fed had not yet tightened interest rates; however, the markets
expected such a move.
MARKET ENVIRONMENT
Concerns about higher interest rates were dampened somewhat by sluggish
consumer spending during January and February, along with the severe winter
weather. These conflicting economic signals seemed to form the foundation for
a great deal of the market volatility we have seen so far this year. As a
result, the markets experienced a good deal of stock rotation, as investors
scrambled to find value in an unpredictable market environment. Still, the
S&P 500 rose 9.67% from the beginning of 1996 through May 31, confounding
those skeptics who felt that the bull market had come to a close.
PORTFOLIO FOCUS
We have been pleased with the performance of several of the Fund's
sectors. Strong returns from the Consumer Cyclicals, Technology and Financial
Services sectors have been key drivers of the Fund's performance. Sears,
Roebuck Co. and Consolidated Stores are two holdings in the Consumer
Cyclicals sector that have performed well, driven by investor belief that
consumer debt levels, although high, would not hamper spending. Other stocks
in the sector with strong performance include Nike, an athletic shoe and
apparel manufacturer, Jones Apparel Group, a women's apparel maker, and CUC
International, a consumer buying group membership company.
Continued strong demand for PCs, computer networking systems and software
has helped the performance of the Fund's technology sector. Winners in this
area include BMC Software, a maker of business software, Computer Associates
International, in the network software business, Hewlett-Packard, a PC and
peripherals manufacturer, and the software giant Microsoft.
Financial Services stocks were also decent performers, supported by
speculation that a better interest rate environment was approaching.
Citicorp, BankAmerica and Green Tree Financial all performed well in this
sector.
We have also increased the Fund's exposure to small-capitalization
stocks. While it is uncertain that small-cap stocks will continue to
outperform the market as they have recently, we will continue to look for
opportunities in this area, while maintaining a solid position in
larger-capitalization companies, some of which are mentioned above.
In terms of the Fund's social investment criteria, we believe that the
present holdings meet the objectives of the Fund's special considerations. We
were particularly pleased that two of the Fund's holdings, Hewlett-Packard
and the Federal National Mortgage Association (Fannie Mae), America's largest
mortgage guarantor, were among the recipients of the Council on Economic
Priorities' prestigious America's Corporate Conscience Award for 1996.
Hewlett-Packard received praise for its high degree of responsiveness to
employees, while Fannie Mae was lauded for its accomplishments in the area of
equal employment opportunity.
The Fund is continually engaged in a process of identifying companies
that not only meet traditional investment standards, but which also show
evidence that they conduct their business in a manner that contributes to the
enhancement of the quality of life in America. Recent acquisitions include
Neopath, a medical technology company whose automated PAP-smear testing
process helps to reduce the incidence of false negatives in cervical cancer
tests, and Neurogen, a neuropharmaceutical company developing treatments for
anxiety and schizophrenia that lack the negative side effects of traditional
psychiatric and neurological disorder drugs.
OUTLOOK
We expect the market to undergo a 5%-10% correction from its current
levels during 1996. At the same time, we see a continuation of modest
economic growth during the medium term. Given these expectations, the Federal
Reserve is likely, in our opinion, to keep interest rates at a level
favorable to the markets. At some point over the coming 12 months, we do
expect some economic weakness, leading to falling Fed rates and an
increasingly positive market environment, though we will most likely see some
bumps along the way as economic data and market sector corrections come
along. At this point we do, however, express cautious optimism for the
future, and we have positioned the Fund accordingly.
Sincerely,
[Maceo K. Sloan signature logo]
Maceo K. Sloan
Portfolio Manager
NCM Capital Management Group, Inc.
[Eric Steedman signature logo]
Eric Steedman
Portfolio Manager
The Dreyfus Corporation
June 21, 1996
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
THE DREYFUS THIRD CENTURY FUND, INC. MAY 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN THE DREYFUS THIRD
CENTURY FUND, INC.
AND THE STANDARD & POOR'S 500 COMPOSITE STOCK PRICE INDEX
[Exhibit A:
$163,843
The Dreyfus
Third Century Fund
Dollars
$162,168
Standard & Poor's 500
Composite Stock
Price Index*
(Years shown above are as of May 31)
*Source: Lipper Analytical Services, Inc.]
