Dreyfus
Institutional
Money Market
Fund
Annual Report
December 31, 1996
<PAGE>
Dreyfus Institutional Money Market Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report that Dreyfus Institutional Money Market Fund --
Money Market Series provided an annualized yield of 4.90% for the fiscal year
ended December 31, 1996. The annualized yield for the Government Securities
Series was 4.72%. After taking into account the effect of compounding, the
annualized effective yield was 5.01% for the Money Market Series and 4.82% for
the Government Securities Series.*
MONEY MARKET OVERVIEW
The money market in 1996 was characterized by considerable volatility.
However, when all was said and done, the changes in prices and yields over the
year were not very great. The three-month U.S. Treasury bill rate, a bellwether
measurement, closed the year yielding 5.18%, only 11 basis points above the rate
when the year began.
The major influences on rates during the year were the market's expectations
of possible action by the Federal Reserve Board ("the Fed"); also, the state of
the economy and the market's expectations of how it might behave. Indeed, it was
a year when anticipations and expectations influenced the market as much as the
actual developments themselves.
Early in the year, rates generally rose, especially after strong employment
reports last spring and early summer convinced the money market that the Fed
would need to tighten money rates in order to prevent a recurrence of inflation.
By late summer, however, it became clear that inflation was not an immediate
threat and the Fed acknowledged that by taking no preemptive action.
Furthermore, the economy was a constructive influence, providing continued yet
moderate growth without exerting undue upward pressure on wage levels or general
price indications. Thus in the latter part of the year interest rates simmered
down, though not without short-lived inflation "scares."
To take advantage of this kind of market, we followed a policy for most of
the year of keeping our average maturities somewhat longer than the industry
average. Our maturity structure has been geared to deal with changeable
eventualities, while seeking superior yields.
Interest yields, in the long run, reflect the underlying economy. As 1997
begins, signs of strength continue to be visible, despite the inevitable weak
spots. Thus, we believe it would be prudent to plan for some action this year by
the Fed to step, once again, on the economic brakes. Such action could come as
early as mid-winter, or later if the economy takes a more measured pace toward
expansion.
We will continue to look for opportunities to extend maturities in an effort
to reap better yields, yet not neglect to safeguard the underlying capital.
Sincerely,
[GRAPHIC OMITTED]
Patricia A. Larkin
Senior Portfolio Manager
January 16, 1997
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund, Money Market Series
- --------------------------------------------------------------------------------
Statement of Investments December 31, 1996
Principal
Negotiable Bank Certificates of Deposit--8.7% Amount Value
- ---------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
Chase Manhattan Bank USA
5.45%, 6/9/97............................................................. $12,000,000 $ 12,000,000
Old Kent Bank & Trust Co.
4.80%, 2/28/97............................................................ 10,000,000 10,036,402
Providian National Bank
5.45%, 3/20/97............................................................ 20,000,000 20,011,422
-------------
TOTAL NEGOTIABLE BANK CERTIFICATES OF DEPOSIT
(cost $42,047,824)........................................................ $ 42,047,824
=============
Commercial Paper--34.5%
- ---------------------------------------------------------------------------
ABN-AMRO North America Finance Inc.
5.58%, 2/28/97............................................................ $ 9,000,000 $ 8,921,265
Bear Stearns Companies Inc.
5.45%, 6/10/97............................................................ 10,000,000 9,764,445
Chrysler Financial Corp.
5.49%, 1/21/97-2/19/97.................................................... 19,000,000 18,903,550
Dresdner U.S. Finance Inc.
5.63%, 1/6/97............................................................. 20,000,000 19,985,000
General Electric Capital Corp.
5.46%, 6/10/97............................................................ 15,000,000 14,645,333
General Motors Acceptance Corp.
5.48%-5.58%, 4/7/97-5/12/97............................................... 22,000,000 21,632,287
Goldman Sachs & Co.
