DREYFUS FOUNDERS FUNDS INC, N-30D, 2000-08-24

DREYFUS FOUNDERS FUNDS INC
N-30D, 2000-08-24

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DREYFUS FOUNDERS
GOVERNMENT SECURITIES FUND

DREYFUS FOUNDERS
MONEY MARKET FUND

SEMIANNUAL REPORT
JUNE 30, 2000

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
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A Message from Founders 4
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Government Securities Fund
Management Overview 6
-----------------------------------------------------------------------------
Government Securities Fund
Statement of Investments 9
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Money Market Fund
Statement of Investments 11
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Statements of Assets and Liabilities 13
-----------------------------------------------------------------------------
Statements of Operations 14
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Statements of Changes in Net Assets 16
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Government Securities Fund
Financial Highlights 18
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Money Market Fund
Financial Highlights 19
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Notes to Financial Statements 20
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</TABLE>

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o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
-----------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the figures
listed here. The Fund's portfolio composition is subject to change and there is
no assurance the Fund will continue to hold any particular security. Opinions
regarding sectors, industries, companies, and/or themes are subject to change at
any time, based on market and other conditions, and should not be construed as a
recommendation of any specific security.

COMPARATIVE INDEXES

The comparative indexes included with the Fund's performance chart are meant to
provide a basis for judging its performance against its peer group and/or a
specific unmanaged securities index. Each benchmark shown accounts for both
change in security price and reinvestment of any dividends or coupon payments.
The Lipper indexes shown reflect the expenses of managing the mutual funds in
each index.

The securities indexes are unmanaged groups of securities; they do not reflect
the costs of managing a mutual fund.

o The Lehman Brothers U.S. Treasury Composite Index is composed of all public
obligations of the U.S. Treasury, excluding certain securities, that have at
least one year to maturity and an outstanding par value of at least $100
million.

o The Lipper U.S. Government Fund Index is an average of the performance of the
30 largest U.S. government funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

o The Lehman Brothers Intermediate Government Bond Index is an unmanaged index
comprising a large number of U.S. publicly issued, fixed-rate,
non-convertible domestic bonds with maturities from one to 10 years.

3
<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

Although it's impossible to predict where these and other changes will take
the world--and how they will affect investors and the markets--I believe in one
thing with greater certainty than any other: growth. And as a long-term investor
like you, my goal is to harness its potential on behalf of my investments.

A CHALLENGING FIRST HALF

Yet by mid-March, the markets had begun to show an entirely different side.
Suddenly, investors were exuding uncertainty, providing a stark contrast to the
confidence that prevailed earlier in the year. Behind this shift were many
factors, including concern over the U.S. Federal Reserve Board's interest rate
increases and questions about high stock valuations. And unfortunately,
investors' apprehension was global in scope, as international markets responded
to these events as well as to the overall weakness in the NASDAQ Composite Index
and the struggles of a

4
<PAGE>

declining euro. The result was widespread profit-taking, most notably from the
very areas that had, just weeks earlier, been considered the most attractive:
media, telecommunications, and technology. Stocks related to these sectors,
regardless of their size or geographic location, plummeted.

A TEST OF FORTITUDE

At Founders, we've always emphasized sound fundamentals over day-to-day
investor sentiments, and therefore our portfolio managers chose to keep the
majority of their tech holdings in place. Although this decision somewhat
hampered your Funds in the short term, we feel it may ultimately prove
beneficial. It's true that in the volatile first half, many investors failed to
acknowledge earnings reports that met or exceeded expectations; yet, over the
long run, strong earnings growth has historically been a compelling reason to
invest.

THE BIG PICTURE IN SIGHT

History shows that disciplined investors with a strong understanding of the
markets' risks and rewards have a better chance of realizing their financial
goals. With this in mind, it is a privilege to count you as one of our stalwart
shareholders, and I appreciate your continued support of Founders' longstanding
dedication to growth.

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

GOVERNMENT SECURITIES FUND
MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Margaret Danuser

HOW DID THE FUND PERFORM IN THE FIRST HALF OF 2000?

Government Securities Fund posted a 3.18% return for the first six months of
2000, slightly underperforming the Lehman Brothers Intermediate Government Bond
Index's return of 3.49% for the same period. However, the Fund had a very strong
second quarter.

WHAT HAS THE BOND MARKET BEEN LIKE OVER THE PAST SIX MONTHS, AND HOW HAVE YOU
POSITIONED THE PORTFOLIO TO RESPOND TO THESE MARKET CONDITIONS?

U.S. Treasuries have been the best-performing developed bond market so far this
year, returning 5.5%. Meanwhile, 30-year bonds posted their best half-year
returns since 1995 due to the Federal Reserve's interest rate increases and the
Treasury Department's announcement of a $30 billion debt buyback program for
2000. Indeed, Treasury market gains outpaced both agency and corporate sector
returns during the first half as proposed legislation to alter the status of
government sponsored enterprises (agencies) was debated in Congress and the
market worried about the effect of rising interest rates

-------------------------------------------------------------------------
FUND AT A GLANCE

This fund pursues current income by investing at least 65% of its
total assets in U.S. government obligations. The Fund may also invest in
securities issued by foreign governments and/or their agencies, without
allocating more than 25% of its total assets in the securities of any one
foreign country.
-------------------------------------------------------------------------

6
<PAGE>
on corporate balance sheets.

In terms of positioning the Fund to benefit from these market conditions,
we reduced our average security duration to 4.38 years as of June 30, 2000 from
5.09 years, where it stood at year-end in 1999. We also redistributed assets
away from our overweighted position in maturities seven-years and longer toward
the middle part of the yield curve as longer-dated Treasuries rallied. Finally,
we reduced our exposure to agency securities when we saw that their spreads were
widening.

DO YOU EXPECT TO CONTINUE SEEING AN INVERTED YIELD CURVE? WHY OR WHY NOT?

Recent economic data suggests a slowdown or pause in growth, which could mean we
are near the end of the Federal Reserve's tightening cycle. Renewed market
interest in shorter-dated securities has caused the yield curve to begin
reinverting or flattening. The inverted spread between the two-year note and

[GRAPH]

GROWTH OF $10,000 INVESTMENT

<TABLE>
<CAPTION>
LEHMAN LIPPER
GOVT. BROS. US GOVT.
SEC. US TR. CO. FD. INDX. CPI
<S> <C> <C> <C> <C>
06/30/1990 10,000.00 10,000.00 10,000.00 10,000.00
07/31/1990 10,133.03 10,132.46 10,064.01 10,046.15
08/31/1990 9,927.37 9,985.88 10,127.45 10,130.77
09/30/1990 9,993.54 10,075.60 10,188.23 10,200.00
10/31/1990 10,129.43 10,240.52 10,252.41 10,269.23
11/30/1990 10,322.02 10,474.74 10,312.86 10,292.31
12/31/1990 10,509.57 10,633.66 10,374.73 10,330.77
01/31/1991 10,612.14 10,753.24 10,432.86 10,369.23
02/28/1991 10,686.47 10,794.02 10,482.96 10,376.92
03/31/1991 10,733.60 10,849.75 10,535.38 10,376.92
04/30/1991 10,873.37 10,978.24 10,586.97 10,400.00
05/31/1991 10,885.37 11,016.48 10,637.82 10,438.46
06/30/1991 10,857.91 11,003.19 10,684.61 10,461.54
07/31/1991 10,976.08 11,145.39 10,734.79 10,484.62
08/31/1991 11,208.84 11,394.58 10,783.16 10,515.38
09/30/1991 11,419.15 11,641.34 10,829.45 10,546.15
10/31/1991 11,519.64 11,738.05 10,876.07 10,561.54
11/30/1991 11,629.40 11,856.06 10,918.47 10,607.69
12/31/1991 12,071.86 12,267.28 10,963.27 10,638.46
01/31/1992 11,779.34 12,071.50 11,000.54 10,646.15
02/28/1992 11,835.09 12,118.45 11,033.50 10,669.23
03/31/1992 11,782.88 12,048.46 11,068.86 10,707.69
04/30/1992 11,869.21 12,132.40 11,102.07 10,730.77
05/31/1992 12,083.70 12,339.30 11,135.36 10,753.85
06/30/1992 12,256.63 12,525.92 11,166.49 10,784.62
07/31/1992 12,495.06 12,839.98 11,197.80 10,815.38
08/31/1992 12,623.06 12,966.13 11,226.86 10,838.46
09/30/1992 12,790.78 13,154.72 11,253.86 10,861.54
10/31/1992 12,600.85 12,959.14 11,279.70 10,907.69
11/30/1992 12,522.95 12,927.82 11,304.54 10,938.46
12/31/1992 12,713.15 13,153.90 11,330.55 10,953.85
01/31/1993 12,991.44 13,441.33 11,356.63 10,984.62
02/28/1993 13,173.07 13,710.71 11,380.48 11,015.38
03/31/1993 13,245.25 13,750.56 11,406.65 11,030.77
04/30/1993 13,349.72 13,873.66 11,431.74 11,069.23
05/31/1993 13,295.28 13,838.90 11,455.76 11,100.00
06/30/1993 13,541.37 14,153.91 11,480.93 11,107.69
07/30/1993 13,643.53 14,239.94 11,506.19 11,123.08
08/31/1993 14,067.06 14,559.02 11,531.53 11,146.15
09/30/1993 14,119.78 14,621.95 11,555.71 11,161.54
10/29/1993 14,189.03 14,663.71 11,581.14 11,207.69
11/30/1993 13,890.16 14,820.39 11,606.64 11,230.77
12/31/1993 13,895.29 14,566.77 11,633.31 11,261.54
01/31/1994 14,068.44 14,763.53 11,658.90 11,261.54
02/28/1994 13,667.94 14,461.49 11,683.41 11,292.31
03/31/1994 13,284.21 14,150.59 11,711.40 11,323.08
04/29/1994 13,038.21 14,028.28 11,739.56 11,330.77
05/31/1994 13,014.90 14,014.46 11,772.43 11,353.85
06/30/1994 12,945.87 13,987.90 11,806.55 11,384.62
07/29/1994 13,199.89 14,223.30 11,843.15 11,423.08
08/31/1994 13,132.19 14,236.27 11,882.24 11,469.23
09/30/1994 12,903.68 14,037.50 11,922.65 11,492.31
10/31/1994 12,892.19 14,027.00 11,965.55 11,500.00
11/30/1994 12,824.07 13,995.38 12,011.01 11,530.77
12/30/1994 12,853.52 14,067.60 12,061.45 11,561.54
01/31/1995 13,006.49 14,338.00 12,114.53 11,584.62
02/28/1995 13,173.91 14,651.40 12,164.22 11,615.38
03/31/1995 13,198.73 14,731.36 12,221.36 11,638.46
04/28/1995 13,325.12 14,923.86 12,275.19 11,676.92
05/31/1995 13,626.65 15,674.18 12,332.82 11,707.69
06/30/1995 13,699.04 15,651.33 12,388.31 11,730.77
07/31/1995 13,695.38 15,595.00 12,444.12 11,746.15
08/31/1995 13,781.90 15,762.81 12,498.86 11,769.23
09/29/1995 13,866.41 15,907.38 12,552.61 11,784.62
10/31/1995 13,999.83 16,160.38 12,607.84 11,823.08
11/30/1995 14,145.86 16,410.58 12,662.00 11,830.77
12/29/1995 14,283.26 16,649.27 12,716.49 11,853.85
01/31/1996 14,367.51 16,754.58 12,771.15 11,900.00
02/29/1996 14,174.49 16,413.47 12,819.68 11,930.77
03/29/1996 14,059.02 16,278.85 12,870.94 11,969.23
04/30/1996 13,981.26 16,172.82 12,921.20 12,015.38
05/31/1996 13,933.37 16,150.79 12,972.88 12,046.15
06/28/1996 14,099.06 16,366.27 13,020.83 12,053.85
07/31/1996 14,116.20 16,405.50 13,075.57 12,092.31
08/30/1996 14,066.94 16,355.90 13,127.82 12,107.69
09/30/1996 14,258.11 16,621.14 13,179.00 12,215.38
10/31/1996 14,580.79 16,983.54 13,231.75 12,176.92
11/29/1996 14,862.49 17,274.98 13,283.34 12,215.38
12/31/1996 14,617.24 17,111.24 13,331.21 12,238.46
01/31/1997 14,598.33 17,116.46 13,385.86 12,261.54
02/28/1997 14,605.08 17,132.25 13,426.03 12,292.31
03/31/1997 14,441.27 16,957.22 13,460.89 12,300.00
04/30/1997 14,650.02 17,194.69 13,509.34 12,315.38
05/30/1997 14,761.13 17,343.19 13,556.62 12,315.38
06/30/1997 14,908.96 17,539.43 13,598.69 12,330.77
07/31/1997 15,287.96 18,038.37 13,644.90 12,353.85
08/29/1997 15,130.56 17,854.41 13,689.95 12,376.92
09/30/1997 15,346.54 18,127.82 13,746.10 12,407.69
10/31/1997 15,578.39 18,443.16 13,799.68 12,423.08
11/28/1997 15,567.99 18,535.53 13,847.96 12,446.15
12/31/1997 15,769.50 18,730.95 13,904.77 12,446.15
01/31/1998 16,032.37 19,015.20 13,949.24 12,453.85
02/27/1998 15,953.61 18,955.68 13,998.10 12,469.23
03/31/1998 16,016.00 19,010.53 14,047.04 12,469.23
04/30/1998 16,061.21 19,091.58 14,104.67 12,500.00
05/29/1998 16,225.36 19,288.81 14,162.48 12,530.77
06/30/1998 16,411.38 19,517.12 14,217.71 12,538.46
07/31/1998 16,441.93 19,546.79 14,277.42 12,561.54
08/31/1998 16,869.36 20,073.70 14,337.38 12,576.92
09/30/1998 17,402.49 20,644.16 14,394.77 12,584.62
10/30/1998 17,267.00 20,569.55 14,450.91 12,607.69
11/30/1998 17,275.20 20,559.66 14,504.33 12,630.77
12/31/1998 17,308.91 20,609.43 14,559.48 12,646.15
01/29/1999 17,364.68 20,721.93 14,613.31 12,661.54
02/26/1999 16,904.99 20,193.12 14,661.59 12,669.23
03/31/1999 16,932.82 20,273.81 14,712.85 12,692.31
04/30/1999 16,975.60 20,331.88 14,764.34 12,784.62
05/31/1999 16,850.00 20,118.83 14,817.50 12,784.62
06/30/1999 16,771.88 20,092.47 14,869.36 12,784.62
07/30/1999 16,689.31 20,079.18 14,818.80 12,823.08
08/31/1999 16,645.78 20,074.42 14,803.98 12,853.85
09/30/1999 16,818.55 20,233.46 14,963.86 12,915.38
10/29/1999 16,824.68 20,242.10 14,902.07 12,938.46
11/30/1999 16,785.10 20,210.22 14,903.56 12,953.85
12/31/1999 16,655.63 20,089.42 14,830.53 12,984.62
01/31/2000 16,521.06 20,153.17 14,784.56 13,007.69
02/29/2000 16,683.88 20,425.73 14,947.18 13,076.92
03/31/2000 16,887.25 20,824.35 15,137.01 13,169.23
04/28/2000 16,859.44 20,763.72 15,082.52 13,169.23
05/31/2000 16,879.56 20,787.02 15,065.94 13,176.92
06/30/2000 17,185.72 21,155.44 15,355.20 13,253.85
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The above graph compares a
$10,000 investment made in Class F shares of Dreyfus Founders Government
Securities Fund on 6/30/90 to a $10,000 investment made in unmanaged securities
indexes and the Consumer Price Index on that date. Class F shares are available
only to grandfathered investors. All dividends and capital gain distributions
are reinvested. The Fund's performance shown in the line graph takes into
account all applicable fees and net expenses of Class F shares. More complete
information about the indexes shown may be found on page 3. Further information
related to Fund performance is contained elsewhere in this report.

7
<PAGE>

30-year Treasury bond grew as wide as 76 basis points in mid-May, though since
then it has narrowed due to investors' belief that the Federal Reserve has
accomplished its goal of slowing the economy and containing inflation.
If we see continued signs of the economy cooling off, the yield curve should
return to a more normal, upward-sloping shape.

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 5 10 SINCE
DATE DATE* YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C>
Class F Shares 3/1/88 3.18% 2.47% 4.64% 5.56% 5.77%
</TABLE>

*Total return is not annualized.

WHAT IS YOUR MANAGEMENT STRATEGY FOR THE SECOND HALF OF THE YEAR?

We intend to continue monitoring economic fundamentals and spread/product
relationships for value. We are not completely convinced that the Federal
Reserve is done with its efforts to contain inflation and growth, and therefore
will keep a wary eye on the Fed's second-half activity.

WHAT DO YOU BELIEVE LIES AHEAD FOR THE FIXED-INCOME MARKET?

We believe that the market will closely follow every economic data point up
until the August 22nd Federal Open Market Committee (FOMC) meeting, which is
widely viewed as the last time the Fed can act before the November elections. If
it appears that the economy will be in for a "soft landing," corporate bonds and
equities may do well. We could also see competition from other market sectors
weighing on the performance of Treasuries.

/s/ MARGARET R. DANUSER

Margaret R. Danuser
Portfolio Manager

8
<PAGE>

GOVERNMENT SECURITIES FUND
STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Principal Amount Market Value
-----------------------------------------------
<C> <S> <C>
U.S. GOVERNMENT SECURITIES-91.2%
U.S. AGENCIES-21.7%
$1,025,000 Federal Farm Credit
Bank 6.55% 08/19/03 $ 1,010,650
500,000 Federal Home Loan
Mortgage Corporation
6.625% 09/15/09 482,200
500,000 Federal Home Loan
Mortgage Corporation
6.875% 01/15/05 496,920
500,000 Federal National
Mortgage Association
6.50% 08/15/04 490,305
350,000 Tennessee Valley
Authority 7.125%
05/01/30 350,431
-----------
2,830,506
-----------
FANNIE MAE POOLS-10.3%
882,505 Federal National
Mortgage Association
6.50% 04/01/28 Pool
#421854 833,579
523,460 Federal National
Mortgage Association
7.00% 03/01/12 Pool
#373543 514,132
-----------
1,347,711
-----------
MORTGAGE-BACKED SECURITIES-4.1%
541,524 Federal Home Loan
Mortgage Corporation
7.50% 11/01/29 Pool
#C32819 534,447
-----------
U.S. TREASURY BONDS-4.0%
350,000 U.S. Treasury Bond
6.25% 08/15/23 352,188
150,000 U.S. Treasury Bond
7.25% 05/15/16 165,047
-----------
517,235
-----------
</TABLE>

<TABLE>
<CAPTION>
Principal Amount Market Value
-----------------------------------------------
<C> <S> <C>
U.S. TREASURY NOTES-51.1%
$ 300,000 U.S. Treasury Note
5.75% 08/15/03 $ 294,843
500,000 U.S. Treasury
Inflation Index Bond
4.25% 01/15/10 507,345
750,000 U.S. Treasury Note
5.625% 05/15/08 723,285
500,000 U.S. Treasury Note
6.00% 08/15/09 495,940
300,000 U.S. Treasury Note
6.25% 02/15/03 299,157
500,000 U.S. Treasury Note
6.25% Due 02/15/07 500,470
500,000 U.S. Treasury Note
6.50% 08/15/05 505,315
500,000 U.S. Treasury Note
6.625% 03/31/02 500,940
300,000 U.S. Treasury Note
6.625% 05/15/07 306,189
780,000 U.S. Treasury Note
6.875% 05/15/06 802,667
200,000 U.S. Treasury Note
7.00% 07/15/06 207,188
940,000 U.S. Treasury Note
7.25% 05/15/04 969,084
515,000 U.S. Treasury Note
7.25% 08/15/04 532,222
-----------
6,644,645
-----------
TOTAL U.S. GOVERNMENT SECURITIES
(COST-$11,953,689) 11,874,544
-----------
</TABLE>

See notes to financial statements.

9
<PAGE>

GOVERNMENT SECURITIES FUND
STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------
<C> <S> <C>
CORPORATE SHORT-TERM NOTES-3.2%
FINANCIAL SERVICES-3.2%
$ 415,000 Associates Corporation
N.A. 6.93% 07/03/00 $ 414,840
-----------
TOTAL CORPORATE SHORT-TERM NOTES
(AMORTIZED COST-$414,840) 414,840
-----------
U.S. AGENCIES-4.2%
545,000 Federal Home Loan Bank
Discount Note 6.50%
07/05/00 544,593
-----------
TOTAL U.S. AGENCIES
(AMORTIZED COST-$544,593) 544,593
-----------
</TABLE>

-----------------------------------------------
<C> <S> <C>
TOTAL INVESTMENTS-98.6%
(COST-$12,913,122) $12,833,977
OTHER ASSETS AND LIABILITIES-1.4% 178,432
-----------
NET ASSETS-100.0% $13,012,409
===========
</TABLE>

See notes to financial statements.

10
<PAGE>

MONEY MARKET FUND
STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------
<C> <S> <C>
CORPORATE SHORT TERM NOTES-99.9%
CAPTIVE FINANCE AUTOMOTIVE-3.2%
$2,400,000 Ford Motor Credit
Company 6.54%
07/10/00 $ 2,396,076
1,000,000 Ford Motor Credit
Company 6.81%
07/05/00 999,243
------------
3,395,319
------------
CAPTIVE FINANCE UTILITIES-5.0%
5,300,000 National Rural
Utilities CPC 6.65%
07/14/00 5,287,273
------------
CHEMICALS-5.0%
5,300,000 PPG Industries, Inc.
6.60% 07/31/00 5,270,850
------------
ELECTRIC UTILITIES-4.4%
465,000 Duke Energy
Corporation 6.53%
07/11/00 4,641,565
------------
ELECTRONICS-3.1%
2,300,000 Sharp Electronics
Corporation 6.60%
07/24/00 2,290,302
1,000,000 Sharp Electronics
Corporation 6.85%
07/06/00 999,049
------------
3,289,351
------------
</TABLE>

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES-18.7%
$5,300,000 American Express
Credit Corporation
6.58% 07/06/00 $ 5,295,156
4,300,000 Household Finance
Corporation 6.48%
07/07/00 4,295,356
5,400,000 Merrill Lynch &
Company, Inc. 6.54%
07/12/00 5,389,209
4,900,000 Morgan Stanley Dean
Witter 6.58% 07/28/00 4,875,818
------------
19,855,539
------------
FOOD & BEVERAGE-16.7%
2,000,000 California Almond
Growers Exchange
6.62% 07/18/00 1,993,748
2,000,000 California Almond
Growers Exchange
6.63% 08/08/00 1,986,003
5,100,000 Golden Peanut Company
6.56% 08/28/00 5,046,099
4,700,000 Kellogg Company 6.50%
07/05/00 4,696,605
4,000,000 McCormick & Company,
Inc. 6.53% 07/05/00 3,997,098
------------
17,719,553
------------
HEALTHCARE SERVICES-5.0%
2,100,000 Becton, Dickinson,
and Company 6.54%
07/10/00 2,096,566
3,200,000 Becton, Dickinson,
and Company 6.57%
08/07/00 3,178,392
------------
5,274,958
------------
</TABLE>

See notes to financial statements.

11
<PAGE>

MONEY MARKET FUND
STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------
<C> <S> <C>
INSURANCE-7.6%
$5,300,000 American General
Corporation 6.53%
07/13/00 $ 5,288,464
2,800,000 MetLife Funding, Inc.
6.63% 08/14/00 2,777,311
------------
8,065,775
------------
INVESTMENT COMPANIES-4.7%
5,000,000 Ciesco LP 6.58%
07/24/00 4,978,981
------------
MANUFACTURING-3.2%
3,400,000 Minnesota Mining &
Manufacturing Company
6.50% 08/02/00 3,380,356
------------
OIL & GAS-1.7%
1,800,000 Texaco, Inc. 6.65%
07/11/00 1,796,675
------------
PHOTOGRAPHY & IMAGING-1.4%
1,500,000 Eastman Kodak Company
6.56% 09/01/00 1,483,053
------------
RETAIL-4.7%
5,000,000 The May Department
Stores Company 6.54%
07/03/00 4,998,183
------------
</TABLE>

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------
<C> <S> <C>
TELECOMMUNICATION SERVICES-7.6%
$4,100,000 AT&T Corporation
6.68% 07/11/00 $ 4,092,392
4,000,000 Bellsouth
Telecommunications,
Inc. 6.53% 07/21/00 3,985,489
------------
8,077,881
------------
UTILITIES-7.9%
3,100,000 New England Power
Company 6.95%
07/06/00 3,097,008
5,300,000 Potomac Electric
Power Company 6.53%
07/25/00 5,276,927
------------
8,373,935
------------
TOTAL CORPORATE SHORT-TERM NOTES
(AMORTIZED COST-$105,889,247) 105,889,247
------------
TOTAL INVESTMENTS-99.9%
(AMORTIZED COST-$105,889,247) 105,889,247
OTHER ASSETS AND LIABILITIES-0.1% 104,435
------------
NET ASSETS-100.0% $105,993,682
============
</TABLE>

See notes to financial statements.

12
<PAGE>

STATEMENTS OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
GOVERNMENT MONEY
SECURITIES FUND MARKET FUND
--------------- ------------
<S> <C> <C>
ASSETS
Investment securities, at cost.............. $12,913,122 $105,889,247
----------- ------------
Investment securities, at market............ 12,833,977 105,889,247
Cash........................................ 3,202 52,060
Receivables:
Capital shares sold....................... 57,815 249,256
Interest.................................. 199,389 0
----------- ------------
Total Assets............................ 13,094,383 106,190,563
----------- ------------

LIABILITIES
Payables:
Capital shares redeemed................... 2,000 120,452
Advisory fees............................. 6,946 44,846
Shareholder servicing fees................ 1,733 11,156
Accounting fees........................... 246 2,062
Distribution fees......................... 3,219 0
Dividends................................. 59,590 9,234
Other..................................... 8,240 9,131
----------- ------------
Total Liabilities....................... 81,974 196,881
----------- ------------
Net Assets.................................. $13,012,409 $105,993,682
=========== ============
Net Assets--Class F......................... $13,012,409 $105,993,682
Shares Outstanding--Class F................. 1,444,903 105,992,919
Net Asset Value, Offering and Redemption
Price Per Share........................... $ 9.01 $ 1.00
</TABLE>

See notes to financial statements.

13
<PAGE>

STATEMENTS OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET
SECURITIES FUND FUND
--------------- ------------
<S> <C> <C>
INVESTMENT INCOME:
Income:
Interest............................... $ 390,964 $2,980,272
---------- ----------
Total Investment Income.............. 390,964 2,980,272
---------- ----------
Expenses:
Advisory fees.......................... 39,147 242,389
Shareholder servicing fees............. 11,063 68,200
Accounting fees........................ 1,384 11,133
Distribution fees...................... 15,046 0
Transfer agency fees................... 8,258 37,327
Registration fees...................... 9,218 30,747
Postage and mailing expenses........... 2,155 2,375
Custodian fees and expenses............ 1,895 4,286
Printing expenses...................... 3,890 15,706
Legal and audit fees................... 1,404 4,919
Directors' fees and expenses........... 1,393 3,294
Other expenses......................... 2,693 4,363
---------- ----------
Total Expenses....................... 97,546 424,739
Earnings Credits..................... (3,913) (13,696)
Reimbursed/Waived Expenses........... (13,662) 0
---------- ----------
Net Expenses....................... 79,971 411,043
---------- ----------
Net Investment Income.................. 310,993 2,569,229
---------- ----------
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
GOVERNMENT MONEY MARKET
SECURITIES FUND FUND
--------------- ------------
<S> <C> <C>
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY
TRANSACTIONS
Net Realized Gain (Loss) from Security
Transactions:
Proceeds from long-term securities
sold................................. 0 0
Proceeds from long-term U.S. Government
Obligations.......................... 8,110,113 0
Cost of securities sold................ 8,458,996 0
---------- ----------
Net Realized (Loss) from Security
Transactions........................... (348,883) (1,194)
Net Realized Gain (Loss) from Foreign
Currency Transactions.................. 0 0
Net Change in Unrealized Appreciation/
Depreciation........................... 348,839 0
---------- ----------
Net Realized and Unrealized (Loss) on
Investments and Foreign Currency
Transactions......................... (44) (1,194)
---------- ----------
Net Increase in Net Assets Resulting from
Operations............................. $ 310,949 $2,568,035
========== ==========
Purchases of long-term securities........ $ 0 $ 0
========== ==========
Purchases of long-term U.S. Government
Obligations............................ $7,236,539 $ 0
========== ==========
</TABLE>

See notes to financial statements.

15
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
GOVERNMENT
SECURITIES FUND MONEY MARKET FUND
-------------------------- -----------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 12/31/99 ENDED 6/30/00 12/31/99
----------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
OPERATIONS
Net Investment
Income.............. $ 310,993 $ 657,749 $ 2,569,229 $ 4,586,016
Net Realized (Loss)
from Security
Transactions........ (348,883) (39,933) (1,194) (12,334)
Net Realized Gain
(Loss) from Foreign
Currency
Transactions........ 0 0 0 0
Net Change in
Unrealized
Appreciation/
Depreciation........ 348,839 (1,165,737) 0 0
----------- ------------ ------------- -------------
Net Increase
(Decrease) in Net
Assets Resulting
from Operations... 310,949 (547,921) 2,568,035 4,573,682
----------- ------------ ------------- -------------
DIVIDENDS AND
DISTRIBUTIONS TO
SHAREHOLDERS
From Net Investment
Income
Class F............. (308,873) (659,658) (2,567,251) (4,575,734)
From Net Realized
Gains from Security
Transactions and
Foreign Currency
Transactions
Class F............. 0 0 0 0
----------- ------------ ------------- -------------
Net (Decrease) from
Dividends and
Distributions..... (308,873) (659,658) (2,567,251) (4,575,734)
----------- ------------ ------------- -------------
</TABLE>

16
<PAGE>

<TABLE>
<CAPTION>
GOVERNMENT
SECURITIES FUND MONEY MARKET FUND
-------------------------- -----------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 12/31/99 ENDED 6/30/00 12/31/99
----------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
CAPITAL SHARE
TRANSACTIONS
Proceeds from shares
sold
Class F............. $ 8,225,667 $ 21,629,884 $141,838,030 $ 338,595,898
Reinvested dividends
and distributions
Class F............. 281,072 581,447 1,974,818 4,191,319
----------- ------------ ------------- -------------
8,506,739 22,211,331 143,812,848 342,787,217
Cost of shares
redeemed
Class F............. (8,772,343) (22,947,944) (130,685,514) (341,334,144)
----------- ------------ ------------- -------------
Net Increase
(Decrease) from
Capital Share
Transactions...... (265,604) (736,613) 13,127,334 1,453,073
----------- ------------ ------------- -------------
Net Increase
(Decrease) in Net
Assets............ (263,528) (1,944,192) 13,128,118 1,451,021

NET ASSETS
Beginning of
period........... 13,275,937 15,220,129 92,865,564 91,414,543
----------- ------------ ------------- -------------
End of period....... $13,012,409 $ 13,275,937 $105,993,682 $ 92,865,564
=========== ============ ============= =============
Net Assets consist of:
Capital (par value and
paid-in surplus).... $16,502,732 $ 16,768,336 $105,988,753 $ 92,861,419
Accumulated
undistributed
(distribution in
excess of) net
investment
income.............. 5,213 3,093 21,325 19,347
Accumulated
undistributed net
realized (loss) from
security
transactions........ (3,416,391) (3,067,508) (16,396) (15,202)
Unrealized
appreciation
(depreciation) on
investments and
foreign currency
transactions........ (79,145) (427,984) 0 0
----------- ------------ ------------- -------------
Total............... $13,012,409 $ 13,275,937 $105,993,682 $ 92,865,564
=========== ============ ============= =============
</TABLE>

See notes to financial statements.

17
<PAGE>

GOVERNMENT SECURITIES FUND
FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED -----------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period........................ $ 8.96 $ 9.74 $ 9.28 $ 9.04 $ 9.29 $ 8.78
Income from investment
operations:
Net investment income
(loss).................... (0.05) 0.42 0.43 0.45 0.46 0.45
Net gains (losses) on
securities (both realized
and unrealized)........... 0.29 (0.78) 0.46 0.24 (0.25) 0.51
------- ------- ------- ------- ------- -------
Total from investment
operations............. 0.24 (0.36) 0.89 0.69 0.21 0.96
Less distributions:
From net investment
income.................... (0.19) (0.42) (0.43) (0.45) (0.46) (0.45)
From net realized gains..... 0.00 0.00 0.00 0.00 0.00 0.00
------- ------- ------- ------- ------- -------
Total distributions..... (0.19) (0.42) (0.43) (0.45) (0.46) (0.45)
Net Asset Value, end of
period........................ $ 9.01 $ 8.96 $ 9.74 $ 9.28 $ 9.04 $ 9.29
======= ======= ======= ======= ======= =======
Total Return/Ratios
Total return................ 3.18% (3.77%) 9.76% 7.90% 2.34% 11.10%
Net assets, end of period
(000s).................... $13,012 $13,276 $15,220 $13,259 $15,190 $20,263
Net expenses to average net
assets#,+................. 1.33%* 1.31% 1.25% 1.26% 1.26% 1.30%
Gross expenses to average
net assets#,+............. 1.39%* 1.35% 1.28% 1.31% 1.29% 1.30%
Net investment income (loss)
to average net assets+.... 5.16%* 4.47% 4.46% 4.99% 5.06% 4.92%
Portfolio turnover rate@.... 111% 127% 90% 147% 166% 141%
</TABLE>

<TABLE>
<S> <C>
* Annualized.
# Ratio of Net Expenses to Average Net Assets reflects
reductions in a Fund's expenses through the use of brokerage
commissions and custodial and transfer agent credits. Ratio
of Gross Expenses to Average Net Assets is the total of a
Fund's operating expenses before expense offset arrangements
and earnings credits divided by its average net assets for
the stated period.
+ Certain fees were waived by the management company. Had
these fees not been waived, the net expense ratios would
have been 1.56% (2000), 1.49% (1999), 1.46% (1998), 1.44%
(1997), and 1.46% (1996). The gross expense ratios would
have been 1.62% (2000), 1.53% (1999), 1.49% (1998), 1.49%
(1997), and 1.49% (1996). The net investment income ratios
would have been 4.93% (2000), 4.29% (1999), 4.25% (1998),
4.81% (1997), and 4.86% (1996).
@ Portfolio Turnover Rate is a measure of portfolio activity
that is calculated by dividing the lesser of purchases or
sales of securities, excluding securities having maturity
dates at acquisition of one year or less, by the average
value of the portfolio securities held during the period,
which is a rolling 12-month period.
</TABLE>

See notes to financial statements.

18
<PAGE>

MONEY MARKET FUND
FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED --------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- ------- ------- -------- -------- --------
<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
Income from investment operations:
Net investment income........... 0.03 0.04 0.05 0.05 0.05 0.05
Net gains (losses) on securities
(both realized and
unrealized).................... 0.00 0.00 0.00 0.00 0.00 0.00
-------- ------- ------- -------- -------- --------
Total from investment
operations................. 0.03 0.04 0.05 0.05 0.05 0.05
Less distributions:
From net investment income...... (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
From net realized gains......... 0.00 0.00 0.00 0.00 0.00 0.00
-------- ------- ------- -------- -------- --------
Total distributions.......... (0.03) (0.04) (0.05) (0.05) (0.05) (0.05)
Net Asset Value, end of period..... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
======== ======= ======= ======== ======== ========
Total Return/Ratios
Total return.................... 2.63% 4.35% 4.67% 4.70% 4.51% 5.10%
Net assets, end of period
(000s)......................... $105,994 $92,866 $91,415 $106,073 $109,866 $125,646
Net expenses to average net
assets#........................ 0.85%* 0.89% 0.85% 0.82% 0.86% 0.89%
Gross expenses to average net
assets#........................ 0.88%* 0.91% 0.87% 0.84% 0.88% 0.89%
Net investment income to average
net assets..................... 4.84%* 4.30% 4.67% 4.77% 4.58% 5.11%
</TABLE>

See notes to financial statements.

19
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds. All of the Company's series
funds, with the exception of Focus Fund, are diversified portfolios. The
following notes pertain to Dreyfus Founders Government Securities Fund and
Dreyfus Founders Money Market Fund (each a "Fund" and, collectively, the
"Funds"). The Funds offer Class F shares. The following significant accounting
policies have been consistently followed by the Funds in the preparation of
their financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Funds' net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days,
and all securities held by Money Market Fund, are valued at amortized cost,
which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Funds may invest at least
a portion of their assets in foreign securities. In the event that the Funds
execute a foreign security transaction, the Funds may enter into a foreign
currency contract to settle the foreign security transaction. The resultant
foreign currency gain or loss from the contract is recorded as foreign currency
gain or loss and is presented as such in the Statements of Operations.
FEDERAL INCOME TAXES--No provision has been made for federal income taxes
since it is the policy of the Funds to comply with the special provisions of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies, and to make distributions of income and capital gains sufficient to
relieve it from all income taxes. The Funds are treated as a separate tax
entities for federal income tax purposes.

20
<PAGE>

INVESTMENT INCOME--Dividend income is recorded on the ex-dividend date.
Certain dividends from foreign securities will be recorded as soon as the Fund
is informed of the dividend if such information is obtained subsequent to the
ex-dividend date. Interest income is accrued daily and includes the accretion of
discounts and the amortization of premiums.
DISTRIBUTIONS TO SHAREHOLDERS--Dividends are declared daily and paid monthly
from net investment income, and capital gains (if any) are distributed annually.
All dividends and distributions are recorded on the ex-dividend date.
EXPENSES--Each Fund bears expenses incurred specifically on its behalf and, in
addition, each Fund bears a portion of general expenses based on the relative
net assets, or number of shareholder accounts of each Fund. The type of expense
determines the allocation method.
ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
OTHER--Security transactions are recorded on the date the securities are
purchased or sold (trade date).

21
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

IFTC. Each Fund paid Founders a monthly fee equal on an annual basis to $26 per
Class F shareholder account of each Fund considered to be an open account at any
time during a given month.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Company's eleven
series from $0 to $500 million and 0.02% of the net assets of the Company's
eleven series in excess of $500 million, plus reasonable out-of-pocket expenses.
The fee so computed is allocated to each of the series on a pro rata basis based
on relative average daily net assets.
Government Securities Fund has adopted a Distribution Plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 applicable to its Class F shares.
Under the plan, Government Securities Fund may pay distribution expenses of up
to 0.25% of the value of the average daily net assets of the Fund's Class F
shares. During the six months ended June 30, 2000, Founders elected not to
collect the full 0.25% from Government Securities Fund and waived $13,654, which
resulted in the fund paying 0.02% under the plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Company's eleven series. The amount paid to the director under the plan will
be determined based upon the performance of the selected series. Deferral of
directors' fees under the plan will not affect the net assets of the Funds, and
will not materially affect the Funds' assets, liabilities or net income per
share.
The officers of the Company are also officers and/or directors of Founders.
Founders serves as investment adviser to the Funds. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly-owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Funds, including services provided by Founders, are subject to
the supervision and general oversight of the Company's board of directors.

22
<PAGE>

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The capital loss
carryover for the Government Securities Fund expires in the years 2002 through
2004. Net capital loss carryovers utilized in 1999 by the Government Securities
Fund amounted to $12,749. The aggregate cost of investments and the composition
of unrealized appreciation and depreciation of investment securities for federal
income tax purposes as of June 30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS DREYFUS FOUNDERS
GOVERNMENT MONEY MARKET
SECURITIES FUND FUND
---------------- ----------------
<S> <C> <C>
Net Capital Loss Carryovers............. $ 3,015,848 $ 5,448
Post-October Capital Loss Deferral...... $ 46,229 $ 9,754
Post-October Currency Loss Deferral..... $ 0 $ 0
Federal Tax Cost........................ $12,927,135 $105,889,247
Unrealized Appreciation................. $ 17,200 $ 0
Unrealized (Depreciation)............... $ (108,954) $ 0
Net Appreciation/(Depreciation)......... $ (91,754) $ 0
</TABLE>

23
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

4. FUND SHARE TRANSACTIONS
Government Securities Fund is authorized to issue 100 million shares of $0.01
par value capital stock. Money Market Fund is authorized to issue 2 billion
shares of $0.01 par value capital stock. Transactions in shares of the Funds for
the periods indicated were as follows:

<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED
ENDED 6/30/00 12/31/99
-------------- ------------
<S> <C> <C>
GOVERNMENT SECURITIES FUND--CLASS F:
Sold..................................... 916,057 2,323,196
Reinvested Dividends..................... 31,493 62,867
Redeemed................................. (983,788) (2,467,784)
NET (DECREASE) IN SHARES OUTSTANDING..... (36,238) (81,721)
MONEY MARKET FUND--CLASS F:
Sold..................................... 141,838,030 338,595,898
Reinvested Dividends..................... 1,974,818 4,191,319
Redeemed................................. (130,685,514) (341,334,144)
NET INCREASE IN SHARES OUTSTANDING....... 13,127,334 1,453,073
</TABLE>

24
<PAGE>

This page intentionally left blank.
<PAGE>
DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

This report is authorized for distribution to prospective investors only if
preceded or accompanied by a current prospectus, which contains more complete
information, including charges, expenses, and share classes. Please read the
prospectus carefully before you invest or send money.

Date of first use: August 28, 2000

A-636-GMM

<PAGE>
DREYFUS FOUNDERS
BALANCED FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
-----------------------------------------------------------------------------
A Message from Founders 4
-----------------------------------------------------------------------------
Management Overview 6
-----------------------------------------------------------------------------
Statement of Investments 12
-----------------------------------------------------------------------------
Statement of Assets and Liabilities 16
-----------------------------------------------------------------------------
Statement of Operations 18
-----------------------------------------------------------------------------
Statements of Changes in Net Assets 19
-----------------------------------------------------------------------------
Financial Highlights 22
-----------------------------------------------------------------------------
Notes to Financial Statements 28
-----------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

<TABLE>
<S> <C> <C>
AU Australia GE Germany MA Malaysia
AT Austria HK Hong Kong MX Mexico
BE Belgium ID Indonesia NE Netherlands
BR Brazil IE Ireland NW Norway
CA Canada IS Israel SP Spain
CN China IT Italy SW Sweden
DE Denmark JA Japan SZ Switzerland
FI Finland KR South Korea UK United Kingdom
FR France LU Luxembourg
</TABLE>

The views expressed herein are current to the date of this report. The views
and the composition of the Fund's portfolio are subject to change at any time
based on market and other conditions.

-----------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
-----------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

COMPARATIVE INDEXES

o The Standard & Poor's (S&P) 500 Index is a market-value-weighted, unmanaged
index of common stocks considered representative of the broad market.

o The Lipper Balanced Fund Index is an average of the performance of the 30
largest balanced funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

4
<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Curtis Anderson, CFA

HOW DID THE FUND PERFORM DURING THE FIRST HALF OF 2000?

The high degree of volatility experienced by the domestic stock and bond
markets in the first half of 2000 greatly impacted Dreyfus Founders Balanced
Fund, resulting in a strong first-quarter performance that was significantly
undercut by much weaker second-quarter returns. Overall, the Fund's first-half
performance fell short of its benchmarks, as large-cap growth stocks suffered
at the hands of volatility, profit-taking, and uncertainty about the pace of
the economy.

WHAT FACTORS AFFECTED YOUR ASSET ALLOCATION DECISIONS?

Since taking the Fund's helm in December 1999, I've aimed for an equity
allocation in the 60-65% range, which is higher than the more defensive equity
allocation in the prior year. We simply believe that the large-cap equity market
presents the best opportunities to enhance the Fund's performance.

--------------------------------------------------------------------------------

FUND AT A GLANCE

This fund invests primarily in a balanced portfolio of common stocks, U.S.
and foreign government obligations, and a variety of corporate
fixed-income securities.

--------------------------------------------------------------------------------

<PAGE>

We stood by this allocation throughout the first half, in spite of
investors' heavy profit-taking, the Fed's interest rate hikes, and the
subsequent onset of a market correction. In fact, we chose to take advantage of
the market's dips by purchasing or adding to several fundamentally strong
companies at attractive price and valuation levels. Many of these firms are
technology-oriented, and as such performed well during the first quarter.

