<PAGE>
Dreyfus
Institutional
Money Market
Fund
Semi-Annual
Report
June 30, 1996
<PAGE>
Dreyfus Institutional Money Market Fund
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
Dreyfus Institutional Money Market Fund completed its latest
semi-annual fiscal period June 30, 1996, after six months during which
interest rates initially declined, and then began a rise that has lasted
through the end of the reporting period.
We are pleased to report that the Fund's Money Market Series provided
an annualized yield of 4.87% and an annualized effective yield of 4.98% after
compounding.* The Government Securities Series provided an annualized yield
of 4.75% to its shareholders for the six months. After taking into account
the effect of compounding the annualized effective yield was 4.85%.*
THE ECONOMY
The U.S. economy is rebounding in 1996 following its midcycle growth
slowdown of last year. Yet overall corporate profit growth is slowing this
year. Although inflation remains low, faster economic growth has reignited
fears of higher inflation in the future. This has pushed bond yields higher
and built expectations for a Federal Reserve Board tightening in coming
months. This is the sixth expansion year for this business cycle, and we
believe that it will prove a long cycle.
Economic growth has accelerated since year-end. The first quarter's
2.3% growth in real Gross Domestic Product brought about a rebound in demand
which depleted inventories. Even stronger second quarter growth is apparent,
led by manufacturers' attempts to rebuild inventories. In addition, steady
job creation continues to support growth in consumer incomes and spending. As
yet, there are few indications of economic cooling. Some previously strong
capital goods sectors may now be slowing, but overall economic growth is
broadening to more industries. Despite better economic performance this year
than last, profit growth may have peaked last year.
Non-oil price inflation has remained minimal this year, although
surging oil prices boosted overall inflation temporarily this spring.
Nevertheless, signs of a faster economic pace have renewed fears of higher
future inflation, especially coming from upward pressure on wages as the
labor market tightens. Thus, bond yields have risen substantially this year.
Short-term market rates are also higher on expectations for Federal Reserve
tightening in coming months. So far, long-term rates have risen much more
than short-term rates, forcing the yield curve to steepen. A steep yield
curve is usually supportive of sustained growth in the real economy.
As we look forward, the question arises whether the higher interest
rates already in place and those in prospect will effectively cool the
economy. At present, however, any advance signs of an eventual cooling off in
the economy are hard to discern. The preoccupation at present is with the
economy's impressive strength, and the problems such growth could create.
THE MONEY MARKET AND THE PORTFOLIOS
During the latest six months, the money markets generally have
reflected the underlying economic conditions described in the preceding
section.
<PAGE>
At the end of January, shortly after the latest semi-annual fiscal
period began, the Federal Reserve Board, still concerned about slack in the
economy, lowered interest rates by one quarter of one percent. The Federal
Funds rate was set at 5-1/4% and the discount rate at 5%.
As the previous year ended and a new one began, we had prepared the
portfolio for the possibility of lower rates by extending the average
maturities of the Portfolios.
After the Fed's January 31 action, economic statistics began to
indicate that business activity was accelerating. By springtime this was
beginning to change the course of interest rates. Short-term yields started
firming. In recognition of this market trend, we began gradually to shorten
average maturities as opportunities arose. To make the Portfolios' returns as
attractive as possible, we tried to maintain maturities that were a bit
longer than the market average. However, in the face of rising concern about
a possible revival of inflation, average maturities were reduced as the year
went on.
Currently, the market expects another change in course by the Federal
Reserve. The central bank has not revised its interest rate targets since
late January. Accordingly, we have been positioning the portfolio for the
possibility of higher rates.
We appreciate the opportunity to manage money on your behalf and will
continue our best efforts to bring you rewarding returns.
Sincerely,
Patricia A. Larkin
Portfolio Manager
July 18, 1996
New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund, Money Market Series
- ------------------------------------------------------------------------------
Statement of Investments June 30, 1996 (Unaudited)
Principal
Negotiable Bank Certificates of Deposit--11.0% Amount Value
- --------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Old Kent Bank & Trust Co.