5.52%, 8/1/97............................................................. 20,000,000 19,375,778
PaineWebber Group Inc.
5.50%-5.67%, 4/1/97-6/2/97................................................ 20,000,000 19,636,236
Svenska Handelsbanken Inc.
5.50%, 4/1/97............................................................. 24,000,000 23,678,400
SwedBank Inc.
5.57%, 2/12/97............................................................ 10,000,000 9,936,883
-------------
TOTAL COMMERCIAL PAPER
(cost $166,479,177)....................................................... $166,479,177
=============
Corporate Notes--18.4%
- ----------------------------------------------------------------------------
Bear Stearns Companies Inc.
5.43%, 9/3/97............................................................. $10,000,000 $ 10,001,931
Heller Financial Inc.
5.65%, 5/15/97............................................................ 6,000,000 6,044,810
Lehman Brothers Inc.
5.55%, 8/15/97............................................................ 19,510,000 19,711,586
Merrill Lynch & Co. Inc.
5.45%-5.47%, 5/13/97-10/27/97 (a)......................................... 23,000,000 22,997,457
PNC Bank N.A.
5.61%, 5/15/97 (a)........................................................ 10,000,000 9,996,388
<PAGE>
Dreyfus Institutional Money Market Fund, Money Market Series
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
Principal
Corporate Notes (continued) Amount Value
- ---------------------------------------------------------------------------- ----------- ------------
Salomon Inc.
5.49%, 11/10/97 (a)....................................................... $20,000,000 $ 20,000,000
------------
TOTAL CORPORATE NOTES
(cost $88,752,172)........................................................ $ 88,752,172
============
U.S. Government Agencies--24.4%
- ----------------------------------------------------------------------------
Federal Farm Credit Banks,
Floating Rate Notes
5.33%-5.48%, 7/25/97-10/23/98 (a)........................................ $58,000,000 $ 57,952,812
Federal National Mortgage Association,
Floating Rate Notes
5.34%-5.36%, 11/21/97-5/14/98 (a)........................................ 45,000,000 45,055,661
Notes
5.32%, 12/9/97........................................................... 15,000,000 14,993,253
------------
TOTAL U.S. GOVERNMENT AGENCIES
(cost $118,001,726)....................................................... $118,001,726
============
Time Deposits--4.1%
- ---------------------------------------------------------------------------
Republic National Bank of New York (London)
6.25%, 1/2/97
(cost $20,000,000)....................................................... $20,000,000 $ 20,000,000
============
Repurchase Agreements--9.1%
- ---------------------------------------------------------------------------
Lanston (Aubrey G.) & Co., Inc.
6.80%, dated 12/31/96, due 1/2/97 in the amount of
$36,013,600 (fully collateralized by $35,884,000 U.S. Treasury
Notes 5.875% to 6.50%, due from 5/15/97 to 7/31/97
value $36,445,760)........................................................ $36,000,000 $ 36,000,000
Barclays de Zoette Wedd Securities Inc.