However, in the second quarter the reverse was true, and the Fund suffered
as a result. Several of its holdings represent sectors that were, on average,
hard-hit by the challenging market conditions. For example,
semiconductor-related companies in the Fund experienced significant

GROWTH OF $10,000 INVESTMENT

[GRAPH]

<TABLE>
<CAPTION>
LIPPER
BAL. FD.
BALANCED S&P 500 INDEX CPI
<S> <C> <C> <C> <C>
06/30/1990 10,000.00 10,000.00 10,000.00 10,000.00
07/31/1990 9,961.09 9,975.25 9,994.04 10,046.15
08/31/1990 9,468.22 9,064.21 9,439.37 10,130.77
09/30/1990 9,266.65 8,624.75 9,191.08 10,200.00
10/31/1990 9,358.40 8,597.32 9,193.88 10,269.23
11/30/1990 9,568.11 9,142.47 9,620.44 10,292.31
12/31/1990 9,631.26 9,397.55 9,851.37 10,330.77
01/31/1991 9,764.65 9,816.72 10,197.10 10,369.23
02/28/1991 10,164.84 10,500.78 10,667.20 10,376.92
03/31/1991 10,305.97 10,759.75 10,877.31 10,376.92
04/30/1991 10,386.80 10,795.32 10,918.65 10,400.00
05/31/1991 10,710.12 11,244.93 11,265.92 10,438.46
06/30/1991 10,366.46 10,735.23 10,906.51 10,461.54
07/31/1991 10,856.22 11,248.72 11,280.63 10,484.62
08/31/1991 11,073.88 11,501.67 11,562.60 10,515.38
09/30/1991 11,190.02 11,310.26 11,597.31 10,546.15
10/31/1991 11,299.86 11,476.92 11,785.15 10,561.54
11/30/1991 11,162.56 11,000.00 11,525.90 10,607.69
12/31/1991 11,833.01 12,258.97 12,397.26 10,638.46
01/31/1992 11,587.39 12,044.15 12,293.12 10,646.15
02/28/1992 11,659.63 12,184.95 12,440.65 10,669.23
03/31/1992 11,536.60 11,948.38 12,251.57 10,707.69
04/30/1992 11,624.11 12,313.94 12,383.87 10,730.77
05/31/1992 11,842.88 12,356.08 12,544.86 10,753.85
06/30/1992 11,602.80 12,174.92 12,448.30 10,784.62
07/31/1992 11,955.74 12,688.18 12,814.26 10,815.38
08/31/1992 11,970.45 12,415.05 12,695.04 10,838.46
09/30/1992 12,272.23 12,559.75 12,841.03 10,861.54
10/31/1992 12,257.41 12,628.99 12,842.35 10,907.69
11/30/1992 12,405.62 13,040.58 13,135.13 10,938.46
12/31/1992 12,545.81 13,192.98 13,322.96 10,953.85
01/31/1993 12,833.00 13,314.72 13,501.53 10,984.62
02/28/1993 13,029.50 13,481.72 13,667.59 11,015.38
03/31/1993 13,264.35 13,767.00 13,949.12 11,030.77
04/30/1993 13,142.66 13,447.05 13,843.14 11,069.23
05/31/1993 13,522.95 13,781.72 14,085.40 11,100.00
06/30/1993 13,775.11 13,824.08 14,234.70 11,107.69
07/30/1993 13,851.72 13,792.53 14,291.62 11,123.08
08/31/1993 14,326.72 14,303.23 14,723.25 11,146.15
09/30/1993 14,794.04 14,191.19 14,754.14 11,161.54
10/29/1993 15,209.69 14,498.22 14,906.08 11,207.69
11/30/1993 14,978.77 14,342.70 14,667.58 11,230.77
12/31/1993 15,286.86 14,520.74 14,914.03 11,261.54
01/31/1994 15,595.00 15,025.64 15,304.77 11,261.54
02/28/1994 15,663.47 14,603.23 15,004.78 11,292.31
03/31/1994 15,131.49 13,969.34 14,460.11 11,323.08
04/29/1994 15,320.42 14,162.65 14,491.95 11,330.77
05/31/1994 15,303.24 14,374.02 14,603.52 11,353.85
06/30/1994 15,062.93 14,025.20 14,349.42 11,384.62
07/29/1994 15,218.22 14,500.11 14,673.76 11,423.08
08/31/1994 15,735.84 15,083.95 15,040.60 11,469.23
09/30/1994 15,287.89 14,712.15 14,769.81 11,492.31
10/31/1994 15,287.89 15,055.07 14,815.62 11,500.00
11/30/1994 14,906.56 14,494.98 14,470.41 11,530.77
12/30/1994 14,991.10 14,708.92 14,609.33 11,561.54
01/31/1995 15,218.77 15,099.67 14,790.47 11,584.62
02/28/1995 15,516.49 15,674.80 15,220.93 11,615.38
03/31/1995 15,831.73 16,140.36 15,490.32 11,638.46
04/28/1995 15,919.78 16,626.87 15,781.56 11,676.92
05/31/1995 16,465.70 17,271.68 16,286.51 11,707.69
06/30/1995 16,959.33 17,680.04 16,574.81 11,730.77
07/31/1995 17,649.74 18,277.81 16,924.51 11,746.15
08/31/1995 17,702.85 18,313.38 17,056.53 11,769.23
09/29/1995 18,323.07 19,083.84 17,464.18 11,784.62
10/31/1995 18,233.95 19,028.32 17,420.50 11,823.08
11/30/1995 18,893.43 19,848.05 17,962.30 11,830.77
12/29/1995 19,399.81 20,230.32 18,244.34 11,853.85
01/31/1996 19,845.32 20,932.22 18,574.56 11,900.00
02/29/1996 20,250.32 21,112.49 18,583.83 11,930.77
03/29/1996 20,473.34 21,317.17 18,654.43 11,969.23
04/30/1996 20,737.91 21,645.04 18,777.54 12,015.38
05/31/1996 21,165.28 22,183.50 18,969.13 12,046.15
06/28/1996 21,501.98 22,273.13 19,031.71 12,053.85
07/31/1996 20,867.16 21,298.55 18,542.57 12,092.31
08/30/1996 21,440.55 21,743.37 18,835.57 12,107.69
09/30/1996 22,055.32 22,962.76 19,532.48 12,215.38
10/31/1996 22,591.25 23,609.92 19,946.53 12,176.92
11/29/1996 23,415.74 25,384.39 20,876.06 12,215.38
12/31/1996 23,038.56 24,881.49 20,619.32 12,238.46
01/31/1997 23,711.70 26,446.71 21,250.26 12,261.54
02/28/1997 23,624.84 26,639.35 21,328.88 12,292.31
03/31/1997 23,210.38 25,540.58 20,708.23 12,300.00
04/30/1997 23,930.25 27,076.37 21,331.52 12,315.38
05/30/1997 24,846.45 28,703.34 22,203.98 12,315.38
06/30/1997 25,544.44 29,991.19 22,925.60 12,330.77
07/31/1997 26,268.64 32,393.76 24,230.06 12,353.85
08/29/1997 25,478.60 30,576.92 23,461.96 12,376.92
09/30/1997 26,512.05 32,248.16 24,398.11 12,407.69
10/31/1997 26,357.27 31,184.28 23,954.05 12,423.08
11/28/1997 26,578.39 32,616.72 24,392.45 12,446.15
12/31/1997 26,937.19 33,178.15 24,753.41 12,446.15
01/31/1998 27,672.92 33,559.09 24,926.68 12,453.85
02/27/1998 28,456.11 35,959.53 25,916.29 12,469.23
03/31/1998 28,979.22 37,803.23 26,709.32 12,469.23
04/30/1998 29,218.12 38,181.61 26,896.27 12,500.00
05/29/1998 29,050.89 37,502.68 26,624.67 12,530.77
06/30/1998 29,456.76 39,028.99 27,106.54 12,538.46
07/31/1998 28,808.04 38,637.12 26,789.41 12,561.54
08/31/1998 27,150.19 33,046.27 24,480.19 12,576.92
09/30/1998 28,566.23 35,155.41 25,537.68 12,584.62
10/30/1998 29,532.93 38,035.67 26,492.81 12,607.69
11/30/1998 30,257.97 40,331.55 27,462.42 12,630.77
12/31/1998 30,698.09 42,657.75 28,475.79 12,646.15
01/29/1999 30,345.53 44,451.95 28,931.40 12,661.54
02/26/1999 29,665.58 43,046.49 28,237.06 12,669.23
03/31/1999 30,068.05 44,766.89 28,934.56 12,692.31
04/30/1999 30,701.33 46,511.16 29,883.62 12,784.62
05/31/1999 30,574.67 45,392.20 29,423.40 12,784.62
06/30/1999 31,007.14 47,919.29 30,235.49 12,784.62
07/30/1999 30,344.70 46,429.54 29,670.09 12,823.08
08/31/1999 30,421.14 46,195.32 29,358.55 12,853.85
09/30/1999 29,735.80 44,926.09 28,982.76 12,915.38
10/29/1999 30,249.82 47,789.74 29,823.26 12,938.46
11/30/1999 29,890.01 48,741.81 30,145.35 12,953.85
12/31/1999 30,016.17 51,611.37 31,037.65 12,984.62
01/31/2000 29,041.44 49,027.31 30,258.61 13,007.69
02/29/2000 30,302.86 48,085.15 30,185.99 13,076.92
03/31/2000 31,837.81 52,788.96 31,963.94 13,169.23
04/28/2000 29,738.30 51,205.23 31,379.00 13,169.23
05/31/2000 28,731.68 50,134.00 31,084.04 13,176.92
06/30/2000 30,195.62 51,383.05 31,581.38 13,253.85
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The above graph compares a
$10,000 investment made in Class F shares of Dreyfus Founders Balanced Fund on
6/30/90 to a $10,000 investment made in unmanaged securities indexes and the
Consumer Price Index on that date. On December 31, 1999, the Fund adopted a
multiclass structure. Existing Fund shares were designated as Class F shares
and Class F shares are available only to grandfathered investors. All dividends
and capital gain distributions are reinvested. Performance for Class A, B, C, R
and T shares will vary from the performance of Class F shares shown above due
to differences in charges and expenses. The Fund's performance shown in the
line graph takes into account all applicable fees and net expenses of Class F
shares. More complete information about the indexes shown may be found on page
3. Further information related to Fund performance is contained elsewhere in
this report.

<PAGE>

declines, and telecommunications and biotechnology holdings also hampered the
Fund's performance. Nonetheless, we chose to retain these companies in the Fund
because we continue to believe that they represent some of the best growth
stories in the market. Their performance may have hurt the Fund in the short
term, but in our opinion, these firms' long-term growth may ultimately prove
beneficial.

We have been concentrating the Fund's fixed-income allocation in the
intermediate (3-6 years) range since the end of 1999. This strategy was adopted
to position the Fund for the inverted yield curve that prevailed in the first
half of 2000. We believe that the sharp inversion was due to the diminished
supply of long-dated Treasuries and to the Federal Reserve's proactive attempts
to curb inflation. Unfortunately, during the first half of 2000 the bond market
was nearly as volatile as the stock market--an occurrence that sometimes
accompanies inverted yield curves--and our bond holdings were not capable of
offsetting losses in the Fund's equity allocation.

COMPOSITION OF EQUITY ASSETS

[PIE CHART]

--------------------------------------------------------------------------------
<TABLE>
<S> <C>
40.02% Technology
18.05% Healthcare
11.06% Telecom Services
8.63% Financial
7.58% Consumer Staples
5.62% Consumer Cyclicals
5.08% Capital Goods
2.27% Energy
1.69% Business Services
</TABLE>
--------------------------------------------------------------------------------

Portfolio composition is subject to change.

<PAGE>

WHICH INVESTMENT STRATEGIES PROVED EFFECTIVE DURING THE FIRST SIX MONTHS OF
2000?

Balanced Fund has the flexibility to adjust its mix of stocks and bonds to
respond to changing market conditions. We took advantage of this flexibility by
managing the Fund with vigilance in the first half. For example, in the first
quarter Microsoft was one of the Fund's top equity holdings. However, the
company's growth prospects suddenly diminished in April after it failed to
reach an agreement with the Justice Department in its antitrust case and warned
of decreased earnings in the coming year. We chose to sell the holding upon
hearing this news, even though Microsoft was a leading stock in 1999.

AVERAGE ANNUAL TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 5 10 20
DATE DATE* YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 2/19/63 0.60% (2.61%) 12.23% 11.69% 12.53%
</TABLE>

*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- (4.94%)
Without sales charge 12/31/99 -- -- -- 0.86%

CLASS B SHARES
With redemption** 12/31/99 -- -- -- (3.67%)
Without redemption 12/31/99 -- -- -- 0.34%

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- (1.06%)
Without redemption 12/31/99 -- -- -- (0.06%)

CLASS R SHARES 12/31/99 -- -- -- 0.85%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- (3.95%)
Without sales charge 12/31/99 -- -- -- 0.56%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.

<PAGE>

Microsoft's difficulties were certainly unique, but many other technology
stocks also suffered in the second quarter due to the tech stock sell-off. It
was important for our large-cap equity team to monitor these changes and
determine which were fundamental in nature, and which were merely the result of
investors' indiscriminate flight from the sector as a whole. Although the Fund
was hurt by this event in the short term, we decided to endure the loss in the
name of long-term growth potential.

One such company with strong growth prospects is NEXTEL PARTNERS, a
wireless communications provider covering 40 million people, which we added to
the Fund in the first quarter. We were pleased with the company's first-half
performance, and believe that as consumers' and businesses' reliance on wireless
services continues to fuel demand, Nextel may experience additional growth.

Another exciting growth prospect we uncovered in the first half was
AMERICAN INTERNATIONAL GROUP (AIG). AIG is the largest U.S.-based international
insurance underwriter in the world, and we believe it's very well managed. The
company's high credit ratings are a huge competitive advantage, especially in
emerging markets, and AIG has excellent access to the reinsurance market, making
it easier to maintain the desired risk profile.

LARGEST EQUITY HOLDINGS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
1. General Electric Company 4.76%
2. Pfizer, Inc. 3.76%
3. Cisco Systems, Inc. 3.40%
4. Intel Corporation 3.25%
5. Tyco International Limited 3.21%
6. Texas Instruments, Inc. 2.01%
7. Abbott Laboratories 1.94%
8. Corning, Inc. 1.88%
9. WorldCom, Inc. 1.79%
10. Nortel Networks Corporation Sponsored ADR 1.75%
</TABLE>

--------------------------------------------------------------------------------
Holdings listed are a percentage of equity assets. Portfolio holdings are
subject to change.

<PAGE>

WILL YOUR MANAGEMENT APPROACH REMAIN THE SAME GOING FORWARD?

As vital as it is to constantly monitor and adjust the Fund's portfolio of
stocks and bonds, we believe it's just as important to do so without adjusting
our management philosophy. While companies and markets may change, we will
continue to stand by our growth-oriented approach to investing, which emphasizes
earnings growth and sound fundamentals above all.

WHAT DO YOU EXPECT TO SEE IN THE SECOND HALF OF THE YEAR?

We suspect that the extreme market volatility we experienced in the first half
may remain with us through the latter six months of 2000. Much hinges on the
outcome of the Federal Reserve Board's upcoming meetings and the results gleaned
from various measurements of the economy's condition.

/s/ CURTIS ANDERSON

Curtis Anderson, CFA
Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
COMMON STOCKS (DOMESTIC)-63.2%
AUTOMOTIVE-0.6%
60,300 General Motors
Corporation Class H* $ 5,291,325
------------
BANKING-3.5%
86,900 Citigroup, Inc. 5,235,725
95,300 Fifth Third Bancorp 6,027,725
95,900 The Bank of New York
Company, Inc. 4,459,350
167,100 The Chase Manhattan
Corporation 7,697,044
194,500 Wells Fargo & Company 7,536,875
------------
30,956,719
------------
BIOTECHNOLOGY-2.3%
121,000 Amgen, Inc.* 8,500,250
29,100 Genentech, Inc.* 5,005,200
67,000 Genzyme Corporation 3,986,500
20,000 Human Genome Sciences,
Inc.* 2,666,250
------------
20,158,200
------------
BUSINESS SERVICES-1.1%
200,100 Comdisco, Inc. 4,464,731
59,100 Omnicom Group, Inc. 5,263,594
------------
9,728,325
------------
COMPUTER EQUIPMENT-3.6%
130,400 Apple Computer, Inc.* 6,821,550
89,000 EMC Corporation* 6,847,438
106,800 Gateway, Inc.* 6,060,900
51,400 International Business
Machines Corporation 5,631,513
69,200 Sun Microsystems, Inc.* 6,292,875
------------
31,654,276
------------
COMPUTER NETWORKING-3.1%
308,200 Cisco Systems, Inc.* 19,589,963
72,200 Foundry Networks, Inc.* 7,969,075
------------
27,559,038
------------

COMPUTER SOFTWARE/SERVICES-2.1%
73,800 Automatic Data
Processing, Inc. $ 3,952,913
112,800 Oracle Corporation* 9,475,200
28,900 Redback Networks, Inc.* 5,180,325
------------
18,608,438
------------
DIVERSIFIED-1.2%
40,000 Corning, Inc. 10,795,000
------------
ELECTRONICS-4.1%
516,900 General Electric Company 27,395,700
176,200 Jabil Circuit, Inc.* 8,743,925
------------
36,139,625
------------
FINANCIAL SERVICES-1.2%
108,600 Capital One Financial
Corporation 4,846,275
131,600 Freddie Mac 5,329,800
------------
10,176,075
------------
FOOD & BEVERAGE-0.6%
74,400 Anheuser-Busch
Companies, Inc. 5,556,750
------------
INSURANCE-1.0%
72,900 American International
Group, Inc. 8,565,750
------------
MANUFACTURING-2.1%
389,800 Tyco International
Limited 18,466,775
------------
MEDICAL SUPPLIES & EQUIPMENT-1.7%
106,800 Baxter International,
Inc. 7,509,375
147,200 Guidant Corporation* 7,286,400
------------
14,795,775
------------
OIL & GAS-1.5%
102,400 Exxon Mobile Corporation 8,038,400
120,000 The Williams Companies,
Inc. 5,002,500
------------
13,040,900
------------
</TABLE>

12
<PAGE>
<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
PHARMACEUTICALS-7.9%
250,200 Abbott Laboratories $ 11,149,538
111,300 American Home Products
Corporation 6,538,875
83,300 Bristol-Myers Squibb
Company 4,852,225
98,000 Eli Lilly and Company 9,787,750
44,720 IDEC Pharmaceuticals
Corporation 5,243,420
40,000 MedImmune, Inc.* 2,957,500
451,450 Pfizer, Inc. 21,669,600
129,900 Pharmacia Corporation 6,714,206
------------
68,913,114
------------
PUBLISHING & BROADCASTING-4.2%
89,500 AMFM, Inc.* 6,175,500
296,400 AT&T Corporation-Liberty
Media Group 7,187,700
153,900 Comcast Corporation
Special Class A 6,242,569
146,200 EchoStar Communications
Corporation* 4,842,875
96,500 The McGraw-Hill
Companies, Inc. 5,211,000
97,100 Time Warner, Inc. 7,379,600
------------
37,039,244
------------
RETAIL-2.4%
111,900 Costco Wholesale
Corporation* 3,692,700
113,000 Lowe's Companies, Inc. 4,640,063
99,900 The Home Depot, Inc. 4,988,756
128,400 Wal-Mart Stores, Inc. 7,399,050
------------
20,720,569
------------

SEMICONDUCTORS & EQUIPMENT-7.5%
129,100 Analog Devices, Inc.* $ 9,811,600
85,200 Applied Micro Circuits
Corporation* 8,413,500
140,000 Intel Corporation 18,707,500
60,800 JDS Uniphase
Corporation* 7,284,600
93,000 National Semiconductor
Corporation 5,277,750
168,400 Texas Instruments, Inc. 11,566,975
61,800 Vitesse Semiconductor
Corporation 4,546,163
------------
65,608,088
------------
SUPERMARKETS-0.8%
334,200 The Kroger Company 7,373,288
------------
TELECOMMUNICATION SERVICES-6.1%
190,800 AT&T Corporation 6,034,050
44,800 Juniper Networks, Inc.* 6,518,400
59,600 Level 3 Communications,
Inc.* 5,241,075
98,600 Nextel Communications,
Inc.* 6,033,088
192,500 SBC Communications, Inc. 8,325,625
101,600 US West, Inc. 8,712,200
71,150 WinStar Communications,
Inc.* 2,410,206
225,000 WorldCom, Inc.* 10,321,875
------------
53,596,519
------------
</TABLE>

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS EQUIPMENT-4.6%
80,700 Comverse Technology,
Inc.* $ 7,505,100
26,200 E-Tek Dynamics, Inc.* 6,908,613
167,100 Lucent Technologies,
Inc. 9,900,675
111,200 Nextel Partners, Inc.* 3,620,950
64,300 Qwest Communications
International, Inc.* 3,194,906
57,200 RF Micro Devices, Inc.* 5,005,000
65,000 Tellabs, Inc.* 4,448,438
------------
40,583,682
------------
TOTAL COMMON STOCKS (DOMESTIC)
(COST-$502,057,393) 555,327,475
------------
COMMON STOCKS (FOREIGN)-2.3%
TELECOMMUNICATION SERVICES-1.1%
147,450 Nortel Networks
Corporation Sponsored
ADR (CA) 10,063,595
------------
TELECOMMUNICATIONS EQUIPMENT-1.2%
110,025 Nokia Oyj (FI) 5,494,373
234,875 Telefonaktiebolaget LM
Ericsson Class B
Sponsored ADR (SW) 4,697,500
------------
10,191,873
------------
TOTAL COMMON STOCKS (FOREIGN)
(COST-$17,868,519) 20,255,468
------------
</TABLE>

<TABLE>
<CAPTION>
Principal Amount Market Value
-----------------------------------------------
<C> <S> <C>
CORPORATE BONDS (DOMESTIC)-4.8%
RETAIL-3.0%
$ 7,000,000 Target Corporation
7.50% 02/15/05 7,103,180
20,000,000 Wal-Mart Stores,
Inc. 6.55% 08/10/04 19,736,800
------------
26,839,980
------------

TELECOMMUNICATION SERVICES-0.8%
$ 7,000,000 WorldCom, Inc. 7.75%
04/01/07 $ 6,999,020
------------
TRANSPORTATION-1.0%
9,000,000 Hertz Corporation
6.50% 05/15/06 8,451,180
------------
TOTAL CORPORATE BONDS (DOMESTIC)
(COST-$42,279,742) 42,290,180
------------
U.S. GOVERNMENT SECURITIES-27.5%
U.S. AGENCIES-14.4%
19,715,000 Federal Home Loan
Bank 6.75% 02/15/02 19,666,107
19,865,000 Federal Home Loan
Bank 7.25% 05/15/02 19,980,018
22,500,000 Federal Home Loan
Mortgage Corporation
6.45% 04/29/09
Callable 04/29/02 20,952,450
7,000,000 Federal Home Loan
Mortgage Corporation
6.645% 03/10/04 6,908,650
10,000,000 Federal Home Loan
Mortgage Corporation
6.875% 01/15/05 9,938,400
36,500,000 Federal National
Mortgage Association
6.00% 05/15/08 33,971,645
15,000,000 Sallie Mae Variable
Rate 6.094% 10/19/00 14,991,450
------------
126,408,720
------------
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
Principal Amount Market Value
-----------------------------------------------
<C> <S> <C>
U.S. TREASURY NOTES-13.1%
$10,500,000 U.S. Treasury Note
5.50% 02/15/08 $ 10,053,750
28,925,000 U.S. Treasury Note
5.875% 02/15/04 28,527,281
13,000,000 U.S. Treasury Note
6.25% 02/15/07 13,012,220
11,900,000 U.S. Treasury Note
6.50% 05/15/05 12,030,186
32,150,000 U.S. Treasury Note
6.875% 05/15/06 33,084,279
17,700,000 U.S. Treasury Note
7.25% 05/15/04 18,247,638
------------
114,955,354
------------
TOTAL U.S. GOVERNMENT SECURITIES
(COST-$246,271,238) 241,364,074
------------
</TABLE>

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------
<C> <S> <C>
CORPORATE SHORT-TERM NOTES
FINANCIAL SERVICES-2.0%
$17,200,000 Associates
Corporation N.A.
6.93% 07/03/00 $ 17,193,378
------------
TOTAL CORPORATE
SHORT-TERM NOTES
(AMORTIZED COST-$17,193,378) 17,193,378
------------
TOTAL INVESTMENTS-99.8%
(COST-$825,670,270) 876,430,575
OTHER ASSETS AND
LIABILITIES-0.2% 1,849,945
------------
NET ASSETS-100.0% $878,280,520
============
</TABLE>

* Non-income producing.
See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS
Investment securities, at cost.............................. $825,670,270
------------
Investment securities, at market............................ 876,430,575
Cash........................................................ 2,250,121
Receivables:
Investment securities sold................................ 4,118,386
Capital shares sold....................................... 1,923,200
Dividends and interest.................................... 4,592,904
Other assets................................................ 77,153
------------
Total Assets............................................ 889,392,339
------------

LIABILITIES
Payables:
Investment securities purchased........................... 9,482,507
Capital shares redeemed................................... 471,944
Advisory fees............................................. 422,053
Shareholder servicing fees................................ 10,695
Accounting fees........................................... 16,576
Distribution fees......................................... 363,831
Other..................................................... 286,176
Dividends................................................. 58,037
------------
Total Liabilities....................................... 11,111,819
------------
Net Assets.................................................. $878,280,520
============
</TABLE>

16
<PAGE>

<TABLE>
<S> <C>
Net Assets--Class A......................................... $ 9,664
Shares Outstanding--Class A................................. 921
Net Asset Value and Redemption Price Per Share.............. $ 10.49
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price)........................ $ 11.13
Net Assets--Class B......................................... $ 151,503
Shares Outstanding--Class B................................. 14,517
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share.... $ 10.44
Net Assets--Class C......................................... $ 62,716
Shares Outstanding--Class C................................. 6,032
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share.... $ 10.40
Net Assets--Class F......................................... $878,045,147
Shares Outstanding--Class F................................. 83,924,426
Net Asset Value, Offering and Redemption Price Per Share.... $ 10.46
Net Assets--Class R......................................... $ 1,018
Shares Outstanding--Class R................................. 97
Net Asset Value, Offering and Redemption Price Per Share.... $ 10.47
Net Assets--Class T......................................... $ 10,472
Shares Outstanding--Class T................................. 1,001
Net Asset Value and Redemption Price Per Share.............. $ 10.46
Maximum offering price per share (net asset value plus sales
charge of 4.50% of offering price)........................ $ 10.95
</TABLE>

See notes to financial statements.

17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................. $ 1,483,707
Interest.................................................. 9,769,100
Foreign taxes withheld.................................... (4,189)
------------
Total Investment Income................................. 11,248,618
------------
Expenses:
Advisory fees............................................. 2,680,492
Shareholder servicing fees--Note 2........................ 66,925
Accounting fees........................................... 106,003
Distribution fees--Note 2................................. 1,153,928
Transfer agency fees--Note 2.............................. 553,831
Registration fees......................................... 54,742
Postage and mailing expenses.............................. 58,554
Custodian fees and expenses............................... 18,820
Printing expenses......................................... 87,029
Legal and audit fees...................................... 92,611
Directors' fees and expenses.............................. 65,129
Other expenses............................................ 61,408
------------
Total Expenses.......................................... 4,999,472
Earnings Credits........................................ (66,352)
------------
Net Expenses............................................ 4,933,120
------------
Net Investment Income..................................... 6,315,498
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net Realized Gain (Loss) from Security Transactions:
Proceeds from long-term securities sold................... 680,223,718
Proceeds from long-term U.S. Government Obligations....... 220,306,564
Cost of securities sold................................... 922,617,137
------------
Net Realized (Loss) from Security Transactions.............. (22,086,855)
Net Realized Gain (Loss) from Foreign Currency
Transactions.............................................. 0
Net Change in Unrealized Appreciation/Depreciation.......... 20,907,050
------------
Net Realized and Unrealized (Loss) on Investments and
Foreign Currency Transactions........................... (1,179,805)
------------
Net Increase in Net Assets Resulting from Operations........ $ 5,135,693
============
Purchases of long-term securities........................... $612,230,187
============
Purchases of long-term U.S. Government Obligations.......... $126,147,459
============
</TABLE>

See notes to financial statements.

18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment Income........................ $ 6,315,498 $ 32,920,849
Net Realized Gain (Loss) from Security
Transactions............................... (22,086,855) 13,974,823
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... 0 (1,863)
Net Change in Unrealized
Appreciation/Depreciation.................. 20,907,050 (73,716,183)
-------------- --------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ 5,135,693 (26,822,374)
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... (42) 0
Class B.................................... (532) 0
Class C.................................... (247) 0
Class F.................................... (6,305,040) (32,920,849)
Class R.................................... (8) 0
Class T.................................... (70) 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (41,778,666)
Class R.................................... 0 0
Class T.................................... 0 0
In Excess of Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (114,180)
Class R.................................... 0 0
Class T.................................... 0 0
</TABLE>

* Inception date December 31, 1999, for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
In Excess of Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... $ 0 $ 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (61,157,419)
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
Net (Decrease) from Dividends and
Distributions............................ $ (6,305,939) $ (135,971,114)
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class A.................................... 18,020 1,000
Class B.................................... 155,786 1,000
Class C.................................... 82,309 1,000
Class F.................................... 164,779,175 518,570,342
Class R.................................... 0 1,000
Class T.................................... 9,602 1,000
Reinvested dividends and distributions
Class A.................................... 42 0
Class B.................................... 317 0
Class C.................................... 247 0
Class F.................................... 6,215,573 136,654,564
Class R.................................... 9 0
Class T.................................... 6 0
-------------- --------------
171,261,086 655,229,906
Cost of shares redeemed
Class A.................................... (9,719) 0
Class B.................................... (2,712) 0
Class C.................................... (19,370) 0
Class F.................................... (347,608,351) (680,827,728)
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
(347,640,152) (680,827,728)
-------------- --------------
Net (Decrease) from Capital Share
Transactions............................. (176,379,066) (25,597,822)
-------------- --------------
Net (Decrease) in Net Assets............... (177,549,312) (188,391,310)
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
NET ASSETS
Beginning of period........................ $1,055,829,832 $1,244,221,142
-------------- --------------
End of period.............................. $ 878,280,520 $1,055,829,832
============== ==============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $ 910,785,027 $1,087,164,093
Accumulated undistributed (distribution in
excess of) net investment income........... 5,021 (4,538)
Accumulated undistributed net realized (loss)
from security transactions................. (83,265,486) (61,178,631)
Unrealized appreciation on investments and
foreign currency transactions.............. 50,755,958 29,848,908
-------------- --------------
Total...................................... $ 878,280,520 $1,055,829,832
============== ==============
</TABLE>

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS A SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $10.47
Income from investment operations:
Net investment income................................ 0.08
Net gains on securities (both realized and
unrealized)........................................ 0.01
------
Total from investment operations................ 0.09
Less distributions:
From net investment income........................... (0.07)
From net realized gains.............................. 0.00
------
Total distributions............................. (0.07)
Net Asset Value, end of period........................... $10.49
======
Total Return/Ratios
Total return......................................... 0.86%*
Net assets, end of period (000s)..................... $ 10
Net expenses to average net assets#.................. 1.26%**
Gross expenses to average net assets#................ 1.27%**
Net investment income to average net assets.......... 1.30%**
Portfolio turnover rate@............................. 155%
</TABLE>

<TABLE>
<S> <C>
* Sales charges are not reflected in the total return.
** Annualized.
# Ratio of Net Expenses to Average Net Assets reflects
reductions in a Fund's expenses through the use of brokerage
commissions and custodial and transfer agent credits. Ratio
of Gross Expenses to Average Net Assets is the total of a
Fund's operating expenses before expense offset arrangements
and earnings credits divided by its average net assets for
the stated period.
@ Portfolio Turnover Rate is a measure of portfolio activity
that is calculated by dividing the lesser of purchases or
sales of securities, excluding securities having maturity
dates at acquisition of one year or less, by the average
value of the portfolio securities held during the period,
which is a rolling 12-month period.
</TABLE>

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS B SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 10.47
Income from investment operations:
Net investment income................................ 0.08
Net (losses) on securities (both realized and
unrealized)........................................ (0.04)
--------
Total from investment operations................ 0.04
Less distributions:
From net investment income........................... (0.07)
From net realized gains.............................. 0.00
--------
Total distributions............................. (0.07)
Net Asset Value, end of period........................... $ 10.44
========
Total Return/Ratios
Total return......................................... 0.34%*
Net assets, end of period (000s)..................... $ 152
Net expenses to average net assets#.................. 1.95%**
Gross expenses to average net assets#................ 1.97%**
Net investment income to average net assets.......... 0.74%**
Portfolio turnover rate@............................. 155%
</TABLE>

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS C SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 10.47
Income from investment operations:
Net investment income................................ 0.08
Net (losses) on securities (both realized and
unrealized)........................................ (0.09)
-------
Total from investment operations................ (0.01)
Less distributions:
From net investment income........................... (0.06)
From net realized gains.............................. 0.00
-------
Total distributions............................. (0.06)
Net Asset Value, end of period........................... $ 10.40
=======
Total Return/Ratios
Total return......................................... (0.06%)*
Net assets, end of period (000s)..................... $ 63
Net expenses to average net assets#.................. 1.95%**
Gross expenses to average net assets#................ 1.97%**
Net investment income to average net assets.......... 0.84%**
Portfolio turnover rate@............................. 155%
</TABLE>

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED --------------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- ---------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period....................... $ 10.47 $ 12.19 $ 11.35 $ 10.61 $ 9.58 $ 8.56
Income from investment
operations:
Net investment income...... 0.14 0.32 0.30 0.29 0.28 0.28
Net gains (losses) on
securities (both realized
and unrealized)........... (0.08) (0.61) 1.27 1.48 1.50 2.21
------------ ---------- ---------- -------- -------- --------
Total from investment
operations............ 0.06 (0.29) 1.57 1.77 1.78 2.49
Less distributions:
From net investment
income*................... (0.07) (0.32) (0.30) (0.30) (0.27) (0.28)
From net realized gains.... 0.00 (0.45) (0.43) (0.73) (0.48) (1.19)
In excess of net realized
gains..................... 0.00 (0.66) 0.00 0.00 0.00 0.00
------------ ---------- ---------- -------- -------- --------
Total distributions..... (0.07) (1.43) (0.73) (1.03) (0.75) (1.47)
Net Asset Value, end of
period....................... $ 10.46 $ 10.47 $ 12.19 $ 11.35 $ 10.61 $ 9.58
============ ========== ========== ======== ======== ========
Total Return/Ratios
Total return............... 0.60% (2.22%) 13.96% 16.90% 18.76% 29.40%
Net assets, end of period
(000s).................... $ 878,045 $1,055,825 $1,244,221 $942,690 $394,896 $130,346
Net expenses to average net
assets#................... 1.07%** 0.97% 0.99% 0.99% 1.10% 1.19%
Gross expenses to average
net assets#............... 1.08%** 0.98% 1.00% 1.01% 1.12% 1.23%
Net investment income
(loss) to average net
assets.................... 1.37%** 2.64% 2.51% 2.77% 3.09% 2.92%
Portfolio turnover rate@... 155% 218% 211% 203% 146% 286%
</TABLE>

<TABLE>
<S> <C>
* Distributions in excess of net investment income for the
years ended December 31, 1999 and 1998 aggregated less than
$0.01 on a per share basis.
** Annualized.
# Ratio of Net Expenses to Average Net Assets reflects
reductions in a Fund's expenses through the use of brokerage
commissions and custodial and transfer agent credits. Ratio
of Gross Expenses to Average Net Assets is the total of a
Fund's operating expenses before expense offset arrangements
and earnings credits divided by its average net assets for
the stated period.
@ Portfolio Turnover Rate is a measure of portfolio activity
that is calculated by dividing the lesser of purchases or
sales of securities, excluding securities having maturity
dates at acquisition of one year or less, by the average
value of the portfolio securities held during the period,
which is a rolling 12-month period.
</TABLE>

See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS R SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $10.47
Income from investment operations:
Net investment income................................ 0.18
Net (losses) on securities (both realized and
unrealized)........................................ (0.09)
------
Total from investment operations................ 0.09
Less distributions:
From net investment income........................... (0.09)
From net realized gains.............................. 0.00
------
Total distributions............................. (0.09)
Net Asset Value, end of period........................... $10.47
======
Total Return/Ratios
Total return......................................... 0.85%
Net assets, end of period (000s)..................... $ 1
Net expenses to average net assets#.................. 0.80%*
Gross expenses to average net assets#................ 0.80%*
Net investment income to average net assets.......... 1.69%*
Portfolio turnover rate@............................. 155%
</TABLE>

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS T SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 10.47
Income from investment operations:
Net investment income................................ 0.12
Net (losses) on securities (both realized and
unrealized)........................................ (0.06)
-------
Total from investment operations................ 0.06
Less distributions:
From net investment income........................... (0.07)
From net realized gains.............................. 0.00
-------
Total distributions............................. (0.07)
Net Asset Value, end of period........................... $ 10.46
=======
Total Return/Ratios
Total return......................................... 0.56%*
Net assets, end of period (000s)..................... $ 10
Net expenses to average net assets#.................. 1.29%**
Gross expenses to average net assets#................ 1.31%**
Net investment income to average net assets.......... 1.19%**
Portfolio turnover rate@............................. 155%
</TABLE>

See notes to financial statements.

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Balanced Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

28
<PAGE>

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $329
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $3, $52, $29, and $11, respectively, for shareholder servicing fees
under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net assets
of Class B and Class C shares and 0.25% of the average daily net assets of Class
T

30
<PAGE>

shares. During the six months ended June 30, 2000, Class B, Class C, and Class T
shares were charged $155, $86, and $11, respectively, pursuant to the
Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS
BALANCED FUND
----------------
<S> <C>
Net Capital Loss Carryovers.............................. $ 0
Post-October Capital Loss Deferral....................... $ 61,670,305
Post-October Currency Loss Deferral...................... $ 0
Federal Tax Cost......................................... $827,150,969
Unrealized Appreciation.................................. $ 85,631,809
Unrealized (Depreciation)................................ $(34,711,147)
Net Appreciation......................................... $ 50,920,662
</TABLE>

32
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 850 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED 6/30/00 ENDED 12/31/99*
------------- ---------------
<S> <C> <C>
CLASS A
Shares sold................................ 1,726 96
Shares issued for dividends reinvested..... 4 0
Shares redeemed............................ (905) 0
NET INCREASE IN SHARES OUTSTANDING......... 825 96
CLASS B
Shares sold................................ 14,647 96
Shares issued for dividends reinvested..... 30 0
Shares redeemed............................ (256) 0
NET INCREASE IN SHARES OUTSTANDING......... 14,421 96
CLASS C
Shares sold................................ 7,719 96
Shares issued for dividends reinvested..... 23 0
Shares redeemed............................ (1,806) 0
NET INCREASE IN SHARES OUTSTANDING......... 5,936 96
CLASS F
Shares sold................................ 15,651,031 43,238,372
Shares issued for dividends reinvested..... 584,612 12,956,554
Shares redeemed............................ (33,196,139) (57,397,322)
NET (DECREASE) IN SHARES OUTSTANDING....... (16,960,496) (1,202,396)
CLASS R
Shares sold................................ 0 96
Shares issued for dividends reinvested..... 1 0
Shares redeemed............................ 0 0
NET INCREASE IN SHARES OUTSTANDING......... 1 96
CLASS T
Shares sold................................ 904 96
Shares issued for dividends reinvested..... 1 0
Shares redeemed............................ 0 0
NET INCREASE IN SHARES OUTSTANDING......... 905 96
</TABLE>

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R, and Class T shares.

33
<PAGE>

This page intentionally left blank.
<PAGE>
DREYFUS FOUNDERS FUNDS
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

Date of first use: August 28, 2000

<PAGE>
DREYFUS FOUNDERS
BALANCED FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
-----------------------------------------------------------------------------
A Message from Founders 4
-----------------------------------------------------------------------------
Management Overview 6
-----------------------------------------------------------------------------
Statement of Investments 12
-----------------------------------------------------------------------------
Statement of Assets and Liabilities 16
-----------------------------------------------------------------------------
Statement of Operations 18
-----------------------------------------------------------------------------
Statements of Changes in Net Assets 19
-----------------------------------------------------------------------------
Financial Highlights 22
-----------------------------------------------------------------------------
Notes to Financial Statements 28
-----------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views
and the composition of the Fund's portfolio are subject to change at any time
based on market and other conditions.

-----------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
-----------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

COMPARATIVE INDEXES

o The Standard & Poor's (S&P) 500 Index is a market-value-weighted, unmanaged
index of common stocks considered representative of the broad market.

o The Lipper Balanced Fund Index is an average of the performance of the 30
largest balanced funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

4
<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Curtis Anderson, CFA

HOW DID THE FUND PERFORM DURING THE FIRST HALF OF 2000?

WHAT FACTORS AFFECTED YOUR ASSET ALLOCATION DECISIONS?

--------------------------------------------------------------------------------

FUND AT A GLANCE

This fund invests primarily in a balanced portfolio of common stocks, U.S.
and foreign government obligations, and a variety of corporate
fixed-income securities.

--------------------------------------------------------------------------------

<PAGE>

GROWTH OF $10,000 INVESTMENT

[GRAPH]

<PAGE>

COMPOSITION OF EQUITY ASSETS

[PIE CHART]

Portfolio composition is subject to change.

<PAGE>

WHICH INVESTMENT STRATEGIES PROVED EFFECTIVE DURING THE FIRST SIX MONTHS OF
2000?

AVERAGE ANNUAL TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 5 10 20
DATE DATE* YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 2/19/63 0.60% (2.61%) 12.23% 11.69% 12.53%
</TABLE>

*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00

CLASS B SHARES
With redemption** 12/31/99 -- -- -- (3.67%)
Without redemption 12/31/99 -- -- -- 0.34%

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- (1.06%)
Without redemption 12/31/99 -- -- -- (0.06%)

CLASS R SHARES 12/31/99 -- -- -- 0.85%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- (3.95%)
Without sales charge 12/31/99 -- -- -- 0.56%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.

<PAGE>

--------------------------------------------------------------------------------
Holdings listed are a percentage of equity assets. Portfolio holdings are
subject to change.

<PAGE>

WILL YOUR MANAGEMENT APPROACH REMAIN THE SAME GOING FORWARD?

WHAT DO YOU EXPECT TO SEE IN THE SECOND HALF OF THE YEAR?

/s/ CURTIS ANDERSON

Curtis Anderson, CFA
Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

14
<PAGE>

* Non-income producing.
See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

16
<PAGE>

See notes to financial statements.

17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

See notes to financial statements.

18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

* Inception date December 31, 1999, for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

20
<PAGE>

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Balanced Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

28
<PAGE>

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

30
<PAGE>

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

32
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 850 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R, and Class T shares.

33
<PAGE>

This page intentionally left blank.
<PAGE>

FOR MORE INFORMATION

Dreyfus Founders
Balanced Fund
2930 East Third Avenue
Denver, CO 80206

MANAGER

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

TRANSFER AGENT &
To Obtain Information: DIVIDEND DISBURSING AGENT
-------------------------------
BY TELEPHONE | Dreyfus Transfer, Inc.
Call your financial | P.O. Box 9671
representative or | Providence, RI 02940
1-800-554-4611 |
| DISTRIBUTOR
BY MAIL Write to: |
Dreyfus Founders Funds | Dreyfus Service Corporation
144 Glenn Curtiss Boulevard | 200 Park Avenue
Uniondale, NY 11556-0144 | New York, NY 10166

Founders and Founders Funds are registered trademarks of
Founders Asset Management LLC.

<PAGE>
DREYFUS FOUNDERS
DISCOVERY FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
--------------------------------------------------------------
A Message from Founders 4
--------------------------------------------------------------
Management Overview 6
--------------------------------------------------------------
Statement of Investments 12
--------------------------------------------------------------
Statement of Assets and Liabilities 16
--------------------------------------------------------------
Statement of Operations 18
--------------------------------------------------------------
Statements of Changes in Net Assets 19
--------------------------------------------------------------
Financial Highlights 22
--------------------------------------------------------------
Notes to Financial Statements 28
--------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

---------------------------------------------------------
o Not FDIC-Insured o Not Bank-Guaranteed o May Lose Value
---------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the figures
listed here. Unless otherwise indicated, the Fund's performance is computed
without a sales charge. The Fund's portfolio composition is subject to change
and there is no assurance the Fund will continue to hold any particular
security. Opinions regarding sectors, industries, companies, and/or themes are
subject to change at any time, based on market and other conditions, and should
not be construed as a recommendation of any specific security.