4.80%-5.20%, 10/18/96-2/28/97.................................... $ 20,000,000 $ 20,151,882
Union Bank of California
5.05%-5.25%, 7/30/96-8/5/96...................................... 22,000,000 22,000,000
------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $42,151,882)............................................... $ 42,151,882
------------
------------
Commercial Paper--41.4%
- ---------------------------------------------------------------------
ABN-AMRO North America Finance Inc.
4.98%, 8/9/96.................................................... $ 10,000,000 $ 9,947,350
Bankers Trust New York Corp.
5.40%-5.42%, 7/3/96-7/8/96....................................... 20,000,000 19,986,821
Den Danske Corp. Inc.
5.26%, 7/22/96................................................... 6,000,000 5,982,080
Dresdner U.S. Finance Inc.
5.63%, 1/6/97.................................................... 20,000,000 19,433,000
Ford Motor Credit Co.
5.29%-5.67%, 7/22/96-10/1/96..................................... 15,000,000 14,854,026
General Electric Capital Services Inc.
5.42%, 8/22/96................................................... 10,000,000 9,922,433
General Motors Acceptance Corp.
5.39%-5.87%, 9/23/96-1/21/97..................................... 22,000,000 21,513,003
Lehman Brothers Holdings Inc.
5.08%-6.01%, 11/1/96-3/7/97...................................... 17,000,000 16,485,340
Merrill Lynch & Co. Inc.
5.46%, 9/4/96.................................................... 6,000,000 5,941,500
SwedBank Inc.
5.06%-5.53%, 7/18/96-10/11/96.................................... 24,000,000 23,803,934
UBS Finance (Delaware) Inc.
5.55%, 7/01/96................................................... 10,000,000 10,000,000
------------
TOTAL COMMERCIAL PAPER
(cost $157,869,487).............................................. $157,869,487
------------
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund, Money Market Series
- ------------------------------------------------------------------------------
Statement of Investments (continued) June 30, 1996 (Unaudited)
Principal
Corporate Notes--10.0% Amount Value
- --------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Comerica Bank
5.39%, 7/26/96 (a)............................................... $ 15,000,000 $ 14,999,955
Merrill Lynch & Co. Inc.
5.47%, 5/13/97 (a)............................................... 13,000,000 12,997,813
PNC Bank N.A.
5.49%, 5/15/97 (a)............................................... 10,000,000 9,991,428
------------
TOTAL CORPORATE NOTES
(cost $37,989,196)............................................... $ 37,989,196
------------
------------
Short-Term Bank Notes--8.7%
- ---------------------------------------------------------------------
Comerica Bank
5.40%, 9/18/96 (a)............................................... $ 3,000,000 $ 2,999,606
First National Bank of Boston
5.46%, 7/10/96 (a)............................................... 5,000,000 5,000,000
PNC Bank N.A.
5.50%, 9/18/96................................................... 5,000,000 5,000,797
Society National Bank, Cleveland
5.92%, 5/21/97 (a)............................................... 20,000,000 20,000,000
------------
TOTAL SHORT-TERM BANK NOTES
(cost $33,000,403)............................................... $ 33,000,403
------------
------------
U.S Government Agencies--33.6%
- ---------------------------------------------------------------------
Federal Farm Credit Banks,
Floating Rate Notes
5.33%-5.48%, 11/7/96-10/23/98 (a)................................ $ 93,000,000 $ 92,924,256
Federal National Mortgage Association,
Floating Rate Notes
5.34%-5.36%, 10/18/96-5/14/98 (a)................................ 35,000,000 35,085,677
------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $128,009,933).............................................. $128,009,933
------------
------------
Time Deposits--2.2%
- ---------------------------------------------------------------------
Republic National Bank of New York (London)
5.37%, 7/01/96
(cost $8,517,000)................................................ $ 8,517,000 $ 8,517,000
------------
------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund, Money Market Series
- ------------------------------------------------------------------------------
Statement of Investments (continued) June 30, 1996 (Unaudited)
Principal
Repurchase Agreements--8.9% Amount Value
- --------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
Lanston (Aubrey G.) & Co., Inc.