5.50%, dated 12/31/96, due 1/2/97 in the amount of
$8,176,498 (fully collateralized by $8,185,000 U.S. Treasury
Notes 5.50%, due 9/30/97, value $8,278,318)............................... 8,174,000 8,174,000
------------
TOTAL REPURCHASE AGREEMENTS
(cost $44,174,000)........................................................ $ 44,174,000
============
TOTAL INVESTMENTS
(cost $479,454,899).............................................. 99.2% $479,454,899
======= ============
CASH AND RECEIVABLES (NET).......................................... .8% $ 3,700,781
======= ============
NET ASSETS.......................................................... 100.0% $483,155,680
======= ============
<FN>
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
(a) Variable interest rates--subject to periodic change.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund, Money Market Series
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
Annualized
Yield on
Date of Principal
U.S. Treasury Bills--23.9% Purchase Amount Value
- ------------------------------------------------------------------ ------------- ----------- ------------
<S> <C> <C> <C>
2/6/97......................................................... 4.88% $ 5,000,000 $ 4,976,700
3/6/97......................................................... 5.29 10,000,000 9,910,622
7/24/97........................................................ 5.59 5,000,000 4,849,833
8/21/97........................................................ 5.91 5,000,000 4,819,717
-----------
TOTAL U.S. TREASURY BILLS
(cost $24,556,872)............................................. $24,556,872
-----------
-----------
U.S. Treasury Notes--34.2%
- ------------------------------------------------------------------
6.875%, 2/28/97................................................ 5.30% $10,000,000 $10,023,833
6.625%, 3/31/97................................................ 5.57 5,000,000 5,010,130
6.50%, 4/30/97 ................................................ 5.21 5,000,000 5,019,516
5.875%, 7/31/97................................................ 5.20 10,000,000 10,024,394
6%, 8/31/97 ................................................... 5.55 5,000,000 5,011,914
-----------
TOTAL U.S. TREASURY NOTES
(cost $35,089,787)............................................. $35,089,787
===========
Repurchase Agreements--41.1%
- ------------------------------------------------------------------
Lanston (Aubrey G.) & Co., Inc.
dated 12/31/96, due 1/2/97 in the amount of $5,001,563
(fully collateralized by $4,994,000 U.S. Treasury
Notes 5.50%, due 9/30/97, value $5,050,558).................... 5.63% $ 5,000,000 $ 5,000,000
Bear Stearns & Co. Inc.
dated 12/31/96, due 1/2/97 in the amount of $10,003,694
(fully collateralized by $10,645,000 U.S. Treasury
Bills due 10/16/97, value $10,180,976)......................... 6.65 10,000,000 10,000,000
Daiwa Securities America Inc.
dated 12/31/96, due 1/2/97 in the amount of $7,002,683
(fully collateralized by $7,042,000 U.S. Treasury
Notes 6.375%, due 6/30/97, value $7,287,011)................... 6.90 7,000,000 7,000,000
Nikko Securities Co. International, Inc.
dated 12/31/96, due 1/2/97 in the amount of $6,002,250
(fully collateralized by $5,934,000 U.S. Treasury
Notes 7.375%, due 11/15/97, value $6,059,432).................. 6.75 6,000,000 6,000,000
<PAGE>
Dreyfus Institutional Money Market Fund, Money Market Series
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
Annualized
Yield on
Date of Principal
Repurchase Agreements (continued) Purchase Amount Value
- ------------------------------------------------------------------ ------------- ----------- ------------
SBC Capital Corp.
dated 12/31/96, due 1/2/97 in the amount of $4,216,405
(fully collateralized by $4,476,000 U.S. Treasury
Bills due 9/18/97, value $4,291,821)........................... 6.00% $ 4,215,000 $ 4,215,000
UBS Securities Inc.