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Part of the Discovery Fund's
historical performance is due to the Fund's purchase of securities sold in
initial public offerings (IPOs). There is no guarantee that the Fund's
investments in IPOs, if any, will continue to have a similar impact on
performance. There are risks associated with small-cap investing such as
limited product lines and small market share.

COMPARATIVE INDEXES

o The Russell 2000 Index is a widely recognized, unmanaged small-cap index
comprising common stocks of the 2,000 U.S. public companies next in size
after the largest 1,000 publicly traded U.S. companies.

o The Lipper Small-Cap Growth Fund Index is an average of the performance of
the 30 largest small-cap growth funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

3
<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

4
<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Rob Ammann, CFA

HOW HAS DISCOVERY FUND PERFORMED RELATIVE TO ITS BENCHMARKS YEAR-TO-DATE?

After posting lofty gains in the middle of the first quarter of 2000, small-cap
stocks were subsequently punished by investors' sudden flight from rapid-growth
sectors during the remainder of the first half. This volatility created a
challenging market environment, but Discovery Fund, thanks to strong stock
selection and meticulous research, fared significantly better than its small-cap
growth peers and benchmarks in the period ended June 30, 2000. While the Fund
posted a negative return in the second quarter, it was relatively minimal, and
we were pleased with the Fund's solid overall performance in the first half.

WHAT MARKET TRENDS IMPACTED YOUR INVESTMENT STRATEGIES IN THE FIRST SIX MONTHS
OF 2000?

Our hands-on management style and dedication to in-depth research, always
valuable when exploring the small-cap market, were vital tools during the
extreme twists and turns small caps experienced during the first half. We have
always been vigilant about avoiding stocks that are merely "news-makers,"

--------------------------------------------------------------------------------

FUND AT A GLANCE

This fund invests primarily in common stocks of small-cap, rapidly growing
U.S. companies with market capitalizations of less than $2.2 billion.

--------------------------------------------------------------------------------
6
<PAGE>

opting instead for small growth companies that show strong earnings. This
proved advantageous as a number of overvalued firms eschewed by Discovery Fund
not only plunged in the second quarter, but also offered little hope of revival
in a less friendly market.

We continued to carefully monitor the 10 largest holdings in the Fund in an
effort to appropriately position the stocks that we believe have the best
appreciation potential. It is fairly common to see stocks "climb" their way to
the top of portfolios after they have exhausted their potential. However, we
try to keep the top 10 "fresh" with our best ideas and monitor the performance
of these holdings with the goal that they outperform the market.

GROWTH OF $10,000 INVESTMENT

[GRAPH]

<TABLE>
<CAPTION>
LIPPER
SMALL CAP
GROWTH
DISCOVERY RUSSELL 200 FD. INX. CPI

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The above graph compares a
$10,000 investment made in Class F shares of Dreyfus Founders Discovery Fund on
6/30/90 to a $10,000 investment made in unmanaged securities indexes and the
Consumer Price Index on that date. On December 31, 1999, the Fund adopted a
multiclass structure. Existing Fund shares were designated as Class F shares and
Class F shares are available only to grandfathered investors. All dividends and
capital gain distributions are reinvested. Performance for Class A, B, C, R and
T shares will vary from the performance of Class F shares shown above due to
differences in charges and expenses. The Fund's performance shown in the line
graph takes into account all applicable fees and net expenses of Class F shares.
More complete information about the indexes shown may be found on page 3.
Further information related to Fund performance is contained elsewhere in this
report.

7
<PAGE>

As our strategies grew more cautious to hedge risk during the market's
second-quarter decline, we gravitated toward these top 10 stocks, resulting in a
slight increase in portfolio concentration among the holdings in which we had
the most confidence.

WHICH INVESTMENT IDEAS CONTRIBUTED THE MOST, AND WHICH CONTRIBUTED THE LEAST TO
DISCOVERY'S PERFORMANCE DURING THE FIRST HALF?

In the first quarter, one idea that was particularly influential was the theme
we call "enabling materials." We are referring to those materials related to
semiconductor advancement--a key growth area in the technology sector as
companies race to discover new materials that offer performance advantages over
silicon. Light-emitting diodes (LEDs)--semiconductors used to enable traffic
lights, digital clocks, and other technologies--are one such material. Several
of the Fund's stocks are related to LEDs. Our holdings in this area, which made
positive contributions to the Fund's overall performance in the first half,
include CREE RESEARCH (+90.62% in the first half of 2000), AMERICAN XTAL
TECHNOLOGY (+184.47%), and EMCORE (+239.44%).

PORTFOLIO COMPOSITION

[PIE CHART]

--------------------------------------------------------------------------------
<TABLE>
<S> <C>
42.42% Technology
12.51% Business Services
10.76% Consumer Cyclicals
8.35% Other Assets & Liabilities
7.41% Energy
7.30% Capital Goods
7.19% Healthcare
2.10% Telecom Services
1.09% Consumer Staples
0.87% Transportation
</TABLE>
--------------------------------------------------------------------------------

Portfolio composition is subject to change.

8
<PAGE>

Another technology-related theme emerged in the second quarter from research
indicating that less than 4% of the buildings in the U.S. have fiberoptic
penetration--yet an insatiable appetite for bandwidth exists in the enterprise
market. As a result, we are seeing great demand for technology that provides
comparable fiber-type bandwidth quickly and easily.

One solution to this is called "broadband fixed wireless." There are a number
of smaller communications equipment companies serving this market by supplying
millimeter wave radios and components allowing voice

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 5 10 SINCE
DATE DATE* YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 12/31/89 20.53% 85.52% 32.34% 24.25% 24.90%
</TABLE>

*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- 13.64%
Without sales charge 12/31/99 -- -- -- 20.57%

CLASS B SHARES
With redemption** 12/31/99 -- -- -- 16.11%
Without redemption 12/31/99 -- -- -- 20.11%

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- 19.13%
Without redemption 12/31/99 -- -- -- 20.13%

CLASS R SHARES 12/31/99 -- -- -- 20.72%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- 15.00%
Without sales charge 12/31/99 -- -- -- 20.40%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

9
<PAGE>

and data to be transmitted and received without the need to lay costly
fiberoptic cable. Some of the companies that are benefiting from this "broadband
fixed wireless" theme and which boosted the Fund's performance are DIGITAL
MICROWAVE, the Fund's largest holding as of June 30, 2000, HARRIS CORPORATION,
REMEC, TELAXIS COMMUNICATIONS, and VYYO, INC.

There were, however, some first-half laggards within the technology sector.
With the second-quarter sell-off, software holdings PC-TEL, INC. and EXCHANGE
APPLICATIONS struggled. However, we continue to have confidence in these
companies' long-term growth prospects, and therefore kept them in the Fund.

The Fund's overweight position in transportation stocks, which served it well
early in the year, proved detrimental later in the half as concerns over a
slowing economy increased. As a result, we cut back or sold many of our holdings
in this area.

LARGEST EQUITY HOLDINGS
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C>
1. Digital Microwave Corporation 3.00%
2. EMCORE Corporation 2.80%
3. Insight Enterprises, Inc. 2.50%
4. Harris Corporation 2.37%
5. REMEC, Inc. 2.19%
6. American Xtal Technology, Inc. 2.15%
7. National-Oilwell, Inc. 1.86%
8. GSI Lumonics, Inc. Sponsored ADR 1.83%
9. Quanta Services, Inc. 1.74%
10. Brooks Automation, Inc. 1.72%
</TABLE>
--------------------------------------------------------------------------------
Portfolio holdings are subject to change.

10
<PAGE>

WHERE DO YOU GET YOUR INVESTMENT IDEAS?

Our investment ideas are the results of the small-cap team's exhaustive equity
research. Using our bottom-up, company-by-company approach, we regularly
identify particular areas of strength within Discovery Fund's portfolio. We then
investigate additional companies positioned to capitalize on the market or
industry dynamics that we've pinpointed during this process, thereby leveraging
our cumulative findings into new investment themes.

We also meet with numerous companies to determine the quality of their
products and the capabilities of their management teams, and we regularly speak
with the executives leading the companies in the Fund. This process keeps us
abreast of the latest news about our holdings, these firms' industries, and the
small-cap market in general. Being well-informed is the first step to generating
ideas.

LOOKING AHEAD, WHAT ENCOURAGES YOU ABOUT THE DOMESTIC SMALL-CAP MARKET?

Although the recent market volatility has hampered many small-cap stocks'
performance of late, our enthusiasm for small-cap investing remains strong. In
fact, we are pleased to be navigating a more value-conscious market, and believe
that this challenging environment will serve as a much-needed test of small
growth companies' mettle. In our opinion, the truly deserving firms will
ultimately flourish, and we invite the opportunity to find them and harness
their vision and earnings potential on behalf of Discovery Fund's future.

/s/ ROBERT AMMANN

Robert Ammann, CFA
Portfolio Manager

11
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Shares Market Value
------------------------------------------------
<C> <S> <C>
COMMON STOCKS (DOMESTIC)-86.1%
AUTO PARTS & EQUIPMENT-1.4%
776,814 Gentex Corporation* $ 19,420,350
--------------
BIOTECHNOLOGY-1.2%
176,845 BioCryst
Pharmaceuticals,
Inc.* 5,073,241
51,750 Myriad Genetics,
Inc.* 7,662,234
24,789 Protein Design Labs,
Inc. 4,088,636
--------------
16,824,111
--------------
BUSINESS SERVICES-12.5%
216,350 Black Box
Corporation* 17,118,694
404,325 Braun Consulting,
Inc.* 8,516,095
165,342 CDW Computer Centers,
Inc.* 10,333,875
182,527 Corporate Executive
Board Company* 10,928,804
103,600 Digex, Inc.* 7,038,325
428,850 Dycom Industries,
Inc.* 19,727,100
363,925 eLoyalty Corporation* 4,594,553
284,850 Globix Corporation* 8,349,666
573,862 Insight Enterprises,
Inc.* 34,037,190
429,912 Quanta Services,
Inc.* 23,645,160
284,500 Razorfish, Inc.* 4,552,000
166,800 Tanning Technology
Corporation* 3,210,900
450,658 The Management
Network Group, Inc.* 15,773,030
436,425 Zamba Corporation* 2,359,444
--------------
170,184,836
--------------
COMPUTER NETWORKING-2.3%
134,240 Alteon Websystems,
Inc.* 13,424,000
328,100 F5 Networks, Inc.* 17,901,956
--------------
31,325,956
--------------

COMPUTER SOFTWARE/SERVICES-9.1%
168,925 Documentum, Inc.* $ 15,076,556
229,925 Eprise Corporation* 3,779,392
362,790 Exchange
Applications, Inc.* 9,613,935
111,995 Interwoven, Inc.* 12,312,450
84,455 Macromedia, Inc.* 8,160,464
322,525 Macrovision
Corporation* 20,601,284
86,450 Mercury Interactive
Corporation* 8,364,038
347,870 PC-TEL, Inc.* 13,219,060
173,986 Peregrine Systems,
Inc.* 6,056,888
337,950 Pinnacle Systems,
Inc.* 7,646,119
107,799 Remedy Corporation* 6,009,794
476,825 Secure Computing
Corporation* 8,940,469
206,858 TenFold Corporation* 3,387,300
--------------
123,167,749
--------------
CONSUMER PRODUCTS-0.7%
543,075 Fossil, Inc.* 10,012,945
--------------
DISTRIBUTION-0.4%
96,115 Patterson Dental
Company* 4,895,858
--------------
ELECTRONICS-2.7%
345,800 Methode Electronics,
Inc. 13,356,525
258,530 SmartDisk
Corporation* 6,786,413
361,286 The Titan Corporation
* 16,167,549
--------------
36,310,487
--------------
FINANCIAL SERVICES-0.7%
310,300 CompuCredit
Corporation* 9,270,213
--------------
HEALTHCARE SERVICES-2.0%
342,617 Accredo Health, Inc.* 11,820,287
274,406 Albany Molecular
Research, Inc.* 14,920,826
--------------
26,741,113
--------------
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
------------------------------------------------
<C> <S> <C>
LEISURE & ENTERTAINMENT-0.7%
458,345 JAKKS Pacific, Inc.* $ 6,731,942
332,072 Liquid Audio, Inc.* 3,144,323
--------------
9,876,265
--------------
MANUFACTURING-5.5%
218,385 Adept Technology,
Inc.* 10,195,850
164,421 American
Superconductor
Corporation* 7,923,037
369,070 AstroPower, Inc.* 9,826,489
98,580 Capstone Turbine
Corporation* 4,454,584
202,250 Insituform
Technologies, Inc.* 5,523,953
390,025 The Shaw Group, Inc. 18,379,928
76,125 Trex Company, Inc.* 3,806,250
344,925 Valence Technology,
Inc.* 6,359,555
605,950 Zomax, Inc.* 7,915,222
--------------
74,384,868
--------------
MEDICAL SUPPLIES & EQUIPMENT-1.9%
58,880 MiniMed, Inc.* 6,963,151
235,600 PolyMedica
Corporation* 10,189,700
166,432 Zoll Medical
Corporation* 8,155,168
--------------
25,308,019
--------------
OIL & GAS-0.3%
258,760 Syntroleum
Corporation* 4,431,265
--------------
OIL SERVICES-5.4%
331,325 Cal Dive
International, Inc.* 17,953,673
242,250 Helmerich and Payne,
Inc. 9,054,094
769,105 National-Oilwell,
Inc.* 25,284,327
801,700 Veritas DGC, Inc. 20,844,200
--------------
73,136,294
--------------

PHARMACEUTICALS-2.1%
204,267 Celgene Corporation* $ 12,026,220
216,975 King Pharmaceuticals,
Inc.* 9,519,778
248,803 Regeneron
Pharmaceuticals,
Inc.* 7,417,439
--------------
28,963,437
--------------
PHOTOGRAPHY & IMAGING-0.7%
455,890 Concord Camera
Corporation 9,459,718
--------------
PUBLISHING & BROADCASTING-2.9%
356,760 Cox Radio, Inc. Class
A* 9,989,280
313,945 Entercom
Communications
Corporation 15,304,819
289,750 Pegasus
Communications
Corporation 14,179,641
--------------
39,473,740
--------------
RESTAURANTS-0.8%
416,675 CEC Entertainment,
Inc.* 10,677,297
--------------
RETAIL-3.5%
410,775 Michaels Stores, Inc. 18,818,630
364,175 The Men's Wearhouse,
Inc.* 8,102,894
270,150 Tweeter Home
Entertainment Group,
Inc.* 8,121,384
491,630 Ultimate Electronics,
Inc.* 13,151,103
--------------
48,194,011
--------------
</TABLE>

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
------------------------------------------------
<C> <S> <C>
SEMICONDUCTORS & EQUIPMENT-15.7%
202,350 Advanced Energy
Industries, Inc.* $ 11,926,003
677,314 American Xtal
Technology, Inc.* 29,251,498
367,270 Brooks Automation,
Inc.* 23,459,371
174,225 Cree Research, Inc.* 23,302,592
317,736 EMCORE Corporation* 38,108,462
185,575 Kopin Corporation* 12,839,470
238,069 Pericom Semiconductor
Corporation* 16,352,364
129,385 PRI Automation, Inc.* 8,458,544
275,425 SanDisk Corporation* 16,852,567
145,615 Silicon Storage
Technology, Inc.* 12,859,625
435,130 Therma-Wave, Inc.* 9,572,860
158,031 Zoran Corporation* 10,420,169
--------------
213,403,525
--------------
TELECOMMUNICATION SERVICES-2.1%
20,477 Aether Systems, Inc.* 4,196,505
101,165 ITXC Corporation* 3,578,712
570,154 Spectrasite Holdings,
Inc.* 16,178,120
114,300 TeleCorp PCS, Inc.* 4,607,719
--------------
28,561,056
--------------

TELECOMMUNICATIONS EQUIPMENT-10.6%
1,070,752 Digital Microwave
Corporation* $ 40,755,498
986,300 Harris Corporation 32,301,325
154,575 Netro Corporation* 8,849,419
713,665 REMEC, Inc.* 29,840,118
191,339 Tekelec* 9,220,148
190,189 Telaxis
Communications
Corporation* 5,931,519
208,350 ViaSat, Inc.* 11,250,900
233,280 Vyyo, Inc.* 6,298,560
--------------
144,447,487
--------------
TRANSPORTATION-0.9%
240,375 C.H. Robinson
Worldwide, Inc. 11,883,539
--------------
TOTAL COMMON STOCKS
(DOMESTIC)
(COST-$846,787,287) 1,170,354,139
--------------
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
------------------------------------------------
<C> <S> <C>
COMMON STOCKS (FOREIGN)-5.6%
ELECTRONICS-0.7%
257,950 Optimal Robotics
Corporation Sponsored
ADR (CA)* $ 9,866,588
--------------
MANUFACTURING-1.8%
709,150 GSI Lumonics, Inc.
Sponsored ADR (CA)* 24,864,572
--------------
OIL SERVICES-1.7%
800,225 Core Laboratories NV
Sponsored ADR (NE)* 23,206,525
--------------
SEMICONDUCTORS & EQUIPMENT-1.4%
330,700 ASM International NV
Sponsored ADR (NE)* 8,763,550
126,100 M-Systems Flash Disk
Pioneers Limited
Sponsored ADR (IS)* 9,812,156
--------------
18,575,706
--------------
TOTAL COMMON STOCKS
(FOREIGN)
(COST-$56,968,443) 76,513,391
--------------
</TABLE>

<TABLE>
<CAPTION>
Principal
Amount Amortized Cost
------------------------------------------------
<C> <S> <C>
CORPORATE SHORT-TERM NOTES-8.7%
CAPTIVE FINANCE AUTOMOTIVE-2.9%
$40,000,000 Ford Motor Credit
Company 6.78%
07/03/00 $ 39,984,933
--------------
FINANCIAL SERVICES-5.8%
22,400,000 American Express
Credit Corporation
6.77% 07/05/00 22,383,150
10,400,000 Associates
Corporation N.A.
6.93% 07/03/00 10,395,996
46,000,000 Morgan Stanley Dean
Witter 6.85%
07/05/00 45,964,989
--------------
78,744,135
--------------
TOTAL CORPORATE SHORT-TERM NOTES
(AMORTIZED COST-$118,729,068) 118,729,068
--------------
TOTAL INVESTMENTS-100.4%
(COST-$1,022,484,798) 1,365,596,598
OTHER ASSETS AND
LIABILITIES-(0.4%) (5,080,591)
--------------
NET ASSETS-100.0% $1,360,516,007
==============
</TABLE>

* Non-income producing.
See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS

Investment securities, at cost............................. $1,022,484,798
--------------
Investment securities, at market........................... 1,365,596,598
Cash....................................................... 4,654,047
Receivables:
Investment securities sold............................... 10,432,800
Capital shares sold...................................... 8,057,926
Dividends and interest................................... 19,230
Other assets............................................... 85,530
--------------
Total Assets........................................... 1,388,846,131
--------------

LIABILITIES
Payables:
Investment securities purchased.......................... 26,203,115
Capital shares redeemed.................................. 291,689
Advisory fees............................................ 799,852
Shareholder servicing fees............................... 53,987
Accounting fees.......................................... 23,573
Distribution fees........................................ 761,072
Other.................................................... 196,836
--------------
Total Liabilities...................................... 28,330,124
--------------

Net Assets................................................. $1,360,516,007
==============
</TABLE>

16
<PAGE>

<TABLE>
<S> <C>
Net Assets--Class A........................................ $ 19,721,494
Shares Outstanding--Class A................................ 400,141
Net Asset Value and Redemption Price Per Share............. $ 49.29
Maximum offering price per share (net asset value plus
sales charge of 5.75% of offering price)................. $ 52.30
Net Assets--Class B........................................ $ 30,809,290
Shares Outstanding--Class B................................ 627,496
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share... $ 49.10
Net Assets--Class C........................................ $ 13,641,099
Shares Outstanding--Class C................................ 277,761
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share... $ 49.11
Net Assets--Class F........................................ $1,290,135,856
Shares Outstanding--Class F................................ 26,195,740
Net Asset Value, Offering and Redemption Price Per Share... $ 49.25
Net Assets--Class R........................................ $ 5,390,181
Shares Outstanding--Class R................................ 109,221
Net Asset Value, Offering and Redemption Price Per Share... $ 49.35
Net Assets--Class T........................................ $ 818,087
Shares Outstanding--Class T................................ 16,621
Net Asset Value and Redemption Price Per Share............. $ 49.22
Maximum offering price per share (net asset value plus
sales charge of 4.50% of offering price)................. $ 51.54
</TABLE>

See notes to financial statements.

17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................. $ 269,917
Interest.................................................. 3,089,024
------------
Total Investment Income................................. 3,358,941
------------
Expenses:
Advisory fees............................................. 4,266,970
Shareholder servicing fees--Note 2........................ 266,049
Accounting fees........................................... 123,648
Distribution fees--Note 2................................. 1,378,263
Transfer agency fees--Note 2.............................. 239,122
Registration fees......................................... 272,628
Postage and mailing expenses.............................. 48,664
Custodian fees and expenses............................... 22,898
Printing expenses......................................... 103,601
Legal and audit fees...................................... 57,888
Directors' fees and expenses.............................. 27,018
Line of Credit expenses................................... 12,006
Other expenses............................................ 87,158
------------
Total Expenses.......................................... 6,905,913
Earnings Credits........................................ (134,180)
------------
Net Expenses............................................ 6,771,733
------------
Net Investment (Loss)..................................... (3,412,792)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net Realized Gain (Loss) from Security Transactions:
Proceeds from long-term securities sold................... 562,774,056
Proceeds from long-term U.S. Government Obligations....... 0
Cost of securities sold................................... 457,737,150
------------
Net Realized Gain from Security Transactions................ 105,036,906
Net Realized Gain (Loss) from Foreign Currency
Transactions.............................................. 0
Net Change in Unrealized Appreciation/Depreciation.......... 85,571,641
------------
Net Realized and Unrealized Gain on Investments and
Foreign Currency Transactions........................... 190,608,547
------------
Net Increase in Net Assets Resulting from Operations........ $187,195,755
============
Purchases of long-term securities........................... $872,500,909
============
Purchases of long-term U.S. Government Obligations.......... $ 0
============
</TABLE>

See notes to financial statements.

18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (3,412,792) $ (3,581,246)
Net Realized Gain from Security
Transactions............................... 105,036,906 149,376,865
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... 0 0
Net Change in Unrealized
Appreciation/Depreciation.................. 85,571,641 196,819,214
-------------- --------------
Net Increase in Net Assets Resulting from
Operations............................... 187,195,755 342,614,833
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (101,164,202)
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
Net (Decrease) from Dividends and
Distributions............................ $ 0 $ (101,164,202)
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>

CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class A.................................... $ 67,068,010 $ 1,000
Class B.................................... 30,226,937 1,000
Class C.................................... 13,418,460 1,000
Class F.................................... 537,725,210 478,102,796
Class R.................................... 5,163,241 1,000
Class T.................................... 774,792 1,000
Shares issued in connection with acquisition
Class F.................................... 0 112,828,331
Reinvested dividends and distributions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 90,038,106
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
654,376,650 680,974,233
Cost of shares redeemed
Class A.................................... (48,892,476) 0
Class B.................................... (648,660) 0
Class C.................................... (227,359) 0
Class F.................................... (237,432,809) (357,391,341)
Class R.................................... (7,561) 0
Class T.................................... (4,773) 0
-------------- --------------
(287,213,638) (357,391,341)
-------------- --------------
Net Increase from Capital Share
Transactions............................. 367,163,012 323,582,892
-------------- --------------
Net Increase in Net Assets................. 554,358,767 565,033,523
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
NET ASSETS
Beginning of period........................ $ 806,157,240 $ 241,123,717
-------------- --------------
End of period.............................. $1,360,516,007 $ 806,157,240
============== ==============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $ 864,933,812 $ 497,770,800
Accumulated undistributed (distribution in
excess of) net investment income........... (3,412,792) 0
Accumulated undistributed net realized gain
from security transactions................. 155,883,187 50,846,281
Unrealized appreciation on investments and
foreign currency transactions.............. 343,111,800 257,540,159
-------------- --------------
Total...................................... $1,360,516,007 $ 806,157,240
============== ==============
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS A SHARES ----------------
<S> <C>
Net Asset Value, beginning of period.................... $ 40.88
Income from investment operations:
Net investment (loss)............................... (0.05)
Net gains on securities (both realized and
unrealized)....................................... 8.46
-------
Total from investment operations............... 8.41
Less distributions:
From net investment income.......................... 0.00
From net realized gains............................. 0.00
-------
Total distributions............................ 0.00
Net Asset Value, end of period.......................... $ 49.29
=======
Total Return/Ratios
Total return........................................ 20.57%*
Net assets, end of period (000s).................... $19,721
Net expenses to average net assets#................. 1.11%**
Gross expenses to average net assets#............... 1.14%**
Net investment (loss) to average net assets......... (0.44%)**
Portfolio turnover rate@............................ 125%
</TABLE>

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS B SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 40.88
Income from investment operations:
Net investment (loss)................................ (0.12)
Net gains on securities (both realized and
unrealized)........................................ 8.34
-------
Total from investment operations................ 8.22
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
-------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 49.10
=======
Total Return/Ratios
Total return......................................... 20.11%*
Net assets, end of period (000s)..................... $30,809
Net expenses to average net assets#.................. 1.85%**
Gross expenses to average net assets#................ 1.88%**
Net investment (loss) to average net assets.......... (1.18%)**
Portfolio turnover rate@............................. 125%
</TABLE>

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS C SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 40.88
Income from investment operations:
Net investment (loss)................................ (0.10)
Net gains on securities (both realized and
unrealized)........................................ 8.33
-------
Total from investment operations................ 8.23
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
-------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 49.11
=======
Total Return/Ratios
Total return......................................... 20.13%*
Net assets, end of period (000s)..................... $13,641
Net expenses to average net assets#.................. 1.82%**
Gross expenses to average net assets#................ 1.85%**
Net investment (loss) to average net assets.......... (1.16%)**
Portfolio turnover rate@............................. 125%
</TABLE>

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period.......................... $ 40.86 $ 24.37 $ 23.45 $ 24.22 $ 21.70 $ 19.88
Income from investment
operations:
Net investment income
(loss)....................... 0.24 (0.08) (0.07) 0.07 (0.20) (0.12)
Net gains (losses) on
securities (both realized and
unrealized).................. 8.15 22.72 3.15 2.69 4.72 6.29
---------- -------- -------- -------- -------- --------
Total from investment
operations............... 8.39 22.64 3.08 2.76 4.52 6.17
Less distributions:
From net investment income.... 0.00 0.00 0.00 0.00 0.00 0.00
From net realized gains....... 0.00 (6.15) (2.16) (3.53) (2.00) (4.35)
---------- -------- -------- -------- -------- --------
Total distributions........ 0.00 (6.15) (2.16) (3.53) (2.00) (4.35)
Net Asset Value, end of
period....................... $ 49.25 $ 40.86 $ 24.37 $ 23.45 $ 24.22 $ 21.70
========== ======== ======== ======== ======== ========
Total Return/Ratios
Total return.................. 20.53% 94.59% 14.19% 12.00% 21.20% 31.30%
Net assets, end of period
(000s)....................... $1,290,136 $806,152 $241,124 $246,281 $247,494 $216,623
Net expenses to average net
assets#...................... 1.25%* 1.45% 1.55% 1.52% 1.58% 1.58%
Gross expenses to average net
assets#...................... 1.27%* 1.46% 1.57% 1.54% 1.59% 1.63%
Net investment (loss) to
average net assets........... (0.63%)* (0.96%) (0.91%) (0.55%) (0.85%) (0.60%)
Portfolio turnover rate@...... 125% 157% 121% 90% 106% 118%
</TABLE>

See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS R SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 40.88
Income from investment operations:
Net investment income................................ 0.01
Net gains on securities (both realized and
unrealized)........................................ 8.46
-------
Total from investment operations................ 8.47
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
-------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 49.35
=======
Total Return/Ratios
Total return......................................... 20.72%
Net assets, end of period (000s)..................... $ 5,390
Net expenses to average net assets#.................. 0.90%**
Gross expenses to average net assets#................ 0.94%**
Net investment (loss) to average net assets.......... (0.19%)**
Portfolio turnover rate@............................. 125%
</TABLE>

<TABLE>
<S> <C>
* Annualized
# Ratio of Net Expenses to Average Net Assets reflects
reductions in a Fund's expenses through the use of brokerage
commissions and custodial and transfer agent credits. Ratio
of Gross Expenses to Average Net Assets is the total of a
Fund's operating expenses before expense offset arrangements
and earnings credits divided by its average net assets for
the stated period.
@ Portfolio Turnover Rate is a measure of portfolio activity
that is calculated by dividing the lesser of purchases or
sales of securities, excluding securities having maturity
dates at acquisition of one year or less, by the average
value of the portfolio securities held during the period,
which is a rolling 12-month period.
</TABLE>

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS T SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 40.88
Income from investment operations:
Net investment (loss)................................ (0.07)
Net gains on securities (both realized and
unrealized)........................................ 8.41
-------
Total from investment operations................ 8.34
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
-------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 49.22
=======
Total Return/Ratios
Total return......................................... 20.40%*
Net assets, end of period (000s)..................... $ 818
Net expenses to average net assets#.................. 1.34%**
Gross expenses to average net assets#................ 1.37%**
Net investment (loss) to average net assets.......... (0.68%)**
Portfolio turnover rate@............................. 125%
</TABLE>

See notes to financial statements.

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Discovery Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

28
<PAGE>

FEDERAL INCOME TAXES--No provision has been made for federal income taxes
since it is the policy of the Fund to comply with the special provisions of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies, and to make distributions of income and capital gains sufficient to
relieve it from all income taxes. The Fund is treated as a separate tax entity
for federal income tax purposes.
INVESTMENT INCOME--Dividend income is recorded on the ex-dividend date.
Certain dividends from foreign securities will be recorded as soon as the Fund
is informed of the dividend if such information is obtained subsequent to the
ex-dividend date. Interest income is accrued daily and includes the accretion of
discounts and the amortization of premiums.
DISTRIBUTIONS TO SHAREHOLDERS--The Fund declares and distributes dividends and
capital gains (if any) annually. All dividends and distributions are recorded on
the ex-dividend date.
EXPENSES--Each Class of the Fund bears expenses incurred specifically on its
behalf and, in addition, each Class bears a portion of general expenses based on
the relative net assets, or number of shareholder accounts of the Class. The
type of expense determines the allocation method.
ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
OTHER--Security transactions are recorded on the date the securities are
purchased or sold (trade date).
2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
In accordance with an investment advisory agreement between the Company and
Founders Asset Management LLC ("Founders"), the Fund compensates Founders for
its services as investment adviser by the payment of fees computed daily and
paid monthly at the annual rate equal to a percentage of the average daily value
of the Fund's net assets. The fee is 1% of the first $250 million of net assets,
0.80% of the next $250 million of net assets, and 0.70% of net assets in excess
of $500 million.
Effective March 22, 2000, Dreyfus Service Corporation (the "Distributor"), a
wholly-owned subsidiary of The Dreyfus Corporation (an affiliate of Founders)
became the distributor of the Fund's shares. The Distributor retained $32,095
during the six months ended June 30, 2000 from commissions earned on sales of
Fund shares.

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $2,780
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $10,803, $15,489, $6,069, and $402, respectively, for shareholder
servicing fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net

30
<PAGE>

assets of Class B and Class C shares and 0.25% of the average daily net assets
of Class T shares. During the six months ended June 30, 2000, Class B, Class C,
and Class T shares were charged $46,467, $18,206, and $402, respectively,
pursuant to this Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS
DISCOVERY FUND
----------------
<S> <C>
Net Capital Loss Carryovers.............................. $ 0
Post-October Capital Loss Deferral....................... $ 0
Post-October Currency Loss Deferral...................... $ 0
Federal Tax Cost......................................... $1,022,642,147
Unrealized Appreciation.................................. $ 390,584,333
Unrealized (Depreciation)................................ $ (47,334,494)
Net Appreciation......................................... $ 343,249,839
</TABLE>

32
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 450 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED 6/30/00 ENDED 12/31/99*
-------------- ---------------
<S> <C> <C>
CLASS A
Shares sold........................... 1,450,763 25
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (1,050,647) 0
NET INCREASE IN SHARES OUTSTANDING.... 400,116 25
CLASS B
Shares sold........................... 641,540 25
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (14,069) 0
NET INCREASE IN SHARES OUTSTANDING.... 627,471 25
CLASS C
Shares sold........................... 282,616 25
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (4,880) 0
NET INCREASE IN SHARES OUTSTANDING.... 277,736 25
CLASS F
Shares sold........................... 11,751,836 14,796,323
Shares issued in connection with
acquisition......................... 0 4,485,102
Shares issued for dividends
reinvested.......................... 0 2,350,865
Shares redeemed....................... (5,288,259) (11,793,719)
NET INCREASE IN SHARES OUTSTANDING.... 6,463,577 9,838,571
CLASS R
Shares sold........................... 109,357 25
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (161) 0
NET INCREASE IN SHARES OUTSTANDING.... 109,196 25
CLASS T
Shares sold........................... 16,700 25
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... 104 0
NET INCREASE IN SHARES OUTSTANDING.... 16,596 25
</TABLE>

* From December 30, 1999 (commencement of initial offering) to December 31,
1999, for Class A, Class B, Class C, Class R, and Class T shares.

33
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

5. LINE OF CREDIT
Discovery, Mid-Cap Growth, and Passport Funds have a Line of Credit Arrangement
("LOC") with State Street, to be used for extraordinary or emergency purposes,
primarily for financing redemption payments. For Discovery and Passport Funds,
borrowings will be limited to 10% of each Fund's net assets computed at the
lesser of cost or market value. Mid-Cap Growth Fund may borrow amounts up to 10%
of the market value of the net assets of the Fund. Combined borrowings will be
subject to the $75 million cap on the total LOC. Each fund agrees to pay annual
fees and interest on the unpaid balance based on prevailing market rates as
defined in the LOC. At June 30, 2000 there were no such borrowings.

34
<PAGE>

This page intentionally left blank.
<PAGE>
DREYFUS FOUNDERS FUNDS
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

Date of first use: August 28, 2000

<PAGE>
DREYFUS FOUNDERS
DISCOVERY FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

---------------------------------------------------------
o Not FDIC-Insured o Not Bank-Guaranteed o May Lose Value
---------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the figures
listed here. Unless otherwise indicated, the Fund's performance is computed
without a sales charge. The Fund's portfolio composition is subject to change
and there is no assurance the Fund will continue to hold any particular
security. Opinions regarding sectors, industries, companies, and/or themes are
subject to change at any time, based on market and other conditions, and should
not be construed as a recommendation of any specific security.

COMPARATIVE INDEXES

o The Lipper Small-Cap Growth Fund Index is an average of the performance of
the 30 largest small-cap growth funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

3
<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

4
<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Rob Ammann, CFA

HOW HAS DISCOVERY FUND PERFORMED RELATIVE TO ITS BENCHMARKS YEAR-TO-DATE?

WHAT MARKET TRENDS IMPACTED YOUR INVESTMENT STRATEGIES IN THE FIRST SIX MONTHS
OF 2000?

--------------------------------------------------------------------------------

FUND AT A GLANCE

This fund invests primarily in common stocks of small-cap, rapidly growing
U.S. companies with market capitalizations of less than $2.2 billion.

--------------------------------------------------------------------------------
6
<PAGE>

GROWTH OF $10,000 INVESTMENT

[GRAPH]

<TABLE>
<CAPTION>
LIPPER
SMALL CAP
GROWTH
DISCOVERY RUSSELL 200 FD. INX. CPI

7
<PAGE>

WHICH INVESTMENT IDEAS CONTRIBUTED THE MOST, AND WHICH CONTRIBUTED THE LEAST TO
DISCOVERY'S PERFORMANCE DURING THE FIRST HALF?

PORTFOLIO COMPOSITION

[PIE CHART]

Portfolio composition is subject to change.

8
<PAGE>

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 5 10 SINCE
DATE DATE* YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 12/31/89 20.53% 85.52% 32.34% 24.25% 24.90%
</TABLE>

*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00

CLASS B SHARES
With redemption** 12/31/99 -- -- -- 16.11%
Without redemption 12/31/99 -- -- -- 20.11%

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- 19.13%
Without redemption 12/31/99 -- -- -- 20.13%

CLASS R SHARES 12/31/99 -- -- -- 20.72%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- 15.00%
Without sales charge 12/31/99 -- -- -- 20.40%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

9
<PAGE>

10
<PAGE>

WHERE DO YOU GET YOUR INVESTMENT IDEAS?

LOOKING AHEAD, WHAT ENCOURAGES YOU ABOUT THE DOMESTIC SMALL-CAP MARKET?

/s/ ROBERT AMMANN

Robert Ammann, CFA
Portfolio Manager

11
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

12
<PAGE>

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

14
<PAGE>

* Non-income producing.
See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS

Net Assets................................................. $1,360,516,007
==============
</TABLE>

16
<PAGE>

See notes to financial statements.

17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

See notes to financial statements.

18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>

20
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
NET ASSETS
Beginning of period........................ $ 806,157,240 $ 241,123,717
-------------- --------------
End of period.............................. $1,360,516,007 $ 806,157,240
============== ==============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $ 864,933,812 $ 497,770,800
Accumulated undistributed (distribution in
excess of) net investment income........... (3,412,792) 0
Accumulated undistributed net realized gain
from security transactions................. 155,883,187 50,846,281
Unrealized appreciation on investments and
foreign currency transactions.............. 343,111,800 257,540,159
-------------- --------------
Total...................................... $1,360,516,007 $ 806,157,240
============== ==============
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Discovery Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

28
<PAGE>

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $2,780
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $10,803, $15,489, $6,069, and $402, respectively, for shareholder
servicing fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net

30
<PAGE>

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

32
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 450 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

* From December 30, 1999 (commencement of initial offering) to December 31,
1999, for Class A, Class B, Class C, Class R, and Class T shares.

33
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

34
<PAGE>

This page intentionally left blank.
<PAGE>

FOR MORE INFORMATION

Dreyfus Founders
Discovery Fund
2930 East Third Avenue
Denver, CO 80206

MANAGER

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

Founders and Founders Funds are registered trademarks of
Founders Asset Management LLC.

<PAGE>
DREYFUS FOUNDERS
FOCUS FUND

SEMIANNUAL REPORT
JUNE 30, 2000

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
-------------------------------------------------------------------------------
A Message from Founders 4
-------------------------------------------------------------------------------
Management Overview 6
-------------------------------------------------------------------------------
Statement of Investments 12
-------------------------------------------------------------------------------
Statement of Assets and Liabilities 13
-------------------------------------------------------------------------------
Statement of Operations 15
-------------------------------------------------------------------------------
Statements of Changes in Net Assets 16
-------------------------------------------------------------------------------
Financial Highlights 19
-------------------------------------------------------------------------------
Notes to Financial Statements 25
-------------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.

------------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
------------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the
figures listed here. The Fund's portfolio composition is subject to change and
there is no assurance the Fund will continue to hold any particular security.
Opinions regarding sectors, industries, companies, and/or themes are subject to
change at any time, based on market and other conditions, and should not be
construed as a recommendation of any specific security.

COMPARATIVE INDEXES

The comparative indexes mentioned in this report are meant to provide a basis
for judging the Fund's performance against its peer group and/or a specific
unmanaged securities index. Each benchmark accounts for both change in security
price and reinvestment of any dividends or coupon payments. The securities
indexes are unmanaged groups of securities; they do not reflect the costs of
managing a mutual fund.

o The Standard & Poor's (S&P) 500 Index is a market-value-weighted, unmanaged
index of common stocks considered representative of the broad market.

o The Russell 1000 Growth Index is an unmanaged index that measures the
performance of those common stocks of the largest 1,000 publicly traded
U.S. companies with higher price-to-book ratios and higher forecasted
growth values.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

Although it's impossible to predict where these and other changes will
take the world--and how they will affect investors and the markets--I believe
in one thing with greater certainty than any other: growth. And as a long-term
investor like you, my goal is to harness its potential on behalf of my
investments.

A CHALLENGING FIRST HALF

Yet by mid-March, the markets had begun to show an entirely different
side. Suddenly, investors were exuding uncertainty, providing a stark contrast
to the confidence that prevailed earlier in the year. Behind this shift were
many factors, including concern over the U.S. Federal Reserve Board's interest
rate increases and questions about high stock valuations. And unfortunately,
investors' apprehension was global in scope, as international markets responded
to these events as well as to the overall weakness in the NASDAQ Composite
Index and the struggles of a

<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

A discussion with portfolio manager Scott Chapman, CFA

HOW HAS FOCUS FUND PERFORMED SINCE ITS INCEPTION ON DECEMBER 31, 1999?

The Dreyfus Founders Focus Fund posted an exceptional return in the first
quarter, but gave some ground in the second as the large-cap technology market
experienced a sell-off. With this sell-off came erratic market movements,
triggered in large part by the Federal Reserve Board's interest rate increases.
However, Focus Fund stood its ground and finished on a strong note; its Class F
shares outperformed the Standard & Poor's (S&P) 500 Index and the Fund's
large-cap growth peer average during the half.*

WHAT WAS YOUR APPROACH TO MANAGING THE FUND DURING ITS FIRST SIX MONTHS?

Focus Fund invests in a concentrated portfolio of 20-30 large-cap stocks, and
in order to optimize this concentration, we manage the Fund by mining our
equity research for growth investments in which we have the greatest

--------------------------------------------------------------------------
FUND AT A GLANCE

Focus Fund seeks long-term growth by normally investing in a concentrated
portfolio of 20-30 common stocks that are selected for their long-term
growth potential. Although the Fund can invest in any size company, it
generally invests in larger, more established companies.
--------------------------------------------------------------------------

*Performance for Class A, B, C, R, and T shares will vary from the performance
of Class F shares due to differences in charges and expenses.

<PAGE>

confidence. The result is a Fund anchored by an elite group of large-cap
companies that exhibit what we believe are superior earnings growth and
sustainable advantages over their competitors.

Typically, these firms are also undergoing a positive transformation
following a strategic inflection point in their business cycles. We have found
that such transformations can often be traced back to a number of catalysts,
including the launch of a new product, the hiring of new management, or the
realization of new opportunities following regulatory changes. Another feature
of some companies in the portfolio is their participation in a market that is
growing rapidly or in the process of being revolutionized.

Finding and choosing such a small number of market-leading companies is
strictly directed by our intensive, bottom-up research. We believe strongly in
the value of meeting company management teams face-to-face, and therefore these
meetings are consistently one of our top priorities. We also frequently check
in with company leaders, and speak on a daily basis with our Wall Street
contacts and our knowledgeable team of in-house analysts. We round out this
research with in-depth reading of trade journals and attendance at industry
trade shows.

WHICH STRATEGIES HELPED OR HURT THE FUND IN THE FIRST HALF?

The Fund is positioned to benefit from the rapid-growth opportunities presented
by technology-oriented "New Economy" companies in industries such as wireless,
Internet infrastructure, business-to-business e-commerce, life sciences, and
entertainment content. In considering short-term performance, this strategy was
successful in the first quarter, but gave ground in the second quarter as
investors fled to "Old Economy" investments they deemed more stable in light of
the Federal Reserve Board's aggressive interest rate hikes.

<PAGE>

Indeed, investors' concerns over higher interest rates caused a widespread
sell-off in the latter part of the half, and "New Economy" stocks were
particularly vulnerable to this unfortunate market dip. As a result, we saw
many of the Fund's holdings drop. Still, the Fund's Class F performance for
the first half exceeded the S&P 500, the Russell 1000 Growth Index, and the
large-cap growth peer average.*

We believe it is important to maintain a long-term perspective in choosing
stocks, and in our opinion the technology sell-off was largely indiscriminate.
While it's true that tech companies tend to have the highest price-to-earnings
ratios--a fact that led many investors to claim in the first half that these
issues were overvalued--we gauge earnings growth based on five-year
projections. Also, we were impressed with our technology holdings' solid
business performances in the first half. For these reasons, we chose to ride
out the market's volatility and remain invested in the companies that we felt
were fundamentally strong.