<TABLE>
<CAPTION>
<S> <C> <C> <C>
AVERAGE ANNUAL TOTAL RETURNS <C>
ONE YEAR ENDED FIVE YEARS ENDED TEN YEARS ENDED FROM INCEPTION (3/29/72)
MAY 31, 1996 MAY 31, 1996 MAY 31, 1996 TO MAY 31, 1996
_________ _________ _________ ______________
33.63% 11.16% 11.96% 12.26%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in The Dreyfus Third
Century Fund, Inc. on 3/29/72 (Inception Date) to a $10,000 investment made
in the Standard & Poor's 500 Composite Stock Price Index on that date. For
comparative purposes, the value of the Index on 3/31/72 is used as the
beginning value on 3/29/72. All dividends and capital gain distributions are
reinvested.
The Dreyfus Third Century Fund primarily seeks capital growth through
investment in common stocks of companies that, in the opinion of the Fund's
management, not only meet traditional investment standards, but which also
show evidence that they conduct their business in a manner that contributes
to the enhancement of the quality of life in America. Current income is a
secondary goal. The Fund's performance shown in the line graph takes into
account all applicable fees and expenses. The Standard & Poor's 500 Composite
Stock Price Index is a widely accepted, unmanaged index of overall stock
market performance which does not take into account charges, fees and other
expenses and is not subject to the same socially responsible investment
criteria as The Dreyfus Third Century Fund. Further information relating to
Fund performance is contained in the Financial Highlights section of the
Prospectus and elsewhere in this report.
<TABLE>
<CAPTION>
THE DREYFUS THIRD CENTURY FUND, INC.
STATEMENT OF INVESTMENTS MAY 31, 1996
COMMON STOCKS-98.3% SHARES VALUE
_______ _______
<S> <C> <C>
COMMERCIAL SERVICES-2.3%..... Grainger (W.W.) 55,700 $ 3,724,938
...................................Sysco 212,000 7,234,500
_______
10,959,438
_______
CONSUMER DURABLES-1.9%..... Briggs & Stratton 104,500 4,493,500
Oakwood Homes.......................... 95,000 4,607,500
_______
9,101,000
_______
CONSUMER
NON-DURABLES-14.1%......... CPC International 80,000 5,530,000
Campbell Soup.......................... 142,500 9,191,250
Coca-Cola.............................. 229,800 10,570,800
Gillette............................... 141,600 8,372,100
Jones Apparel Group.................. (a) 130,000 6,630,000
NIKE, Cl. B............................ 80,800 8,110,300
PepsiCo................................ 297,000 9,875,250
Tambrands.............................. 180,000 8,302,500
_______
66,582,200
_______
CONSUMER SERVICES-6.3%... BET Holdings, Cl. A (a) 73,900 1,967,588
CUC International.................... (a) 225,700 8,350,900
Disney (Walt).......................... 133,600 8,116,200
Regal Cinemas........................ (a) 60,000 2,782,500
Service Corp. International............ 150,000 8,381,250
_______
29,598,438
_______
ELECTRONIC TECHNOLOGY-13.0% Applied Materials (a) 207,000 7,710,750
Atmel............................ (a) 60,000 2,130,000
Coherent............................. (a) 58,400 2,854,300
....EMC (a) 514,100 11,374,463
Hewlett-Packard........................ 95,200 10,162,600
Linear Technology...................... 194,400 6,706,800
Sun Microsystems..................... (a) 168,600 10,558,575
....3COM (a) 206,300 10,160,275
_______
61,657,763
_______
FINANCE-15.2%..................... AFLAC 171,150 5,155,894
Allstate............................... 163,070 6,889,707
American International Group........... 74,700 7,040,475
BankAmerica............................ 175,000 13,168,750
Citicorp............................... 99,200 8,332,800
Federal National Mortgage Association.. 310,600 9,589,775
Green Tree Financial................... 266,800 8,737,700
MGIC Investment........................ 75,000 4,406,250
SunAmerica............................. 150,000 8,400,000
_______
71,721,351
_______
THE DREYFUS THIRD CENTURY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
HEALTH SERVICES-1.1%...... HealthCare COMPARE (a) 105,000 $ 5,079,375
_______
HEALTH TECHNOLOGY-14.3%............Amgen (a) 135,600 8,068,200
Becton, Dickinson & Co. ............... 85,400 7,259,000
Bristol-Myers Squibb................... 103,500 8,836,313
Chiron............................... (a) 50,000 5,250,000
Guidant................................ 100,000 5,800,000
Johnson & Johnson...................... 99,540 9,692,707