dated 12/31/96, due 1/2/97 in the amount of $10,003,722
(fully collateralized by $10,062,000 U.S. Treasury
Notes 6.50% due 4/30/97, value $10,200,509).................... 6.70 10,000,000 10,000,000
------------
TOTAL REPURCHASE AGREEMENTS
(cost $42,215,000)............................................. $ 42,215,000
============
TOTAL INVESTMENTS
(cost $101,861,659)..................................... 99.2% $101,861,659
====== ============
CASH AND RECEIVABLES (NET) .................................. .8% $ 863,906
====== ============
NET ASSETS.................................................100.0% $102,725,565
====== ============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996
Money Government
Market Securities
Series Series
-------------- -------------
<S> <C> <C> <C>
ASSETS: Investments in securities, at value
(including repurchase agreements of $44,174,000 and
$42,215,000 for the Money Market Series and the
Government Securities Series, respectively)--Note 2(a,b) $479,454,899 $101,861,659
Cash............................................. 1,320,672 233,604
Interest receivable.............................. 2,641,065 728,880
Prepaid expenses ................................ 14,319 12,598
------------ ------------
483,430,955 102,836,741
----------- ------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 200,082 51,015
Accrued expenses................................. 75,193 60,161
----------- ------------
275,275 111,176
----------- ------------
NET ASSETS..................................................................... $483,155,680 $102,725,565
============ ============
REPRESENTED BY: Paid-in capital.................................. $483,167,356 $102,786,227
Accumulated net realized gain (loss) on investments (11,676) (60,662)
------------ ------------
NET ASSETS..................................................................... $483,155,680 $102,725,565
============ ============
SHARES OUTSTANDING
(unlimited number of $.001 par value shares of Beneficial Interest authorized). 483,167,356 102,786,227
NET ASSET VALUE, offering and redemption price per share....................... $1.00 $1.00
===== =====
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Institutional Money Market Fund
- --------------------------------------------------------------------------------
Statement of Operations Year Ended December 31, 1996
Money Government
Market Securities
Series Series
------------ ----------------
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME: Interest Income.................................. $24,257,175 $8,168,684
------------ -----------
EXPENSES--Note 2(c): Management fee--Note 3(a)......................... $ 2,208,098 $ 761,707
Shareholder servicing costs--Note 3(b)........... 156,505 66,655
Custodian fees................................... 86,803 67,721
Trustees' fees and expenses--Note 3(c)............ 54,113 19,179
Professional fees................................ 23,555 13,813
Registration fees................................ 17,387 18,538
Prospectus and shareholders' reports............. 8,425 159
Miscellaneous.................................... 4,959 5,839
------------ -----------
Total Expenses.............................. 2,559,845 953,611
------------ -----------
INVESTMENT INCOME--NET.......................................................... 21,697,330 7,215,073
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 2(b).............................. 80,184 21,014
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $21,777,514 $7,236,087
============ ===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Institutional Money Market Fund
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Money Market Series Government Securities Series
-------------------------------- ------------------------------
Year Ended December 31, Year Ended December 31,
-------------------------------- ------------------------------
1996 1995 1996 1995
--------------- --------------- ------------- ----------------
<S> <C> <C> <C> <C>
OPERATIONS:
Investment income--net........................$ 21,697,330 $ 18,813,579 $ 7,215,073 $ 8,067,225
Net realized gain (loss) on investments...... 80,184 155,073 21,014 41,000
--------------- --------------- ------------- -------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ 21,777,514 18,968,652 7,236,087 8,108,225
--------------- --------------- ------------- -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net........................ (21,697,330) (18,813,579) (7,215,073) (8,067,225)
--------------- --------------- ------------- -------------
BENEFICIAL INTEREST TRANSACTIONS:
($1.00 per share):
Net proceeds from shares sold................ 5,173,786,531 4,216,643,080 574,692,866 553,280,575
Dividends reinvested......................... 2,582,594 2,451,545 1,899,711 2,467,638
Cost of shares redeemed...................... (5,095,326,061) (4,180,042,611) (597,059,331) (552,899,065)
--------------- --------------- ------------- -------------
Increase (Decrease) in Net Assets from
Beneficial Interest Transactions......... 81,043,064 39,052,014 (20,466,754) 2,849,148
--------------- --------------- ------------- -------------
Total Increase (Decrease) in
Net Assets............................ 81,123,248 39,207,087 (20,445,740) 2,890,148
NET ASSETS:
Beginning of Period.......................... 402,032,432 362,825,345 123,171,305 120,281,157
--------------- --------------- ------------- -------------
End of Period................................ $ 483,155,680 $ 402,032,432 $ 102,725,565 $ 123,171,305
=============== =============== ============= =============
</TABLE>
See 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,
------------------------------------------------------
PER SHARE DATA: 1996 1995 1994 1993 1992