[PIE CHART]
PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------
40.64% Technology
14.51% Telecom Services
11.61% Healthcare
11.06% Consumer Staples
10.45% Consumer Cyclicals
6.10% Capital Goods
3.22% Financial
2.41% Other Assets & Liabilities
-------------------------------------------------------------------------------

Portfolio composition is subject to change.

*Performance for Class A, B, C, R, and T shares will vary from the performance
of Class F shares due to differences in charges and expenses.

<PAGE>

Some of the investment ideas that proved fruitful in the first half even as
the market as a whole struggled included CORNING, a premier provider of a
variety of products, such as optical fiber and cable products, high-performance
glass, advanced optical materials, and ceramic substrates. Corning benefited
from strong demand for optical-communications technologies used to expand the
capacity of the Internet.

We were also pleased with the performance of PFIZER. One of the world's top
pharmaceutical companies, Pfizer makes drugs such as the anti-hypertensive
Norvasc, the antibiotic Zithromax, the antidepressant Zoloft, and the erectile
dysfunction drug Viagra. In November 1999, Pfizer agreed to purchase
Warner-Lambert, and when combined, the company expects strong annual growth
for the next three years.

AGGREGATE TOTAL RETURN AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- (1.23%)
Without sales charge 12/31/99 -- -- -- 4.80%

CLASS B SHARES
With redemption* 12/31/99 -- -- -- 0.40%
Without redemption 12/31/99 -- -- -- 4.40%

CLASS C SHARES
With redemption** 12/31/99 -- -- -- 3.40%
Without redemption 12/31/99 -- -- -- 4.40%

CLASS F SHARES 12/31/99 -- -- -- 4.72%

CLASS R SHARES 12/31/99 -- -- -- 9.52%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- 1.47%
Without sales charge 12/31/99 -- -- -- 6.24%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

*The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to
Class A shares.

**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.

<PAGE>

WHAT HAVE BEEN SOME OF THE CHALLENGES IN MANAGING A CONCENTRATED LARGE-CAP
FUND, AND HOW HAVE YOU MET THESE CHALLENGES?

Of course, market volatility is always something we must contend with, but it
provides us with opportunities to buy companies at better prices, which we did
in the first half. A smaller number of heavier-weighted portfolio

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
LARGEST EQUITY HOLDINGS
<S> <C> <C>
1. Corning, Inc. 6.10%
2. JDS Uniphase Corporation 5.72%
3. Redback Networks, Inc. 5.30%
4. Juniper Networks, Inc. 5.17%
5. Pfizer, Inc. 4.98%
6. Broadcom Corporation 4.73%
7. Comcast Corporation Special Class A 4.68%
8. Verisign, Inc. 4.61%
9. Nokia Oyj Sponsored ADR 4.19%
10. Nortel Networks Corporation Sponsored ADR 4.03%
-------------------------------------------------------------------------------
</TABLE>

Portfolio holdings are subject to change.

10
<PAGE>

holdings means less diversity, which in turn invites greater volatility. We met
this challenge in the first half by sticking to our growth-oriented philosophy
and focusing on businesses' fundamentals rather than on daily market shifts.
While it's important to analyze market movements, we always do so from the
bottom-up and with a forward-looking view; in our opinion, this approach helped
the Fund stay the course in the first half.

WHAT WILL YOUR STRATEGY BE GOING FORWARD?

It is difficult to predict the market's future, but our outlook for the Fund is
positive. We will continue to practice our bottom-up, company-by-company
research and target the firms that we believe represent the most promising
growth prospects.

/s/ SCOTT CHAPMAN

Scott Chapman, CFA
Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
COMMON STOCKS (DOMESTIC)-89.4%
BANKING-3.2%
4,025 Citigroup, Inc. $ 242,506
----------
BIOTECHNOLOGY-3.4%
1,470 Genentech, Inc.* 252,840
----------
COMPUTER NETWORKING-3.9%
4,625 Cisco Systems, Inc.* 293,977
----------
COMPUTER SOFTWARE/SERVICES-9.9%
2,225 Redback Networks, Inc.* 398,831
1,969 VeriSign, Inc.* 347,159
----------
745,990
----------
DIVERSIFIED-6.1%
1,700 Corning, Inc. 458,788
----------
LEISURE & ENTERTAINMENT-3.1%
6,025 The Walt Disney Company 233,845
----------
MEDICAL SUPPLIES & EQUIPMENT-3.3%
3,500 Baxter International,
Inc. 246,094
----------
PHARMACEUTICALS-5.0%
7,800 Pfizer, Inc. 374,400
----------
PUBLISHING & BROADCASTING-14.4%
3,775 AMFM, Inc.* 260,475
9,048 AT&T Corporation-Liberty
Media Group 219,414
8,675 Comcast Corporation
Special Class A 351,880
7,470 EchoStar Communications
Corporation* 247,444
----------
1,079,213
----------
RETAIL-4.0%
4,050 The Home Depot, Inc. 202,247
1,775 Wal-Mart Stores, Inc. 102,284
----------
304,531
----------
</TABLE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
SEMICONDUCTORS & EQUIPMENT-20.3%
2,600 Applied Micro Circuits
Corporation* $ 256,750
1,627 Broadcom Corporation* 356,211
1,925 Intel Corporation 257,228
3,592 JDS Uniphase Corporation* 430,367
3,275 Texas Instruments, Inc. 224,952
----------
1,525,508
----------
TELECOMMUNICATION SERVICES-10.5%
2,675 Juniper Networks, Inc.* 389,213
2,458 Sprint Corporation (PCS
Group)* 146,251
2,176 VoiceStream Wireless
Corporation* 253,096
----------
788,560
----------
TELECOMMUNICATIONS EQUIPMENT-2.3%
1,600 Sycamore Networks, Inc.* 176,600
----------
TOTAL COMMON STOCKS
(DOMESTIC)
(COST-$6,143,038) 6,722,852
----------
COMMON STOCKS (FOREIGN)-8.2%
TELECOMMUNICATION SERVICES-4.0%
4,443 Nortel Networks
Corporation Sponsored ADR
(CA) 303,235
----------
TELECOMMUNICATIONS EQUIPMENT-4.2%
6,313 Nokia Oyj Sponsored ADR
(FI) 315,255
----------
TOTAL COMMON STOCKS
(FOREIGN)
(COST-$589,408) 618,490
----------
TOTAL INVESTMENTS-97.6%
(COST-$6,732,446) 7,341,342
OTHER ASSETS AND
LIABILITIES-2.4% 181,342
----------
NET ASSETS-100.0% $7,522,684
==========
</TABLE>

* Non-income producing.
See notes to financial statements.

12
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS
Investment securities, at cost.............................. $6,732,446
----------
Investment securities, at market............................ 7,341,342
Cash........................................................ 40,350
Receivables:
Investment securities sold................................ 207,827
Capital shares sold....................................... 27,464
Dividends and interest.................................... 345
From adviser.............................................. 3,988
Other assets................................................ 5,286
----------
Total Assets............................................ 7,626,602
----------

LIABILITIES
Payables:
Investment securities purchased........................... 89,278
Advisory fees............................................. 6,176
Shareholder servicing fees................................ 1,557
Accounting fees........................................... 167
Distribution fees......................................... 5,223
Other..................................................... 1,517
----------
Total Liabilities....................................... 103,918
----------
Net Assets.................................................. $7,522,684
==========
</TABLE>
See notes to financial statements.

13
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited) (continued)

<TABLE>
<S> <C>
Net Assets--Class A.................................................... $ 248,486
Shares Outstanding--Class A............................................ 18,984
Net Asset Value and Redemption Price Per Share......................... $ 13.10
Maximum offering price per share (net asset value plus sales charge of
5.75% of offering price)............................................. $ 13.90

Net Assets--Class B.................................................... $ 564,808
Shares Outstanding--Class B............................................ 43,323
Net Asset Value, Offering and Redemption Price (excluding applicable
contingent deferred sales charge) Per Share.......................... $ 13.05

Net Assets--Class C.................................................... $ 30,266
Shares Outstanding--Class C............................................ 2,322
Net Asset Value, Offering and Redemption Price (excluding applicable
contingent deferred sales charge) Per Share.......................... $ 13.05

Net Assets--Class F.................................................... $ 6,676,969
Shares Outstanding--Class F............................................ 510,552
Net Asset Value, Offering and Redemption Price Per Share............... $ 13.09

Net Assets--Class R.................................................... $ 1,094
Shares Outstanding--Class R............................................ 80
Net Asset Value, Offering and Redemption Price Per Share............... $ 13.69

Net Assets--Class T.................................................... $ 1,061
Shares Outstanding--Class T............................................ 80
Net Asset Value and Redemption Price Per Share......................... $ 13.28
Maximum offering price per share (net asset value plus sales charge of
4.50% of offering price)............................................. $ 13.91
</TABLE>

See notes to financial statements.
14
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................. $ 5,106
Interest.................................................. 15,256
Foreign taxes withheld.................................... (191)
------------
Total Investment Income................................. 20,171
------------
Expenses:
Advisory fees............................................. 28,980
Shareholder servicing fees--Note 2........................ 8,294
Accounting fees........................................... 783
Distribution fees--Note 2................................. 9,063
Transfer agency fees--Note 2.............................. 2,061
Registration fees......................................... 10,075
Postage and mailing expenses.............................. 160
Custodian fees and expenses............................... 5,784
Printing expenses......................................... 703
Legal and audit fees...................................... 194
Directors' fees and expenses.............................. 180
Other expenses............................................ 447
------------
Total Expenses.......................................... 66,724
Earnings Credits........................................ (4,459)
Reimbursed/Waived Expenses.............................. (3,988)
Expense Offset to Broker Commissions.................... (425)
------------
Net Expenses............................................ 57,852
------------
Net Investment (Loss)................................. (37,681)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net Realized Gain (Loss) from Security Transactions:
Proceeds from long-term securities sold................... 12,612,979
Proceeds from long-term U.S. Government Obligations....... 0
Cost of securities sold................................... 13,588,375
------------
Net Realized (Loss) from Security Transactions.............. (975,396)
Net Realized Gain (Loss) from Foreign Currency
Transactions.............................................. 0
Net Change in Unrealized Appreciation/Depreciation.......... 594,533
------------
Net Realized and Unrealized (Loss) on Investments and
Foreign Currency Transactions........................... (380,863)
------------
Net (Decrease) in Net Assets Resulting from Operations...... $ (418,544)
============
Purchases of long-term securities........................... $ 18,414,468
============
Purchases of long-term U.S. Government Obligations.......... $ 0
============
</TABLE>

See notes to financial statements.

15
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- ----------
<S> <C> <C>
OPERATIONS
Net Investment Income (Loss).................... $ (37,681) $ 72
Net Realized Gain (Loss) from Security
Transactions.................................. (975,396) 0
Net Realized Gain (Loss) from Foreign Currency
Transactions.................................. 0 0
Net Change in Unrealized
Appreciation/Depreciation..................... 594,533 14,361
----------- ----------
Net Increase (Decrease) in Net Assets
Resulting from Operations................... (418,544) 14,433
----------- ----------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A....................................... 0 0
Class B....................................... 0 0
Class C....................................... 0 0
Class F....................................... 0 0
Class R....................................... 0 0
Class T....................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency Transactions
Class A....................................... 0 0
Class B....................................... 0 0
Class C....................................... 0 0
Class F....................................... 0 0
Class R....................................... 0 0
Class T....................................... 0 0
----------- ----------
Net (Decrease) from Dividends and
Distributions............................... 0 0
----------- ----------
</TABLE>

16
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- ----------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class A....................................... 307,776 750,000
Class B....................................... 640,590 250,000
Class C....................................... 28,400 250,000
Class F....................................... 7,765,870 250,000
Class R....................................... 0 250,000
Class T....................................... 0 250,000
Reinvested dividends and distributions
Class A....................................... 0 0
Class B....................................... 0 0
Class C....................................... 0 0
Class F....................................... 0 0
Class R....................................... 0 0
Class T....................................... 0 0
----------- ----------
8,742,636 2,000,000
Cost of shares redeemed
Class A....................................... (792,029) 0
Class B....................................... (291,339) 0
Class C....................................... (248,962) 0
Class F....................................... (979,953) 0
Class R....................................... (252,737) 0
Class T....................................... (250,821) 0
----------- ----------
(2,815,841) 0
----------- ----------
Net Increase from Capital Share
Transactions................................ 5,926,795 2,000,000
----------- ----------
Net Increase in Net Assets.................... 5,508,251 2,014,433
----------- ----------
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class F, Class
R, and Class T shares.
See notes to financial statements.

17
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

<TABLE>
<CAPTION>
SIX MONTHS PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- ----------
<S> <C> <C>
NET ASSETS
Beginning of period........................... $ 2,014,433 $ 0
----------- ----------
End of period................................. $ 7,522,684 $2,014,433
=========== ==========
Net Assets consist of:
Capital (par value and paid-in surplus)......... $ 7,926,795 $2,000,000
Accumulated undistributed (distribution in
excess of) net investment income.............. (37,609) 72
Accumulated undistributed net realized gain
(loss) from security transactions............. (975,396) 0
Unrealized appreciation on investments and
foreign currency transactions................. 608,894 14,361
----------- ----------
Total......................................... $ 7,522,684 $2,014,433
=========== ==========
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class F, Class
R, and Class T shares.
See notes to financial statements.

18
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS A SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $12.50
Income from investment operations:
Net investment (loss)................................ (0.20)
Net gains on securities (both realized and
unrealized)........................................ 0.80
------
Total from investment operations................ 0.60
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $13.10
======
Total Return/Ratios
Total return......................................... 4.80%*
Net assets, end of period (000s)..................... $ 248
Net expenses to average net assets#.................. 1.46%**
Gross expenses to average net assets#................ 1.59%**
Net investment (loss) to average net assets.......... (0.83%)**
Portfolio turnover rate@............................. 185%
</TABLE>

See notes to financial statements.

19
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS B SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $12.50
Income from investment operations:
Net investment (loss)................................ (0.10)
Net gains on securities (both realized and
unrealized)........................................ 0.65
------
Total from investment operations................ 0.55
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $13.05
======
Total Return/Ratios
Total return......................................... 4.40%*
Net assets, end of period (000s)..................... $ 565
Net expenses to average net assets#.................. 2.24%**
Gross expenses to average net assets#................ 2.37%**
Net investment (loss) to average net assets.......... (1.64%)**
Portfolio turnover rate@............................. 185%
</TABLE>

20
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS C SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $12.50
Income from investment operations:
Net investment (loss)................................ (0.89)
Net gains on securities (both realized and
unrealized)........................................ 1.44
------
Total from investment operations................ 0.55
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $13.05
======
Total Return/Ratios
Total return......................................... 4.40%*
Net assets, end of period (000s)..................... $ 30
Net expenses to average net assets#.................. 2.21%**
Gross expenses to average net assets#................ 2.34%**
Net investment (loss) to average net assets.......... (1.56%)**
Portfolio turnover rate@............................. 185%
</TABLE>

See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS F SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $12.50
Income from investment operations:
Net investment (loss)................................ (0.05)
Net gains on securities (both realized and
unrealized)........................................ 0.64
------
Total from investment operations................ 0.59
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $13.09
======
Total Return/Ratios
Total return......................................... 4.72%
Net assets, end of period (000s)..................... $6,677
Net expenses to average net assets#, +............... 1.50%*
Gross expenses to average net assets#, +............. 1.69%*
Net investment (loss) to average net assets+......... (1.10%)*
Portfolio turnover rate@............................. 185%
</TABLE>

<TABLE>
<S> <C>
* Annualized.
# Ratio of Net Expenses to Average Net Assets reflects
reductions in a Fund's expenses through the use of brokerage
commissions and custodial and transfer agent credits. Ratio
of Gross Expenses to Average Net Assets is the total of a
Fund's operating expenses before expense offset arrangements
and earnings credits divided by its average net assets for
the stated period.
+ Certain fees were reimbursed by the management company. Had
these fees not been reimbursed, the net expense ratio would
have been 1.75%. The gross expense ratio would have been
1.94%. The net investment income ratio would have been
(1.35%).
@ Portfolio Turnover Rate is a measure of portfolio activity
that is calculated by dividing the lesser of purchases or
sales of securities, excluding securities having maturity
dates at acquisition of one year or less, by the average
value of the portfolio securities held during the period,
which is a rolling six-month period.
</TABLE>

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS R SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $12.50
Income from investment operations:
Net investment (loss).................................. (8.83)
Net gains on securities (both realized and
unrealized).......................................... 10.02
------
Total from investment operations................ 1.19
Less distributions:
From net investment income............................. 0.00
From net realized gains................................ 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $13.69
======
Total Return/Ratios
Total return........................................... 9.52%
Net assets, end of period (000s)....................... $ 1
Net expenses to average net assets#.................... 1.21%*
Gross expenses to average net assets#.................. 1.33%*
Net investment (loss) to average net assets............ (0.56%)*
Portfolio turnover rate@............................... 185%
</TABLE>

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS T SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $12.50
Income from investment operations:
Net investment (loss)................................ (16.68)
Net gains on securities (both realized and
unrealized)........................................ 17.46
------
Total from investment operations................ 0.78
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $13.28
======
Total Return/Ratios
Total return......................................... 6.24%*
Net assets, end of period (000s)..................... $ 1
Net expenses to average net assets#.................. 1.71%**
Gross expenses to average net assets#................ 1.83%**
Net investment (loss) to average net assets.......... (1.06%)**
Portfolio turnover rate@............................. 185%
</TABLE>

See notes to financial statements.

24
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Focus Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.
FEDERAL INCOME TAXES--No provision has been made for federal income taxes
since it is the policy of the Fund to comply with the special provisions of
Subchapter M of the

25
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Internal Revenue Code applicable to regulated investment companies, and to make
distributions of income and capital gains sufficient to relieve it from all
income taxes. The Fund is treated as a separate tax entity for federal income
tax purposes.
INVESTMENT INCOME--Dividend income is recorded on the ex-dividend date.
Certain dividends from foreign securities will be recorded as soon as the Fund
is informed of the dividend if such information is obtained subsequent to the
ex-dividend date. Interest income is accrued daily and includes the accretion of
discounts and the amortization of premiums.
DISTRIBUTIONS TO SHAREHOLDERS--The Fund declares and distributes dividends and
capital gains (if any) annually. All dividends and distributions are recorded on
the ex-dividend date.
EXPENSES--Each Class of the Fund bears expenses incurred specifically on its
behalf and, in addition, each Class bears a portion of general expenses based on
the relative net assets, or number of shareholder accounts of the Class. The
type of expense determines the allocation method.
ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
OTHER--Security transactions are recorded on the date the securities are
purchased or sold (trade date).

26
<PAGE>

distributor of the Fund's shares. The Distributor retained $5,461 during the six
months ended June 30, 2000 from commissions earned on sales of Fund shares.
Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $61
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $1,140, $667, $331, and $316, respectively, for shareholder
servicing fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Class T shares. Under the plan, Class B and Class C shares pay the Distributor
for distributing their shares at an annual rate of 0.75% of the value of the
average daily net assets of Class B and Class C shares and 0.25% of the average
daily net assets of Class T shares. During the six months ended June 30, 2000,
Class B, Class C, and Class T shares were charged $2,000, $994, and $316,
respectively, pursuant to this Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly-owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

28
<PAGE>

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS
FOCUS FUND
----------------
<S> <C>
Net Capital Loss Carryovers.............................. $ 0
Post-October Capital Loss Deferral....................... $ 0
Post-October Currency Loss Deferral...................... $ 0
Federal Tax Cost......................................... $6,975,540
Unrealized Appreciation.................................. $ 754,730
Unrealized (Depreciation)................................ $ (287,578)
Net Appreciation......................................... $ 467,152
</TABLE>

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 300 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

<TABLE>
<CAPTION>
SIX MONTHS PERIOD ENDED
ENDED 6/30/00 12/31/99*
------------- ------------
<S> <C> <C>
CLASS A
Shares sold............................... 21,807 60,000
Shares issued for dividends reinvested.... 0 0
Shares redeemed........................... (62,823) 0
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING............................. (41,016) 60,000
CLASS B
Shares sold............................... 46,494 20,000
Shares issued for dividends reinvested.... 0 0
Shares redeemed........................... (23,171) 0
NET INCREASE IN SHARES OUTSTANDING........ 23,323 20,000
CLASS C
Shares sold............................... 2,142 20,000
Shares issued for dividends reinvested.... 0 0
Shares redeemed........................... (19,820) 0
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING............................. (17,678) 20,000
CLASS F
Shares sold............................... 569,700 20,000
Shares issued for dividends reinvested.... 0 0
Shares redeemed........................... (79,148) 0
NET INCREASE IN SHARES OUTSTANDING........ 490,552 20,000
CLASS R
Shares sold............................... 0 20,000
Shares issued for dividends reinvested.... 0 0
Shares redeemed........................... (19,920) 0
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING............................. (19,920) 20,000
CLASS T
Shares sold............................... 0 20,000
Shares issued for dividends reinvested.... 0 0
Shares redeemed........................... (19,920) 0
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING............................. (19,920) 20,000
</TABLE>

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class F, Class R, and Class T shares.
30
<PAGE>

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

Date of first use: August 28, 2000

A-636-FOC

<PAGE>
DREYFUS FOUNDERS
FOCUS FUND

SEMIANNUAL REPORT
JUNE 30, 2000

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.

------------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
------------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the
figures listed here. The Fund's portfolio composition is subject to change and
there is no assurance the Fund will continue to hold any particular security.
Opinions regarding sectors, industries, companies, and/or themes are subject to
change at any time, based on market and other conditions, and should not be
construed as a recommendation of any specific security.

COMPARATIVE INDEXES

o The Standard & Poor's (S&P) 500 Index is a market-value-weighted, unmanaged
index of common stocks considered representative of the broad market.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

Although it's impossible to predict where these and other changes will
take the world--and how they will affect investors and the markets--I believe
in one thing with greater certainty than any other: growth. And as a long-term
investor like you, my goal is to harness its potential on behalf of my
investments.

A CHALLENGING FIRST HALF

Yet by mid-March, the markets had begun to show an entirely different
side. Suddenly, investors were exuding uncertainty, providing a stark contrast
to the confidence that prevailed earlier in the year. Behind this shift were
many factors, including concern over the U.S. Federal Reserve Board's interest
rate increases and questions about high stock valuations. And unfortunately,
investors' apprehension was global in scope, as international markets responded
to these events as well as to the overall weakness in the NASDAQ Composite
Index and the struggles of a

<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

A discussion with portfolio manager Scott Chapman, CFA

HOW HAS FOCUS FUND PERFORMED SINCE ITS INCEPTION ON DECEMBER 31, 1999?

WHAT WAS YOUR APPROACH TO MANAGING THE FUND DURING ITS FIRST SIX MONTHS?

--------------------------------------------------------------------------
FUND AT A GLANCE

*Performance for Class A, B, C, R, and T shares will vary from the performance
of Class F shares due to differences in charges and expenses.

<PAGE>

confidence. The result is a Fund anchored by an elite group of large-cap
companies that exhibit what we believe are superior earnings growth and
sustainable advantages over their competitors.

WHICH STRATEGIES HELPED OR HURT THE FUND IN THE FIRST HALF?

<PAGE>

Portfolio composition is subject to change.

*Performance for Class A, B, C, R, and T shares will vary from the performance
of Class F shares due to differences in charges and expenses.

<PAGE>

AGGREGATE TOTAL RETURN AS OF 6/30/00

CLASS B SHARES
With redemption* 12/31/99 -- -- -- 0.40%
Without redemption 12/31/99 -- -- -- 4.40%

CLASS C SHARES
With redemption** 12/31/99 -- -- -- 3.40%
Without redemption 12/31/99 -- -- -- 4.40%

CLASS F SHARES 12/31/99 -- -- -- 4.72%

CLASS R SHARES 12/31/99 -- -- -- 9.52%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- 1.47%
Without sales charge 12/31/99 -- -- -- 6.24%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

*The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to
Class A shares.

**The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.

<PAGE>

WHAT HAVE BEEN SOME OF THE CHALLENGES IN MANAGING A CONCENTRATED LARGE-CAP
FUND, AND HOW HAVE YOU MET THESE CHALLENGES?

Portfolio holdings are subject to change.

10
<PAGE>

WHAT WILL YOUR STRATEGY BE GOING FORWARD?

/s/ SCOTT CHAPMAN

Scott Chapman, CFA
Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

* Non-income producing.
See notes to financial statements.

12
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

13
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited) (continued)

See notes to financial statements.
14
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

See notes to financial statements.

15
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

16
<PAGE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class F, Class
R, and Class T shares.
See notes to financial statements.

17
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

* Inception date December 31, 1999 for Class A, Class B, Class C, Class F, Class
R, and Class T shares.
See notes to financial statements.

18
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

See notes to financial statements.

19
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

20
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<S> <C>
* Annualized.
# Ratio of Net Expenses to Average Net Assets reflects
reductions in a Fund's expenses through the use of brokerage
commissions and custodial and transfer agent credits. Ratio
of Gross Expenses to Average Net Assets is the total of a
Fund's operating expenses before expense offset arrangements
and earnings credits divided by its average net assets for
the stated period.
+ Certain fees were reimbursed by the management company. Had
these fees not been reimbursed, the net expense ratio would
have been 1.75%. The gross expense ratio would have been
1.94%. The net investment income ratio would have been
(1.35%).
@ Portfolio Turnover Rate is a measure of portfolio activity
that is calculated by dividing the lesser of purchases or
sales of securities, excluding securities having maturity
dates at acquisition of one year or less, by the average
value of the portfolio securities held during the period,
which is a rolling six-month period.
</TABLE>

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

See notes to financial statements.

24
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Focus Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.
FEDERAL INCOME TAXES--No provision has been made for federal income taxes
since it is the policy of the Fund to comply with the special provisions of
Subchapter M of the

25
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

26
<PAGE>

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

28
<PAGE>

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 300 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class F, Class R, and Class T shares.
30
<PAGE>

FOR MORE INFORMATION

Dreyfus Founders
Focus Fund
2930 East Third Avenue
Denver, CO 80206

MANAGER

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

Founders and Founders Funds are registered trademarks of
Founders Asset Management LLC.

<PAGE>

DREYFUS FOUNDERS
GROWTH FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

-------------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
-------------------------------------------------------------
<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the
figures listed here. The Fund's portfolio composition is subject to change and
there is no assurance the Fund will continue to hold any particular security.
Opinions regarding sectors, industries, companies, and/or themes are subject to
change at any time, based on market and other conditions, and should not be
construed as a recommendation of any specific security.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed, may
be worth more or less than their original cost.

COMPARATIVE INDEXES

o The Standard & Poor's (S&P) 500 Index is a market-value-weighted, unmanaged
index of common stocks considered representative of the broad market.

o The Lipper Large-Cap Growth Fund Index is an average of the performance of
the 30 largest large-cap growth funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

At the conclusion of the first six months of 2000, we find ourselves in an
environment where passing a millennial milestone seems an appropriate setting
for both the vast changes that have recently influenced our lives and for those
that undoubtedly lie ahead. Scientists have just laid the groundwork for
exploring the human genome; the scope of the Internet and wireless technologies
is expanding almost daily; businesses continue to merge and construct global
identities.
Although it's impossible to predict where these and other changes will take
the world--and how they will affect investors and the markets--I believe in one
thing with greater certainty than any other: growth. And as a long-term investor
like you, my goal is to harness its potential on behalf of my investments.

A CHALLENGING FIRST HALF

In analyzing the specific events of the year's first half, it's admittedly easy
to be distracted from a long-term perspective. The new millennium began with a
resounding echo of the favorable market conditions we saw in the fourth quarter
of 1999, as bullish investors, undaunted by the U.S. economy's fast pace and the
cautionary remarks of Federal Reserve Board Chairman Alan Greenspan, continued
to feel optimistic about rapid-growth, technology-oriented equities. As a
result, February and early March were particularly rewarding for growth stocks,
and most of the Dreyfus Founders Funds posted excellent returns for the first
quarter as a whole.
Yet by mid-March, the markets had begun to show an entirely different side.
Suddenly, investors were exuding uncertainty, providing a stark contrast to the
confidence that prevailed earlier in the year. Behind this shift were many
factors, including concern over the U.S. Federal Reserve Board's interest rate
increases and questions about high stock valuations. And unfortunately,
investors' apprehension was global in scope, as international markets responded
to these events as well as to the overall weakness in the NASDAQ Composite
Index and the struggles of a

4
<PAGE>

A TEST OF FORTITUDE

Like the market indexes, our equity Funds slipped in the second quarter, with
the majority losing much of the ground they'd gained in the first quarter. This
setback was largely due to investors' flight from technology stocks--an action
that seemed indiscriminate to us. In fact, the earnings reports issued by the
overwhelming majority of the technology companies included in our portfolios
were excellent during the first half, and our research continued to show quality
in other areas of these firms.
At Founders, we've always emphasized sound fundamentals over day-to-day
investor sentiments, and therefore our portfolio managers chose to keep the
majority of their tech holdings in place. Although this decision somewhat
hampered your Funds in the short term, we feel it may ultimately prove
beneficial. It's true that in the volatile first half, many investors failed to
acknowledge earnings reports that met or exceeded expectations; yet, over the
long run, strong earnings growth has historically been a compelling reason to
invest.

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTOS]

A discussion with portfolio managers Tom Arrington, CFA, left, and Scott
Chapman, CFA

HOW DID THE FUND PERFORM DURING THE FIRST HALF OF THE YEAR?

In spite of a strong first quarter, the Dreyfus Founders Growth Fund suffered an
overall decline in the first half of 2000. This decline was the result of a
disappointing second quarter, which was driven by investors' indiscriminate exit
from technology and consumer cyclical stocks to areas they deemed more stable,
such as utilities, consumer staples, and energy. The Federal Reserve's interest
rate increases, Microsoft's antitrust case woes, and sudden concern over high
price-to-earnings ratios were also factors contributing to the Fund's
second-quarter troubles.

WHAT WERE SOME OF THE MAIN INFLUENCES ON DOMESTIC LARGE-COMPANY STOCKS, AND HOW
DID THESE INFLUENCES AFFECT THE FUND?

U.S. large-cap stocks performed well through mid-March, buoyed by investor
confidence, scant signs of inflation, and rapid growth within the technology and
communications sectors. Several of the Fund's holdings in these and other areas,
chosen based on findings that emerged from our bottom-up research, posted
impressive returns.

--------------------------------------------------------------------------------
FUND AT A GLANCE

This fund invests primarily in the common stocks of well-established,
high-quality growth companies.
--------------------------------------------------------------------------------

6
<PAGE>

By late March, investors began showing signs of disenchantment with
large-cap technology companies. Unfortunately, this sentiment soon developed
into a full-fledged sell-off. Indeed, as the second quarter progressed, it
became increasingly evident that investors were more concerned with Federal
Reserve interest rate raises than they were with growth opportunities--even as
steadily growing earnings and revenues were reported throughout the quarter by
the large majority of companies included in the Growth Fund.

GROWTH OF $10,000 INVESTMENT GRAPH

[GRAPH]

<TABLE>
<CAPTION>
LIPPER
LARGE-CAP
GROWTH GROWTH FD.
FUND S&P 500 INDEX CPI
<S> <C> <C> <C> <C>
06/30/1990 10,000.00 10,000.00 10,000.00 10,000.00
07/31/1990 9,713.98 9975.25 9808.15 10,046.15
08/31/1990 8,887.71 9,064.21 8,897.42 10,130.77
09/30/1990 8,516.95 8,624.75 8,385.76 10,200.00
10/31/1990 8,379.24 8,597.32 8,270.28 10,269.23
11/30/1990 8,739.41 9,142.47 8,836.27 10,292.31
12/31/1990 8,911.54 9,397.55 9,116.90 10,330.77
01/31/1991 9,374.90 9,816.72 9,765.40 10,369.23
02/28/1991 9,902.91 10,500.78 10,474.69 10,376.92
03/31/1991 10,387.81 10,759.75 10,810.72 10,376.92
04/30/1991 10,236.95 10,795.32 10,782.72 10,400.00
05/31/1991 10,829.62 11,244.93 11,189.26 10,438.46
06/30/1991 10,247.73 10,735.23 10,579.51 10,461.54
07/31/1991 11,012.81 11,248.72 11,160.08 10,484.62
08/31/1991 11,454.61 11,501.67 11,539.11 10,515.38
09/30/1991 11,433.06 11,310.26 11,420.92 10,546.15
10/31/1991 11,767.11 11,476.92 11,602.21 10,561.54
11/30/1991 11,486.94 11,000.00 11,188.27 10,607.69
12/31/1991 13,134.41 12,258.97 12,521.26 10,638.46
01/31/1992 12,947.11 12,044.15 12,499.08 10,646.15
02/28/1992 12,970.52 12,184.95 12,579.08 10,669.23
03/31/1992 12,361.80 11,948.38 12,157.20 10,707.69
04/30/1992 11,881.84 12,313.94 12,096.45 10,730.77
05/31/1992 12,209.62 12,356.08 12,226.92 10,753.85
06/30/1992 11,799.90 12,174.92 11,870.08 10,784.62
07/31/1992 12,314.97 12,688.18 12,300.16 10,815.38
08/31/1992 11,764.78 12,415.05 12,084.72 10,838.46
09/30/1992 11,928.67 12,559.75 12,301.18 10,861.54
10/31/1992 12,350.09 12,628.99 12,550.01 10,907.69
11/30/1992 13,087.59 13,040.58 13,189.50 10,938.46
12/31/1992 13,701.33 13,192.98 13,383.62 10,953.85
01/31/1993 14,130.31 13,314.72 13,440.82 10,984.62
02/28/1993 13,766.33 13,481.72 13,197.21 11,015.38
03/31/1993 14,468.29 13,767.00 13,617.81 11,030.77
04/30/1993 13,961.32 13,447.05 13,197.37 11,069.23
05/31/1993 15,131.26 13,781.72 13,696.18 11,100.00
06/30/1993 15,768.23 13,824.08 13,805.53 11,107.69
07/30/1993 15,872.22 13,792.53 13,711.14 11,123.08
08/31/1993 16,678.18 14,303.23 14,280.50 11,146.15
09/30/1993 17,289.15 14,191.19 14,494.50 11,161.54
10/29/1993 17,276.16 14,498.22 14,659.69 11,207.69
11/30/1993 16,431.20 14,342.70 14,363.33 11,230.77
12/31/1993 17,199.68 14,520.74 14,810.15 11,261.54
01/31/1994 18,255.55 15,025.64 15,349.23 11,261.54
02/28/1994 17,991.58 14,603.23 15,100.53 11,292.31
03/31/1994 17,060.74 13,969.34 14,361.49 11,323.08
04/29/1994 16,810.67 14,162.65 14,431.16 11,330.77
05/31/1994 16,366.09 14,374.02 14,517.70 11,353.85
06/30/1994 15,310.21 14,025.20 13,976.13 11,384.62
07/29/1994 15,990.97 14,500.11 14,377.83 11,423.08
08/31/1994 17,019.07 15,083.95 15,114.86 11,469.23
09/30/1994 16,768.99 14,712.15 14,754.81 11,492.31
10/31/1994 17,296.93 15,055.07 15,132.82 11,500.00
11/30/1994 16,505.02 14,494.98 14,574.62 11,530.77
12/30/1994 16,624.37 14,708.92 14,688.15 11,561.54
01/31/1995 16,510.02 15,099.67 14,802.63 11,584.62
02/28/1995 17,310.50 15,674.80 15,312.33 11,615.38
03/31/1995 17,996.63 16,140.36 15,747.19 11,638.46
04/28/1995 18,396.87 16,626.87 16,176.73 11,676.92
05/31/1995 19,011.53 17,271.68 16,711.55 11,707.69
06/30/1995 20,312.32 17,680.04 17,565.22 11,730.77
07/31/1995 22,284.95 18,277.81 18,520.43 11,746.15
08/31/1995 22,284.95 18,313.38 18,623.24 11,769.23
09/29/1995 23,285.55 19,083.84 19,314.80 11,784.62
10/31/1995 23,285.55 19,028.32 19,205.23 11,823.08
11/30/1995 24,028.86 19,848.05 19,809.43 11,830.77
12/29/1995 24,203.24 20,230.32 19,817.16 11,853.85
01/31/1996 24,629.30 20,932.22 20,400.02 11,900.00
02/29/1996 25,399.48 21,112.49 20,858.73 11,930.77
03/29/1996 25,563.34 21,317.17 20,868.61 11,969.23
04/30/1996 26,792.35 21,645.04 21,365.30 12,015.38
05/31/1996 27,808.33 22,183.50 21,995.82 12,046.15
06/28/1996 27,251.18 22,273.13 21,797.54 12,053.85
07/31/1996 25,219.22 21,298.55 20,630.37 12,092.31
08/30/1996 26,169.65 21,743.37 21,249.82 12,107.69
09/30/1996 27,628.07 22,962.76 22,728.79 12,215.38
10/31/1996 27,431.43 23,609.92 23,012.08 12,176.92
11/29/1996 29,184.82 25,384.39 24,500.00 12,215.38
12/31/1996 28,212.79 24,881.49 23,891.63 12,238.46
01/31/1997 29,848.32 26,446.71 25,405.83 12,261.54
02/28/1997 29,190.55 26,639.35 25,041.20 12,292.31
03/31/1997 28,301.68 25,540.58 23,757.92 12,300.00
04/30/1997 29,706.10 27,076.37 25,061.70 12,315.38
05/30/1997 31,590.50 28,703.34 26,762.93 12,315.38
06/30/1997 33,368.25 29,991.19 27,883.50 12,330.77
07/31/1997 36,319.30 32,393.76 30,548.30 12,353.85
08/29/1997 34,577.11 30,576.92 28,882.18 12,376.92
09/30/1997 36,319.30 32,248.16 30,477.46 12,407.69
10/31/1997 34,754.89 31,184.28 29,419.34 12,423.08
11/28/1997 35,057.10 32,616.72 30,073.26 12,446.15
12/31/1997 35,714.32 33,178.15 30,483.56 12,446.15
01/31/1998 36,107.01 33,559.09 31,023.14 12,453.85
02/27/1998 38,442.50 35,959.53 33,392.16 12,469.23
03/31/1998 40,467.96 37,803.23 34,945.90 12,469.23
04/30/1998 41,088.00 38,181.61 35,531.63 12,500.00
05/29/1998 40,467.96 37,502.68 34,736.98 12,530.77
06/30/1998 42,679.44 39,028.99 36,725.36 12,538.46
07/31/1998 42,038.73 38,637.12 36,708.01 12,561.54
08/31/1998 34,722.25 33,046.27 30,713.22 12,576.92
09/30/1998 36,871.73 35,155.41 32,947.36 12,584.62
10/30/1998 39,475.90 38,035.67 35,072.22 12,607.69
11/30/1998 41,439.36 40,331.55 37,480.44 12,630.77
12/31/1998 44,655.31 42,657.75 41,601.70 12,646.15
01/29/1999 47,762.14 44,451.95 44,302.53 12,661.54
02/26/1999 46,515.03 43,046.49 42,483.87 12,669.23
03/31/1999 49,074.89 44,766.89 44,898.83 12,692.31
04/30/1999 48,418.52 46,511.16 45,052.30 12,784.62
05/31/1999 46,405.64 45,392.20 43,559.84 12,784.62
06/30/1999 49,578.11 47,919.29 46,587.74 12,784.62
07/30/1999 47,893.42 46,429.54 45,125.63 12,823.08
08/31/1999 47,959.06 46,195.32 45,134.96 12,853.85
09/30/1999 47,127.65 44,926.09 44,676.94 12,915.38
10/29/1999 51,044.01 47,789.74 48,103.00 12,938.46
11/30/1999 53,735.15 48,741.81 50,480.34 12,953.85
12/31/1999 62,098.16 51,611.37 56,086.38 12,984.62
01/31/2000 59,860.86 49,027.31 53,835.22 13,007.69
02/29/2000 66,156.52 48,085.15 56,666.59 13,076.92
03/31/2000 67,821.49 52,788.96 60,643.49 13,169.23
04/28/2000 59,678.75 51,205.23 55,950.93 13,169.23
05/31/2000 55,048.05 50,134.00 52,730.01 13,176.92
06/30/2000 59,652.74 51,383.05 56,217.30 13,253.85
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The above graph compares a
$10,000 investment made in Class F shares of Dreyfus Founders Growth Fund on
6/30/90 to a $10,000 investment made in unmanaged securities indexes and the
Consumer Price Index on that date. On December 31, 1999, the Fund adopted a
multiclass structure. Existing Fund shares were designated as Class F shares and
Class F shares are available only to grandfathered investors. All dividends and
capital gain distributions are reinvested. Performance for Class A, B, C, R and
T shares will vary from the performance of Class F shares shown above due to
differences in charges and expenses. The Fund's performance shown in the line
graph takes into account all applicable fees and net expenses of Class F shares.
More complete information about the indexes shown may be found on page 3.
Further information related to Fund performance is contained elsewhere in this
report.

<PAGE>

This short-term viewpoint hurt the Fund's performance, since we target those
companies with the highest expected growth rates and the most attractive
valuations when viewed over a five-year horizon. Several of the Fund's tech
holdings, which fared superbly in 1999 and early 2000, were hard-hit by
investors' sudden exit. For example, CISCO SYSTEMS, TEXAS INSTRUMENTS, and
GENERAL MOTORS, CLASS H--a class of stock representing Hughes Electronics
Corporation, which manufactures advanced electronic systems--declined -17.8%,
-14.1%, and -29.5% in the second quarter, respectively.
COSTCO also suffered in the second quarter, as did many retail companies in
the face of rising interest rates. Costco forecasted lower earnings growth this
year than had been expected, and this announcement negatively affected the
Fund's performance.

WHAT STRATEGIES BENEFITED THE FUND IN THE FIRST HALF?

We believe that our commitment to the basic principles of growth and
forward-looking research provide a strong foundation for the Growth Fund. Even
with the extreme, daily market movements we experienced in the first half, this
foundation remained firmly intact. We continued to conduct

PORTFOLIO COMPOSITION

[PIE CHART]
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
46.94% Technology
15.18% Healthcare
10.24% Consumer Cyclicals
8.93% Consumer Staples
7.52% Telecom Services
4.42% Capital Goods
3.62% Financial
1.56% Other Assets & Liabilities
1.12% Energy
0.47% Business Services
</TABLE>
--------------------------------------------------------------------------------
Portfolio composition is subject to change.

<PAGE>

in-depth research from the bottom up, considering reasonably valued large-cap
companies with dominant brand names, high and growing market shares, high
barriers to entry from competition, and large, untapped market opportunities.
Our research methods are the key to how we manage the Fund. Throughout the
first half, we continued to employ the hands-on approach that we believe yields
the most accurate data. We met with numerous company management teams, visited
and talked with the competitors, customers, suppliers, and distributors of
these companies, conducted quarterly earnings conference calls, and attended
industry conferences. As always, we used trade journals and in-house analysis
as well to help us fully understand the workings of each prospective and current
Fund holding.

AVERAGE ANNUAL TOTAL RETURNS AS OF 6/30/00

<TABLE>
INCEPTION YEAR-TO- 1 5 10 20
DATE DATE* YEAR YEARS YEARS YEARS

<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 1/5/62 (3.94%) 20.32% 24.04% 19.55% 18.13%
</TABLE>

* Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- (9.50%)
Without sales charge 12/31/99 -- -- -- (3.98%)

CLASS B SHARES
With redemption** 12/31/99 -- -- -- (8.10%)
Without redemption 12/31/99 -- -- -- (4.27%)

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- (5.23%)
Without redemption 12/31/99 -- -- -- (4.27%)

CLASS R SHARES 12/31/99 -- -- -- (3.89%)

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- (8.37%)
Without sales charge 12/31/99 -- -- -- (4.06%)
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

9
<PAGE>

Several exciting companies that withstood this degree of scrutiny proved to
be strong performers for the Fund during the first half. For example, PFIZER
has the highest projected earnings-per-share growth rate of the major
pharmaceutical companies for 2000 through 2002 and the largest research budget.
This growth is being driven by a stable of blockbuster drugs, low risk of
competition from generic drugs, and merger-related cost savings.
WALGREENS was another first-half standout. As America's largest drugstore
chain, with close to 2,800 retail drugstores serving customers in nearly 40
U.S. states and Puerto Rico, Walgreens has produced strong annual earnings
growth. Furthermore, Walgreens operates in a robust industry, one which we
believe may continue to grow given the aging population's increasing demand for
pharmaceutical products.