Medtronic.............................. 169,600 9,540,000
Merck & Co. ........................... 146,762 9,484,494
Neopath.............................. (a) 97,700 2,515,775
Neurogen............................. (a) 40,000 1,170,000
_______
67,616,489
_______
INDUSTRIAL SERVICES-.7%......... Schlumberger 42,210 3,519,259
_______
PROCESS INDUSTRIES-5.3%....... Avery Dennison 100,000 5,700,000
....Bemis 300,600 9,957,375
Sigma-Aldrich.......................... 170,900 9,570,400
_______
25,227,775
_______
PRODUCER
MANUFACTURING-3.6%...............Dover 125,800 5,975,500
Harnischfeger Industries............... 160,000 5,600,000
Philips Electronics, N.V. ............. 158,500 5,567,313
_______
17,142,813
_______
RETAIL TRADE-2.6%........ Consolidated Stores (a) 113,000 4,279,875
Sears, Roebuck & Co. .................. 158,700 8,073,862
_______
12,353,737
_______
TECHNOLOGY SERVICES-10.3%.. Arrow Electronics (a) 191,500 9,431,375
BMC Software......................... (a) 148,560 9,359,280
Computer Associates International.............. 128,950 9,381,113
Ericsson (LM) Telephone, Cl. B, A.D.R......... 195,000 4,497,187
Microsoft............................ (a) 48,000 5,700,000
....Oracle (a) 310,500 10,285,312
_______
48,654,267
_______
TRANSPORTATION-3.0%.......... Comair Holdings 127,500 3,346,875
Delta Air Lines........................ 56,000 4,641,000
Federal Express...................... (a) 82,820 6,346,082
_______
14,333,957
_______
UTILITIES-4.6%.................... CMS Energy 75,000 2,156,250
Century Telephone Enterprises.................. 261,900 8,511,750
....GTE 153,430 6,559,132
THE DREYFUS THIRD CENTURY FUND, INC.
STATEMENT OF INVESTMENTS (CONTINUED) MAY 31, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
_______ _______
UTILITIES (CONTINUED)..... 360 Communications 200,000 $ 4,625,000
_______
21,852,132
_______
TOTAL COMMON STOCKS
(cost $361,774,796).................. $465,399,994
=======
PRINCIPAL
SHORT-TERM INVESTMENT-.1% AMOUNT
_______
U.S. TREASURY BILL;.......... 4.98%, 8/8/1996
(cost $340,764)...................... $.......344,000 $ 340,743
=======
TOTAL INVESTMENTS (cost $362,115,560)....................................... 98.4% $465,740,737
==== =======
CASH AND RECEIVABLES (NET).................................................. 1.6% $ 7,711,406
==== =======
NET ASSETS.................................................................. 100.0% $473,452,143
==== =======
NOTE TO STATEMENT OF INVESTMENTS;
(a) Non-income producing.
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS THIRD CENTURY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES MAY 31, 1996
ASSETS:
<S> <C> <C>
Investments in securities, at value
(cost $362,115,560)-see statement..................................... $465,740,737
Cash.................................................................... 903,182
Receivable for investment securities sold............................... 7,195,281
Dividends receivable.................................................... 489,962
Receivable for subscriptions to Common Stock............................ 62,778
Prepaid expenses........................................................ 62,720
_______
474,454,660
LIABILITIES:
Due to The Dreyfus Corporation and subsidiaries......................... $329,540
Payable for investment securities purchased............................. 324,482
Payable for Common Stock redeemed....................................... 32,718
Accrued expenses........................................................ 315,777 1,002,517
____ _______
NET ASSETS.................................................................. $473,452,143
=======
REPRESENTED BY:
Paid-in capital......................................................... $329,978,345
Accumulated undistributed investment income-net......................... 773,541
Accumulated undistributed net realized gain on investments.............. 39,075,080
Accumulated net unrealized appreciation on investments-Note 4........... 103,625,177
_______
NET ASSETS at value applicable to 51,201,638 shares outstanding
(150 million shares of $.331/3 par value Common Stock authorized)....... $473,452,143
=======
NET ASSET VALUE, offering and redemption price per share
($473,452,143 / 51,201,638 shares)...................................... $9.25
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS THIRD CENTURY FUND, INC.