5.40%, dated 6/28/96, due 7/1/96 in the amount
of $14,006,300 (fully collateralized by $14,561,000
U.S. Treasury Bills due 12/26/96, value $14,191,587)............. $ 14,000,000 $ 14,000,000
SBC Capital Corp.
5.25%, dated 6/28/96, due 7/1/96 in the amount
of $20,008,750 (fully collateralized by $20,669,000
U.S. Treasury Bills due 9/26/96, value $20,420,145).............. 20,000,000 20,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(cost $34,000,000)............................................... $ 34,000,000
------------
------------
TOTAL INVESTMENTS
(cost $441,537,901).............................................. 115.8% $441,537,901
------ ------------
------ ------------
LIABILITIES, LESS CASH AND RECEIVABLES............................... (15.8%) $(60,316,369)
------ ------------
------ ------------
NET ASSETS........................................................... 100.0% $381,221,532
------ ------------
------ ------------
</TABLE>
Note to Statement of Investments;
- ------------------------------------------------------------------------------
(a) Variable interest rate-subject to periodic change.
See independent accountants' review report and notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund, Government Securities Series
- ------------------------------------------------------------------------------
Statement of Investments June 30, 1996 (Unaudited)
Annualized
Yield on
Date of Principal
U.S. Treasury Bills--38.0% Purchase Amount Value
- -------------------------------------------------------------- ---------- ------------ ------------
<S> <C> <C> <C>
7/25/96................................................... 5.70% $ 10,000,000 $ 9,964,000
8/22/96................................................... 5.87 10,000,000 9,919,906
10/17/96.................................................. 5.22 15,000,000 14,775,000
11/14/96.................................................. 5.46 5,000,000 4,902,250
2/6/97.................................................... 4.88 5,000,000 4,857,611
3/6/97.................................................... 5.29 10,000,000 9,653,661
5/1/97.................................................... 5.58 5,000,000 4,777,067
------------
TOTAL U.S. TREASURY BILLS (cost $58,849,495).................. $ 58,849,495
------------
------------
U.S. Treasury Notes--29.1%
- --------------------------------------------------------------
6.125%, 7/31/96........................................... 4.90% $ 5,000,000 $ 5,003,846
7.875%, 7/31/96........................................... 4.93 5,000,000 5,011,571
6.25%, 8/31/96............................................ 5.19 15,000,000 15,014,674
4.375%, 11/15/96.......................................... 5.37 15,000,000 14,937,747
6.625%, 3/31/97........................................... 5.57 5,000,000 5,031,072
------------
TOTAL U.S. TREASURY NOTES (cost $44,998,910).................. $ 44,998,910
------------
------------
Repurchase Agreements--32.4%
- --------------------------------------------------------------
Lanston (Aubrey G.) & Co., Inc.
dated 6/28/96, due 7/1/96 in the amount of
$15,006,813 (fully collateralized by
$14,908,000 U.S. Treasury Notes 6.50% due
9/30/96, value $15,193,508)............................... 5.45% $ 15,000,000 $ 15,000,000
Barclays de Zoette Wedd Securities Inc.
dated 6/28/96, due 7/1/96 in the amount of
$3,106,294 (fully collateralized by
$3,155,000 U.S. Treasury Notes 4.375% due
11/15/96, value $3,159,812)............................... 5.00 3,105,000 3,105,000
Daiwa Securities America Inc.
dated 6/28/96, due 7/1/96 in the amount of
$20,009,167 (fully collateralized by
$19,971,000 U.S. Treasury Notes 6.50% due
5/15/97, value $20,255,370)............................... 5.50 20,000,000 20,000,000
UBS Securities Inc.
dated 6/28/96, due 7/1/96 in the amount of
$12,005,450 (fully collateralized by
$12,939,000 U.S. Treasury Bills due 6/26/97,
value $12,241,588)........................................ 5.45 12,000,000 12,000,000
------------
TOTAL REPURCHASE AGREEMENTS (cost $50,105,000)................ $ 50,105,000
------------
------------
TOTAL INVESTMENTS (cost $153,953,405).............. 99.5% $153,953,405
------ ------------
------ ------------
CASH AND RECEIVABLES (NET)......................... .5% $ 828,121
------ ------------
------ ------------
NET ASSETS......................................... 100.0% $154,781,526
------ ------------
------ ------------
See independent accountants' review report and notes to financial statements.