WHICH AREAS OF STRENGTH OR WEAKNESS EMERGED
FROM YOUR RESEARCH?

In conducting research and analysis one company at a time, some broad themes
generally emerge from our findings. The solid overall performance of healthcare
stocks was one such theme in the first half. Throughout the market's
fluctuations, we were pleased to see ongoing strength in this area, with
several of the Fund's healthcare companies posting excellent returns.

LARGEST EQUITY HOLDINGS
--------------------------------------------------------------------------------

<TABLE>
<S> <C>
1. Pfizer, Inc. 4.30%
2. Cisco Systems, Inc. 3.81%
3. Intel Corporation 3.31%
4. JDS Uniphase Corporation 2.78%
5. Nokia Oyj Sponsored ADR 2.50%
6. EMC Corporation 2.31%
7. Corning, Inc. 2.25%
8. Nortel Networks Corporation Sponsored ADR 2.21%
9. General Electric Company 2.15%
10. Time Warner, Inc. 2.04%
</TABLE>

--------------------------------------------------------------------------------
Portfolio holdings are subject to change.

10
<PAGE>

The most dramatic sector-related trend of the first half, however, concerned
technology stocks. During the first few months of the half, many
technology-oriented "New Economy" companies prospered, but by late March
investors saw a reversal of fortune for these same firms. Ironically, little had
actually changed in terms of the earnings potential exhibited by the tech
companies in the Growth Fund--the outlook remained strong, and earnings reports
were positive. For this reason, we chose to evaluate our technology holdings'
status in terms of their fundamental strength rather than in terms of
investors' sudden disinterest.

WHAT DO YOU EXPECT FROM DOMESTIC LARGE-CAP GROWTH
COMPANIES IN COMING MONTHS?

In our opinion, the Federal Reserve's efforts to rein in the economy may finally
be having an effect, as evidenced by slowed consumer spending in May and June.
We believe that if investors gain conviction in the possible cessation of
interest rate increases, they may take note of strong, large-cap growth
companies once again.

/s/ THOMAS ARRINGTON

Thomas Arrington, CFA
Co-Portfolio Manager

/s/ SCOTT CHAPMAN

Scott Chapman, CFA
Co-Portfolio Manager

11
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Shares Market Value
-------------------------------------------------
<C> <S> <C>
COMMON STOCKS (DOMESTIC)-92.0%
AUTOMOTIVE-1.1%
396,725 General Motors
Corporation Class H* $ 34,812,619
--------------
BANKING-2.6%
657,214 Citigroup, Inc. 39,597,144
447,211 Fifth Third Bancorp 28,286,096
318,275 The Bank of New York
Company, Inc. 14,799,788
--------------
82,683,028
--------------
BIOTECHNOLOGY-2.0%
434,604 Amgen, Inc.* 30,530,931
84,325 Celera Genomics* 7,884,388
142,232 Genentech, Inc.* 24,463,904
--------------
62,879,223
--------------
BUSINESS SERVICES-0.5%
167,300 Omnicom Group, Inc. 14,900,156
8,796 Per-Se Technologies
Warrants* 19,729
--------------
14,919,885
--------------
COMPUTER EQUIPMENT-5.1%
657,125 Dell Computer
Corporation* 32,404,477
953,460 EMC Corporation* 73,356,829
615,037 Sun Microsystems,
Inc.* 55,929,918
--------------
161,691,224
--------------
COMPUTER NETWORKING-5.3%
1,901,389 Cisco Systems, Inc.* 120,857,038
273,225 Foundry Networks,
Inc.* 30,157,209
220,350 Network Appliance,
Inc.* 17,724,403
--------------
168,738,650
--------------

COMPUTER SOFTWARE/SERVICES-10.0%
284,186 Automatic Data
Processing, Inc. $ 15,221,713
126,600 Inktomi Corporation* 14,970,450
350,624 Mercury Interactive
Corporation* 33,922,872
687,300 Oracle Corporation* 57,733,200
294,275 Redback Networks,
Inc.* 52,748,794
231,650 Seibel Systems, Inc.* 37,889,253
284,650 VeriSign, Inc.* 50,187,353
289,443 VERITAS Software
Corporation* 32,707,059
176,654 Yahoo!, Inc.* 21,883,014
--------------
317,263,708
--------------
CONSUMER PRODUCTS-0.8%
349,031 Colgate-Palmolive
Company 20,898,231
198,639 The Gillette Company 6,939,950
--------------
27,838,181
--------------
CONSUMER SERVICES-0.7%
828,189 DeVry, Inc.* 21,895,247
--------------
DIVERSIFIED-2.4%
3,961 Berkshire Hathaway,
Inc.* 6,971,360
264,275 Corning, Inc. 71,321,216
--------------
78,292,576
--------------
ELECTRONICS-3.7%
1,289,633 General Electric
Company 68,350,549
498,272 Jabil Circuit, Inc.* 24,726,748
249,161 PE Corp-PE Biosystems
Group 16,413,481
101,375 Sanmina Corporation 8,661,227
--------------
118,152,005
--------------
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-------------------------------------------------
<C> <S> <C>
FINANCIAL SERVICES-1.1%
57,200 Affymetrix, Inc.* $ 9,441,575
282,450 American Express
Company 14,722,706
313,173 The Charles Schwab
Corporation 10,530,442
--------------
34,694,723
--------------
FOOD & BEVERAGE-1.1%
594,200 The Coca-Cola Company 34,129,363
--------------
LEISURE & ENTERTAINMENT-2.5%
276,114 Harley-Davidson, Inc. 10,630,389
445,525 The Walt Disney
Company 17,291,939
758,775 Viacom, Inc. Class B* 51,738,970
--------------
79,661,298
--------------
MANUFACTURING-2.2%
310,843 Danaher Corporation 15,367,301
1,128,110 Tyco International
Limited 53,444,211
--------------
68,811,512
--------------
MEDICAL SUPPLIES & EQUIPMENT-3.0%
631,125 Baxter International,
Inc. 44,375,977
719,183 Guidant Corporation* 35,599,559
285,450 Medtronic, Inc.* 14,218,978
--------------
94,194,514
--------------
OIL & GAS-0.3%
135,200 The Coastal
Corporation 8,230,300
--------------
OIL SERVICES-0.9%
579,750 Halliburton Company 27,356,953
--------------

PHARMACEUTICALS-10.2%
759,825 Abbott Laboratories $ 33,859,702
327,714 Bristol-Myers Squibb
Company 19,089,341
415,250 Eli Lilly and Company 41,473,094
91,875 IDEC Pharmaceuticals
Corporation 10,772,344
262,400 MedImmune, Inc.* 19,401,200
548,100 Merck & Company, Inc. 41,998,163
2,844,464 Pfizer, Inc. 136,534,272
431,325 Schering-Plough
Corporation 21,781,913
--------------
324,910,029
--------------
PUBLISHING & BROADCASTING-6.7%
661,112 AMFM, Inc.* 45,616,728
1,292,275 AT&T Corporation-
Liberty Media Group 31,337,669
1,045,402 Comcast Corporation
Special Class A 42,404,119
371,579 EchoStar
Communications
Corporation* 12,308,554
851,831 Time Warner, Inc. 64,739,156
742,700 USA Networks, Inc.* 16,060,888
--------------
212,467,114
--------------
RETAIL-5.3%
606,207 Costco Wholesale
Corporation* 20,004,831
527,362 Kohl's Corporation* 29,334,511
308,775 Lowe's Companies, Inc. 12,679,073
782,763 The Home Depot, Inc. 39,089,227
723,275 Walgreen Company 23,280,414
807,850 Wal-Mart Stores, Inc. 46,552,356
--------------
170,940,412
--------------
</TABLE>

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
-------------------------------------------------
<C> <S> <C>
SEMICONDUCTORS & EQUIPMENT-12.9%
686,500 Analog Devices, Inc.* $ 52,174,000
224,425 Applied Micro Circuits
Corporation* 22,161,969
118,050 Broadcom Corporation* 25,845,572
787,262 Intel Corporation 105,197,885
735,912 JDS Uniphase
Corporation* 88,171,457
222,611 LSI Logic Corporation 12,048,820
257,175 Maxim Integrated
Products, Inc.* 17,455,753
855,200 Texas Instruments,
Inc. 58,741,550
372,175 Vitesse Semiconductor
Corporation 27,378,123
--------------
409,175,129
--------------
SUPERMARKETS-0.5%
779,500 The Kroger Company 17,197,719
--------------
TELECOMMUNICATION SERVICES-4.8%
324,200 Juniper Networks,
Inc.* 47,171,100
191,175 Level 3
Communications, Inc.* 16,811,452
314,200 Nextel Communications,
Inc.* 19,225,113
794,050 SBC Communications,
Inc. 34,342,663
324,200 Sprint Corporation
(PCS Group)* 19,289,900
137,935 VoiceStream Wireless
Corporation* 16,043,565
--------------
152,883,793
--------------

TELECOMMUNICATIONS EQUIPMENT-6.3%
122,700 CIENA Corporation* $ 20,444,888
236,150 Comverse Technology,
Inc.* 21,961,950
147,900 E-Tek Dynamics, Inc.* 38,999,381
751,725 Lucent Technologies,
Inc. 44,539,706
221,650 Qwest Communications
International, Inc.* 11,013,234
157,375 RF Micro Devices,
Inc.* 13,770,313
92,524 Sycamore Networks,
Inc.* 10,212,337
460,035 Tellabs, Inc.* 31,483,645
182,600 Williams
Communications Group,
Inc.* 6,060,038
--------------
198,485,492
--------------
TOTAL COMMON STOCKS
(DOMESTIC)
(COST-$2,454,925,779) 2,922,304,697
--------------
COMMON STOCKS (FOREIGN)-6.4%
COMPUTER SOFTWARE/SERVICES-0.2%
86,900 Business Objects SA
Sponsored ADR (FR)* 7,641,769
--------------
SEMICONDUCTORS & EQUIPMENT-0.5%
89,475 PMC-Sierra, Inc.
Sponsored ADR (CA)* 15,892,997
--------------
TELECOMMUNICATION SERVICES-2.8%
1,028,534 Nortel Networks
Corporation Sponsored
ADR (CA) 70,197,446
380,640 Vodafone AirTouch PLC
Sponsored ADR (UK) 15,772,770
--------------
85,970,216
--------------
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-------------------------------------------------
<C> <S> <C>
TELECOMMUNICATIONS EQUIPMENT-2.9%
1,591,015 Nokia Oyj Sponsored
ADR (FI) $ 79,451,312
678,425 Telefonaktiebolaget LM
Ericsson Class B
Sponsored ADR (SW) 13,568,500
--------------
93,019,812
--------------
TOTAL COMMON STOCKS
(FOREIGN)
(COST-$199,223,791) 202,524,794
--------------
</TABLE>

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-------------------------------------------------
<C> <S> <C>
CORPORATE SHORT-TERM NOTES-1.5%
FINANCIAL SERVICES-1.5%
$46,900,000 Associates Corporation
N.A. 6.93% 07/03/00 $ 46,881,944
--------------
TOTAL CORPORATE
SHORT-TERM NOTES
(AMORTIZED COST-$46,881,944)
46,881,944
--------------
TOTAL INVESTMENTS-99.9%
(COST-$2,701,031,514) 3,171,711,435
OTHER ASSETS AND
LIABILITIES-0.1% 2,489,475
--------------
NET ASSETS-100.0% $3,174,200,910
==============
</TABLE>

* Non-income producing.
See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS
Investment securities, at cost............................. $2,701,031,514
--------------
Investment securities, at market........................... 3,171,711,435
Cash....................................................... 7,891,250
Receivables:
Capital shares sold...................................... 2,816,972
Dividends and interest................................... 564,975
Other assets............................................... 55,993
--------------
Total Assets........................................... 3,183,040,625
--------------
LIABILITIES
Payables:
Capital shares redeemed.................................. 5,328,699
Advisory fees............................................ 1,702,572
Shareholder servicing fees............................... 65,935
Accounting fees.......................................... 58,831
Distribution fees........................................ 1,525,724
Other.................................................... 157,954
--------------
Total Liabilities...................................... 8,839,715
--------------
Net Assets................................................. $3,174,200,910
==============
</TABLE>

16
<PAGE>

<TABLE>
<S> <C>
Net Assets--Class A........................................ $ 6,019,492
Shares Outstanding--Class A................................ 262,498
Net Asset Value and Redemption Price Per Share............. $ 22.93
Maximum offering price per share (net asset value plus
sales charge of 5.75% of offering price)................. $ 24.33
Net Assets--Class B........................................ $ 17,022,323
Shares Outstanding--Class B................................ 744,578
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share... $ 22.86
Net Assets--Class C........................................ $ 3,129,531
Shares Outstanding--Class C................................ 136,890
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share... $ 22.86
Net Assets--Class F........................................ $3,147,185,970
Shares Outstanding--Class F................................ 137,232,516
Net Asset Value, Offering and Redemption Price Per Share... $ 22.93
Net Assets--Class R........................................ $ 3,020
Shares Outstanding--Class R................................ 132
Net Asset Value, Offering and Redemption Price Per Share... $ 22.95
Net Assets--Class T........................................ $ 840,574
Shares Outstanding--Class T................................ 36,683
Net Asset Value and Redemption Price Per Share............. $ 22.91
Maximum offering price per share (net asset value plus
sales charge of 4.50% of offering price)................. $ 23.99
</TABLE>

See notes to financial statements.

17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................ $ 4,287,171
Interest................................................. 3,872,504
Foreign taxes withheld................................... (48,551)
--------------
Total Investment Income................................ 8,111,124
--------------
Expenses:
Advisory fees............................................ 10,795,847
Shareholder servicing fees--Note 2....................... 372,795
Accounting fees.......................................... 373,017
Distribution fees--Note 2................................ 4,075,820
Transfer agency fees--Note 2............................. 504,904
Registration fees........................................ 397,782
Postage and mailing expenses............................. 5,739
Custodian fees and expenses.............................. 62,834
Printing expenses........................................ 139,589
Legal and audit fees..................................... 73,081
Directors' fees and expenses............................. 78,251
Other expenses........................................... 371,656
--------------
Total Expenses......................................... 17,251,315
Earnings Credits....................................... (234,417)
--------------
Net Expenses........................................... 17,016,898
--------------
Net Investment (Loss).................................... (8,905,774)
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON
INVESTMENTS AND FOREIGN CURRENCY TRANSACTIONS
Net Realized Gain (Loss) from Security Transactions:
Proceeds from long-term securities sold.................. 3,340,613,585
Proceeds from long-term U.S. Government Obligations...... 0
Cost of securities sold.................................. 3,003,964,477
--------------
Net Realized Gain from Security Transactions............... 336,649,108
Net Realized Gain (Loss) from Foreign Currency
Transactions............................................. 0
Net Change in Unrealized Appreciation/Depreciation......... (449,524,913)
--------------
Net Realized and Unrealized (Loss) on Investments and
Foreign Currency Transactions.......................... (112,875,805)
--------------
Net (Decrease) in Net Assets Resulting from Operations..... $ (121,781,579)
==============
Purchases of long-term securities.......................... $3,355,194,151
==============
Purchases of long-term U.S. Government Obligations......... $ 0
==============
</TABLE>

18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (8,905,774) $ (12,727,489)
Net Realized Gain from Security
Transactions............................... 336,649,108 437,419,900
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... 0 0
Net Change in Unrealized
Appreciation/Depreciation.................. (449,524,913) 517,564,784
-------------- --------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ (121,781,579) 942,257,195
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (493,801,317)
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
Net (Decrease) from Dividends and
Distributions............................ 0 (493,801,317)
</TABLE>

* Inception date December 31, 1999, for Class A, Class B, Class C, Class R and
Class T shares.
See notes to financial statements.

19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
-------------- --------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class A.................................... $ 6,132,644 $ 1,000
Class B.................................... 17,244,251 1,000
Class C.................................... 3,229,378 1,000
Class F.................................... 463,904,522 938,300,163
Class R.................................... 1,849 1,000
Class T.................................... 854,909 1,000
Reinvested dividends and distributions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 474,679,046
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
491,367,553 1,412,984,209
Cost of shares redeemed
Class A.................................... (95,679) 0
Class B.................................... (147,344) 0
Class C.................................... (27,021) 0
Class F.................................... (518,719,416) (898,008,658)
Class R.................................... 0 0
Class T.................................... (6,564) 0
-------------- --------------
(518,996,024) (898,008,658)
-------------- --------------
Net Increase (Decrease) from Capital Share
Transactions............................. (27,628,471) 514,975,551
-------------- --------------
Net Increase (Decrease) in Net Assets...... (149,410,050) 963,431,429
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
NET ASSETS
Beginning of period........................ $3,323,610,960 $2,360,179,531
-------------- --------------
End of period.............................. $3,174,200,910 $3,323,610,960
============== ==============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $2,306,183,458 $2,333,811,929
Accumulated undistributed (distribution in
excess of) net investment income........... (8,905,774) 0
Accumulated undistributed net realized gain
from security transactions................. 406,246,430 69,597,322
Unrealized appreciation on investments and
foreign currency transactions.............. 470,676,796 920,201,709
-------------- --------------
Total...................................... $3,174,200,910 $3,323,610,960
============== ==============
</TABLE>

* Inception date December 31, 1999, for Class A, Class B, Class C, Class R and
Class T shares.
See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS A SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $23.88
Income from investment operations:
Net investment (loss)................................ (0.02)
Net (losses) on securities (both realized and
unrealized)........................................ (0.93)
------
Total from investment operations................ (0.95)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $22.93
======
Total Return/Ratios
Total return......................................... (3.98%)*
Net assets, end of period (000s)..................... $6,019
Net expenses to average net assets#.................. 0.98%**
Gross expenses to average net assets#................ 1.00%**
Net investment (loss) to average net assets.......... (0.44%)**
Portfolio turnover rate@............................. 177%
</TABLE>

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS B SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 23.88
Income from investment operations:
Net investment (loss)................................ (0.04)
Net (losses) on securities (both realized and
unrealized)........................................ (0.98)
-------
Total from investment operations................ (1.02)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
-------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 22.86
=======
Total Return/Ratios
Total return......................................... (4.27%)*
Net assets, end of period (000s)..................... $17,022
Net expenses to average net assets#.................. 1.74%**
Gross expenses to average net assets#................ 1.75%**
Net investment (loss) to average net assets.......... (1.19%)**
Portfolio turnover rate@............................. 177%
</TABLE>

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS C SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $23.88
Income from investment operations:
Net investment (loss)................................ (0.05)
Net (losses) on securities (both realized and
unrealized)........................................ (0.97)
------
Total from investment operations................ (1.02)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $22.86
======
Total Return/Ratios
Total return......................................... (4.27%)*
Net assets, end of period (000s)..................... $3,130
Net expenses to average net assets#.................. 1.74%**
Gross expenses to average net assets#................ 1.75%**
Net investment (loss) to average net assets.......... (1.19%)**
Portfolio turnover rate@............................. 177%
</TABLE>

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ------------------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- ---------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning
of period................ $ 23.87 $ 20.41 $ 17.28 $ 15.87 $ 14.77 $ 11.63
Income from investment
operations:
Net investment income
(loss)................ (0.07) (0.09) 0.01 0.07 0.02 0.02
Net gains (losses) on
securities (both
realized and
unrealized)........... (0.87) 7.73 4.26 4.09 2.40 5.27
---------- ---------- ---------- ---------- ---------- --------
Total from
investment
operations........ (0.94) 7.64 4.27 4.16 2.42 5.29
Less distributions:
From net investment
income*............... 0.00 0.00 (0.01) (0.07) (0.02) (0.02)
From net realized
gains................. 0.00 (4.18) (1.13) (2.68) (1.30) (2.13)
---------- ---------- ---------- ---------- ---------- --------
Total
distributions..... 0.00 (4.18) (1.14) (2.75) (1.32) (2.15)
Net Asset Value, end of
period................... $ 22.93 $ 23.87 $ 20.41 $ 17.28 $ 15.87 $ 14.77
========== ========== ========== ========== ========== ========
Total Return/Ratios
Total return........... (3.94%) 39.06% 25.04% 26.60% 16.57% 45.59%
Net assets, end of
period (000s)......... $3,147,186 $3,323,606 $2,360,180 $1,757,449 $1,118,323 $655,927
Net expenses to average
net assets#........... 1.05%** 1.08% 1.08% 1.10% 1.19% 1.24%
Gross expenses to
average net assets#... 1.06%** 1.09% 1.10% 1.12% 1.20% 1.28%
Net investment income
(loss) to average net
assets................ (0.54%)** (0.47%) 0.05% 0.48% 0.15% 0.12%
Portfolio turnover
rate@................. 177% 117% 143% 189% 134% 130%
</TABLE>

<TABLE>
<S> <C>
* Distributions in excess of net investment income for the
year ended December 31, 1998 aggregated less than $0.01 on a
per share basis.
** Annualized.
# Ratio of Net Expenses to Average Net Assets reflects
reductions in a Fund's expenses through the use of brokerage
commissions and custodial and transfer agent credits. Ratio
of Gross Expenses to Average Net Assets is the total of a
Fund's operating expenses before expense offset arrangements
and earnings credits divided by its average net assets for
the stated period.
@ Portfolio Turnover Rate is a measure of portfolio activity
that is calculated by dividing the lesser of purchases or
sales of securities, excluding securities having maturity
dates at acquisition of one year or less, by the average
value of the portfolio securities held during the period,
which is a rolling 12-month period.
</TABLE>

See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS R SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $23.88
Income from investment operations:
Net investment (loss)................................ (0.01)
Net (losses) on securities (both realized and
unrealized)........................................ (0.92)
------
Total from investment operations................ (0.93)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $22.95
======
Total Return/Ratios
Total return......................................... (3.89%)
Net assets, end of period (000s)..................... $ 3
Net expenses to average net assets#.................. 0.74%*
Gross expenses to average net assets#................ 0.74%*
Net investment (loss) to average net assets.......... (0.13%)*
Portfolio turnover rate@............................. 177%
</TABLE>

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS T SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $23.88
Income from investment operations:
Net investment (loss)................................ (0.03)
Net (losses) on securities (both realized and
unrealized)........................................ (0.94)
------
Total from investment operations................ (0.97)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $22.91
======
Total Return/Ratios
Total return......................................... (4.06%)*
Net assets, end of period (000s)..................... $ 841
Net expenses to average net assets#.................. 1.24%**
Gross expenses to average net assets#................ 1.25%**
Net investment (loss) to average net assets.......... (0.70%)**
Portfolio turnover rate@............................. 177%
</TABLE>

See notes to financial statements.

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Growth Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

28
<PAGE>

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $864
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $2,514, $7,055, $1,412, and $374, respectively, for shareholder
servicing fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net assets
of Class B and Class C shares and 0.25% of the average daily net assets of Class
T

30
<PAGE>

shares. During the six months ended June 30, 2000, Class B, Class C, and Class T
shares were charged $21,164, $4,237, and $374, respectively, pursuant to the
Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS
GROWTH FUND
----------------
<S> <C>
Net Capital Loss Carryovers.............................. $ 0
Post-October Capital Loss Deferral....................... $ 0
Post-October Currency Loss Deferral...................... $ 0
Federal Tax Cost......................................... $2,757,519,330
Unrealized Appreciation.................................. $ 490,437,210
Unrealized (Depreciation)................................ $ (49,177,765)
Net Appreciation......................................... $ 441,259,445
</TABLE>

32
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 750 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED 6/30/00 ENDED 12/31/99*
------------- ---------------
<S> <C> <C>
CLASS A
Shares sold.............................. 266,433 42
Shares issued for dividends reinvested... 0 0
Shares redeemed.......................... (3,977) 0
NET INCREASE IN SHARES OUTSTANDING....... 262,456 42
CLASS B
Shares sold.............................. 751,182 42
Shares issued for dividends reinvested... 0 0
Shares redeemed.......................... (6,646) 0
NET INCREASE IN SHARES OUTSTANDING....... 744,536 42
CLASS C
Shares sold.............................. 138,007 42
Shares issued for dividends reinvested... 0 0
Shares redeemed.......................... (1,159) 0
NET INCREASE IN SHARES OUTSTANDING....... 136,848 42
CLASS F
Shares sold.............................. 19,434,404 42,506,965
Shares issued for dividends reinvested... 0 21,478,690
Shares redeemed.......................... (21,449,310) (40,443,230)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING............................ (2,014,906) 23,542,425
CLASS R
Shares sold.............................. 90 42
Shares issued for dividends reinvested... 0 0
Shares redeemed.......................... 0 0
NET INCREASE IN SHARES OUTSTANDING....... 90 42
CLASS T
Shares sold.............................. 36,961 42
Shares issued for dividends reinvested... 0 0
Shares redeemed.......................... (320) 0
NET INCREASE IN SHARES OUTSTANDING....... 36,641 42
</TABLE>

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R, and Class T shares.

33
<PAGE>

This page intentionally left blank.
<PAGE>

DREYFUS FOUNDERS FUNDS
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

Date of first use: August 28, 2000

<PAGE>

DREYFUS FOUNDERS
GROWTH FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

-------------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
-------------------------------------------------------------
<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the
figures listed here. The Fund's portfolio composition is subject to change and
there is no assurance the Fund will continue to hold any particular security.
Opinions regarding sectors, industries, companies, and/or themes are subject to
change at any time, based on market and other conditions, and should not be
construed as a recommendation of any specific security.
Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed, may
be worth more or less than their original cost.

COMPARATIVE INDEXES

o The Standard & Poor's (S&P) 500 Index is a market-value-weighted, unmanaged
index of common stocks considered representative of the broad market.

o The Lipper Large-Cap Growth Fund Index is an average of the performance of
the 30 largest large-cap growth funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

4
<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTOS]

A discussion with portfolio managers Tom Arrington, CFA, left, and Scott
Chapman, CFA

HOW DID THE FUND PERFORM DURING THE FIRST HALF OF THE YEAR?

WHAT WERE SOME OF THE MAIN INFLUENCES ON DOMESTIC LARGE-COMPANY STOCKS, AND HOW
DID THESE INFLUENCES AFFECT THE FUND?

--------------------------------------------------------------------------------
FUND AT A GLANCE

This fund invests primarily in the common stocks of well-established,
high-quality growth companies.
--------------------------------------------------------------------------------

6
<PAGE>

GROWTH OF $10,000 INVESTMENT GRAPH

[GRAPH]

<PAGE>

WHAT STRATEGIES BENEFITED THE FUND IN THE FIRST HALF?

PORTFOLIO COMPOSITION

<PAGE>

AVERAGE ANNUAL TOTAL RETURNS AS OF 6/30/00

<TABLE>
INCEPTION YEAR-TO- 1 5 10 20
DATE DATE* YEAR YEARS YEARS YEARS

<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 1/5/62 (3.94%) 20.32% 24.04% 19.55% 18.13%
</TABLE>

* Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00

CLASS B SHARES
With redemption** 12/31/99 -- -- -- (8.10%)
Without redemption 12/31/99 -- -- -- (4.27%)

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- (5.23%)
Without redemption 12/31/99 -- -- -- (4.27%)

CLASS R SHARES 12/31/99 -- -- -- (3.89%)

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- (8.37%)
Without sales charge 12/31/99 -- -- -- (4.06%)
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

9
<PAGE>

WHICH AREAS OF STRENGTH OR WEAKNESS EMERGED
FROM YOUR RESEARCH?

LARGEST EQUITY HOLDINGS
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
Portfolio holdings are subject to change.

10
<PAGE>

WHAT DO YOU EXPECT FROM DOMESTIC LARGE-CAP GROWTH
COMPANIES IN COMING MONTHS?

/s/ THOMAS ARRINGTON

Thomas Arrington, CFA
Co-Portfolio Manager

/s/ SCOTT CHAPMAN

Scott Chapman, CFA
Co-Portfolio Manager

11
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

12
<PAGE>

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

14
<PAGE>

* Non-income producing.
See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

16
<PAGE>

See notes to financial statements.

17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (8,905,774) $ (12,727,489)
Net Realized Gain from Security
Transactions............................... 336,649,108 437,419,900
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... 0 0
Net Change in Unrealized
Appreciation/Depreciation.................. (449,524,913) 517,564,784
-------------- --------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ (121,781,579) 942,257,195
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (493,801,317)
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
Net (Decrease) from Dividends and
Distributions............................ 0 (493,801,317)
</TABLE>

* Inception date December 31, 1999, for Class A, Class B, Class C, Class R and
Class T shares.
See notes to financial statements.

19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

20
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
NET ASSETS
Beginning of period........................ $3,323,610,960 $2,360,179,531
-------------- --------------
End of period.............................. $3,174,200,910 $3,323,610,960
============== ==============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $2,306,183,458 $2,333,811,929
Accumulated undistributed (distribution in
excess of) net investment income........... (8,905,774) 0
Accumulated undistributed net realized gain
from security transactions................. 406,246,430 69,597,322
Unrealized appreciation on investments and
foreign currency transactions.............. 470,676,796 920,201,709
-------------- --------------
Total...................................... $3,174,200,910 $3,323,610,960
============== ==============
</TABLE>

* Inception date December 31, 1999, for Class A, Class B, Class C, Class R and
Class T shares.
See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Growth Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

28
<PAGE>

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $864
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $2,514, $7,055, $1,412, and $374, respectively, for shareholder
servicing fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net assets
of Class B and Class C shares and 0.25% of the average daily net assets of Class
T

30
<PAGE>

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

32
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 750 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R, and Class T shares.

33
<PAGE>

This page intentionally left blank.
<PAGE>

FOR MORE INFORMATION

Dreyfus Founders
Growth Fund
2930 East Third Avenue
Denver, CO 80206

MANAGER

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

Founders and Founders Funds are registered trademarks of
Founders Asset Management LLC.

<PAGE>
DREYFUS FOUNDERS
GROWTH AND
INCOME FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
------------------------------------------------------------------------
A Message from Founders 4
------------------------------------------------------------------------
Management Overview 6
------------------------------------------------------------------------
Statement of Investments 12
------------------------------------------------------------------------
Statement of Assets and Liabilities 16
------------------------------------------------------------------------
Statement of Operations 18
------------------------------------------------------------------------
Statements of Changes in Net Assets 19
------------------------------------------------------------------------
Financial Highlights 22
------------------------------------------------------------------------
Notes to Financial Statements 28
------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:
<TABLE>
<S> <C> <C>
AU Australia GE Germany MA Malaysia
AT Austria HK Hong Kong MX Mexico
BE Belgium ID Indonesia NE Netherlands
BR Brazil IE Ireland NW Norway
CA Canada IS Israel SP Spain
CN China IT Italy SW Sweden
DE Denmark JA Japan SZ Switzerland
FI Finland KR South Korea UK United Kingdom
FR France LU Luxembourg
</TABLE>

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

-------------------------------------------------------------
O NOT FDIC-INSURED O NOT BANK-GUARANTEED O MAY LOSE VALUE
-------------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

COMPARATIVE INDEXES

o The Standard & Poor's (S&P) 500 Index is a market-value-weighted, unmanaged
index of common stocks considered representative of the broad market.

o The Lipper Large-Cap Core Fund Index is an average of the performance of
the 30 largest large-cap core funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

3
<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

4
<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

5
<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Thomas Arrington, CFA

HOW DID THE GROWTH AND INCOME FUND PERFORM DURING THE FIRST HALF?

In the markedly volatile first half of 2000, the Growth and Income Fund fell
into negative territory and trailed its benchmarks. Although the Fund's
first-quarter return was solid, in the second quarter Growth and Income was hurt
by a sharp market correction that curtailed investors' confidence and caused
indiscriminate selling, especially of technology companies.

WHAT MARKET EVENTS AFFECTED LARGE-CAP COMPANIES IN THE FIRST HALF?

Unusually strong economic growth and low unemployment caused the Federal Reserve
to express concern for price pressures. Investors feared an aggressive Fed that
could slow business and consumer spending. As a result, they fled stocks with
relatively high near-term price-to-earnings (P/E) ratios, even though many of
these companies reported strong earnings growth throughout the half. Indeed, the
fluctuations we experienced in April and May served as pointed reminders that
economic uncertainty can be a significant factor in shaping the market's course.

--------------------------------------------------------------------------------

FUND AT A GLANCE

This fund invests primarily in common stocks of large, well-established,
stable and mature companies. These companies generally pay regular
dividends, although the Fund may invest in non-dividend paying companies if
they offer better prospects for capital appreciation.

--------------------------------------------------------------------------------

6
<PAGE>

Large-cap stocks within the technology sector were particularly volatile
during the first half. This can be attributed in part to investors' wariness
toward tech companies' price-to-earnings ratios, which have always been higher
than those of companies in more traditional sectors. When the market showed
weakness, many investors opted to sell large quantities of technology stocks.

Unfortunately, the technology sell-off hurt the Growth and Income Fund in
the latter part of the first half since we had a substantial position in this
area due to our belief that the tech sector is attractive. The technology
companies

GROWTH OF $10,000 INVESTMENT

<TABLE>
<CAPTION>
LIPPER
LARGE-CAP CORE
GR. & INC. S&P 500 FD. INDEX CPI
---------- ------- -------------- ---

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The above graph compares a
$10,000 investment made in Class F shares of Dreyfus Founders Growth and Income
Fund on 6/30/90 to a $10,000 investment made in unmanaged securities indexes and
the Consumer Price Index on that date. On December 31, 1999, the Fund adopted a
multiclass structure. Existing Fund shares were designated as Class F shares and
Class F shares are available only to grandfathered investors. All dividends and
capital gain distributions are reinvested. Performance for Class A, B, C, R and
T shares will vary from the performance of Class F shares shown above due to
differences in charges and expenses. The Fund's performance shown in the line
graph takes into account all applicable fees and net expenses of Class F shares.
More complete information about the indexes shown may be found on page 3.
Further information related to Fund performance is contained elsewhere in this
report.

7
<PAGE>

in the Growth and Income Fund reported solid results for the first two quarters
of 2000, and therefore we kept them in the Fund even as outside factors
triggered losses. Although the Fund slipped in the first half due to this
decision, we remain confident in our technology stocks, and believe they are
attractive when viewed over a five-year horizon, considering the compounding of
projected earnings growth.

Market volatility was also a strain on some of the Fund's consumer cyclical
holdings. Many investors feared that rising interest rates would reduce earnings
growth for retailers. We subsequently saw, as a result, the share prices of HOME
DEPOT and COSTCO WHOLESALE decline.

PORTFOLIO COMPOSITION

[PIE CHART]

------------------------------------------------------------------------------

<TABLE>
<S> <C>
35.70% Technology
13.57% Healthcare
8.91% Consumer Cyclicals
8.71% Financial
8.62% Consumer Staples
7.13% Telecom Services
5.65% Energy
4.47% Capital Goods
2.53% U.S. Bonds
1.70% Business Services
1.61% Other Assets & Liabilities
1.40% Utilities
</TABLE>

------------------------------------------------------------------------------

Portfolio composition is subject to change.

8
<PAGE>

WHAT WAS YOUR STRATEGY FOR SEEKING GROWTH, AND HOW DID THIS STRATEGY BENEFIT
THE FUND?

Growth and Income Fund is focused on large, well-established, stable companies
of great financial strength that possess attractive growth prospects. In the
first half, we continued to stand by this emphasis, conducting in-depth,
bottom-up research to uncover the companies we believe have impressive records
of profitability and strong reputations for quality management. To reach
informed decisions about the myriad large-cap prospects open to the Fund, we
regularly meet with company leaders, chart five-year growth expectations, attend
industry conferences, read a variety of trade journals, and talk daily with
Wall Street contacts.

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 5 10 20
DATE DATE* YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 7/5/38 (4.99%) 5.96% 16.35% 13.17% 14.60%
</TABLE>

*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00
<TABLE>
<CAPTION>

INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>

CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- (9.84%)
Without sales charge 12/31/99 -- -- -- (4.34%)

Class B Shares
With redemption** 12/31/99 -- -- -- (9.05%)
Without redemption 12/31/99 -- -- -- (5.26%)

Class C Shares
With redemption*** 12/31/99 -- -- -- (6.20%)
Without redemption 12/31/99 -- -- -- (5.26%)

Class R Shares 12/31/99 -- -- -- (4.73%)

Class T Shares
With sales charge (4.50%) 12/31/99 -- -- -- (9.38%)
Without sales charge 12/31/99 -- -- -- (5.12%)
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

9
<PAGE>

In the first half, several companies representing a variety of sectors and
industries emerged from our research and became solid contributors to the Fund.
One standout was technology company CORNING, INC., an optical equipment and
cable, photonic components, and liquid-crystal display glass manufacturer. The
company has produced strong earnings growth--up 78% in the first quarter alone.
For the year-to-date period ended June 30, Corning's stock was up 109.6%--an
impressive increase, especially in light of the technology sector's
second-quarter struggles.

WHAT WERE SOME OF THE FUND'S SUCCESSFUL THEMES?

In analyzing our company-by-company research, we were able to pinpoint some
general areas that showed exceptional growth in the first half. For example, a
number of the Fund's holdings in the financials sector shone, including THE BANK
OF NEW YORK. Providing a full range of banking and other financial services,
this company has transformed itself from a simple banking services provider into
a leader in securities processing. Looking ahead, we believe that the Bank of
New York could benefit from the privatization of pensions, growth in
cross-border investments, and financial deregulation worldwide.

LARGEST EQUITY HOLDINGS

-------------------------------------------------------------------------------

<TABLE>
<S> <C>
1. Pfizer, Inc. 3.73%
2. Intel Corporation 3.64%
3. Cisco Systems, Inc. 3.39%
4. General Electric Company 2.51%
5. Viacom, Inc. Class B 2.26%
6. Citigroup, Inc. 2.23%
7. Nokia Oyj Sponsored ADR 2.18%
8. EMC Corporation 2.10%
9. Nortel Networks Corporation Sponsored ADR 2.09%
10. Corning, Inc. 2.00%
</TABLE>
-------------------------------------------------------------------------------
Portfolio holdings are subject to change.

10
<PAGE>

Healthcare was another sector that excelled during the half. PFIZER posted
impressive gains after announcing that they expect strong earnings growth
between 2000 and 2002 as a result of the Warner-Lambert merger. BAXTER, a
leading developer, manufacturer, and distributor of a wide variety of medical
products, also performed well in the first half. With its focus on new
products, global business strategies, and low-cost manufacturing, we believe
Baxter could continue to see strong earnings growth.

HOW HAVE YOU POSITIONED THE GROWTH AND INCOME FUND FOR THE SECOND HALF OF 2000?

We remain confident in our bottom-up approach, and therefore we continue to
position the Fund to capitalize on the growth potential of the specific
companies we've identified as growth prospects rather than relying on sector
weightings or market forecasts. Although the latter half of the six-month
period was a trying time for the Fund, we continue to believe that over the
long term, companies with strong business fundamentals and growth prospects may
deliver solid investment returns.