------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............... $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Investment Operations:
Investment income--net.............................. .049 .054 .036 .027 .035
----- ----- ----- ----- -----
Distributions:
Dividends from investment income--net............... (.049) (.054) (.036) (.027) (.035)
----- ----- ----- ----- -----
Net asset value, end of period..................... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN............................... 5.03% 5.57% 3.65% 2.76% 3.51%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ .58% .62% .63% .63% .63%
Ratio of net investment income
to average net assets........................... 4.91% 5.43% 3.59% 2.72% 3.48%
Net Assets, end of period (000's Omitted).......... $483,156 $402,032 $362,825 $354,177 $329,574
</TABLE>
See 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,
------------------------------------------------------
PER SHARE DATA: 1996 1995 1994 1993 1992
------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............... $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- -----
Investment Operations:
Investment income--net.............................. .047 .052 .034 .026 .034
------ ----- ----- ----- -----
Distributions:
Dividends from investment income--net............... (.047) (.052) (.034) (.026) (.034)
------ ----- ----- ----- -----
Net asset value, end of period..................... $1.00 $1.00 $1.00 $1.00 $1.00
====== ===== ===== ===== =====
TOTAL INVESTMENT RETURN............................... 4.84% 5.36% 3.49% 2.63% 3.44%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ .63% .65% .69% .65% .64%
Ratio of net investment income
to average net assets........................... 4.74% 5.23% 3.40% 2.61% 3.42%
Net Assets, end of period (000's Omitted).......... $102,726 $123,171 $120,281 $134,574 $192,141
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Institutional Money Market Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
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. 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 per share of $1.00.
The Series' financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
NOTE 2--Significant Accounting Policies:
(a) Portfolio valuation: Investments are valued at amortized cost, which has
been determined by the Fund's Board of 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 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.
<PAGE>
Dreyfus Institutional Money Market Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(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
$12,000 available for Federal income tax purposes to be applied against future
net securities profits, if any, realized subsequent to December 31, 1996. If not
applied, the carryover expires in 2002.
The Government Securities Series has an unused capital loss carryover of
approximately $61,000 available for Federal income tax purposes to be applied
against future net securities profits, if any, realized subsequent to December
31, 1996. If not applied, the carryover expires in 1997.
At December 31, 1996, the cost of investments of each series for Federal
income tax purposes was substantially the same as the cost for financial
reporting purposes (see the Statement of Investments).
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee for each series is computed at the annual rate of .50 of 1% of
the value of the average daily net assets of each series and is payable monthly.
(b) Pursuant to the Fund's Shareholder Services Plan, each series reimburses
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, an amount
not to exceed an annual rate of .25 of 1% of the value of each series' average
daily net assets for 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 December 31, 1996, the Money Market Series and the
Government Securities Series were charged an aggregate of $53,687 and $53,700,
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 $58,736 and $6,362, respectively, during the period ended December
31, 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
- --------------------------------------------------------------------------------
Report of Ernst & Young LLP, Independent Auditors
Shareholders and Board of Trustees
Dreyfus Institutional Money Market Fund
We have audited 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 December 31, 1996, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and financial highlights for
each of the years indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1996 by correspondence with the custodians and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective series constituting the Dreyfus Institutional Money Market
Fund at December 31, 1996, the results of their operations for the year then
ended, the changes in their net assets for each of the two years in the period
then ended, and the financial highlights for each of the indicated years, in
conformity with generally accepted accounting principles.
Ernst & Young LLP
New York, New York
February 7, 1997
<PAGE>
Dreyfus Institutional Money Market Fund, Government Securities Series
- --------------------------------------------------------------------------------
Important Tax Information (Unaudited)
For State individual income tax purposes, the Fund hereby designates 54.96%
of the ordinary income dividends paid during its fiscal year ended December 31,
1996 as attributable to interest income from direct obligations of the United
States. Such dividends are currently exempt from taxation for individual income
tax purposes in most states, including New York, California and the District of
Columbia.
<PAGE>
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. 179/195AR9612