STATEMENT OF OPERATIONS YEAR ENDED MAY 31, 1996
INVESTMENT INCOME:
<S> <C> <C>
INCOME:
Cash dividends (net of $78,787 foreign taxes withheld at source)...... $ 5,248,818
Interest.............................................................. 904,332
______
TOTAL INCOME.................................................... $ 6,153,150
EXPENSES:
Investment advisory fee-Note 3(a)..................................... 3,154,864
Shareholder servicing costs-Note 3(b)................................. 1,192,986
Professional fees..................................................... 89,450
Directors' fees and expenses-Note 3(c)................................ 54,327
Prospectus and shareholders' reports.................................. 51,648
Custodian fees-Note 3(b).............................................. 50,005
Registration fees..................................................... 31,646
Miscellaneous......................................................... 21,062
______
TOTAL EXPENSES.................................................. 4,645,988
_______
INVESTMENT INCOME-NET........................................... 1,507,162
REALIZED AND UNREALIZED GAIN ON INVESTMENTS:
Net realized gain on investments-Note 4................................. $62,835,662
Net unrealized appreciation on investments.............................. 54,728,281
______
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 117,563,943
_______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $119,071,105
=======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS THIRD CENTURY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED MAY 31,
__________________________________
1995 1996
_______ ______
<S> <C>
OPERATIONS: <C>
Investment income-net................................................... $ 3,346,699 $ 1,507,162
Net realized gain on investments........................................ 12,839,259 62,835,662
Net unrealized appreciation on investments for the year................. 22,739,756 54,728,281
_______ ______
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. 38,925,714 119,071,105
_______ ______
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income-net................................................... (2,986,999) (2,113,842)
Net realized gain on investments........................................ (46,183,615) (27,118,179)
_______ ______
TOTAL DIVIDENDS....................................................... (49,170,614) (29,232,021)
_______ ______
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold........................................... 68,296,100 347,500,025
Dividends reinvested.................................................... 47,326,617 27,798,267
Cost of shares redeemed................................................. (126,884,560) (360,518,670)
_______ ______
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL STOCK TRANSACTIONS..... (11,261,843) 14,779,622
_______ ______
TOTAL INCREASE (DECREASE) IN NET ASSETS........................... (21,506,743) 104,618,706
NET ASSETS:
Beginning of year....................................................... 390,340,180 368,833,437
_______ ______
End of year (including undistributed investment income-net:
$1,380,221 in 1995 and $773,541 in 1996).............................. $ 368,833,437 $ 473,452,143
======= ======
SHARES SHARES
_______ ______
CAPITAL SHARE TRANSACTIONS:
Shares sold............................................................. 9,474,361 40,415,926
Shares issued for dividends reinvested.................................. 7,548,119 3,419,227
Shares redeemed......................................................... (17,546,982) (42,120,754)
_______ ______
NET INCREASE (DECREASE) IN SHARES OUTSTANDING......................... (524,502) 1,714,399
======= ======
See notes to financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE DREYFUS THIRD CENTURY FUND, INC.
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.
YEAR ENDED MAY 31,
____________________________________________________________
PER SHARE DATA: 1992 1993 1994 1995 1996
____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year........... $ 7.79 $ 7.80 $ 8.48 $ 7.80 $ 7.45
____ ____ ____ ____ ____
INVESTMENT OPERATIONS:
Investment income-net........................ .05 .04 .05 .07 .03
Net realized and unrealized gain (loss)
on investments............................. .26 .74 (.08) .65 2.39
____ ____ ____ ____ ____
TOTAL FROM INVESTMENT OPERATIONS........... .31 .78 (.03) .72 2.42
____ ____ ____ ____ ____
DISTRIBUTIONS:
Dividends from investment income-net......... (.08) (.05) (.04) (.07) (.05)
Dividends from net realized gain on investments (.22) (.05) (.61) (1.00) (.57)
____ ____ ____ ____ ____
TOTAL DISTRIBUTIONS........................ (.30) (.10) (.65) (1.07) (.62)
____ ____ ____ ____ ____
Net asset value, end of year................. $ 7.80 $ 8.48 $ 7.80 $ 7.45 $ 9.25
==== ==== ==== ==== ====
TOTAL INVESTMENT RETURN.......................... 3.92% 10.02% (.63%) 11.81% 33.63%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... 1.08% 1.11% 1.17% 1.12% 1.11%
Ratio of net investment income to average net assets .83% .48% .52% .93% .36%
Portfolio Turnover Rate...................... 47.92% 67.30% 71.70% 133.54% 92.08%
Net Assets, end of year (000's Omitted)...... $443,533 $526,335 $390,340 $368,833 $473,452
See notes to financial statements.