<PAGE>
</TABLE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities June 30, 1996 (Unaudited)
Money Government
Market Securities
Series Series
<S> <C> <C>
-------------- --------------
ASSETS:
Investments in securities, at value (including repurchase agreements of
$34,000,000 and $50,105,000 for the Money Market Series and
the Government Securities Series, respectively)--Note 2(a,b)..... $441,537,901 $153,953,405
Cash............................................................... -- 141,326
Interest receivable................................................ 2,866,324 793,515
Prepaid expenses................................................... 27,202 16,907
------------ ------------
444,431,427 154,905,153
------------ ------------
LIABILITIES:
Due to The Dreyfus Corporation and affiliates...................... 187,864 68,350
Due to Custodian................................................... 62,933,423 --
Accrued expenses................................................... 88,608 55,277
------------ ------------
63,209,895 123,627
------------ ------------
NET ASSETS............................................................. $381,221,532 $154,781,526
------------ ------------
------------ ------------
REPRESENTED BY:
Paid-in capital.................................................... $381,304,834 $154,845,355
Accumulated net realized (loss) on investments..................... (83,302) (63,829)
------------ ------------
NET ASSETS at value applicable to 381,304,834 and 154,845,355 shares
outstanding (unlimited number of $.001 par value shares of Beneficial
Interest authorized)............................................... $381,221,532 $154,781,526
------------ ------------
------------ ------------
NET ASSET VALUE, offering and redemption price per share:
Money Market Series
($381,221,532 / 381,304,834 shares).............................. $1.00
-----
-----
Government Securities Series
($154,781,526 / 154,845,355 shares).............................. $1.00
-----
-----
</TABLE>
See independent accountants' review report and notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund
- ------------------------------------------------------------------------------
Statement of Operations six months ended June 30, 1996 (Unaudited)
Money Government
Market Securities
Series Series
----------- ----------
<S> <C> <C>
INVESTMENT INCOME:
Interest Income......................................................... $11,800,667 $4,715,103
----------- ----------
Expenses--Note 2(c):
Management fee--Note 3(a)............................................. $ 1,080,099 $ 439,505
Shareholder servicing costs--Note 3(b)................................ 67,441 22,877
Custodian fees........................................................ 45,805 41,042
Trustees' fees and expenses--Note 3(c)................................ 30,151 11,959
Registration fees..................................................... 12,288 7,816
Prospectus and shareholders' reports.................................. 4,381 1,412
Professional fees..................................................... 625 4,624
Miscellaneous......................................................... 10,238 1,847
----------- ----------
Total Expenses.................................................. 1,251,028 531,082
----------- ----------
INVESTMENT INCOME--NET...................................................... 10,549,639 4,184,021
NET REALIZED GAIN ON INVESTMENTS--Note 2(b)................................. 8,558 17,847
----------- ----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.. ...................... $10,558,197 $4,201,868
----------- ----------
----------- ----------
</TABLE>
See independent accountants' review report and notes to financial statements.