/s/ THOMAS ARRINGTON

Thomas Arrington, CFA
Portfolio Manager

11
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
COMMON STOCKS (DOMESTIC)-90.1%
AUTOMOTIVE-1.0%
55,550 General Motors
Corporation Class H* $ 4,874,513
------------
BANKING-5.6%
178,687 Citigroup, Inc. 10,765,892
52,725 Fifth Third Bancorp 3,334,856
10,625 State Street Corporation 1,126,914
102,325 The Bank of New York
Company, Inc. 4,758,113
68,212 The Chase Manhattan
Corporation 3,142,015
105,200 Wells Fargo & Company 4,076,500
------------
27,204,290
------------
BIOTECHNOLOGY-1.1%
41,700 Amgen, Inc.* 2,929,425
12,709 Genentech, Inc.* 2,185,948
------------
5,115,373
------------
BUSINESS SERVICES-1.7%
28,775 Computer Sciences
Corporation* 2,149,133
73,600 First Data Corporation 3,652,400
26,950 Omnicom Group, Inc. 2,400,234
------------
8,201,767
------------
COMPUTER EQUIPMENT-6.0%
52,000 Apple Computer, Inc.* 2,720,250
99,275 Dell Computer
Corporation* 4,895,498
131,475 EMC Corporation* 10,115,358
43,825 Gateway, Inc.* 2,487,069
33,175 International Business
Machines Corporation 3,634,736
57,300 Sun Microsystems, Inc.* 5,210,719
------------
29,063,630
------------
COMPUTER NETWORKING- 4.5%
257,375 Cisco Systems, Inc.* 16,359,398
34,175 Foundry Networks, Inc.* 3,772,066
17,500 Network Appliance, Inc.* 1,407,656
------------
21,539,120
------------

COMPUTER SOFTWARE/SERVICES-5.1%
82,700 Automatic Data
Processing, Inc. $ 4,429,619
27,850 Mercury Interactive
Corporation* 2,694,488
100,900 Oracle Corporation* 8,475,600
7,325 Seibel Systems, Inc.* 1,198,095
20,900 VeriSign, Inc.* 3,684,931
27,650 VERITAS Software
Corporation* 3,124,450
9,925 Yahoo!, Inc.* 1,229,459
------------
24,836,642
------------
CONSUMER PRODUCTS-1.0%
51,600 Colgate-Palmolive
Company 3,089,550
47,975 The Gillette Company 1,676,127
------------
4,765,677
------------
CONSUMER SERVICES-0.3%
48,350 DeVry, Inc.* 1,278,253
------------
DIVERSIFIED-2.2%
700 Berkshire Hathaway,
Inc.* 1,232,000
35,675 Corning, Inc. 9,627,783
------------
10,859,783
------------
ELECTRONICS-4.1%
7,322 Agilent Technologies,
Inc.* 539,998
228,000 General Electric Company 12,084,000
93,544 Jabil Circuit, Inc.* 4,642,121
19,500 PE Corp-PE Biosystems
Group 1,284,563
15,825 Sanmina Corporation 1,352,048
------------
19,902,730
------------
FINANCIAL SERVICES-1.0%
58,950 American Express Company 3,072,769
18,950 Northern Trust
Corporation 1,231,750
23,100 The Charles Schwab
Corporation 776,738
------------
5,081,257
------------
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
FOOD & BEVERAGE-1.4%
31,000 Anheuser-Busch
Companies, Inc. $ 2,315,313
77,825 The Coca-Cola Company 4,470,073
------------
6,785,386
------------
INSURANCE-1.7%
59,150 American International
Group, Inc. 6,950,125
14,425 Marsh & McLennan
Companies, Inc. 1,506,511
------------
8,456,636
------------
LEISURE & ENTERTAINMENT-3.1%
39,850 Harley-Davidson, Inc. 1,534,225
66,100 The Walt Disney Company 2,565,506
159,950 Viacom, Inc. Class B* 10,906,591
------------
15,006,322
------------
MANUFACTURING-2.5%
49,500 Danaher Corporation 2,447,156
199,375 Tyco International
Limited 9,445,391
------------
11,892,547
------------
MEDICAL SUPPLIES & EQUIPMENT-2.6%
91,575 Baxter International,
Inc. 6,438,867
71,575 Guidant Corporation* 3,542,963
46,300 Medtronic, Inc.* 2,306,319
------------
12,288,149
------------
OIL & GAS-4.3%
27,450 Chevron Corporation 2,328,103
67,225 Enron Corporation 4,336,013
114,633 Exxon Mobile Corporation 8,998,691
79,475 The Coastal Corporation 4,838,041
------------
20,500,848
------------

OIL SERVICES-0.9%
92,475 Halliburton Company $ 4,363,664
------------
PHARMACEUTICALS-10.0%
121,725 Abbott Laboratories 5,424,370
51,950 Bristol-Myers Squibb
Company 3,026,088
65,050 Eli Lilly and Company 6,496,869
32,325 MedImmune, Inc.* 2,390,030
81,825 Merck & Company, Inc. 6,269,841
374,010 Pfizer, Inc. 17,952,456
54,888 Pharmacia Corporation 2,837,024
71,050 Schering-Plough
Corporation 3,588,025
------------
47,984,703
------------
PUBLISHING & BROADCASTING-5.0%
105,900 AMFM, Inc.* 7,307,100
79,850 AT&T Corporation-Liberty
Media Group 1,936,363
129,325 Comcast Corporation
Special Class A 5,245,745
92,225 Time Warner, Inc. 7,009,100
119,575 USA Networks, Inc.* 2,585,809
------------
24,084,117
------------
RETAIL-4.8%
116,350 Costco Wholesale
Corporation* 3,839,550
25,000 Kohl's Corporation* 1,390,625
49,000 Lowe's Companies, Inc. 2,012,063
38,250 Target Corporation 2,218,500
70,000 The Home Depot, Inc. 3,495,625
82,650 Walgreen Company 2,660,297
128,500 Wal-Mart Stores, Inc. 7,404,813
------------
23,021,473
------------
</TABLE>

* Non-income producing.
See notes to financial statements.
13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
SEMICONDUCTORS & EQUIPMENT-8.2%
86,450 Analog Devices, Inc.* $ 6,570,200
21,700 Applied Micro Circuits
Corporation* 2,142,875
131,175 Intel Corporation 17,528,259
32,525 JDS Uniphase
Corporation* 3,896,902
18,700 National Semiconductor
Corporation 1,061,225
102,300 Texas Instruments, Inc. 7,026,731
16,550 Vitesse Semiconductor
Corporation 1,217,459
------------
39,443,651
------------
SUPERMARKETS-1.0%
47,900 Safeway, Inc. 2,161,488
112,050 The Kroger Company 2,472,103
------------
4,633,591
------------
TELECOMMUNICATION SERVICES-4.5%
58,825 Alltel Corporation* 3,643,473
55,475 GTE Corporation 3,453,319
22,550 Level 3 Communications,
Inc.* 1,982,991
25,676 Nextel Communications,
Inc.* 1,571,050
123,075 SBC Communications, Inc. 5,322,994
26,400 Sprint Corporation 1,346,400
53,850 Sprint Corporation (PCS
Group)* 3,204,075
10,626 VoiceStream Wireless
Corporation* 1,235,937
------------
21,760,239
------------
TELECOMMUNICATIONS EQUIPMENT-5.1%
29,475 E-Tek Dynamics, Inc.* 7,772,189
119,375 Lucent Technologies,
Inc. 7,072,969
96,150 Qwest Communications
International, Inc.* 4,777,453
72,150 Tellabs, Inc.* 4,937,766
------------
24,560,377
------------

UTILITIES-1.4%
20,475 Duke Energy Corporation $ 1,154,278
91,150 The AES Corporation 4,158,719
40,225 The Montana Power
Company 1,420,445
------------
6,733,442
------------
TOTAL COMMON STOCKS
(DOMESTIC)
(COST-$383,282,789) 434,238,180
------------
COMMON STOCKS (FOREIGN)-5.7%
OIL & GAS-0.5%
38,350 Royal Dutch Petroleum
Company (NE) 2,360,922
------------
TELECOMMUNICATION SERVICES-2.6%
147,800 Nortel Networks
Corporation Sponsored
ADR (CA) 10,087,350
60,400 Vodafone AirTouch PLC
Sponsored ADR (UK) 2,502,825
------------
12,590,175
------------
TELECOMMUNICATIONS EQUIPMENT-2.6%
210,321 Nokia Oyj Sponsored ADR
(FI) 10,502,905
109,500 Telefonaktiebolaget LM
Ericsson Class B
Sponsored ADR (SW) 2,190,000
------------
12,692,905
TOTAL COMMON STOCKS (FOREIGN)
(COST-$26,790,184) 27,644,002
------------
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
Principal Amount Market Value
-----------------------------------------------
<C> <S> <C>
CONVERTIBLE BONDS (DOMESTIC)-2.5%
COMPUTER SOFTWARE/SERVICES-1.2%
$5,400,000 Redback Networks,
Inc. 5.00% 04/01/07
144A+ $ 5,987,250
------------
TELECOMMUNICATION SERVICES-1.3%
5,700,000 Juniper Networks,
Inc. Convertible Bond
4.75% 03/15/07 6,205,875
------------
TOTAL CONVERTIBLE BONDS (DOMESTIC)
(COST-$10,675,085) 12,193,125
------------
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------
<C> <S> <C>
CORPORATE SHORT-TERM NOTES-1.4%
FINANCIAL SERVICES-1.4%
$6,600,000 Associates
Corporation N.A.
6.93% 07/03/00 $ 6,597,459
------------
TOTAL CORPORATE SHORT-TERM NOTES
(AMORTIZED COST-$6,597,459) 6,597,459
------------
TOTAL INVESTMENTS-99.7%
(COST-$427,345,517) 480,672,766
OTHER ASSETS AND
LIABILITIES-0.3% 1,230,621
------------
NET ASSETS-100.0% $481,903,387
============
</TABLE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.
15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS
Investment securities, at cost.............................. $427,345,517
------------
Investment securities, at market............................ 480,672,766
Cash........................................................ 1,243,674
Receivables:
Capital shares sold....................................... 131,066
Dividends and interest.................................... 337,020
Other assets................................................ 32,743
------------
Total Assets............................................ 482,417,269
------------

LIABILITIES
Payables:
Capital shares redeemed................................... 40,953
Advisory fees............................................. 247,487
Shareholder servicing fees................................ 34,672
Accounting fees........................................... 9,089
Distribution fees......................................... 127,573
Other..................................................... 54,108
------------
Total Liabilities....................................... 513,882
------------
Net Assets.................................................. $481,903,387
============
</TABLE>

16
<PAGE>

<TABLE>
<S> <C>
Net Assets--Class A......................................... $ 69,641
Shares Outstanding--Class A................................. 9,570
Net Asset Value and Redemption Price Per Share.............. $ 7.28
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price)........................ $ 7.72
Net Assets--Class B......................................... $ 436,465
Shares Outstanding--Class B................................. 60,559
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share.... $ 7.21
Net Assets--Class C......................................... $ 37,637
Shares Outstanding--Class C................................. 5,220
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share.... $ 7.21
Net Assets--Class F......................................... $481,289,393
Shares Outstanding--Class F................................. 66,546,341
Net Asset Value, Offering and Redemption Price Per Share.... $ 7.23
Net Assets--Class R......................................... $ 957
Shares Outstanding--Class R................................. 132
Net Asset Value, Offering and Redemption Price Per Share.... $ 7.25
Net Assets--Class T......................................... $ 69,294
Shares Outstanding--Class T................................. 9,596
Net Asset Value and Redemption Price Per Share.............. $ 7.22
Maximum offering price per share (net asset value plus sales
charge of 4.50% of offering price)........................ $ 7.56
</TABLE>

See notes to financial statements.
17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................. $ 1,669,929
Interest.................................................. 597,310
Foreign taxes withheld.................................... (14,455)
------------
Total Investment Income................................. 2,252,784
------------
Expenses:
Advisory fees............................................. 1,555,177
Shareholder servicing fees--Note 2........................ 210,227
Accounting fees........................................... 57,261
Distribution fees--Note 2................................. 623,636
Transfer agency fees--Note 2.............................. 113,657
Registration fees......................................... 27,327
Postage and mailing expenses.............................. 15,220
Custodian fees and expenses............................... 14,781
Printing expenses......................................... 48,304
Legal and audit fees...................................... 10,825
Directors' fees and expenses.............................. 21,889
Other expenses............................................ 68,365
------------
Total Expenses.......................................... 2,766,669
Earnings Credits........................................ (52,508)
------------
Net Expenses.......................................... 2,714,161
------------
Net Investment (Loss)..................................... (461,377)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net Realized Gain (Loss) from Security Transactions:
Proceeds from long-term securities sold................... 494,125,277
Proceeds from long-term U.S. Government Obligations....... 0
Cost of securities sold................................... 465,659,571
------------
Net Realized Gain from Security Transactions................ 28,465,706
Net Realized Gain (Loss) from Foreign Currency
Transactions.............................................. 0
Net Change in Unrealized Appreciation/Depreciation.......... (53,764,590)
------------
Net Realized and Unrealized (Loss) on Investments and
Foreign Currency Transactions........................... (24,298,884)
------------
Net (Decrease) in Net Assets Resulting from Operations...... $(25,760,261)
============
Purchases of long-term securities........................... $462,860,062
============
Purchases of long-term U.S. Government Obligations.......... $ 0
============
</TABLE>

See notes to financial statements.
18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (461,377) $ (243,734)
Net Realized Gain from Security
Transactions............................... 28,465,706 35,396,085
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... 0 0
Net Change in Unrealized
Appreciation/Depreciation.................. (53,764,590) 36,716,031
-------------- --------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ (25,760,261) 71,868,382
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions
and Foreign Currency Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (50,520,599)
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
Net (Decrease) from Dividends and
Distributions............................ 0 (50,520,599)
-------------- --------------
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.
19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class A.................................... $ 1,711,452 $ 1,000
Class B.................................... 481,278 1,000
Class C.................................... 41,455 1,000
Class F.................................... 12,824,101 27,277,048
Class R.................................... 0 1,000
Class T.................................... 67,884 1,000
Reinvested dividends and distributions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 44,526,472
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
15,126,170 71,808,520
Cost of shares redeemed
Class A.................................... (1,646,582) 0
Class B.................................... (37,131) 0
Class C.................................... (4,894) 0
Class F.................................... (40,813,611) (100,423,325)
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
(42,502,218) (100,423,325)
-------------- --------------
Net (Decrease) from Capital Share
Transactions............................. (27,376,048) (28,614,805)
-------------- --------------
Net (Decrease) in Net Assets............... (53,136,309) (7,267,022)
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
NET ASSETS
Beginning of period........................ $ 535,039,696 $ 542,306,718
-------------- --------------
End of period.............................. $ 481,903,387 $ 535,039,696
============== ==============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $ 397,500,178 $ 424,876,226
Accumulated undistributed (distribution in
excess of)
net investment income...................... (461,377) 0
Accumulated undistributed net realized gain
from security transactions................. 31,542,038 3,076,332
Unrealized appreciation on investments and
foreign currency transactions.............. 53,322,548 107,087,138
-------------- --------------
Total...................................... $ 481,903,387 $ 535,039,696
============== ==============
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.
21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS A SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 7.61
Income from investment operations:
Net investment income................................ 0.01
Net (losses) on securities (both realized and
unrealized)........................................ (0.34)
------
Total from investment operations................ (0.33)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 7.28
======
Total Return/Ratios
Total return......................................... (4.34%)*
Net assets, end of period (000s)..................... $ 70
Net expenses to average net assets#.................. 0.96%**
Gross expenses to average net assets#................ 0.97%**
Net investment income to average net assets.......... 0.33%**
Portfolio turnover rate@............................. 136%
</TABLE>

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS B SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 7.61
Income from investment operations:
Net investment (loss)................................ (0.01)
Net (losses) on securities (both realized and
unrealized)........................................ (0.39)
------
Total from investment operations................ (0.40)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 7.21
======
Total Return/Ratios
Total return......................................... (5.26%)*
Net assets, end of period (000s)..................... $ 436
Net expenses to average net assets#.................. 1.66%**
Gross expenses to average net assets#................ 1.68%**
Net investment (loss) to average net assets.......... (0.76%)**
Portfolio turnover rate@............................. 136%
</TABLE>

See notes to financial statements.
23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS C SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 7.61
Income from investment operations:
Net investment income (loss)......................... 0.00
Net (losses) on securities (both realized and
unrealized)........................................ (0.40)
------
Total from investment operations................ (0.40)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 7.21
======
Total Return/Ratios
Total return......................................... (5.26%)*
Net assets, end of period (000s)..................... $ 38
Net expenses to average net assets#.................. 1.71%**
Gross expenses to average net assets#................ 1.74%**
Net investment (loss) to average net assets.......... (0.80%)**
Portfolio turnover rate@............................. 136%
</TABLE>

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period.......................... $ 7.61 $ 7.32 $ 6.92 $ 7.23 $ 6.69 $ 6.16
Income from investment
operations:
Net investment income
(loss)....................... (0.01) 0.00 0.71 0.13 0.09 0.09
Net gains (losses) on
securities (both realized and
unrealized).................. (0.37) 1.06 0.51 1.25 1.52 1.70
-------- -------- -------- -------- -------- --------
Total from investment
operations............... (0.38) 1.06 1.22 1.38 1.61 1.79
Less distributions:
From net investment income*... 0.00 0.00 (0.11) (0.13) (0.09) (0.09)
From net realized gains....... 0.00 (0.77) (0.71) (1.56) (0.98) (1.17)
-------- -------- -------- -------- -------- --------
Total distributions........ 0.00 (0.77) (0.82) (1.69) (1.07) (1.26)
Net Asset Value, end of period... $ 7.23 $ 7.61 $ 7.32 $ 6.92 $ 7.23 $ 6.69
======== ======== ======== ======== ======== ========
Total Return/Ratios
Total return.................. (4.99%) 15.03% 17.78% 19.40% 24.37% 29.06%
Net assets, end of period
(000s)....................... $481,289 $535,035 $542,307 $543,168 $535,866 $375,200
Net expenses to average net
assets#...................... 1.09%** 1.12% 1.08% 1.09% 1.15% 1.17%
Gross expenses to average net
assets#...................... 1.12%** 1.13% 1.10% 1.11% 1.16% 1.22%
Net investment income (loss)
to average net assets........ (0.18%)** (0.05%) 1.38% 1.84% 1.40% 1.19%
Portfolio turnover rate@...... 136% 165% 259% 256% 195% 235%
</TABLE>

See notes to financial statements.
25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS R SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 7.61
Income from investment operations:
Net investment income (loss)......................... 0.00
Net (losses) on securities (both realized and
unrealized)........................................ (0.36)
------
Total from investment operations................ (0.36)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 7.25
======
Total Return/Ratios
Total return......................................... (4.73%)
Net assets, end of period (000s)..................... $ 1
Net expenses to average net assets#.................. 0.71%*
Gross expenses to average net assets#................ 0.73%*
Net investment income to average net assets.......... 0.05%*
Portfolio turnover rate@............................. 136%
</TABLE>

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS T SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 7.61
Income from investment operations:
Net investment income (loss)......................... 0.00
Net (losses) on securities (both realized and
unrealized)........................................ (0.39)
------
Total from investment operations................ (0.39)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 7.22
======
Total Return/Ratios
Total return......................................... (5.12%)*
Net assets, end of period (000s)..................... $ 69
Net expenses to average net assets#.................. 1.13%**
Gross expenses to average net assets#................ 1.16%**
Net investment (loss) to average net assets.......... (0.22%)**
Portfolio turnover rate@............................. 136%
</TABLE>

See notes to financial statements.
27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Growth and Income
Fund (the "Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R,
and Class T shares. Class A and Class T shares are subject to a sales charge
imposed at the time of purchase, Class B shares are subject to a contingent
deferred sales charge ("CDSC") imposed on Class B share redemptions made within
six years of purchase, Class C shares are subject to a CDSC imposed on Class C
shares redeemed within one year of purchase, and Class F and Class R shares are
sold at net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

28
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $323
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $51, $200, $3, and $28, respectively, for shareholder servicing
fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net

30
<PAGE>

assets of Class B and Class C shares and 0.25% of the average daily net assets
of Class T shares. During the six months ended June 30, 2000, Class B, Class C,
and Class T shares were charged $600, $8, and $28, respectively, pursuant to
this Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly-owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS
GROWTH AND INCOME FUND
----------------------
<S> <C>
Net Capital Loss Carryovers....................... $ 0
Post-October Capital Loss Deferral................ $ 0
Post-October Currency Loss Deferral............... $ 0
Federal Tax Cost.................................. $430,529,423
Unrealized Appreciation........................... $ 65,230,313
Unrealized (Depreciation)......................... $(14,010,500)
Net Appreciation.................................. $ 51,219,813
</TABLE>

32
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 750 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED 6/30/00 ENDED 12/31/99*
------------- ---------------
<S> <C> <C>
CLASS A
Shares sold........................... 239,762 132
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (230,324) 0
NET INCREASE IN SHARES OUTSTANDING.... 9,438 132
CLASS B
Shares sold........................... 65,755 132
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (5,328) 0
NET INCREASE IN SHARES OUTSTANDING.... 60,427 132
CLASS C
Shares sold........................... 5,753 132
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (665) 0
NET INCREASE IN SHARES OUTSTANDING.... 5,088 132
CLASS F
Shares sold........................... 1,736,814 3,713,689
Shares issued for dividends
reinvested.......................... 0 6,124,687
Shares redeemed....................... (5,495,107) (13,622,645)
NET (DECREASE) IN SHARES
OUTSTANDING......................... (3,758,293) (3,784,269)
CLASS R
Shares sold........................... 0 132
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... 0 0
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING......................... 0 132
CLASS T
Shares sold........................... 9,464 132
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... 0 0
NET INCREASE IN SHARES OUTSTANDING.... 9,464 132
</TABLE>

* From December 30, 1999 (commencement of initial offering) to December 31,
1999, for Class A, Class B, Class C, Class R, and Class T shares.
33
<PAGE>

This page intentionally left blank.
<PAGE>
DREYFUS FOUNDERS FUNDS
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

Date of first use: August 28, 2000

<PAGE>
DREYFUS FOUNDERS
GROWTH AND
INCOME FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

-------------------------------------------------------------
O NOT FDIC-INSURED O NOT BANK-GUARANTEED O MAY LOSE VALUE
-------------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

COMPARATIVE INDEXES

o The Standard & Poor's (S&P) 500 Index is a market-value-weighted, unmanaged
index of common stocks considered representative of the broad market.

o The Lipper Large-Cap Core Fund Index is an average of the performance of
the 30 largest large-cap core funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

3
<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

4
<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

5
<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Thomas Arrington, CFA

HOW DID THE GROWTH AND INCOME FUND PERFORM DURING THE FIRST HALF?

WHAT MARKET EVENTS AFFECTED LARGE-CAP COMPANIES IN THE FIRST HALF?

--------------------------------------------------------------------------------

FUND AT A GLANCE

--------------------------------------------------------------------------------

6
<PAGE>

GROWTH OF $10,000 INVESTMENT

<TABLE>
<CAPTION>
LIPPER
LARGE-CAP CORE
GR. & INC. S&P 500 FD. INDEX CPI
---------- ------- -------------- ---

7
<PAGE>

PORTFOLIO COMPOSITION

[PIE CHART]

------------------------------------------------------------------------------

Portfolio composition is subject to change.

8
<PAGE>

WHAT WAS YOUR STRATEGY FOR SEEKING GROWTH, AND HOW DID THIS STRATEGY BENEFIT
THE FUND?

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 5 10 20
DATE DATE* YEAR YEARS YEARS YEARS
<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 7/5/38 (4.99%) 5.96% 16.35% 13.17% 14.60%
</TABLE>

*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00
<TABLE>
<CAPTION>

INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>

CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- (9.84%)
Without sales charge 12/31/99 -- -- -- (4.34%)

Class B Shares
With redemption** 12/31/99 -- -- -- (9.05%)
Without redemption 12/31/99 -- -- -- (5.26%)

Class C Shares
With redemption*** 12/31/99 -- -- -- (6.20%)
Without redemption 12/31/99 -- -- -- (5.26%)

Class R Shares 12/31/99 -- -- -- (4.73%)

Class T Shares
With sales charge (4.50%) 12/31/99 -- -- -- (9.38%)
Without sales charge 12/31/99 -- -- -- (5.12%)
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

9
<PAGE>

WHAT WERE SOME OF THE FUND'S SUCCESSFUL THEMES?

LARGEST EQUITY HOLDINGS

-------------------------------------------------------------------------------

10
<PAGE>

HOW HAVE YOU POSITIONED THE GROWTH AND INCOME FUND FOR THE SECOND HALF OF 2000?

/s/ THOMAS ARRINGTON

Thomas Arrington, CFA
Portfolio Manager

11
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

12
<PAGE>

* Non-income producing.
See notes to financial statements.
13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

14
<PAGE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.
15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

16
<PAGE>

See notes to financial statements.
17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

See notes to financial statements.
18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (461,377) $ (243,734)
Net Realized Gain from Security
Transactions............................... 28,465,706 35,396,085
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... 0 0
Net Change in Unrealized
Appreciation/Depreciation.................. (53,764,590) 36,716,031
-------------- --------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ (25,760,261) 71,868,382
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions
and Foreign Currency Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (50,520,599)
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
Net (Decrease) from Dividends and
Distributions............................ 0 (50,520,599)
-------------- --------------
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.
19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

20
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
NET ASSETS
Beginning of period........................ $ 535,039,696 $ 542,306,718
-------------- --------------
End of period.............................. $ 481,903,387 $ 535,039,696
============== ==============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $ 397,500,178 $ 424,876,226
Accumulated undistributed (distribution in
excess of)
net investment income...................... (461,377) 0
Accumulated undistributed net realized gain
from security transactions................. 31,542,038 3,076,332
Unrealized appreciation on investments and
foreign currency transactions.............. 53,322,548 107,087,138
-------------- --------------
Total...................................... $ 481,903,387 $ 535,039,696
============== ==============
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.
21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.
23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period.......................... $ 7.61 $ 7.32 $ 6.92 $ 7.23 $ 6.69 $ 6.16
Income from investment
operations:
Net investment income
(loss)....................... (0.01) 0.00 0.71 0.13 0.09 0.09
Net gains (losses) on
securities (both realized and
unrealized).................. (0.37) 1.06 0.51 1.25 1.52 1.70
-------- -------- -------- -------- -------- --------
Total from investment
operations............... (0.38) 1.06 1.22 1.38 1.61 1.79
Less distributions:
From net investment income*... 0.00 0.00 (0.11) (0.13) (0.09) (0.09)
From net realized gains....... 0.00 (0.77) (0.71) (1.56) (0.98) (1.17)
-------- -------- -------- -------- -------- --------
Total distributions........ 0.00 (0.77) (0.82) (1.69) (1.07) (1.26)
Net Asset Value, end of period... $ 7.23 $ 7.61 $ 7.32 $ 6.92 $ 7.23 $ 6.69
======== ======== ======== ======== ======== ========
Total Return/Ratios
Total return.................. (4.99%) 15.03% 17.78% 19.40% 24.37% 29.06%
Net assets, end of period
(000s)....................... $481,289 $535,035 $542,307 $543,168 $535,866 $375,200
Net expenses to average net
assets#...................... 1.09%** 1.12% 1.08% 1.09% 1.15% 1.17%
Gross expenses to average net
assets#...................... 1.12%** 1.13% 1.10% 1.11% 1.16% 1.22%
Net investment income (loss)
to average net assets........ (0.18%)** (0.05%) 1.38% 1.84% 1.40% 1.19%
Portfolio turnover rate@...... 136% 165% 259% 256% 195% 235%
</TABLE>

See notes to financial statements.
25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.
27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Growth and Income
Fund (the "Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R,
and Class T shares. Class A and Class T shares are subject to a sales charge
imposed at the time of purchase, Class B shares are subject to a contingent
deferred sales charge ("CDSC") imposed on Class B share redemptions made within
six years of purchase, Class C shares are subject to a CDSC imposed on Class C
shares redeemed within one year of purchase, and Class F and Class R shares are
sold at net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

28
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $323
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $51, $200, $3, and $28, respectively, for shareholder servicing
fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net

30
<PAGE>

assets of Class B and Class C shares and 0.25% of the average daily net assets
of Class T shares. During the six months ended June 30, 2000, Class B, Class C,
and Class T shares were charged $600, $8, and $28, respectively, pursuant to
this Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly-owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

32
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 750 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

* From December 30, 1999 (commencement of initial offering) to December 31,
1999, for Class A, Class B, Class C, Class R, and Class T shares.
33
<PAGE>

This page intentionally left blank.
<PAGE>

FOR MORE INFORMATION

Dreyfus Founders
Growth and Income Fund
2930 East Third Avenue
Denver, CO 80206

MANAGER

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

Founders and Founders Funds are registered trademarks of
Founders Asset Management LLC.

<PAGE>

DREYFUS FOUNDERS
INTERNATIONAL EQUITY FUND

SEMIANNUAL REPORT
JUNE 30, 2000

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
--------------------------------------------------------------------------------
A Message from Founders 4
--------------------------------------------------------------------------------
Management Overview 6
--------------------------------------------------------------------------------
Statement of Investments 12
--------------------------------------------------------------------------------
Statement of Assets and Liabilities 15
--------------------------------------------------------------------------------
Statement of Operations 17
--------------------------------------------------------------------------------
Statements of Changes in Net Assets 18
--------------------------------------------------------------------------------
Financial Highlights 20
--------------------------------------------------------------------------------
Notes to Financial Statements 26
--------------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of
Investments to indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views
and the composition of the Fund's portfolio are subject to change at any time
based on market and other conditions.

-------------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
-------------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the
figures listed here. The Fund's portfolio composition is subject to change and
there is no assurance the Fund will continue to hold any particular security.
Opinions regarding sectors, industries, companies, and/or themes are subject to
change at any time, based on market and other conditions, and should not be
construed as a recommendation of any specific security.

Part of the Fund's historical performance is due to the Fund's purchase of
securities sold in initial public offerings (IPOs). There is no guarantee that
the Fund's investments in IPOs, if any, will continue to have a similar impact
on performance. Investments in foreign securities may entail unique risks,
including political, market, and currency risks.

COMPARATIVE INDEXES

o The Morgan Stanley Capital International (MSCI) World ex U.S. Index is an
average of the performance of selected securities listed on the stock
exchanges of Europe, Canada, Australia, New Zealand, and the Far East.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a
"market basket" of commonly consumed items and is used to measure
inflation.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

Although it's impossible to predict where these and other changes will
take the world--and how they will affect investors and the markets--I believe
in one thing with greater certainty than any other: growth. And as a long-term
investor like you, my goal is to harness its potential on behalf of my
investments.

A CHALLENGING FIRST HALF

Yet by mid-March, the markets had begun to show an entirely different
side. Suddenly, investors were exuding uncertainty, providing a stark contrast
to the confidence that prevailed earlier in the year. Behind this shift were
many factors, including concern over the U.S. Federal Reserve Board's interest
rate increases and questions about high stock valuations. And unfortunately,
investors' apprehension was global in scope, as international markets responded
to these events as well as to the overall weakness in the NASDAQ Composite
Index and the struggles of a

<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Doug Loeffler, CFA

HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 2000?

Although International Equity Fund began the new millennium with a solid
first-quarter return, and finished the first half by outperforming its
benchmark in the month of June, the Fund's overall performance for the
six-month period ended June 30, 2000 was plagued by severe dips in markets
around the world. Since the Fund is positioned with an emphasis on growth
stocks, these market conditions proved to be particularly challenging over the
short term, as evidenced by International Equity's disappointing first-half
comparison to its benchmark, the Morgan Stanley Capital International (MSCI)
World ex U.S. Index.

WHY WERE INTERNATIONAL MARKETS AS VOLATILE AS U.S. MARKETS IN THE FIRST HALF?

In the first half, investors worldwide participated in an equity sell-off,
which was triggered in large part by the U.S. Federal Reserve's interest rate
increases and investors' concerns about an overheated American economy. Adding
to the unfriendly environment were the woes of a declining euro.

---------------------------------------------------------------------------
FUND AT A GLANCE

This fund invests primarily in growth stocks of companies in both emerging
and established economies outside the United States.
---------------------------------------------------------------------------

<PAGE>

HOW DID PERFORMANCE UNFOLD DURING THE SIX-MONTH PERIOD?

April was a particularly difficult month, and in early May we bolstered our
investment strategies to combat weaknesses we believed were causing the Fund's
decline. Doing so first required that we pinpoint the following four primary
factors contributing to the Fund's relative underperformance:

o At the time, the Fund held an unusually large number of mid-cap stocks,
which fell harder than large-cap stocks during the second quarter.

o The Fund was also overweight in the technology, media, and
telecommunications sectors, all of which suffered substantial
profit-taking due to investors' concerns over high valuations in these
areas.

[GRAPH]

GROWTH OF $10,000 INVESTMENT

<TABLE>
<CAPTION>
MSCI
INTNL. EQ. WORLD XUS CPI
<S> <C> <C> <C>
12/29/1995 10,000.00
12/31/1995 10,000.00 10,000.00 10,000.00
01/31/1996 10,000.00 10,058.62 10,038.94
02/29/1996 10,370.00 10,087.67 10,064.89
03/29/1996 10,810.00 10,301.24 10,097.34
04/30/1996 11,200.00 10,605.54 10,136.28
05/31/1996 11,520.00 10,424.08 10,162.23
06/28/1996 11,460.00 10,469.44 10,168.72
07/31/1996 10,800.00 10,163.11 10,201.17
08/30/1996 11,060.00 10,201.34 10,214.15
09/30/1996 11,260.00 10,477.60 10,305.00
10/31/1996 11,200.00 10,407.77 10,272.55
11/29/1996 11,670.00 10,836.94 10,305.00
12/31/1996 11,860.00 10,686.58 10,324.46
01/31/1997 12,110.00 10,353.23 10,343.93
02/28/1997 12,210.00 10,510.22 10,369.89
03/31/1997 12,290.00 10,520.92 10,376.38
04/30/1997 12,220.00 10,585.66 10,389.36
05/30/1997 13,260.00 11,283.45 10,389.36
06/30/1997 13,810.00 11,885.93 10,402.34
07/31/1997 14,250.00 12,104.59 10,421.80
08/29/1997 13,560.00 11,212.60 10,441.27
09/30/1997 14,310.00 11,842.09 10,467.23
10/31/1997 13,770.00 10,949.08 10,480.21
11/28/1997 13,720.00 10,826.24 10,499.68
12/31/1997 13,770.26 10,929.20 10,499.68
01/30/1998 14,135.94 11,395.08 10,506.16
02/27/1998 14,958.73 12,137.21 10,519.14
03/31/1998 15,792.94 12,535.81 10,519.14
04/30/1998 16,250.05 12,633.16 10,545.10
05/29/1998 16,684.30 12,567.41 10,571.06
06/30/1998 16,855.71 12,634.18 10,577.55
07/31/1998 17,118.54 12,716.75 10,597.01
08/31/1998 14,718.75 11,092.68 10,609.99
09/30/1998 14,398.78 10,775.84 10,616.48
10/30/1998 14,615.90 11,897.75 10,635.95
11/30/1998 15,358.69 12,500.54 10,655.42
12/31/1998 16,112.19 12,980.15 10,668.40
01/29/1999 16,870.14 12,982.63 10,681.38
02/26/1999 16,192.58 12,655.99 10,687.87
03/31/1999 16,468.20 13,183.97 10,707.33
04/30/1999 17,076.86 13,749.30 10,785.20
05/28/1999 16,456.72 13,054.75 10,785.20
06/30/1999 17,329.51 13,565.12 10,785.20
07/30/1999 17,754.42 13,955.58 10,817.65
08/31/1999 18,121.91 13,995.25 10,843.61
09/30/1999 18,294.17 14,146.36 10,895.52
10/29/1999 19,224.38 14,692.91 10,914.99
11/30/1999 22,129.86 15,206.71 10,927.97
12/31/1999 25,570.90 16,604.95 10,953.93
01/31/2000 24,129.56 15,596.04 10,973.39
02/29/2000 28,106.11 16,038.17 11,031.80
03/31/2000 26,677.64 16,696.41 11,109.67
04/28/2000 24,052.35 15,830.36 11,109.67
05/31/2000 23,486.11 15,446.79 11,116.16
06/30/2000 24,785.89 16,114.41 11,181.05
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The above graph compares a
$10,000 investment made in Class F shares of Dreyfus Founders International
Equity Fund on 12/29/95, the inception of Class F shares, to a $10,000
investment made in an unmanaged securities index and the Consumer Price Index
on 12/31/95. On December 31, 1999, the Fund adopted a multiclass structure.
Existing Fund shares were designated as Class F shares and Class F shares are
available only to grandfathered investors. All dividends and capital gain
distributions are reinvested. Performance for Class A, B, C, R and T shares
will vary from the performance of Class F shares shown above due to differences
in charges and expenses. The Fund's performance shown in the line graph takes
into account all applicable fees and net expenses of Class F shares. More
complete information about the indexes shown may be found on page 3. Further
information related to Fund performance is contained elsewhere in this report.

7
<PAGE>

o We were more focused on relative rather than absolute valuations, which
proved to be problematic considering the market conditions. By "relative"
valuations, we mean companies' price-to-earnings (P/E) ratios versus those
of their peers in the same industry. In evaluating "absolute" valuations,
we consider P/E ratios on an absolute basis or relative to a company's
history or current growth rates.

o A sharp increase in the supply of primary and secondary offerings affected
several sectors represented in the Fund by causing a harmful "crowding
out" effect.

These four factors not only hampered the Fund's April performance, but
also its first-half showing. However, we believe that since then, we've
effectively counteracted these weaknesses. Using our bottom-up approach, we
reduced the Fund's exposure to mid-cap stocks, significantly trimmed our
telecommunications weighting, focused our research more stringently on absolute
rather than merely relative valuations, and reduced the Fund's exposure to
areas experiencing extreme new equity issuance. We also concentrated on our
favorite names by increasing weightings in the Fund's top 20 stocks.

[PIE CHART]

PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------

20.39% Japan
13.71% Other Countries
12.45% United Kingdom
11.22% France
9.29% Netherlands
6.71% Sweden
6.49% Finland
5.44% Italy
5.03% Other Assets & Liabilities
3.27% Spain
3.26% Mexico
2.74% Switzerland
-------------------------------------------------------------------------------

Portfolio composition is subject to change.

<PAGE>

WHICH INVESTMENT IDEAS WORKED WELL FOR THE FUND?

We seek growth prospects by conducting meetings with company management teams,
frequently traveling abroad to see firms' headquarters, and maintaining regular
contact with Wall Street and international analysts. This research yielded
numerous promising growth stocks throughout the first half, many of which aided
the Fund's overall performance.

Asian companies were of particular interest to us, as we have witnessed a
burgeoning of good growth opportunities there in recent months. Tokyo Gas, the
dominant natural gas utility in Tokyo, has benefited from deregulation in the
electricity sector, which has allowed it to sell gas to new electric plants

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 3 SINCE
DATE DATE* YEAR YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS F SHARES 12/29/95 (3.07%) 43.03% 21.53% 22.35%
</TABLE>

Total return is not annualized

AGGREGATE TOTAL RETURN AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- (8.59%)
Without sales charge 12/31/99 -- -- -- (3.02%)

CLASS B SHARES
With redemption** 12/31/99 -- -- -- (7.24%)
Without redemption 12/31/99 -- -- -- (3.37%)

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- (4.44%)
Without redemption 12/31/99 -- -- -- (3.47%)

CLASS R SHARES 12/31/99 -- -- -- (2.92%)

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- (7.52%)
Without sales charge 12/31/99 -- -- -- (3.17%)
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to
Class A shares.

***The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.

<PAGE>

and companies generating their own electricity. It is becoming increasingly
common for Japanese companies to focus on cost of capital and shareholder
value, and Tokyo Gas's new management has taken this approach. The result has
been a sharp cut in the company's capital expenditure plans in the future,
which we believe may fuel an increase in free cash flow.

We were also pleased with the performance and growth prospects of CHINA
MOBILE, which recently changed its name from China Telecom. The high rate of
new cellular phone subscribers continues to be a welcome surprise in China, and
China Mobile has maintained a dominant No. 1 market share position. In June, we
took advantage of weakness in the stock--which resulted from the listing of the
company's main competitor--and increased our weighting. The company has
recently confirmed that it is in talks with its parent company to broaden its
geographic exposure within China. Previous acquisitions have been transacted at
favorable prices and successfully integrated; therefore, we are optimistic that
any new acquisitions will increase China Mobile's appeal.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
LARGEST EQUITY HOLDINGS
<S> <C>
1. Koninklyke (Royal) Philips Electronics NV
New York Shares Sponsored ADR 3.43%
2. Pioneer Corporation 2.98%
3. NEC Corporation 2.76%
4. Alcatel 2.70%
5. Mitsubishi Electric Corporation 2.68%
6. Samsung Electronics 2.58%
7. Alleanza Assicurazioni 2.30%
8. Ericsson LM Telephone Company ADR Class B 2.19%
9. Vodafone Airtouch PLC 2.19%
10. NTL, Inc. Sponsored ADR 2.12%
-------------------------------------------------------------------------------
</TABLE>

Portfolio holdings are subject to change.

<PAGE>

Two other Japanese stocks' prices didn't fare as well, but we remain
confident in their growth potential. Cell phone component makers MURATA
MANUFACTURING and TAIYO YUDEN both suffered losses in the quarter. We believe
this was due to investors' fear that a slowdown in the demand for cell phone
components would occur. In our opinion, earlier figures showing growth in the
number of orders were inflated because many companies "double-ordered" in
anticipation of a drain on supply. While some investors were concerned by the
reduction to a more normal increase in orders, we believe this rate of growth
may be sustainable for the next few years.

WHAT DO YOU SEE FOR INTERNATIONAL INVESTING ON THE HORIZON?

Earnings reports issued by the Fund's top holdings in the first half were
excellent, and this news has given us a positive outlook for International
Equity Fund. We continue to believe that the international arena offers many
attractive investment opportunities, and, regardless of the world markets'
direction, will remain committed to our emphasis on earnings growth.

/s/ DOUG LOEFFLER

Doug Loeffler, CFA
Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
COMMON STOCKS (FOREIGN)-94.1%
AUTO PARTS & EQUIPMENT-1.4%
10,000 Toyoda Gosei Company,
Limited (JA) $ 636,097
------------
BANKING-6.2%
58,125 Banco Santander Central
Hispano SA (SP) 615,684
48,250 ForeningsSparbanken AB
(SW) 709,664
102,025 Nordic Baltic Holding
AB (SW) 773,560
36,800 San Paolo-IMI SPA (IT) 655,782
------------
2,754,690
------------
BUILDING MATERIALS-1.4%
27,300 Cemex SA de CV
Sponsored ADR (MX) 638,138
------------
BUSINESS SERVICES-1.2%
2,750 Altran Technologies SA
(FR) 540,668
------------
COMPUTER SOFTWARE/SERVICES-3.7%
5,200 Tietoenator Oyj (FI) 174,214
2,525 Check Point Software
Technologies Limited
Sponsored ADR (IS) 535,931
6,625 Dassault Systemes SA
(FR) 620,459
133,025 Scoot.com PLC (UK) 310,157
------------
1,640,761
------------
CONSUMER PRODUCTS-4.5%
51,000 Altadis SA (SP) 786,609
33,900 Electrolux AB-Series B
(SW) 527,592
525 The Swatch Group AG
(SZ) 669,608
------------
1,983,809
------------
</TABLE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
ELECTRONICS-15.6%
32,125 Koninklyke (Royal)
Philips Electronics NV
New York Shares
Sponsored ADR (NE) $ 1,525,938
110,000 Mitsubishi Electric
Corporation (JA) 1,193,556
3,626 Murata Manufacturing
Company, Limited (JA) 521,616
39,000 NEC Corporation (JA) 1,227,487
34,000 Pioneer Corporation
(JA) 1,327,202
3,475 Samsung Electronics
(KR) 1,150,035
------------
6,945,834
------------
ENVIRONMENTAL SERVICES-1.9%
9,525 Vivendi SA (FR) 844,120
------------
FOOD & BEVERAGE-2.8%
47,000 Ajinomoto Company, Inc.
(JA) 604,150
10,325 Heineken NV (NE)* 630,961
------------
1,235,111
------------
INSURANCE-2.3%
76,550 Alleanza Assicurazioni
(IT) 1,023,651
------------
LEISURE & ENTERTAINMENT-1.3%
14,225 Accor SA (FR) 585,390
------------
MANUFACTURING-2.1%
28,800 Perlos Oyj (FI)* 913,804
------------
MEDICAL SUPPLIES & EQUIPMENT-2.9%
72,900 Nycomed Amersham PLC
(UK)* 724,033
1,200 Synthes-Stratec, Inc.
144A (SZ)*+ 549,044
------------
1,273,077
------------
OIL & GAS-3.5%
11,875 BP Amoco PLC Sponsored
ADR (UK) 671,680
5,625 Total Fina Elf SA (FR) 865,965
------------
1,537,645
------------
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
OIL SERVICES-1.7%
124,625 Saipem SPA (IT) $ 740,678
------------
PAPER & FOREST PRODUCTS-1.3%
30,875 Aracruz Celulose SA
Sponsored ADR (BR) 596,273
------------
PHARMACEUTICALS-2.6%
4,100 Novo Nordisk AS B
Shares (DE) 700,702
7,000 Takeda Chemical
Industries, Limited
(JA) 460,485
------------
1,161,187
------------
PUBLISHING & BROADCASTING-4.9%
2,300 Grupo Prisa SA 144A
(SP)*+ 53,576
790 Nippon Television
Network Corporation
(JA) 515,210
15,800 NTL, Inc. Sponsored ADR
(UK)* 946,025
3,925 Societe Europeenne des
Satellites (LU) 662,193
------------
2,177,004
------------
RETAIL-2.5%
3,238 Don Quijote Company,
Limited (JA) 566,183
9,000 Taiyo Yuden Company,
Limited (JA)* 564,831
------------
1,131,014
------------
SEMICONDUCTORS & EQUIPMENT-2.7%
17,850 ASM Lithography Holding
NV Sponsored ADR (NE)* 786,516
7,025 STMicroelectronics NV
(NE) 444,450
------------
1,230,966
------------
</TABLE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
TELECOMMUNICATION SERVICES-16.0%
20,200 HPY Holding - HTF
Holding Oyj Abp SA (FI) $ 929,448
14,075 AT&T Canada, Inc.
Sponsored ADR (CA)* 465,355
500 Bouygues SA (FR) 335,506
54,575 Cable & Wireless PLC
(UK) 924,594
100,000 China Telecom Limited
(HK)* 881,976
9,250 Energis PLC (UK)* 347,033
25,275 Global TeleSystems,
Inc. Sponsored ADR
(GE)* 304,880
55 Nippon Telegraph &
Telephone Corporation
(JA) 732,976
43,600 Partner Communications
Company Limited
Sponsored ADR (IS)* 408,750
14,200 Telefonos de Mexico SA
de CV Sponsored ADR
(MX) 811,175
241,397 Vodafone Airtouch PLC
(UK) 975,821
------------
7,117,514
------------
TELECOMMUNICATIONS EQUIPMENT-8.3%
18,275 Alcatel (FR) 1,203,501
49,250 Marconi PLC (UK) 641,257
17,425 Nokia Oyj Sponsored ADR
(FI) 870,161
48,800 Telefonaktiebolaget LM
Ericsson Class B
Sponsored ADR (SW) 976,000
------------
3,690,919
------------
TRANSPORTATION-1.7%
27,675 TNT Post Group NV (NE) 749,443
------------
UTILITIES-1.6%
257,000 Tokyo Gas Company,
Limited (JA) 725,412
------------
</TABLE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
TOTAL COMMON STOCKS (FOREIGN)
(COST-$37,411,042) $41,873,205
------------
PREFERRED STOCKS (FOREIGN)-0.9%
FINANCIAL SERVICES-0.9%
800 Marschollek,
Lautenschlaeger und
Partner AG non-voting
preferred (MLP
preferred) 401,840
------------
TOTAL PREFERRED STOCKS (FOREIGN)
(COST-$381,634) 401,840
------------
</TABLE>

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-------------------------------------------------------
<C> <S> <C>
CORPORATE SHORT-TERM NOTES-1.1%
FINANCIAL SERVICES-1.1%
$490,000 Associates Corporation
N.A. 6.93% 07/03/00 $ 489,811
-----------
TOTAL CORPORATE SHORT-TERM NOTES
(AMORTIZED COST-$489,811) 489,811
-----------
TOTAL INVESTMENTS-96.1%
(COST-$38,282,487) 42,764,856
OTHER ASSETS AND
LIABILITIES-3.9% 1,748,477
-----------
NET ASSETS-100.0% $44,513,333
===========
</TABLE>

See notes to financial statements.