</TABLE>
THE DREYFUS THIRD CENTURY FUND, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
The Dreyfus Third Century Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company. The Fund's investment objective is to provide capital
growth. The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A. ("Mellon"). NCM
Capital Management Group, Inc. ("NCM") serves as the Fund's sub-investment
adviser. Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares which are sold to the public without a sales
charge.
(A) PORTFOLIO VALUATION: Investments in securities are valued at the last
sales price on the securities exchange on which such securities are primarily
traded or at the last sales price on the national securities market.
Securities not listed on an exchange or the national securities market, or
securities for which there were no transactions, are valued at the average of
the most recent bid and asked prices. Bid price is used when no asked price
is available. Securities for which there are no such valuations are valued at
fair value as determined in good faith under the direction of the Board of
Directors.
(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. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(C) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the ex-dividend
date. Dividends from investment income-net and dividends from net realized
capital gain are normally declared and paid annually, but the Fund may make
distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, if any, it is the
policy of the Fund not to distribute such gain.
(D) FEDERAL INCOME TAXES: It is the policy of the Fund 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.
NOTE 2-BANK LINE OF CREDIT:
The Fund participates in a $100 million unsecured line of credit provided
by The Bank of New York, primarily for temporary or emergency purposes,
including the meeting of redemption requests that otherwise might require the
untimely disposition of securities. Interest is payable at the Federal Funds
rate plus .50% on an annualized basis. During the year ended May 31, 1996,
the amounts borrowed from this line of credit were immaterial.
NOTE 3-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER TRANSACT
IONS WITH AFFILIATES:
(A) Pursuant to the management agreement ("Agreement") with Dreyfus, the
management fee is computed at an annual rate of .75 of 1% of the value of the
Fund's average daily net assets and is payable monthly. The agreement
provides for an expense reimbursement from the Manager should the Fund's
aggregate expenses, exclusive of taxes, brokerage, interest on borrowings and
extraordinary
THE DREYFUS THIRD CENTURY FUND, INC.
NOTES TO FINANCIAL STATEMENTS
expenses, exceed 11\2% of the value of the Fund's average daily net assets
for any full fiscal year. There was no expense reimbursement for the year
ended May 31, 1996.
Pursuant to a Sub-Investment Advisory Agreement with NCM, the
sub-investment advisory fees are payable monthly by Dreyfus, and are based
upon the value of the Fund's average daily net assets, computed at the
following rates:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS
____________
<S> <C>
0 to $400 million..................................................................... .10 of 1%
$400 to $500 million.................................................................. .15 of 1%
$500 to $750 million.................................................................. .20 of 1%
In excess of $750 million............................................................. .25 of 1%
</TABLE>
Prior to April 18, 1996, the sub-investment advisory fee was computed at
an annual rate of .10 of 1% on the first $500
million and .20 of 1% on the excess over $500 million of the value of the
Fund's average daily net assets and was payable monthly by Dreyfus.
(B) Pursuant to the Fund's Shareholder Services Plan, the Fund reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus, an amount
not to exceed an annual rate of .25 of 1% of the value of the Fund's average
daily net assets for certain allocated expenses of providing personal
services and/or maintaining shareholder accounts. The services provided may
include personal services relating to shareholder accounts, such as answering
shareholder inquiries regarding the Fund and providing reports and other
information, and services related to the maintenance of shareholder accounts.
During the year ended May 31, 1996, the Fund was charged an aggregate of
$655,193 pursuant to the Shareholder Services Plan.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer, Inc.,
a wholly-owned subsidiary of Dreyfus, under a transfer agency agreement for
providing personnel and facilities to perform transfer agency services for
the Fund. Such compensation amounted to $128,102 for the period from December
1, 1995 through May 31, 1996.
Effective May 10, 1996, the Fund entered into a Custody Agreement with
Mellon to provide custodial services for the Fund. For the period from May
10, 1996 through May 31, 1996, $4,606 was paid to Mellon pursuant to the
Custody Agreement.
(C) Each director who is not an "affiliated person" as defined in the Act
receives from the Fund an annual fee of $10,000. The Chairman of the Board
receives an additional 25% of such compensation.
NOTE 4-SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the year ended May 31, 1996 amounted
to $378,938,523 and $369,914,313, respectively.