<PAGE>
Dreyfus Institutional Money Market Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Money Market Series Government Securities Series
------------------------------------ ----------------------------------
Year Ended Six Months Ended Year Ended Six Months Ended
December 31, June 30, 1996 December 31, June 30, 1996
1995 (Unaudited) 1995 (Unaudited)
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income--net................. $ 18,813,579 $ 10,549,639 $ 8,067,225 $ 4,184,021
Net realized gain on investments....... 155,073 8,558 41,000 17,847
--------------- -------------- -------------- --------------
Net Increase In Net Assets Resulting
From Operations.................. 18,968,652 10,558,197 8,108,225 4,201,868
--------------- -------------- -------------- --------------
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income--net................. (18,813,579) (10,549,639) (8,067,225) (4,184,021)
--------------- -------------- -------------- --------------
BENEFICIAL INTEREST TRANSACTIONS
($1.00 per share):
Net proceeds from shares sold.......... 4,216,643,080 2,646,651,055 553,280,575 367,810,495
Dividends reinvested................... 2,451,545 1,281,183 2,467,638 1,048,302
Cost of shares redeemed................ (4,180,042,611) (2,668,751,696) (552,899,065) (337,266,423)
--------------- -------------- -------------- --------------
Increase (Decrease) In Net Assets From
Beneficial Interest Transactions... 39,052,014 (20,819,458) 2,849,148 31,592,374
--------------- -------------- -------------- --------------
Total Increase (Decrease) In
Net Assets....................... 39,207,087 (20,810,900) 2,890,148 31,610,221
NET ASSETS:
Beginning of period.................... 362,825,345 402,032,432 120,281,157 123,171,305
--------------- -------------- -------------- --------------
End of period.......................... $ 402,032,432 $ 381,221,532 $ 123,171,305 $ 154,781,526
--------------- -------------- -------------- --------------
--------------- -------------- -------------- --------------
</TABLE>
See independent accountants' review report and notes to financial statements.
<PAGE>
Dreyfus Institutional Money Market Fund, Money Market Series
- ------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Series' financial statements.
<TABLE>
<CAPTION>
Year Ended December 31, Six Months Ended
------------------------------------------------------------- June 30, 1996
PER SHARE DATA: 1991 1992 1993 1994 1995 (Unaudited)
----- ----- ----- ----- ----- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Investment Operations;
Investment income--net........ .057 .035 .027 .036 .054 .024
----- ----- ----- ----- ----- -----
Distributions;
Dividends from investment
income--net................ (.057) (.035) (.027) (.036) (.054) (.024)
----- ----- ----- ----- ----- -----
Net asset value, end of
period..................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL INVESTMENT RETURN.......... 5.85% 3.51% 2.76% 3.65% 5.57% 4.93%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets................. .60% .63% .63% .63% .62% .58%*
Ratio of net investment income
to average net assets...... 5.73% 3.48% 2.72% 3.59% 5.43% 4.87%*
Net Assets, end of period
(000's Omitted)............ $354,090 $329,574 $354,177 $362,825 $402,032 $381,222
<FN>
- ---------------------
* Annualized.
</TABLE>
See independent acccountants' review report and notes to financial statements.
<PAGE>
Dreyfus Institutional Money Market Fund, Government Securities Series
- ------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average
net assets and other supplemental data for each period indicated. This
information has been derived from the Series' financial statements.
<TABLE>
<CAPTION>
Year Ended December 31, Six Months Ended
------------------------------------------------------------- June 30, 1996
PER SHARE DATA: 1991 1992 1993 1994 1995 (Unaudited)
----- ----- ----- ----- ----- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of
period..................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Investment Operations;
Investment income--net....... .056 .034 .026 .034 .052 .024
----- ----- ----- ----- ----- -----
Distributions;
Dividends from investment
income--net................ (.056) (.034) (.026) (.034) (.052) (.024)
----- ----- ----- ----- ----- -----
Net asset value, end of
period..................... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL INVESTMENT RETURN.......... 5.71% 3.44% 2.63% 3.49% 5.36% 4.79%*
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets................. .65% .64% .65% .69% .65% .60%*
Ratio of net investment income
to average net assets...... 5.64% 3.42% 2.61% 3.40% 5.23% 4.75%*
Net Assets, end of period
(000's Omitted)............ $174,173 $192,141 $134,574 $120,281 $123,171 $154,782
<FN>
- ---------------------
* Annualized.
</TABLE>
See independent acccountants' review report and notes to financial statements.
<PAGE>
Dreyfus Institutional Money Market Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--General:
Dreyfus Institutional Money Market Fund (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 Beneficial Interest: 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. (the "Distributor") acts as the distributor of the Fund's shares, which
are sold to the public without a sales charge.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00 for each series; the Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable it to do
so. There is no assurance, however, that the Fund will be able to maintain a
stable net asset value of $1.00.