14
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS
Investment securities, at cost.............................. $38,282,487
-----------
Investment securities, at market............................ 42,764,856
Cash........................................................ 219,639
Foreign currency (cost $433,324)............................ 437,325
Receivables:
Investment securities sold................................ 107,501
Capital shares sold....................................... 1,565,072
Dividends and interest.................................... 12,081
From adviser.............................................. 38,875
Other assets................................................ 26,306
-----------
Total Assets............................................ 45,171,655
-----------

LIABILITIES
Payables:
Investment securities purchased........................... 565,049
Capital shares redeemed................................... 22,421
Advisory fees............................................. 36,845
Shareholder servicing fees................................ 4,120
Accounting fees........................................... 847
Distribution fees......................................... 18,457
Other..................................................... 10,583
-----------
Total Liabilities....................................... 658,322
-----------
Net Assets.................................................. $44,513,333
===========
</TABLE>

See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited) (continued)

<TABLE>
<S> <C>
Net Assets--Class A.................................................. $ 2,412,630
Shares Outstanding--Class A.......................................... 125,137
Net Asset Value and Redemption Price Per Share....................... $ 19.28
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price)........................................ $ 20.46

Net Assets--Class B.................................................. $ 3,368,700
Shares Outstanding--Class B.......................................... 175,286
Net Asset Value, Offering and Redemption Price (excluding applicable
contingent deferred sales charge) Per Share........................ $ 19.21

Net Assets--Class C.................................................. $ 1,759,777
Shares Outstanding--Class C.......................................... 91,676
Net Asset Value, Offering and Redemption Price (excluding applicable
contingent deferred sales charge) Per Share........................ $ 19.19

Net Assets--Class F.................................................. $ 36,176,648
Shares Outstanding--Class F.......................................... 1,878,414
Net Asset Value, Offering and Redemption Price Per Share............. $ 19.26

Net Assets--Class R.................................................. $ 218,601
Shares Outstanding--Class R.......................................... 11,328
Net Asset Value, Offering and Redemption Price Per Share............. $ 19.30

Net Assets--Class T.................................................. $ 576,977
Shares Outstanding--Class T.......................................... 29,969
Net Asset Value and Redemption Price Per Share....................... $ 19.25
Maximum offering price per share (net asset value plus sales charge
of 4.50% of offering price)........................................ $ 20.16
</TABLE>

See notes to financial statements.

16
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................. $ 258,771
Interest.................................................. 56,671
Foreign taxes withheld.................................... (35,614)
-----------
Total Investment Income................................. 279,828
-----------
Expenses:
Advisory fees............................................. 195,138
Shareholder servicing fees--Note 2........................ 26,656
Accounting fees........................................... 4,481
Distribution fees--Note 2................................. 51,224
Transfer agency fees--Note 2.............................. 17,022
Registration fees......................................... 28,743
Postage and mailing expenses.............................. 6,829
Custodian fees and expenses............................... 37,334
Printing expenses......................................... 15,507
Legal and audit fees...................................... 7,555
Directors' fees and expenses.............................. 1,451
Other expenses............................................ 8,916
-----------
Total Expenses............................................ 400,856
Earnings Credits.......................................... (9,131)
Reimbursed/Waived Expenses................................ (34,587)
-----------
Net Expenses.............................................. 357,138
-----------
Net Investment (Loss)..................................... (77,310)
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net Realized Gain (Loss) from Security Transactions:
Proceeds from long-term securities sold................... 41,207,511
Proceeds from long-term U.S. Government Obligations....... 0
Cost of securities sold................................... 36,599,031
-----------
Net Realized Gain from Security Transactions................ 4,608,480
Net Realized (Loss) from Foreign Currency Transactions...... (1,759)
Net Change in Unrealized Appreciation/Depreciation.......... (5,270,704)
-----------
Net Realized and Unrealized (Loss) on Investments and
Foreign Currency Transactions......................... (663,983)
-----------
Net (Decrease) in Net Assets Resulting from Operations...... $ (741,293)
===========
Purchases of long-term securities........................... $48,692,206
===========
Purchases of long-term U.S. Government Obligations.......... $ 0
===========
</TABLE>

See notes to financial statements.

17
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (77,310) $ (86,471)
Net Realized Gain from Security
Transactions............................... 4,608,480 7,255,267
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... (1,759) 0
Net Change in Unrealized
Appreciation/Depreciation.................. (5,270,704) 6,505,235
------------ ------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ (741,293) 13,674,031
------------ ------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (3,490,732)
Class R.................................... 0 0
Class T.................................... 0 0
------------ ------------
Net (Decrease) from Dividends and
Distributions............................ 0 (3,490,732)
------------ ------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class A.................................... 5,876,730 1,000
Class B.................................... 3,526,542 1,000
Class C.................................... 6,336,544 1,000
Class F.................................... 31,417,612 49,053,525
Class R.................................... 235,200 1,000
Class T.................................... 563,781 1,000
</TABLE>

18
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
Reinvested dividends and distributions
Class A.................................... $ 0 $ 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 3,155,881
Class R.................................... 0 0
Class T.................................... 0 0
------------ ------------
47,956,409 52,214,406
Cost of shares redeemed
Class A.................................... (3,607,318) 0
Class B.................................... (87,598) 0
Class C.................................... (4,605,252) 0
Class F.................................... (30,007,990) (45,723,358)
Class R.................................... (5,000) 0
Class T.................................... (479) 0
------------ ------------
(38,313,637) (45,723,358)
------------ ------------
Net Increase from Capital Share
Transactions............................. 9,642,772 6,491,048
------------ ------------
Net Increase in Net Assets................. 8,901,479 16,674,347
NET ASSETS
Beginning of period........................ 35,611,854 18,937,507
------------ ------------
End of period.............................. $ 44,513,333 $ 35,611,854
============ ============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $ 31,621,961 $ 21,979,189
Accumulated undistributed (distribution in
excess of) net investment income........... (78,358) (1,048)
Accumulated undistributed net realized gain
from security transactions................. 8,483,490 3,876,769
Unrealized appreciation on investments and
foreign currency transactions.............. 4,486,240 9,756,944
------------ ------------
Total...................................... $ 44,513,333 $ 35,611,854
============ ============
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

19
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS A SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $19.88
Income from investment operations:
Net investment income................................ 0.01
Net (losses) on securities (both realized and
unrealized)........................................ (0.61)
------
Total from investment operations................ (0.60)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $19.28
======
Total Return/Ratios
Total return......................................... (3.02%)*
Net assets, end of period (000s)..................... $2,413
Net expenses to average net assets#.................. 1.74%**
Gross expenses to average net assets#................ 1.79%**
Net investment income to average net assets.......... 0.21%**
Portfolio turnover rate@............................. 228%
</TABLE>

20
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS B SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $19.88
Income from investment operations:
Net investment (loss)................................ (0.01)
Net (losses) on securities (both realized and
unrealized)........................................ (0.66)
------
Total from investment operations................ (0.67)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $19.21
======
Total Return/Ratios
Total return......................................... (3.37%)*
Net assets, end of period (000s)..................... $3,369
Net expenses to average net assets#.................. 2.50%**
Gross expenses to average net assets#................ 2.55%**
Net investment (loss) to average net assets.......... (0.36%)**
Portfolio turnover rate@............................. 228%
</TABLE>

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS C SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $19.88
Income from investment operations:
Net investment (loss)................................ (0.01)
Net (losses) on securities (both realized and
unrealized)........................................ (0.68)
------
Total from investment operations................ (0.69)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $19.19
======
Total Return/Ratios
Total return......................................... (3.47%)*
Net assets, end of period (000s)..................... $1,760
Net expenses to average net assets#.................. 2.50%**
Gross expenses to average net assets#................ 2.55%**
Net investment (loss) to average net assets.......... (0.35%)**
Portfolio turnover rate@............................. 228%
</TABLE>

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995*
CLASS F SHARES ---------------- ------- ------- ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of period... $ 19.87 $ 14.03 $ 12.05 $ 11.86 $ 10.00 $10.00
Income from investment operations:
Net investment income (loss)........ (0.04) (0.05) 0.03 (0.01) (0.01) 0.00
Net gains (losses) on securities
(both realized and unrealized)..... (0.57) 8.07 2.02 1.89 1.87 0.00
------- ------- ------- ------- ------- ------
Total from investment
operations..................... (0.61) 8.02 2.05 1.88 1.86 0.00
Less distributions:
From net investment income.......... 0.00 0.00 0.00 0.00 0.00 0.00
From net realized gains............. 0.00 (2.18) (0.07) (1.69) 0.00 0.00
------- ------- ------- ------- ------- ------
Total distributions.............. 0.00 (2.18) (0.07) (1.69) 0.00 0.00
Net Asset Value, end of period......... $ 19.26 $ 19.87 $ 14.03 $ 12.05 $ 11.86 $10.00
======= ======= ======= ======= ======= ======
Total Return/Ratios
Total return........................ (3.07%) 58.71% 17.01% 16.10% 18.60% 0.00%
Net assets, end of period (000s).... $36,177 $35,607 $18,938 $15,740 $10,119 $ 767
Net expenses to average net
assets#,+.......................... 1.80%** 1.80% 1.80% 1.85% 1.94% N/A
Gross expenses to average net
assets#,+.......................... 1.85%** 1.82% 1.83% 1.89% 2.00% N/A
Net investment income (loss) to
average net assets+................ (0.43%)** (0.36%) 0.02% (0.21%) (0.15%) N/A
Portfolio turnover rate@............ 228% 205% 148% 164% 71% N/A
</TABLE>

<TABLE>
<S> <C>
* Period December 29, 1995 (inception) to December 31, 1995.
** Annualized.
# Ratio of Net Expenses to Average Net Assets reflects
reductions in a Fund's expenses through the use of brokerage
commissions and custodial and transfer agent credits. Ratio
of Gross Expenses to Average Net Assets is the total of a
Fund's operating expenses before expense offset arrangements
and earnings credits divided by its average net assets for
the stated period.
+ Certain fees were reimbursed by the management company. Had
these fees not been reimbursed, the net expense ratios would
have been 1.98% (2000), 1.97% (1999), 1.89% (1998), 2.01%
(1997), and 2.46% (1996). The gross expense ratios would
have been 2.03% (2000), 1.99% (1999), 1.92% (1998), 2.05%
(1997), and 2.52% (1996). The net investment income ratios
would have been (0.61%) (2000), (0.53%) (1999), (0.07%)
(1998), (0.37%) (1997), and (0.67%) (1996).
@ Portfolio Turnover Rate is a measure of portfolio activity
that is calculated by dividing the lesser of purchases or
sales of securities, excluding securities having maturity
dates at acquisition of one year or less, by the average
value of the portfolio securities held during the period,
which is a rolling 12-month period.
</TABLE>

See notes to financial statements.
23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS R SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 19.88
Income from investment operations:
Net investment income................................ 0.02
Net (losses) on securities (both realized and
unrealized)........................................ (0.60)
-------
Total from investment operations................ (0.58)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
-------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 19.30
=======
Total Return/Ratios
Total return......................................... (2.92%)
Net assets, end of period (000s)..................... $ 219
Net expenses to average net assets#.................. 1.52%*
Gross expenses to average net assets#................ 1.57%*
Net investment income to average net assets.......... 0.27%*
Portfolio turnover rate@............................. 228%
</TABLE>

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS T SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $19.88
Income from investment operations:
Net investment income................................ 0.01
Net (losses) on securities (both realized and
unrealized)........................................ (0.64)
------
Total from investment operations................ (0.63)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $19.25
======
Total Return/Ratios
Total return......................................... (3.17%)*
Net assets, end of period (000s)..................... $ 577
Net expenses to average net assets#.................. 1.98%**
Gross expenses to average net assets#................ 2.03%**
Net investment income to average net assets.......... 0.33%**
Portfolio turnover rate@............................. 228%
</TABLE>

See notes to financial statements.
25
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders International Equity
Fund (the "Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R,
and Class T shares. Class A and Class T shares are subject to a sales charge
imposed at the time of purchase, Class B shares are subject to a contingent
deferred sales charge ("CDSC") imposed on Class B share redemptions made within
six years of purchase, Class C shares are subject to a CDSC imposed on Class C
shares redeemed within one year of purchase, and Class F and Class R shares are
sold at net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION -- The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days,
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES -- Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations. Foreign currency
held

26
<PAGE>

at June 30, 2000 for settling foreign trades is listed on the Statement of
Assets and Liabilities.
FEDERAL INCOME TAXES--No provision has been made for federal income taxes
since it is the policy of the Fund to comply with the special provisions of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies, and to make distributions of income and capital gains sufficient to
relieve it from all income taxes. The Fund is treated as a separate tax entity
for federal income tax purposes.
INVESTMENT INCOME--Dividend income is recorded on the ex-dividend date.
Certain dividends from foreign securities will be recorded as soon as the Fund
is informed of the dividend if such information is obtained subsequent to the
ex-dividend date. Interest income is accrued daily and includes the accretion of
discounts and the amortization of premiums.
DISTRIBUTIONS TO SHAREHOLDERS--The Fund declares and distributes dividends and
capital gains (if any) annually. All dividends and distributions are recorded on
the ex-dividend date.
EXPENSES--Each Class of the Fund bears expenses incurred specifically on its
behalf and, in addition, each Class bears a portion of general expenses based on
the relative net assets, or number of shareholder accounts of the Class. The
type of expense determines the allocation method.
ESTIMATES--The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of income and expenses during the reporting
period. Actual results could differ from those estimates.
OTHER--Security transactions are recorded on the date the securities are
purchased or sold (trade date).

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Founders has agreed to limit the total expenses of International Equity Fund
so that "Net expenses to average net assets" will not exceed 1.80% for Class A
and Class F shares, 2.55% for Class B and Class C shares, 1.55% for Class R
shares, and 2.05% for Class T shares. For the six months ended June 30, 2000,
$29,730 was reimbursed to the Fund.
Effective March 22, 2000, Dreyfus Service Corporation (the "Distributor"), a
wholly-owned subsidiary of The Dreyfus Corporation (an affiliate of Founders)
became the distributor of the Fund's shares. The Distributor retained $6,342
during the six months ended June 30, 2000 from commissions earned on sales of
fund shares.
Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $626
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $1,964, $1,748, $556, and $177, respectively, for shareholder
servicing fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.

28
<PAGE>

The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net assets
of Class B and Class C shares and 0.25% of the average daily net assets of Class
T shares. During the six months ended June 30, 2000, Class B, Class C, and Class
T shares were charged $5,243, $1,666, and $177, respectively, pursuant to this
Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly-owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES

Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS
INTERNATIONAL
EQUITY FUND
----------------
<S> <C>
Net Capital Loss Carryovers........................ $ 0
Post-October Capital Loss Deferral................. $ 0
Post-October Currency Loss Deferral................ $ 0
Federal Tax Cost................................... $38,496,830
Unrealized Appreciation............................ $ 5,781,033
Unrealized (Depreciation).......................... $(1,123,453)
Net Appreciation................................... $ 4,657,580
</TABLE>

30
<PAGE>

4. FUND SHARE TRANSACTIONS

The Fund is authorized to issue 450 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

<TABLE>
<CAPTION>
YEAR OR PERIOD
SIX MONTHS ENDED
ENDED 6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
CLASS A
Shares sold............................. 311,586 51
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (186,500) 0
NET INCREASE IN SHARES OUTSTANDING...... 125,086 51
CLASS B
Shares sold............................. 179,807 51
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (4,572) 0
NET INCREASE IN SHARES OUTSTANDING...... 175,235 51
CLASS C
Shares sold............................. 325,079 51
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (233,454) 0
NET INCREASE IN SHARES OUTSTANDING...... 91,625 51
CLASS F
Shares sold............................. 1,643,085 3,068,369
Shares issued for dividends
reinvested............................ 0 174,841
Shares redeemed......................... (1,556,432) (2,802,337)
NET INCREASE IN SHARES OUTSTANDING...... 86,653 440,873
CLASS R
Shares sold............................. 11,539 51
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (262) 0
NET INCREASE IN SHARES OUTSTANDING...... 11,277 51
CLASS T
Shares sold............................. 29,944 51
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (26) 0
NET INCREASE IN SHARES OUTSTANDING...... 29,918 51
</TABLE>

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R, and Class T shares.

31
<PAGE>

This page intentionally left blank.
<PAGE>

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

Date of first use: August 28, 2000

A-636-INE

<PAGE>

DREYFUS FOUNDERS
INTERNATIONAL EQUITY FUND

SEMIANNUAL REPORT
JUNE 30, 2000

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of
Investments to indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views
and the composition of the Fund's portfolio are subject to change at any time
based on market and other conditions.

-------------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
-------------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the
figures listed here. The Fund's portfolio composition is subject to change and
there is no assurance the Fund will continue to hold any particular security.
Opinions regarding sectors, industries, companies, and/or themes are subject to
change at any time, based on market and other conditions, and should not be
construed as a recommendation of any specific security.

COMPARATIVE INDEXES

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a
"market basket" of commonly consumed items and is used to measure
inflation.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

Although it's impossible to predict where these and other changes will
take the world--and how they will affect investors and the markets--I believe
in one thing with greater certainty than any other: growth. And as a long-term
investor like you, my goal is to harness its potential on behalf of my
investments.

A CHALLENGING FIRST HALF

Yet by mid-March, the markets had begun to show an entirely different
side. Suddenly, investors were exuding uncertainty, providing a stark contrast
to the confidence that prevailed earlier in the year. Behind this shift were
many factors, including concern over the U.S. Federal Reserve Board's interest
rate increases and questions about high stock valuations. And unfortunately,
investors' apprehension was global in scope, as international markets responded
to these events as well as to the overall weakness in the NASDAQ Composite
Index and the struggles of a

<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Doug Loeffler, CFA

HOW DID THE FUND PERFORM DURING THE FIRST SIX MONTHS OF 2000?

WHY WERE INTERNATIONAL MARKETS AS VOLATILE AS U.S. MARKETS IN THE FIRST HALF?

---------------------------------------------------------------------------
FUND AT A GLANCE

<PAGE>

HOW DID PERFORMANCE UNFOLD DURING THE SIX-MONTH PERIOD?

o At the time, the Fund held an unusually large number of mid-cap stocks,
which fell harder than large-cap stocks during the second quarter.

[GRAPH]

GROWTH OF $10,000 INVESTMENT

7
<PAGE>

o A sharp increase in the supply of primary and secondary offerings affected
several sectors represented in the Fund by causing a harmful "crowding
out" effect.

[PIE CHART]

PORTFOLIO COMPOSITION
-------------------------------------------------------------------------------

Portfolio composition is subject to change.

<PAGE>

WHICH INVESTMENT IDEAS WORKED WELL FOR THE FUND?

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 3 SINCE
DATE DATE* YEAR YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS F SHARES 12/29/95 (3.07%) 43.03% 21.53% 22.35%
</TABLE>

Total return is not annualized

AGGREGATE TOTAL RETURN AS OF 6/30/00

CLASS B SHARES
With redemption** 12/31/99 -- -- -- (7.24%)
Without redemption 12/31/99 -- -- -- (3.37%)

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- (4.44%)
Without redemption 12/31/99 -- -- -- (3.47%)

CLASS R SHARES 12/31/99 -- -- -- (2.92%)

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- (7.52%)
Without sales charge 12/31/99 -- -- -- (3.17%)
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to
Class A shares.

***The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.

<PAGE>

Portfolio holdings are subject to change.

<PAGE>

WHAT DO YOU SEE FOR INTERNATIONAL INVESTING ON THE HORIZON?

/s/ DOUG LOEFFLER

Doug Loeffler, CFA
Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

12
<PAGE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

See notes to financial statements.

14
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited) (continued)

See notes to financial statements.

16
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

See notes to financial statements.

17
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

18
<PAGE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

19
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

20
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.
23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.
25
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders International Equity
Fund (the "Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R,
and Class T shares. Class A and Class T shares are subject to a sales charge
imposed at the time of purchase, Class B shares are subject to a contingent
deferred sales charge ("CDSC") imposed on Class B share redemptions made within
six years of purchase, Class C shares are subject to a CDSC imposed on Class C
shares redeemed within one year of purchase, and Class F and Class R shares are
sold at net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION -- The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days,
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES -- Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations. Foreign currency
held

26
<PAGE>

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

28
<PAGE>

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES

30
<PAGE>

4. FUND SHARE TRANSACTIONS

The Fund is authorized to issue 450 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R, and Class T shares.

31
<PAGE>

This page intentionally left blank.
<PAGE>

FOR MORE INFORMATION

Dreyfus Founders
International Equity Fund
2930 East Third Avenue
Denver, CO 80206

MANAGER

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

Founders and Founders Funds are registered trademarks of
Founders Asset Management LLC.

<PAGE>
DREYFUS FOUNDERS
MID-CAP GROWTH FUND

SEMIANNUAL REPORT
JUNE 30, 2000

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

[GRAPHIC]

<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
About this Report 3
--------------------------------------------------------------------------------
A Message from Founders 4
--------------------------------------------------------------------------------
Management Overview 6
--------------------------------------------------------------------------------
Statement of Investments 12
--------------------------------------------------------------------------------
Statement of Assets and Liabilities 15
--------------------------------------------------------------------------------
Statement of Operations 17
--------------------------------------------------------------------------------
Statements of Changes in Net Assets 18
--------------------------------------------------------------------------------
Financial Highlights 20
--------------------------------------------------------------------------------
Notes to Financial Statements 26
--------------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of
Investments to indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

---------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
---------------------------------------------------------
<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

COMPARATIVE INDEXES

Beginning with this Semiannual Report, the Mid-Cap Growth Fund's
performance will be compared to the Russell Midcap Growth Index instead of the
Standard & Poor's MidCap 400 Index. We believe that the new index provides a
better comparison for the Fund's investment performance because it tracks
companies that are more similar to those in which the Fund invests. For your
information, we have presented both indexes.

o The Russell Midcap Growth Index measures the performance of the 800
smallest companies in the Russell 1000 Index with higher price-to-book
ratios and higher forecasted growth values.

o The Lipper Mid-Cap Growth Fund Index is an average of the performance of
the 30 largest mid-cap growth funds tracked by Lipper, Inc.

o The Standard & Poor's (S&P) MidCap 400 Index is a widely recognized,
unmanaged mid-cap index of 400 domestic stocks chosen for their market
size, liquidity, and industry group representations.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

3
<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

4
<PAGE>
declining euro. The result was widespread profit-taking, most notably from the
very areas that had, just weeks earlier, been considered the most attractive:
media, telecommunications, and technology. Stocks related to these sectors,
regardless of their size or geographic location, plummeted.

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

5
<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Kevin Sonnett, CFA

HOW DID MID-CAP GROWTH FUND PERFORM DURING THE FIRST HALF?

The first half of 2000 was a tumultuous period for equity securities of all
market capitalizations, and in this environment, the Dreyfus Founders Mid-Cap
Growth Fund trailed its benchmarks for the overall year-to-date period. However,
in the second quarter, the Fund closed ground on its mid-cap peers and the
Russell Midcap Growth Index, performing admirably in the face of worsening
mid-cap market conditions.

WHAT WERE THE MOST INFLUENTIAL FACTORS BEHIND THE FUND'S PERFORMANCE?

Even though the Fund did well compared to its benchmarks in the latter part of
the first half, it still suffered at the hands of investors who chose to flee
rapid-growth stocks when the market suddenly stalled in mid-March. The ensuing
volatility took its toll, and we saw many holdings hit peaks and valleys
throughout the remainder of the half. For example, in April, Brooks Automation,
a semiconductor capital equipment company and one of our longtime holdings, and
Silicon Storage, a maker of flash memory devices, posted outstanding returns of
44% and 32%, respectively. Yet

----------------------------------------------------------------------------
FUND AT A GLANCE

This fund emphasizes investments in equity securities of medium-size
companies that we believe have favorable growth prospects.
----------------------------------------------------------------------------

6
<PAGE>

in May--just one month later--these two technology holdings significantly
backpedaled. Brooks fell -56% in May, and Silicon Storage dropped -24% for the
month as a result of heavy profit-taking.

Other technology firms in Mid-Cap Growth's portfolio were similarly
affected. Semiconductor and software companies were particularly hard-hit.
Nonetheless, our bottom-up research indicated that these holdings were strong
growth prospects--a fact that led us to believe the sell-off of technology
stocks may have been largely indiscriminate. We therefore chose to keep Brooks,
Silicon Storage, and others in the portfolio, since their fundamentals remained
intact.

<TABLE>
<CAPTION>
[GRAPH]
GROWTH OF $10,000 INVESTMENT

RUSSELL
MID-CAP LIPPER
MID-CAP GROWTH MID CAP
GROWTH S&P 400 FUND INDEX GROWTH INDEX CPI

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The above graph compares a
$10,000 investment made in Class F shares of Dreyfus Founders Mid-Cap Growth
Fund on 6/30/90 to a $10,000 investment made in unmanaged securities indexes and
the Consumer Price Index on that date. On December 31, 1999, the Fund adopted a
multiclass structure. Existing Fund shares were designated as Class F shares and
Class F shares are available only to grandfathered investors. All dividends and
capital gain distributions are reinvested. Performance for Class A, B, C, R and
T shares will vary from the performance of Class F shares shown above due to
differences in charges and expenses. The Fund's performance shown in the line
graph takes into account all applicable fees and net expenses of Class F shares.
More complete information about the indexes shown may be found on page 3.
Further information related to Fund performance is contained elsewhere in this
report.

7
<PAGE>

Performance was also hurt in the first half by the negative returns posted
by a number of the Fund's capital goods, communications services and
transportation companies. These disappointments primarily occurred in the second
quarter, during which time these three areas dropped -50%, -28%, and -14% in the
Russell Midcap Growth Index, respectively. Our investment in ZOMAX, down -56% in
the second quarter, was the capital goods laggard. The decline in communications
services, however, was broad-based. In the transportation sector, US FREIGHTWAYS
fell -34% during the challenging second quarter, and we subsequently sold it
after losing confidence in the company's fundamentals.

Meanwhile, the Fund's holdings within the healthcare and consumer staples
sectors did well throughout the half, thanks in large part to strong individual
stock selection. Biotechnology company Myriad Genetics and generic drug-maker
ANDRX CORPORATION led the Fund's healthcare positions, and RADIO ONE, the top
African-American radio station operator in the U.S., was the most notable
consumer staples performer.

[PIE CHART]

PORTFOLIO COMPOSITION

--------------------------------------------------------------------------------
42.81% Technology
11.44% Business Services
10.40% Healthcare
10.35% Telecom Services
8.40% Other Assets & Liabilities
8.01% Consumer Cyclicals
4.11% Energy
1.86% Financial
1.62% Utilities
0.56% Capital Goods
0.44% Consumer Staples
--------------------------------------------------------------------------------
Portfolio composition is subject to change.

8
<PAGE>

WHICH THEMES CONTRIBUTED THE MOST TO THE FUND'S FIRST-HALF RETURN?

Over the course of our exhaustive research process, we frequently identify
themes that unify the most promising mid-cap growth companies in the Fund. In
the first half, the following themes fueled the Fund's positioning and
performance:

o NETWORK EQUIPMENT. The amount of information housed in corporate databases
continues to grow in size and value. Businesses are eager to be able to
access or share this data with customers, suppliers, and partners at all
times, through multiple media, and from any location. Their desire to

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00
<TABLE>
<CAPTION>

INCEPTION YEAR-TO- 1 5 10 20
DATE DATE* YEAR YEARS YEARS YEARS

<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 9/8/61 7.37% 38.10% 16.07% 16.28% 15.45%
</TABLE>

*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00
<TABLE>
<CAPTION>

INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- 1.42%
Without sales charge 12/31/99 -- -- -- 7.60%

CLASS B SHARES
With redemption** 12/31/99 -- -- -- 3.03%
Without redemption 12/31/99 -- -- -- 7.03%

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- 6.14%
Without redemption 12/31/99 -- -- -- 7.14%

CLASS R SHARES 12/31/99 -- -- -- 7.60%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- 2.55%
Without sales charge 12/31/99 -- -- -- 7.37%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

9
<PAGE>

do so is extraordinarily strong, and consumer appetite for voice, video,
and data services is almost insatiable. As a result, enterprises and
communications providers must continually increase the capacity, speed,
intelligence, and quality of their networks to provide adequate customer
service.

o INFRASTRUCTURE SOFTWARE. As networked computer systems become critical to
the operations of most businesses, software is needed to automate and
provide network management, security, customer service, one-to-one
marketing, and tools for custom application development.

o PROFESSIONAL TECHNOLOGY SERVICES. Most enterprises do not have the in-house
expertise to formulate a cohesive "digital" strategy, design their
networks, build and integrate custom applications, link data and systems
with partners, or make use of the latest technology to enhance customer
relationships. As a result, they are turning to professional service firms
for help.

o COMMUNICATION SERVICES. As the demand for wired and wireless access to one
another and to data explodes, many service providers will benefit from
increased network traffic. Companies beyond cellular operators, such as
tower owners leasing space to the wireless providers, will also benefit,
and therefore our search for mid-sized growth companies affiliated with
this area has been broad.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
LARGEST EQUITY HOLDINGS

<S> <C>
1. Extreme Networks, Inc. 3.16%
2. Digital Microwave Corporation 2.83%
3. Harris Corporation 2.74%
4. Spectrasite Holdings, Inc. 2.49%
5. Amdocs Limited 2.34%
6. Silicon Storage Technology, Inc. 2.31%
7. Macromedia, Inc. 2.29%
8. Rational Software Corporation 2.14%
9. Brooks Automation, Inc. 2.00%
10. Andrx Corporation 1.91%
--------------------------------------------------------------------------------
</TABLE>

Portfolio holdings are subject to change.

10
<PAGE>

o PHARMACEUTICALS. The aging of our population and the desire for a higher
quality of life is significantly increasing the demand for pharmaceutical
products. Also, recent scientific breakthroughs have led to enhanced
research and development technologies allowing for greater success in
discovering new drugs. We believe that many of the Fund's pharmaceutical
and biotechnology concerns may be positioned to benefit from these powerful
trends.

WHAT IS YOUR INVESTMENT STRATEGY GOING FORWARD?

Rather than trying to predict the market's future--an almost impossible task
during these volatile times--we prefer to simply remain true to our
growth-oriented philosophy and our company-by-company approach to equity
research. We have confidence in the mid-cap firms we've selected for the Fund,
but will, of course, monitor them with our usual degree of vigilance in the
second half of 2000.

WHAT DO YOU BELIEVE LIES AHEAD FOR MID-CAP STOCKS?

Mid-cap stocks, frequently overlooked by investors in the past, seem to be
gradually gaining more recognition. Typically less prone to volatility than
small-cap stocks, yet possessing more potential for rapid growth than many
large-cap stocks, quality mid-cap companies are, in our opinion, uniquely
positioned within the broader market. Overall, we believe that the long-term
outlook for mid caps is positive, and we look forward to unearthing more growth
opportunities in coming months.

/s/ KEVIN SONNETT

Kevin Sonnett, CFA
Portfolio Manager

11
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
COMMON STOCKS (DOMESTIC)-89.8%
AUTO PARTS & EQUIPMENT-1.6%
158,875 Gentex Corporation* $ 3,971,875
------------
BIOTECHNOLOGY-2.3%
15,475 Celera Genomics* 1,446,913
17,125 Maxygen, Inc.* 965,422
15,075 Myriad Genetics,
Inc.* 2,232,042
7,803 Protein Design Labs,
Inc. 1,287,007
------------
5,931,384
------------
BUSINESS SERVICES-11.4%
77,250 Amdocs Limited* 5,928,938
40,100 Catalina Marketing
Corporation* 4,090,200
78,025 Convergys
Corporation* 4,047,547
39,550 Diamond Technology
Partners, Inc* 3,477,928
31,025 Digex, Inc.* 2,107,761
148,551 eLoyalty
Corporation* 1,875,456
24,825 Exodus
Communications,
Inc.* 1,143,502
97,125 Luminant Worldwide
Corporation* 855,914
3,439 Per-Se Technologies
Warrants* 7,714
118,650 Razorfish, Inc.* 1,898,400
81,050 True North
Communications, Inc. 3,566,200
------------
28,999,560
------------
COMPUTER NETWORKING-2.3%
35,530 Alteon Websystems,
Inc.* 3,553,000
14,275 Turnstone Systems,
Inc.* 2,369,650
------------
5,922,650
------------
</TABLE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE/SERVICES-13.1%
37,275 DoubleClick, Inc.* $ 1,421,109
27,350 Interwoven, Inc.* 3,006,791
60,050 Macromedia, Inc.* 5,802,331
42,915 Macrovision
Corporation* 2,741,196
29,500 Mercury Interactive
Corporation* 2,854,125
76,025 New Era of Networks,
Inc.* 3,226,311
67,050 Peregrine Systems,
Inc.* 2,334,178
58,500 Rational Software
Corporation* 5,433,188
69,250 Remedy Corporation* 3,860,680
54,345 TenFold Corporation* 889,899
83,825 USinternetworking,
Inc.* 1,713,173
------------
33,282,981
------------
DISTRIBUTION-0.4%
22,025 Patterson Dental
Company* 1,121,898
------------
ELECTRONICS-1.4%
80,050 The Titan
Corporation* 3,582,238
------------
FINANCIAL SERVICES-1.9%
187,875 Metris Companies,
Inc. 4,720,359
------------
HEALTHCARE SERVICES-1.9%
75,975 Andrx Corporation 4,852,903
------------
MANUFACTURING-0.6%
108,250 Zomax, Inc.* 1,414,016
------------
MEDICAL SUPPLIES & EQUIPMENT-1.7%
22,950 MiniMed, Inc.* 2,713,838
76,650 Sybron International
Corporation* 1,518,628
------------
4,232,466
------------
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
OIL SERVICES-4.1%
43,850 BJ Services Company* $ 2,740,625
81,150 Grant Prideco, Inc.* 2,028,750
65,475 Nabors Industries,
Inc.* 2,721,305
73,400 Weatherford
International, Inc.* 2,922,238
------------
10,412,918
------------
PHARMACEUTICALS-4.5%
27,425 Allergan, Inc. 2,043,163
55,730 Celgene Corporation* 3,281,104
38,525 Forest Laboratories,
Inc.* 3,891,025
71,900 Regeneron
Pharmaceuticals,
Inc.* 2,143,519
------------
11,358,811
------------
PUBLISHING & BROADCASTING-5.7%
77,800 Entercom
Communications
Corporation 3,792,750
128,900 Insight
Communications
Company, Inc.* 2,014,063
70,665 Pegasus
Communications
Corporation 3,458,168
139,900 Radio One, Inc.
Class D* 3,112,775
68,600 Radio One, Inc.* 2,032,275
------------
14,410,031
------------
RETAIL-0.8%
85,975 The Men's Wearhouse,
Inc.* 1,912,944
------------
</TABLE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
SEMICONDUCTORS & EQUIPMENT-12.5%
83,425 Atmel Corporation $ 3,076,297
79,275 Brooks Automation,
Inc.* 5,063,691
60,375 Credence Systems
Corporation 3,328,172
25,950 Cree, Inc.* 3,470,813
30,805 PRI Automation,
Inc.* 2,013,877
40,600 SanDisk Corporation* 2,484,213
6,400 SDL, Inc.* 1,825,200
24,600 Semtech Corporation 1,869,600
66,250 Silicon Storage
Technology, Inc.* 5,850,703
35,775 Teradyne, Inc.* 2,629,463
------------
31,612,029
------------
TELECOMMUNICATION SERVICES-9.5%
128,650 Crown Castle
International
Corporation* 4,687,684
48,350 Inet Technologies,
Inc. 2,622,988
176,625 McLeodUSA, Inc.
Class A* 3,653,930
222,286 Spectrasite
Holdings, Inc.* 6,307,365
38,300 TeleCorp PCS, Inc.* 1,543,969
58,000 Time Warner Telecom,
Inc.* 3,741,000
53,975 Tritel, Inc.* 1,602,383
------------
24,159,319
------------
TELECOMMUNICATIONS EQUIPMENT-12.5%
39,400 Adtran, Inc.* 2,356,613
13,425 CIENA Corporation* 2,236,941
188,750 Digital Microwave
Corporation* 7,184,297
76,375 Extreme Networks,
Inc. 8,014,602
211,825 Harris Corporation 6,937,269
12,500 Netro Corporation* 715,625
85,050 Tekelec* 4,098,347
------------
31,543,694
------------
</TABLE>

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
UTILITIES-1.6%
32,375 Calpine Corporation* $ 2,128,656
29,075 Dynergy, Inc. 1,986,186
------------
4,114,842
------------
TOTAL COMMON STOCKS
(DOMESTIC)
(COST-$190,449,665) 227,556,918
------------
COMMON STOCKS (FOREIGN)-1.8%
SEMICONDUCTORS & EQUIPMENT-1.0%
58,825 ASM Lithography
Holding NV Sponsored
ADR(NE)* 2,591,977
------------
TELECOMMUNICATION SERVICES-0.8%
222,200 Partner
Communications
Company Limited
Sponsored ADR(IS)* 2,083,125
------------
TOTAL COMMON STOCKS
(FOREIGN)
(COST-$6,645,742) 4,675,102
------------
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------
<C> <S> <C>
CORPORATE SHORT-TERM NOTES-7.4%
CHEMICALS-4.0%
$10,000,000 Dow Chemical Company
6.85% 07/05/00 $ 9,992,389
------------
FINANCIAL SERVICES-3.4%
5,000,000 American Express
Credit Corporation
6.60% 07/03/00 4,998,167
3,700,000 Associates
Corporation N.A.
6.93% 07/03/00 3,698,575
------------
8,696,742
------------
TOTAL CORPORATE
SHORT-TERM NOTES
(AMORTIZED COST-$18,689,131) 18,689,131
------------
TOTAL INVESTMENTS-99.0%
(COST-$215,784,538) 250,921,151
OTHER ASSETS AND
LIABILITIES-1.0% 2,615,651
------------
NET ASSETS-100.0% $253,536,802
============
</TABLE>

* Non-income producing.

See notes to financial statements.

14
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS
Investment securities, at cost.............................. $215,784,538
------------
Investment securities, at market............................ 250,921,151
Cash........................................................ 692,262
Receivables:
Investment securities sold................................ 2,112,456
Capital shares sold....................................... 1,089,507
Dividends and interest.................................... 11,321
Other assets................................................ 27,179
------------
Total Assets............................................ 254,853,876
------------

LIABILITIES
Payables:
Investment securities purchased........................... 727,629
Capital shares redeemed................................... 139,009
Advisory fees............................................. 156,422
Shareholder servicing fees................................ 21,935
Accounting fees........................................... 4,606
Distribution fees......................................... 97,916
Other..................................................... 169,557
------------
Total Liabilities....................................... 1,317,074
------------
Net Assets.................................................. $253,536,802
============

See notes to financial statements.
</TABLE>

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited) (continued)

<TABLE>
<S> <C>
Net Assets--Class A................................................. $ 399,684
Shares Outstanding--Class A......................................... 42,815
Net Asset Value and Redemption Price Per Share...................... $ 9.34
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price)....................................... $ 9.91

Net Assets--Class B................................................. $ 817,996
Shares Outstanding--Class B......................................... 88,045
Net Asset Value, Offering and Redemption Price (excluding applicable
contingent deferred sales charge) Per Share....................... $ 9.29

Net Assets--Class C................................................. $ 94,397
Shares Outstanding--Class C......................................... 10,154
Net Asset Value and Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share............ $ 9.30

Net Assets--Class F................................................. $ 252,194,809
Shares Outstanding--Class F......................................... 27,052,929
Net Asset Value, Offering and Redemption Price Per Share............ $ 9.32

Net Assets--Class R................................................. $ 9,160
Shares Outstanding--Class R......................................... 981
Net Asset Value, Offering and Redemption Price Per Share............ $ 9.34

Net Assets--Class T................................................. $ 20,756
Shares Outstanding--Class T......................................... 2,227
Net Asset Value and Redemption Price Per Share...................... $ 9.32
Maximum offering price per share (net asset value plus sales charge
of 4.50% of offering price)....................................... $ 9.76
</TABLE>

See notes to financial statements.
16
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................. $ 72,718
Interest.................................................. 330,224
------------
Total Investment Income................................. 402,942
------------
Expenses:
Advisory fees............................................. 985,705
Shareholder servicing fees--Note 2........................ 128,942
Accounting fees........................................... 29,036
Distribution fees--Note 2................................. 317,000
Transfer agency fees--Note 2.............................. 48,691
Registration fees......................................... 61,790
Postage and mailing expenses.............................. 52,074
Custodian fees and expenses............................... 16,391
Printing expenses......................................... 67,210
Legal and audit fees...................................... 26,092
Directors' fees and expenses.............................. 6,191
Line of Credit expenses................................... 2,825
Other expenses............................................ 40,671
------------
Total Expenses.......................................... 1,782,618
Earnings Credits........................................ (31,235)
------------
Net Expenses............................................ 1,751,383
------------
Net Investment (Loss)..................................... (1,348,441)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net Realized Gain (Loss) from Security Transactions:
Proceeds from long-term securities sold................... 303,825,138
Proceeds from long-term U.S. Government Obligations....... 0
Cost of securities sold................................... 248,401,205
------------
Net Realized Gain from Security Transactions................ 55,423,933
Net Realized Gain (Loss) from Foreign Currency
Transactions.............................................. 0
Net Change in Unrealized Appreciation/Depreciation.......... (35,336,862)
------------
Net Realized and Unrealized Gain on Investments and
Foreign Currency Transactions........................... 20,087,071
------------
Net Increase in Net Assets Resulting from Operations........ $ 18,738,630
============
Purchases of long-term securities........................... $278,590,762
============
Purchases of long-term U.S. Government Obligations.......... $ 0
============
</TABLE>

See notes to financial statements.

17
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (1,348,441) $ (2,094,671)
Net Realized Gain from Security
Transactions............................... 55,423,933 61,084,358
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... 0 0
Net Change in Unrealized
Appreciation/Depreciation.................. (35,336,862) 17,833,765
------------- -------------
Net Increase in Net Assets Resulting from
Operations............................... 18,738,630 76,823,452
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (44,217,860)
Class R.................................... 0 0
Class T.................................... 0 0
------------- -------------
Net (Decrease) from Dividends and
Distributions............................ 0 (44,217,860)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class A.................................... 446,809 1,000
Class B.................................... 867,813 1,000
Class C.................................... 191,977 1,000
Class F.................................... 94,528,666 104,424,635
Class R.................................... 13,000 1,000
Class T.................................... 22,965 1,000
</TABLE>

18
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
Reinvested dividends and distributions
Class A.................................... $ 0 $ 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 41,721,645
Class R.................................... 0 0
Class T.................................... 0 0
------------- -------------
96,071,230 146,151,280
Cost of shares redeemed
Class A.................................... (48,922) 0
Class B.................................... (44,138) 0
Class C.................................... (91,595) 0
Class F.................................... (114,472,539) (178,221,800)
Class R.................................... (4,983) 0
Class T.................................... (600) 0
------------- -------------
(114,662,777) (178,221,800)
------------- -------------
Net (Decrease) from Capital Share
Transactions............................. (18,591,547) (32,070,520)
------------- -------------
Net Increase in Net Assets................. 147,083 535,072
NET ASSETS
Beginning of period........................ 253,389,719 252,854,647
------------- -------------
End of period.............................. $253,536,802 $ 253,389,719
============= =============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $148,623,228 $ 167,214,775
Accumulated undistributed (distribution in
excess of) net investment income........... (1,348,441) 0
Accumulated undistributed net realized gain
from security transactions................. 71,126,975 15,703,042
Unrealized appreciation (depreciation) on
investments and foreign currency
transactions............................... 35,135,040 70,471,902
------------- -------------
Total...................................... $253,536,802 $ 253,389,719
============= =============
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R and
Class T shares.

See notes to financial statements.