At May 31, 1996, accumulated net unrealized appreciation on investments
was $103,625,177, consisting of $107,429,785 gross unrealized appreciation
and $3,804,608 gross unrealized depreciation.
At May 31, 1996, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see
the Statement of Investments).
THE DREYFUS THIRD CENTURY FUND, INC.
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
THE DREYFUS THIRD CENTURY FUND, INC.
We have audited the accompanying statement of assets and liabilities of
The Dreyfus Third Century Fund, Inc., including the statement of investments,
as of May 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 verification by
examination of securities held by the custodian as of May 31, 1996 and confirm
ation of securities not held by the custodian by correspondence with others.
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 The Dreyfus Third Century Fund, Inc. at May 31, 1996, the results
of its operations for the year then ended, the changes in its 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 and Young LLP signature logo]
New York, New York
July 9, 1996
THE DREYFUS THIRD CENTURY FUND, INC.
IMPORTANT TAX INFORMATION (UNAUDITED)
For Federal tax purposes the Fund hereby designates $.21 per share as a
long-term capital gain distribution of the $.62 per share paid on December
15, 1995.
PROXY RESULTS (UNAUDITED)
A special meeting of stockholders of the Fund was held on April 18, 1996,
at which stockholders approved an amended and restated sub-investment
advisory agreement between The Dreyfus Corporation and NCM Capital Management
Group, Inc., by a vote of 25,339,938 shares in favor of, and 1,532,568 shares
against, approval of the agreement, with 2,511,106 shares abstaining. At the
meeting, Fund stockholders also approved amending the Fund's fundamental
investment policy and investment restriction with regard to socially
responsible Special Considerations (as described in the Fund's current
Prospectus) to provide that such socially responsible Special Considerations
may be supplemented by action of the Fund's Board members without stockholder
approval. Prior to the effectiveness of the amendment, stockholder approval
was required to supplement or change the Fund's Special Considerations.
Approval of the amendment was obtained by a vote of 20,691,567 shares in
favor of, and 4,287,923 shares against, the amendment, with 2,385,810 shares
abstaining.
[Dreyfus lion "d" logo]
THE DREYFUS
THIRD CENTURY FUND, INC.
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER
NCM Capital Management Group, Inc.
103 West Main Street
Durham, North Carolina 27705
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. 035AR965
[Dreyfus logo]
Third Century
Fund,Inc.
Annual Report
May 31, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN THE DREYFUS THIRD CENTURY FUND, INC. AND THE STANDARD
& POOR'S 500 COMPOSITE STOCK PRICE INDEX
EXHIBIT A:
________________________________________________________
| | STANDARD | |
| | & POOR'S 500 | THE DREYFUS |
| PERIOD | COMPOSITE STOCK | THIRD CENTURY |
| | PRICE INDEX * | FUND |
|--------- | --------------- | ---------------|
| 3/29/72 | 10,000 | 10,000 |
| 5/31/72 | 10,266 | 10,061 |
| 5/31/73 | 10,124 | 8,177 |
| 5/31/74 | 8,721 | 7,551 |
| 5/31/75 | 9,556 | 9,193 |
| 5/31/76 | 10,928 | 10,781 |
| 5/31/77 | 10,937 | 12,082 |
| 5/31/78 | 11,656 | 14,870 |
| 5/31/79 | 12,522 | 17,335 |
| 5/31/80 | 14,858 | 24,830 |
| 5/31/81 | 18,603 | 33,866 |
| 5/31/82 | 16,607 | 26,088 |
| 5/31/83 | 25,378 | 37,009 |
| 5/31/84 | 24,604 | 33,576 |
| 5/31/85 | 32,415 | 43,715 |
| 5/31/86 | 43,971 | 52,949 |
| 5/31/87 | 53,275 | 60,640 |
| 5/31/88 | 49,807 | 58,265 |
| 5/31/89 | 63,136 | 70,235 |
| 5/31/90 | 73,604 | 82,355 |
| 5/31/91 | 82,259 | 96,514 |
| 5/31/92 | 90,345 | 100,299 |
| 5/31/93 | 100,816 | 110,350 |
| 5/31/94 | 105,101 | 109,657 |
| 5/31/95 | 126,288 | 122,610 |
| 5/31/96 | 162,168 | 163,843 |
-------------------------------------------------------
* Source: Lipper Analytical Services, Inc.