NOTE 2--Significant Accounting Policies:
(a) Portfolio valuation: Investments are valued at amortized cost, which
has been determined by the Fund's Board of Trustees 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 among them on a pro rata basis.
(d) Dividends to shareholders: It is the policy of the Fund, with respect
to both series, to declare dividends from investment income-net on each
business day; such dividends are paid monthly. Dividends from net realized
capital gain, with respect to both series, are normally declared and paid
annually, but each series may make distributions on a more frequent basis to
comply with the distribution requirements
<PAGE>
Dreyfus Institutional Money Market Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
of the Internal Revenue Code. However, to the extent that a net realized
capital gain of either series can be reduced by a capital loss carryover of
that series, 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 $92,000 available for Federal income tax purposes to be applied
against future net securities profits, if any, realized subsequent to
December 31, 1995. If not applied, $80,000 of the carryover expires in 1996
and $12,000 expires in 2002.
The Government Securities Series has an unused capital loss carryover of
approximately $82,000 available for Federal income tax purposes to be applied
against future net securities profits, if any, realized subsequent to
December 31, 1995. If not applied, $18,000 of the carryover expires in 1996
and $64,000 expires in 1997.
At June 30, 1996, the cost of investments of each series for Federal
income tax purposes was substantially the same as the cost for financial
reporting purposes (see the Statement of Investments).
NOTE 3 -- Management Fee And Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager,
the management fee for each series is computed at the annual rate of .50 of
1% of the value of the average daily net assets of each series and is payable
monthly.
The Agreement provides for an expense reimbursement from the Manager
should the aggregate expenses of either series, exclusive of taxes, interest
on borrowings, brokerage commissions and extraordinary expenses, exceed the
expense limitation of any state having jurisdiction over the Fund for any
full year. The most stringent state expense limitation applicable to each
series presently requires reimbursement of expenses in any full year that
such expenses (exclusive of certain expenses as described above) exceed 2 1/2%
of the first $30 million, 2% of the next $70 million and 1 1/2% of the excess
over $100 million of the average value of each series' net assets in
accordance with California "blue sky" regulations. No expense reimbursement
was required pursuant to the Agreement for the six months ended June 30,
1996.
(b) Pursuant to the Fund's Shareholder Services Plan, 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
a 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 six months ended June 30,
1996, the Money Market Series and the Government
<PAGE>
Dreyfus Institutional Money Market Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Securities Series were charged an aggregate of $23,200 and $11,330,
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 $28,133 and $3,267, respectively, during the six
months ended June 30, 1996.
(c) Each trustee 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 Institutional Money Market Fund
- ------------------------------------------------------------------------------
Review Report of Ernst & Young LLP, Independent Accountants
Shareholders and Board of Trustees
Dreyfus Institutional Money Market Fund
We have reviewed the accompanying statement of assets and liabilities,
including the statements of investments, of Dreyfus Institutional Money
Market Fund (comprising, respectively, the Money Market Series and the
Government Securities Series) as of June 30, 1996, and the related statements
of operations and changes in net assets and financial highlights for the six
month period ended June 30, 1996. These financial statements and financial
highlights are the responsibility of the Fund's management.
We conducted our review in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data, and making inquiries of persons responsible for financial
and accounting matters. It is substantially less in scope than an audit
conducted in accordance with generally accepted auditing standards, which
will be performed for the full year with the objective of expressing an
opinion regarding the financial statements and financial highlights taken as
a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the interim financial statements and financial highlights
referred to above for them to be in conformity with generally accepted
accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the statement of changes in net assets for the year ended
December 31, 1995 and financial highlights for each of the five years in the
period ended December 31, 1995 and in our report dated February 6, 1996, we
expressed an unqualified opinion on such statement of changes in net assets
and financial highlights.
ERNST & YOUNG LLP
New York, New York
August 5, 1996
<PAGE>
[LOGO]
Dreyfus Institutional
Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 179/195SA966