19
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS A SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 8.68
Income from investment operations:
Net investment (loss)................................ (0.03)
Net gains on securities (both realized and
unrealized)........................................ 0.69
------
Total from investment operations................ 0.66
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 9.34
======
Total Return/Ratios
Total return......................................... 7.60%*
Net assets, end of period (000s)..................... $ 400
Net expenses to average net assets#.................. 1.28%**
Gross expenses to average net assets#................ 1.31%**
Net investment (loss) to average net assets.......... (0.93%)**
Portfolio turnover rate@............................. 190%
</TABLE>

20
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS B SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 8.68
Income from investment operations:
Net investment (loss)................................ (0.04)
Net gains on securities (both realized and
unrealized)........................................ 0.65
------
Total from investment operations................ 0.61
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 9.29
======
Total Return/Ratios
Total return......................................... 7.03%*
Net assets, end of period (000s)..................... $ 818
Net expenses to average net assets#.................. 2.04%**
Gross expenses to average net assets#................ 2.07%**
Net investment (loss) to average net assets.......... (1.67%)**
Portfolio turnover rate@............................. 190%
</TABLE>

See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS C SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 8.68
Income from investment operations:
Net investment (loss)................................ (0.07)
Net gains on securities (both realized and
unrealized)........................................ 0.69
------
Total from investment operations................ 0.62
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 9.30
======
Total Return/Ratios
Total return......................................... 7.14%*
Net assets, end of period (000s)..................... $ 94
Net expenses to average net assets#.................. 2.04%**
Gross expenses to average net assets#................ 2.06%**
Net investment (loss) to average net assets.......... (1.70%)**
Portfolio turnover rate@............................. 190%
</TABLE>

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period......................... $ 8.68 $ 7.44 $ 7.72 $ 7.66 $ 7.05 $ 7.01
Income from investment
operations:
Net investment income
(loss)..................... (0.05) (0.08) (0.03) 0.01 (0.02) 0.00
Net gains (losses) on
securities (both realized
and unrealized............. 0.69 3.12 (0.11) 1.21 1.09 1.79
-------- -------- -------- -------- -------- --------
Total from investment
operations.............. 0.64 3.04 (0.14) 1.22 1.07 1.79
Less distributions:
From net investment income... 0.00 0.00 0.00 0.00 0.00 0.00
From net realized gains...... 0.00 (1.80) (0.14) (1.16) (0.46) (1.75)
-------- -------- -------- -------- -------- --------
Total distributions....... 0.00 (1.80) (0.14) (1.16) (0.46) (1.75)
Net Asset Value, end of
period......................... $ 9.32 $ 8.68 $ 7.44 $ 7.72 $ 7.66 $ 7.05
======== ======== ======== ======== ======== ========
Total Return/Ratios
Total return................. 7.37% 42.27% (1.73%) 16.40% 15.33% 25.70%
Net assets, end of period
(000s)..................... $252,195 $253,385 $252,855 $320,186 $363,835 $388,754
Net expenses to average net
assets#.................... 1.38%* 1.40% 1.33% 1.30% 1.34% 1.29%
Gross expenses to average net
assets#.................... 1.40%* 1.42% 1.35% 1.32% 1.36% 1.35%
Net investment income (loss)
to average net assets...... (1.07%)* (0.98%) (0.39%) (0.05%) (0.28%) 0.00%
Portfolio turnover rate@..... 190% 186% 152% 110% 186% 263%
</TABLE>

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS R SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 8.68
Income from investment operations:
Net investment (loss)................................ (0.03)
Net gains on securities (both realized and
unrealized)........................................ 0.69
------
Total from investment operations................ 0.66
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 9.34
======
Total Return/Ratios
Total return......................................... 7.60%
Net assets, end of period (000s)..................... $ 9
Net expenses to average net assets#.................. 1.03%*
Gross expenses to average net assets#................ 1.06%*
Net investment (loss) to average net assets.......... (0.71%)*
Portfolio turnover rate@............................. 190%
</TABLE>

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS T SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 8.68
Income from investment operations:
Net investment (loss)................................ (0.03)
Net gains on securities (both realized and
unrealized)........................................ 0.67
------
Total from investment operations................ 0.64
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 9.32
======
Total Return/Ratios
Total return......................................... 7.37%*
Net assets, end of period (000s)..................... $ 21
Net expenses to average net assets#.................. 1.57%**
Gross expenses to average net assets#................ 1.59%**
Net investment (loss) to average net assets.......... (1.19%)**
Portfolio turnover rate@............................. 190%
</TABLE>

See notes to financial statements.

25
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Mid-Cap Growth Fund
(the "Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and
Class T shares. Class A and Class T shares are subject to a sales charge imposed
at the time of purchase, Class B shares are subject to a contingent deferred
sales charge ("CDSC") imposed on Class B share redemptions made within six years
of purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

26
<PAGE>

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $123
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $305, $473, $110, and $15, respectively, for shareholder servicing
fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net

28
<PAGE>

assets of Class B and Class C shares and 0.25% of the average daily net assets
of Class T shares. During the six months ended June 30, 2000, Class B, Class C,
and Class T shares were charged $1,420, $329, and $15, respectively, pursuant to
this Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly-owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS
MID-CAP GROWTH
FUND
----------------
<S> <C>
Net Capital Loss Carryovers.............................. $ 0
Post-October Capital Loss Deferral....................... $ 0
Post-October Currency Loss Deferral...................... $ 0
Federal Tax Cost......................................... $216,868,250
Unrealized Appreciation.................................. $ 51,219,041
Unrealized (Depreciation)................................ $(16,111,682)
Net Appreciation......................................... $ 35,107,359
</TABLE>

30
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 500 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

<TABLE>
<CAPTION>
YEAR OR PERIOD
SIX MONTHS ENDED
ENDED 6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
CLASS A
Shares sold............................. 47,376 117
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (4,678) 0
NET INCREASE IN SHARES OUTSTANDING...... 42,698 117
CLASS B
Shares sold............................. 92,886 117
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (4,958) 0
NET INCREASE IN SHARES OUTSTANDING...... 87,928 117
CLASS C
Shares sold............................. 20,444 117
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (10,407) 0
NET INCREASE IN SHARES OUTSTANDING...... 10,037 117
CLASS F
Shares sold............................. 10,633,404 12,994,569
Shares issued for dividends
reinvested............................ 0 5,094,218
Shares redeemed......................... (12,787,138) (22,878,686)
NET (DECREASE) IN SHARES OUTSTANDING.... (2,153,734) (4,789,899)
CLASS R
Shares sold............................. 1,417 117
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (553) 0
NET INCREASE IN SHARES OUTSTANDING...... 864 117
CLASS T
Shares sold............................. 2,178 117
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (68) 0
NET INCREASE IN SHARES OUTSTANDING...... 2,110 117
</TABLE>

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R and Class T shares.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

32
<PAGE>

This page intentionally left blank.
<PAGE>

This page intentionally left blank.
<PAGE>
DREYFUS FOUNDERS FUNDS
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

Date of first use: August 28, 2000

A-636-WWG

<PAGE>
DREYFUS FOUNDERS
MID-CAP GROWTH FUND

SEMIANNUAL REPORT
JUNE 30, 2000

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

[GRAPHIC]

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of
Investments to indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

---------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
---------------------------------------------------------
<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

COMPARATIVE INDEXES

o The Russell Midcap Growth Index measures the performance of the 800
smallest companies in the Russell 1000 Index with higher price-to-book
ratios and higher forecasted growth values.

o The Lipper Mid-Cap Growth Fund Index is an average of the performance of
the 30 largest mid-cap growth funds tracked by Lipper, Inc.

o The Standard & Poor's (S&P) MidCap 400 Index is a widely recognized,
unmanaged mid-cap index of 400 domestic stocks chosen for their market
size, liquidity, and industry group representations.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

3
<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

5
<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Kevin Sonnett, CFA

HOW DID MID-CAP GROWTH FUND PERFORM DURING THE FIRST HALF?

WHAT WERE THE MOST INFLUENTIAL FACTORS BEHIND THE FUND'S PERFORMANCE?

----------------------------------------------------------------------------
FUND AT A GLANCE

6
<PAGE>

in May--just one month later--these two technology holdings significantly
backpedaled. Brooks fell -56% in May, and Silicon Storage dropped -24% for the
month as a result of heavy profit-taking.

<TABLE>
<CAPTION>
[GRAPH]
GROWTH OF $10,000 INVESTMENT

RUSSELL
MID-CAP LIPPER
MID-CAP GROWTH MID CAP
GROWTH S&P 400 FUND INDEX GROWTH INDEX CPI

7
<PAGE>

[PIE CHART]

PORTFOLIO COMPOSITION

8
<PAGE>

WHICH THEMES CONTRIBUTED THE MOST TO THE FUND'S FIRST-HALF RETURN?

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00
<TABLE>
<CAPTION>

INCEPTION YEAR-TO- 1 5 10 20
DATE DATE* YEAR YEARS YEARS YEARS

<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 9/8/61 7.37% 38.10% 16.07% 16.28% 15.45%
</TABLE>

*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00
<TABLE>
<CAPTION>

INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- 1.42%
Without sales charge 12/31/99 -- -- -- 7.60%

CLASS B SHARES
With redemption** 12/31/99 -- -- -- 3.03%
Without redemption 12/31/99 -- -- -- 7.03%

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- 6.14%
Without redemption 12/31/99 -- -- -- 7.14%

CLASS R SHARES 12/31/99 -- -- -- 7.60%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- 2.55%
Without sales charge 12/31/99 -- -- -- 7.37%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

9
<PAGE>

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------
LARGEST EQUITY HOLDINGS

Portfolio holdings are subject to change.

10
<PAGE>

WHAT IS YOUR INVESTMENT STRATEGY GOING FORWARD?

WHAT DO YOU BELIEVE LIES AHEAD FOR MID-CAP STOCKS?

/s/ KEVIN SONNETT

Kevin Sonnett, CFA
Portfolio Manager

11
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

12
<PAGE>

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

* Non-income producing.

See notes to financial statements.

14
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

See notes to financial statements.
</TABLE>

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited) (continued)

See notes to financial statements.
16
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

See notes to financial statements.

17
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (1,348,441) $ (2,094,671)
Net Realized Gain from Security
Transactions............................... 55,423,933 61,084,358
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... 0 0
Net Change in Unrealized
Appreciation/Depreciation.................. (35,336,862) 17,833,765
------------- -------------
Net Increase in Net Assets Resulting from
Operations............................... 18,738,630 76,823,452
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (44,217,860)
Class R.................................... 0 0
Class T.................................... 0 0
------------- -------------
Net (Decrease) from Dividends and
Distributions............................ 0 (44,217,860)
------------- -------------
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class A.................................... 446,809 1,000
Class B.................................... 867,813 1,000
Class C.................................... 191,977 1,000
Class F.................................... 94,528,666 104,424,635
Class R.................................... 13,000 1,000
Class T.................................... 22,965 1,000
</TABLE>

18
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
Reinvested dividends and distributions
Class A.................................... $ 0 $ 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 41,721,645
Class R.................................... 0 0
Class T.................................... 0 0
------------- -------------
96,071,230 146,151,280
Cost of shares redeemed
Class A.................................... (48,922) 0
Class B.................................... (44,138) 0
Class C.................................... (91,595) 0
Class F.................................... (114,472,539) (178,221,800)
Class R.................................... (4,983) 0
Class T.................................... (600) 0
------------- -------------
(114,662,777) (178,221,800)
------------- -------------
Net (Decrease) from Capital Share
Transactions............................. (18,591,547) (32,070,520)
------------- -------------
Net Increase in Net Assets................. 147,083 535,072
NET ASSETS
Beginning of period........................ 253,389,719 252,854,647
------------- -------------
End of period.............................. $253,536,802 $ 253,389,719
============= =============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $148,623,228 $ 167,214,775
Accumulated undistributed (distribution in
excess of) net investment income........... (1,348,441) 0
Accumulated undistributed net realized gain
from security transactions................. 71,126,975 15,703,042
Unrealized appreciation (depreciation) on
investments and foreign currency
transactions............................... 35,135,040 70,471,902
------------- -------------
Total...................................... $253,536,802 $ 253,389,719
============= =============
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R and
Class T shares.

See notes to financial statements.

19
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

20
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period......................... $ 8.68 $ 7.44 $ 7.72 $ 7.66 $ 7.05 $ 7.01
Income from investment
operations:
Net investment income
(loss)..................... (0.05) (0.08) (0.03) 0.01 (0.02) 0.00
Net gains (losses) on
securities (both realized
and unrealized............. 0.69 3.12 (0.11) 1.21 1.09 1.79
-------- -------- -------- -------- -------- --------
Total from investment
operations.............. 0.64 3.04 (0.14) 1.22 1.07 1.79
Less distributions:
From net investment income... 0.00 0.00 0.00 0.00 0.00 0.00
From net realized gains...... 0.00 (1.80) (0.14) (1.16) (0.46) (1.75)
-------- -------- -------- -------- -------- --------
Total distributions....... 0.00 (1.80) (0.14) (1.16) (0.46) (1.75)
Net Asset Value, end of
period......................... $ 9.32 $ 8.68 $ 7.44 $ 7.72 $ 7.66 $ 7.05
======== ======== ======== ======== ======== ========
Total Return/Ratios
Total return................. 7.37% 42.27% (1.73%) 16.40% 15.33% 25.70%
Net assets, end of period
(000s)..................... $252,195 $253,385 $252,855 $320,186 $363,835 $388,754
Net expenses to average net
assets#.................... 1.38%* 1.40% 1.33% 1.30% 1.34% 1.29%
Gross expenses to average net
assets#.................... 1.40%* 1.42% 1.35% 1.32% 1.36% 1.35%
Net investment income (loss)
to average net assets...... (1.07%)* (0.98%) (0.39%) (0.05%) (0.28%) 0.00%
Portfolio turnover rate@..... 190% 186% 152% 110% 186% 263%
</TABLE>

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

25
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Mid-Cap Growth Fund
(the "Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and
Class T shares. Class A and Class T shares are subject to a sales charge imposed
at the time of purchase, Class B shares are subject to a contingent deferred
sales charge ("CDSC") imposed on Class B share redemptions made within six years
of purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations.

26
<PAGE>

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $123
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $305, $473, $110, and $15, respectively, for shareholder servicing
fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net

28
<PAGE>

assets of Class B and Class C shares and 0.25% of the average daily net assets
of Class T shares. During the six months ended June 30, 2000, Class B, Class C,
and Class T shares were charged $1,420, $329, and $15, respectively, pursuant to
this Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly-owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

30
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 500 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R and Class T shares.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

32
<PAGE>

This page intentionally left blank.
<PAGE>

FOR MORE INFORMATION

Dreyfus Founders
Mid-Cap Growth Fund
2930 East Third Avenue
Denver, CO 80206

MANAGER

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

Founders and Founders Funds are registered trademarks of
Founders Asset Management LLC.

<PAGE>

DREYFUS FOUNDERS
PASSPORT FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
-------------------------------------------------------------------------------
A Message from Founders 4
-------------------------------------------------------------------------------
Management Overview 6
-------------------------------------------------------------------------------
Statement of Investments 12
-------------------------------------------------------------------------------
Statement of Assets and Liabilities 20
-------------------------------------------------------------------------------
Statement of Operations 22
-------------------------------------------------------------------------------
Statements of Changes in Net Assets 23
-------------------------------------------------------------------------------
Financial Highlights 26
-------------------------------------------------------------------------------
Notes to Financial Statements 32
-------------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

--------------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
--------------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the
figures listed here. The Fund's portfolio composition is subject to change and
there is no assurance the Fund will continue to hold any particular security.
Opinions regarding sectors, industries, companies, and/or themes are subject to
change at any time, based on market and other conditions, and should not be
construed as a recommendation of any specific security.

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Part of the Fund's historical
performance is due to the Fund's purchase of securities sold in initial public
offerings (IPOs). There is no guarantee that the Fund's investments in IPOs, if
any, will continue to have a similar impact on performance. Investments in
foreign securities may entail unique risks, including political, market, and
currency risks. There are risks associated with small-cap investing such as
limited product lines and small market share.

COMPARATIVE INDEXES

The comparative indexes included with the Fund's performance chart are meant to
provide a basis for judging its performance against its peer group and/or a
specific unmanaged securities index. Each benchmark shown accounts for both
change in security price and reinvestment of any dividends or coupon payments.
The securities indexes are unmanaged groups of securities; they do not reflect
the costs of managing a mutual fund.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Tracy Stouffer, CFA

HOW DID THE PASSPORT FUND PERFORM DURING THE FIRST HALF OF 2000?

Passport Fund's first half was fraught with sudden fluctuations in markets
around the globe. Although the first two months of the period appeared
promising for the Fund, in March a sudden, negative turn in market conditions
served as a reminder that international small-cap companies--highly volatile by
nature--can suffer significant corrections. As the half progressed, it became
increasingly clear that we were experiencing one such correction, and under
these circumstances, the Fund posted a disappointing second-quarter return.
This decline sharply undercut the gains realized by the Fund in January and
February, when the small-cap market was more favorable.

WHAT CAUSED THE EXTREME MARKET VOLATILITY FOR INTERNATIONAL SMALL-CAP STOCKS IN
THE FIRST HALF?

There were many factors that triggered the extreme bout of
first-half volatility, which in turn caused numerous problems for international
small caps. Torn between their desire for quick profits and growing concern
about U.S. inflation

--------------------------------------------------------------------------------
FUND AT A GLANCE

This fund invests primarily in common stocks of small, rapidly growing
companies outside the U.S.
--------------------------------------------------------------------------------

<PAGE>
and interest rates, investors ultimately bolted from many rapid-growth stocks
without discriminating between those that were fundamentally sound and those
that were overvalued. Because many international markets are highly correlated
to the NASDAQ, this trend reverberated throughout the world.

In the first half we saw the euro weaken, a development that caused stocks
everywhere--and European issues in particular--to suffer. Additionally, the
introduction of online trading capability in Europe caused more volatile retail
selling, and the sudden availability of a large amount of both domestic

GROWTH OF $10,000 INVESTMENT

[GRAPH]
<TABLE>
<CAPTION>
MSCI
MSCI WORLD XUS
PASSPORT WORLD XUS SMALL CAP CPI
<S> <C> <C> <C> <C>
11/16/1993 10,000.00
11/30/1993 10,010.00 10,000.00 10,000.00 10,000.00
12/31/1993 10,530.00 10,715.92 10,828.81 10,027.40
01/31/1994 10,830.00 11,605.59 11,981.16 10,027.40
02/28/1994 10,610.00 11,553.33 12,162.66 10,054.79
03/31/1994 9,900.00 11,055.59 11,878.45 10,082.19
04/29/1994 9,980.00 11,503.04 12,344.15 10,089.04
05/31/1994 9,880.00 11,442.29 12,202.11 10,109.59
06/30/1994 9,680.00 11,574.24 12,391.54 10,136.99
07/29/1994 9,920.00 11,700.96 12,438.93 10,171.23
08/31/1994 10,080.00 11,992.95 12,580.97 10,212.33
09/30/1994 9,980.00 11,642.82 12,178.41 10,232.88
10/31/1994 9,990.00 12,009.28 12,328.40 10,239.73
11/30/1994 9,480.00 11,425.31 11,468.07 10,267.12
12/31/1994 9,439.22 11,503.04 11,618.05 10,294.52
01/31/1995 9,068.46 11,049.06 11,160.29 10,315.07
02/28/1995 9,178.69 11,041.22 11,081.39 10,342.47
03/31/1995 9,589.52 11,721.86 11,326.03 10,363.01
04/28/1995 9,950.26 12,154.29 11,586.42 10,397.26
05/31/1995 10,431.24 12,032.14 11,389.17 10,424.66
06/30/1995 10,591.56 11,836.83 11,183.98 10,445.21
07/31/1995 11,393.19 12,553.40 11,862.69 10,458.90
08/31/1995 11,182.77 12,092.23 11,554.91 10,479.45
09/29/1995 11,513.44 12,317.59 11,523.28 10,493.15
10/31/1995 11,713.85 11,994.90 11,081.39 10,527.40
11/30/1995 11,623.66 12,332.61 11,223.43 10,534.25
12/31/1995 11,741.09 12,815.34 11,578.60 10,554.79
01/31/1996 11,901.92 12,890.46 11,918.02 10,595.89
02/29/1996 12,505.06 12,927.69 12,028.43 10,623.29
03/29/1996 12,866.94 13,201.38 12,257.32 10,657.53
04/30/1996 13,319.30 13,591.35 12,873.00 10,698.63
05/31/1996 13,640.97 13,358.81 12,667.81 10,726.03
06/28/1996 13,671.13 13,416.94 12,612.49 10,732.88
07/31/1996 13,088.09 13,024.36 11,933.78 10,767.12
08/30/1996 13,258.98 13,073.36 12,052.13 10,780.82
09/30/1996 13,379.61 13,427.40 12,115.27 10,876.71
10/31/1996 13,691.23 13,337.91 12,044.31 10,842.47
11/29/1996 13,972.70 13,887.91 12,257.32 10,876.71
12/31/1996 14,094.72 13,695.21 11,846.94 10,897.26
01/31/1997 14,307.51 13,268.01 11,677.29 10,917.81
02/28/1997 14,652.03 13,469.20 11,885.91 10,945.21
03/31/1997 14,621.63 13,482.92 11,563.68 10,952.05
04/30/1997 14,256.85 13,565.88 11,193.46 10,965.75
05/30/1997 14,976.28 14,460.12 12,046.56 10,965.75
06/30/1997 15,219.47 15,232.22 12,280.77 10,979.45
07/31/1997 15,158.67 15,512.44 11,961.38 11,000.00
08/29/1997 14,479.77 14,369.33 11,243.10 11,020.55
09/30/1997 15,118.14 15,176.04 11,115.39 11,047.95
10/31/1997 14,439.24 14,031.62 10,526.24 11,061.64
11/28/1997 14,510.17 13,874.19 9,745.53 11,082.19
12/31/1997 14,331.14 14,006.14 9,240.73 11,082.19
01/30/1998 14,698.87 14,603.17 9,743.40 11,089.04
02/27/1998 15,486.88 15,554.25 10,632.51 11,102.74
03/31/1998 16,379.95 16,065.06 10,868.85 11,102.74
04/30/1998 16,831.73 16,189.82 10,857.60 11,130.14
05/29/1998 17,546.19 16,105.56 10,863.40 11,157.53
06/30/1998 17,619.74 16,191.12 10,445.09 11,164.38
07/31/1998 17,682.78 16,296.95 10,266.32 11,184.93
08/31/1998 15,119.14 14,215.64 8,837.70 11,198.63
09/30/1998 14,215.57 13,809.60 8,492.00 11,205.48
10/30/1998 14,835.46 15,247.37 9,152.94 11,226.03
11/30/1998 15,476.37 16,019.86 9,576.95 11,246.58
12/31/1998 16,122.16 16,634.50 9,639.38 11,260.27
01/29/1999 16,651.29 16,637.68 9,534.42 11,273.97
02/26/1999 15,873.80 16,219.08 9,395.33 11,280.82
03/31/1999 16,694.48 16,895.71 9,905.22 11,301.37
04/30/1999 17,504.37 17,620.20 10,667.57 11,383.56
05/28/1999 16,867.26 16,730.11 10,274.49 11,383.56
06/30/1999 17,623.15 17,384.15 10,811.28 11,383.56
07/30/1999 18,325.05 17,884.55 11,142.99 11,417.81
08/31/1999 18,227.87 17,935.38 11,399.12 11,445.21
09/30/1999 18,843.38 18,129.04 11,371.28 11,500.00
10/29/1999 19,707.26 18,829.46 11,202.70 11,520.55
11/30/1999 25,117.31 19,487.92 11,266.44 11,534.25
12/31/1999 30,218.76 21,279.80 11,411.44 11,561.64
01/31/2000 32,076.96 19,986.85 11,430.99 11,582.19
02/29/2000 40,933.04 20,553.45 13,153.18 11,643.84
03/31/2000 34,936.73 21,397.01 11,950.72 11,726.03
04/28/2000 28,413.28 20,287.14 13,834.02 11,726.03
05/31/2000 25,500.78 19,795.58 13,568.06 11,732.88
06/30/2000 27,161.30 20,651.16 15,410.50 11,801.37
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The above graph compares a
$10,000 investment made in Class F shares of Dreyfus Founders Passport Fund on
11/16/93, the inception of Class F, to a $10,000 investment made in an
unmanaged securities index and the Consumer Price Index on 11/30/93. On December
31, 1999, the Fund adopted a multiclass structure. Existing Fund shares were
designated as Class F shares and Class F shares are available only to
grandfathered investors. All dividends and capital gain distributions are
reinvested. Performance for Class A, B, C, R and T shares will vary from the
performance of Class F shares shown above due to differences in charges and
expenses. The Fund's performance shown in the line graph takes into account all
applicable fees and net expenses of Class F shares. More complete information
about the indexes shown may be found on page 3. Further information related to
Fund performance is contained elsewhere in this report.

<PAGE>

and international "lock-up stock" in the second quarter led to unpredictability
as well. By "lock-up stock," we mean stock formerly unavailable during the six
months following companies' initial public offerings (IPOs). This emergence of
large blocks of stock, on top of the explosion of entrepreneurship in Europe,
created challenges in placing the proper valuations on stocks. The result was a
lack of recognition for quality and punishment of stock prices.

The combination of these unfavorable market events created an imposing
obstacle for a large number of companies in Passport Fund. Since investors chose
to take profits from less stable, technology-oriented companies in particular,
many of Passport's holdings in this area severely lagged in the second quarter,
draining the Fund's overall first-half performance. Rather than join the
indiscriminate sell-off, we opted to hold several of our technology firms, as
our bottom-up research indicated that a number of software, business-to-business
e-commerce, and telecommunications companies have sound fundamentals and growth
prospects. Although this decision hurt the Fund's short-term performance, we
believe that it is important to maintain a long-term perspective in pursuing
growth.

PORTFOLIO COMPOSITION

[PIE CHART]

--------------------------------------------------------------------------------
<TABLE>
<S> <C>
19.97% United Kingdom
15.48% Other Countries
11.19% Japan
8.80% France
7.81% Germany
7.63% Switzerland
5.94% Israel
5.63% Canada
5.59% Other Assets & Liabilities
4.25% China
3.88% Hong Kong
3.83% Norway
</TABLE>
--------------------------------------------------------------------------------
Portfolio composition is subject to change.

<PAGE>

WHICH STRATEGIES DID YOU EMPLOY FOR PASSPORT FUND IN THE FIRST HALF?

Due to the sudden shifts in the markets throughout the half, the Fund's high
degree of diversification proved beneficial. As conditions changed, we
identified different types of companies as top growth prospects. For example, in
the first quarter, when market conditions were largely favorable, many of the
Fund's European holdings posted solid returns, due mainly to a range of exciting
technology developments in Europe. Indeed, the

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 5 SINCE
DATE DATE* YEAR YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS F SHARES 11/16/93 (10.12%) 54.12% 20.73% 16.28%
</TABLE>

* Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION 1 5 SINCE
DATE YEAR YEARS INCEPTION
<S> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- (15.20)%
Without sales charge 12/31/99 -- -- (10.03)%

CLASS B SHARES
With redemption** 12/31/99 -- -- (13.84)%
Without redemption 12/31/99 -- -- (10.25)%

CLASS C SHARES
With redemption*** 12/31/99 -- -- (11.28)%
Without redemption 12/31/99 -- -- (10.38)%

CLASS R SHARES 12/31/99 -- -- (9.90)%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- (14.15)%
Without sales charge 12/31/99 -- -- (10.12)%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.

<PAGE>

Fund's technology holdings in January, February, and early March posted
excellent returns as a whole, with companies such as KUDELSKI, a Swiss
firm that produces applications for audio and video data display, and SECURE
NETWORK SOLUTIONS, an Australian computer security company, leading the
portfolio. Unfortunately, in the second half these holdings did not fare as
well.

However, the Fund experienced solid performance in other areas during the
second quarter. One theme that many successful stocks shared was energy. We
believe that as oil and gas producers begin to deploy cash reserves that have
built up over the last year or so, the service companies providing the equipment
and support for drilling may see their earnings growth rates accelerate. Large
producers are not only flush with cash due to cost-cutting efforts and very
healthy hydrocarbon prices, but they are also struggling to meet oil and gas
production goals.

By considering energy companies one at a time, we uncovered several
promising growth firms positioned to benefit from these trends. For example,
PRECISION DRILLING, the dominant oilfield services provider in Canada, holds the
No. 1 or 2 market share position in almost every line of business in which it
operates.

LARGEST EQUITY HOLDINGS
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
1. Eyretel PLC 1.25%
2. Thiel Logistik AG 144A 1.19%
3. BreezeCom Limited Sponsored ADR 1.11%
4. Netgem 1.10%
5. Saurer AG 1.09%
6. HIT Entertainment PLC 144A 1.06%
7. Nippon Thompson Company Limited 1.06%
8. IHC Caland NV 1.03%
9. Man (ED&F) Group PLC 1.01%
10. Chloride Group PLC 1.01%
</TABLE>
--------------------------------------------------------------------------------
Portfolio holdings are subject to change.

<PAGE>

WHICH AREAS OF THE INTERNATIONAL SMALL-CAP MARKET DO YOU EXPECT TO PERFORM WELL
GOING FORWARD?

We are continuing to add positions in the Asian markets, particularly in China,
on a company-by-company basis. We believe there will be an increase in foreign
direct investment and a considerable amount of export growth as a result of
China's anticipated entry into the World Trade Organization (WTO). China has
been the last country in Asia to recover, so we believe there is still plenty of
room for growth. Also, investments in China may help manage risk, as the Chinese
market is less correlated to the NASDAQ than the other Asian markets.

WHAT IS YOUR INVESTMENT STRATEGY FOR PASSPORT FUND LOOKING AHEAD?

Even as specific investment decisions change, our basic strategy remains the
same. We value earnings growth potential above all else, and will continue to
use our in-depth research methods to search for those small, foreign companies
that best meet our high standards.

/s/ TRACY STOUFFER

Tracy Stouffer, CFA
Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
COMMON STOCKS (FOREIGN)-93.8%
AIRLINES-1.6%
21,418,000 China Eastern
Airlines Corporation
Limited H Shares
(CN)* $ 2,720,182
4,570,000 China Southern
Airlines Company
Limited H Shares
(HK)* 1,090,468
190,675 WestJet Airlines
Limited (CA)* 2,895,449
------------
6,706,099
------------
APPAREL-0.3%
908,000 Giordano
International Limited
(HK) 1,380,346
------------
AUTO PARTS & EQUIPMENT-0.7%
38,096 Faurecia (FR) 1,510,036
31,364 SAI Automotive AG
(GE) 275,096
496,525 The Mayflower
Corporation PLC (UK) 1,074,990
------------
2,860,122
------------
AUTOMOTIVE-0.3%
27,330 Brilliance China
Automotive Holdings
Limited Sponsored ADR
(HK) 474,859
181,100 Lex Service PLC (UK) 914,411
------------
1,389,270
------------
</TABLE>

<TABLE>
-----------------------------------------------
<CAPTION>
Shares Market Value
<C> <S> <C>
BASIC INDUSTRY-0.9%
22,619 Carbone Lorraine SA
(FR) $ 897,648
177,500 Tsubaki Nakashima
Company, Limited (JA) 2,617,165
------------
3,514,813
------------
BIOTECHNOLOGY-2.3%
36,125 GPC Biotech AG 144A
(GE)*+ 1,852,653
102,250 Hemosol, Inc. (CA)* 1,004,075
120,031 Oxford GlycoSciences
PLC (UK)* 3,436,557
245,100 Perbio Science (SW)* 1,928,227
203,675 Trinity Biotech PLC
Sponsored ADR (IE)* 598,295
314,750 Xenova Group PLC
(UK)* 388,374
------------
9,208,181
------------
BUILDING MATERIALS-0.7%
53,750 Buzzi Unicem SPA (IT) 488,964
1,950 Sarna Kunststoff
Holding AG (SZ) 2,398,376
------------
2,887,340
------------
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
BUSINESS SERVICES-7.5%
8,255 A Novo (FR) $ 2,041,593
102,900 AIT Group PLC (UK) 1,906,493
597,925 Anite Group PLC (UK) 1,448,418
37,687 Articon Information
Systems AG (GE)* 2,629,998
436,675 C.REL 144A (NW)*+ 561,968
3,810,000 Cosco Pacific Limited
(HK) 3,005,965
14,025 Daum Communications
Corporation (KR)* 1,333,332
12,375 DIS Deutscher
Industrie Service AG
(GE) 1,506,542
88,900 Easynet Group PLC
(UK)* 1,328,116
1,616,000 Eyretel PLC (UK)* 5,113,460
311,275 ITE Group PLC (UK) 339,316
475 Kipling Holding AB
(SW)* 6,716
173,225 Mitie Group PLC (UK) 949,394
40,675 NET2S (FR)* 818,803
4,566 Penauille
Polyservices (FR) 2,203,778
52,687 Prosequr, CIA de
Seguridad SA (SP) 618,688
76,600 Ruecker AG (GE)* 1,182,189
89,850 Scipher PLC (UK)* 718,936
133,205 Sifo Group AB (SW) 1,868,062
23,104 SR Teleperformance
(FR) 883,675
7,000 Sumisho Lease
Company, Limited (JA) 105,197
11,397 Unique International
NV (NE) 274,218
------------
30,844,857
------------
</TABLE>

<TABLE>
-----------------------------------------------
<CAPTION>
Shares Market Value
<C> <S> <C>
CHEMICALS-2.8%
253,925 Agrium, Inc. (CA) $ 2,176,451
118,000 Aico Kogyo Company,
Limited (JA) 939,079
9,830,000 Beijing Yanhua
Petrochemical Company
Limited H Shares
(CN)* 1,147,569
411,000 Central Glass
Company, Limited (JA) 2,187,048
269,300 Oxford Asymmetry
International PLC
(UK)* 2,026,375
21,582,000 Shanghai
Petrochemical Company
Limited H Shares (CN) 2,934,820
------------
11,411,342
------------
COMPUTER EQUIPMENT-1.7%
123,850 Alphameric PLC (UK) 635,657
21,991 Kontron Embedded
Computers AG (GE)* 1,992,091
5,139 Logitech
International SA (SZ) 3,669,134
31,300 Micronics Japan
Company, Limited (JA) 733,676
------------
7,030,558
------------
COMPUTER NETWORKING-3.3%
42,550 BATM Advanced
Communications
Limited (IS) 3,715,475
87,175 Fibernet Group PLC
(UK)* 2,441,692
55,276 NHC Communications,
Inc. Warrants (CA)* 430,882
774,825 Orchestream Holdings
PLC (UK)* 3,730,422
119,525 RADVision Limited
Sponsored ADR (IS)* 3,301,878
------------
13,620,349
------------
</TABLE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
COMPUTER SOFTWARE/SERVICES-6.3%
761,975 Actinic PLC 144A
(UK)+ $ 1,142,097
65,592 Advantage Group
Limited (NZ)* 85,533
90,000 Aldata Solutions Oyj
(FI)* 612,538
77,800 Cedar Group PLC (UK) 800,969
83,100 Commtouch Software
Limited Sponsored ADR
(IS)* 2,711,138
160,419 COR AG Insurance
Technologies (GE)* 2,644,945
104,475 F-Secure Oyj 144A
(FI)*+ 1,212,799
97,900 GEO Interactive Media
Group PLC (IS)* 1,874,996
13,800 PinkRoccade NV (NE)* 720,955
921,750 Sausage Software
Limited (AU)* 1,399,090
260,000 Securenet Limited
(AU)* 1,439,328
23,950 Staffware PLC (UK) 778,511
51,420 Thiel Logistik AG
144A (LU)+ 4,855,128
4,319 Think Tools AG (SZ)* 2,509,966
15,000 Trinitech Group PLC
Sponsored ADR (IE)* 288,750
47,800 Ubizen (BE)* 1,695,360
104,507 Valor Computerized
Systems AG 144A (IS)+ 941,685
232,000 Yuxing Infotech
Holdings Limited
(HK)* 127,235
------------
25,841,023
------------
CONSTRUCTION-1.6%
9,377 Abengoa SA (SP) 253,032
347,000 Hunet, Inc. (JA) 2,669,697
335,390 Samsung Heavy
Industries (KR)* 1,567,175
11,692,000 Zhejiang Expressway
Company Limited H
Shares (HK) 1,994,915
------------
6,484,819
------------
</TABLE>

<TABLE>
-----------------------------------------------
<CAPTION>
Shares Market Value
<C> <S> <C>
CONSUMER PRODUCTS-1.5%
39,800 Aderans Company,
Limited (JA) $ 1,847,025
4,625 Christian Dalloz (FR) 309,456
175,000 VTech Holdings
Limited (HK) 662,284
55,360 Zapf Creaton AG (GE) 3,475,920
------------
6,294,685
------------
CONSUMER SERVICES-0.3%
231,425 Mentmore Abbey PLC
(UK) 714,772
11,000 Tokyo Individualized
Educational
Institute, Inc. (JA)* 603,016
------------
1,317,788
------------
DISTRIBUTION-0.5%
10,526,000 China Shipping
Development Company
Limited H Shares
(CN)* 1,917,501
2,051 Societe Manutan (FR) 179,404
------------
2,096,905
------------
DIVERSIFIED-1.8%
447,700 Bodycote
International PLC
(UK) 1,474,258
492,425 Enodis PLC (UK) 2,414,336
21,450,000 Shenzhen
International
Holdings Limited
(HK)* 1,540,988
56,625 Sommer Allibert SA
(FR) 1,764,103
------------
7,193,685
------------
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
ELECTRONICS-8.2%
32,530 Abacus Polar PLC (UK) $ 227,168
4,225 ACG AG fuer
Chipkarten und
Informationsysteme
(GE)* 923,409
84,217 Adcon Telemetry AG
(GE)* 1,332,037
206,475 Advanced Power
Components PLC (UK) 1,281,677
26,800 Amatech AG (GE)* 929,985
66,000 Ando Electronic
Company, Limited
(JA)* 1,528,334
12,450 Austria Technologie &
Systemtechnik AG
(AT)* 954,755
50,000 Daeduck Electronics
Company, Limited (KR) 506,732
151,500 Idec Izumi
Corporation (JA) 2,140,731
442,775 Imagination
Technologies Group
PLC (UK)* 1,910,536
264,050 JOT Automation Group
Oyj (FI) 1,769,277
155,000 Kinseki Limited (JA) 2,629,689
54,000 Koa Corporation (JA) 1,679,182
185 Kudelski SA (SZ)* 2,334,543
240,220 Pace Micro Technology
PLC (UK) 3,462,369
143,000 Ryoyo Electro
Corporation (JA) 2,865,366
90,814 SZ Telesysteme AG
(GE)* 2,263,386
101,850 Techem AG 144A (GE)*+ 2,440,807
136,000 Toko, Inc. (JA) 1,029,626
49,625 Volex Group (UK) 1,091,601
400 Yamaichi Electronics
Company, Limited (JA) 12,968
------------
33,314,178
------------
</TABLE>

<TABLE>
-----------------------------------------------
<CAPTION>
Shares Market Value
<C> <S> <C>
ENVIRONMENTAL SERVICES-0.6%
59,527 Wedeco AG Water
Technology (GE)* $ 2,316,714
------------
FINANCIAL SERVICES-4.0%
170,375 AOT NV (NE) 979,918
53,650 Challenger
International Limited
Sponsored ADR (AU) 117,574
840,000 China Everbright
Limited (HK) 657,344
34,575 Grenkeleasing AG
(GE)* 1,136,812
2,360,000 HKBC Bank Holding
Company Limited (HK)* 681,206
892,000 Hong Kong Exchanges &
Clearing Limited
(HK)* 1,207,261
46,000 Ichiyoshi Securities
Company, Limited (JA) 387,386
262,925 Intermediate Capital
Group PLC (UK) 2,806,391
511,950 Man (E D & F) Group
PLC (UK) 4,115,752
17,700 Menire Oyj (FI)* 84,835
9,690 Tecis Holding AG (GE) 928,408
9,550 U.C.A. Unternehmer
Consult AG (GE)* 471,458
49,200 Van der Moolen
Holding NV (NE) 2,773,160
------------
16,347,505
------------
FOOD & BEVERAGE-1.8%
134,250 Elior 144A (FR)*+ 1,702,576
148,000 Fuji Oil Company,
Limited (JA) 1,321,909
66,000 Katokichi Company,
Limited (JA) 1,674,929
59,900 Oyj Hartwall ABP (FI) 1,205,809
45,825 Remy Cointreau SA
(FR)* 1,495,726
------------
7,400,949
------------
</TABLE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

15
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
HEALTHCARE SERVICES-0.9%
348,675 Nestor Healthcare
Group PLC (UK) $ 2,560,293
24,700 Oridion Systems
Limited (SZ)* 654,677
1,628,000 Quality Healthcare
Asia (HK)* 480,359
------------
3,695,329
------------
INSURANCE-0.0%
2,960 Metrolife SA (GR)* 27,880
------------
LEISURE & ENTERTAINMENT-0.9%
337,625 Arena Leisure PLC
(UK)* 950,768
512,549 Aristocrat Leisure
Limited (AU) 1,738,758
363,800 Superscape PLC (UK)* 1,129,129
------------
3,818,655
------------
MACHINERY-5.2%
335,000 Amada Company,
Limited (JA) 2,849,676
70,560 Neopost SA (FR)* 2,296,311
284,000 Nippon Thompson
Company Limited (JA) 4,321,678
175,395 Pinguely-Haulotte
(FR) 3,665,271
23,000 Rorze Corporation
(JA) 1,132,593
7,125 Saurer AG (SZ)* 4,460,519
242,900 Shin Sung ENG (KR) 1,307,099
2,269 Swisslog Holding AG
(SZ) 1,116,291
------------
21,149,438
------------

MANUFACTURING-3.7%
3,000 Abric Berhad (MA) $ 8,211
1,436,415 Chloride Group PLC
(UK) 4,110,256
44,175 GSI Lumonics, Inc.
Sponsored ADR (CA)* 1,548,886
11,270 Rieter Holding AG
(SZ) 3,811,881
480,000 Toshiba Tungaloy
Company, Limited (JA) 3,379,914
14,725 Vallourec SA (FR) 621,070
7,429 Zodiac SA (FR) 1,517,561
------------
14,997,779
------------
MEDICAL SUPPLIES & EQUIPMENT-3.5%
114,000 Axis-Shield PLC (UK)* 1,190,916
42,225 Biacore International
AB (SW)* 1,810,186
54,056 Card-Guard Scientific
Survival Limited
(IS)* 2,576,311
17,000 Moritex Corporation
(JA) 1,550,545
362 Phonak Holding AG
(SZ) 1,046,307
2,366 Straumann AG (SZ) 3,564,787
2,457 Tecan AG (SZ) 2,358,635
------------
14,097,687
------------
METALS & MINING-1.2%
26,138,000 Angang New Steel
Company Limited H
Shares (CN)* 2,649,008
10,064,000 Yanshou Coal Mining
Company Limited H
Shares (CN) 2,078,645
------------
4,727,653
------------
</TABLE>

16
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
OIL & GAS-2.6%
140,575 Canadian Hunter
Exploration Limited
(CA)* $ 2,983,791
73,725 Crestar Energy, Inc.
(CA)* 1,122,021
63,825 Ensign Resource
Service Group, Inc.
(CA) 2,102,085
396,090 ERG SPA (IT) 1,192,219
156,725 Genesis Exploration
Limited (CA)* 1,163,512
22,200 Gulf Indonesia
Resources Limited
Sponsored ADR (ID) 177,600
107,525 Rio Alto Exploration
Limited (CA)* 1,966,611
------------
10,707,839
------------
OIL SERVICES-4.9%
256,625 Frontline Limited
144A (NW)*+ 3,152,457
86,300 IHC Caland NV (NE) 4,219,038
89,500 Precision Drilling
Corporation (CA)* 3,455,085
129,675 ProSafe ASA (NW)* 1,926,730
210,125 Smedvig ASA (NW) 3,441,650
301,625 TGS Nopec Geophysical
Company ASA (NW)* 4,005,199
------------
20,200,159
------------
PACKAGING-0.6%
54,614 IFCO Systems NV (NE)* 1,460,631
85,520 M.J. Maillis SA (GR) 1,075,636
------------
2,536,267
------------

PHARMACEUTICALS-1.8%
46,879 Cerep SA (FR)* $ 3,235,514
9,560,000 China Pharmaceutical
Enterprise and
Investment
Corporation Limited
(HK) 1,165,106
49,000 Hisamitsu
Pharmaceutical
Company, Inc. (JA) 755,367
56,600 Karo Bio AB (SW)* 2,116,684
------------
7,272,671
------------
PROPERTY-1.3%
10,440,000 China Resources
Beijing Land Limited
(HK) 1,392,893
44,000 Joint Corporation
(JA) 1,501,302
24,180 Pierre & Vacances
(FR) 1,448,668
237,350 Shaftesbury
International PLC
(UK) 916,340
------------
5,259,203
------------
PUBLISHING & BROADCASTING-2.2%
660,075 HIT Entertainment PLC
144A (UK)*+ 4,347,201
1,573,475 Incepta Group PLC
(UK) 3,144,568
90,245 RT-Set Real Time
Synthesized
Entertainment
Technology Limited
144A (IS)*+ 1,412,673
------------
8,904,442
------------
</TABLE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

17
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
RETAIL-2.9%
34,100 Beter Bed Holding NV
(NE) $ 1,026,400
37,771 Cortefiel SA (SP) 822,620
807,625 Debenhams PLC (UK) 2,647,249
13,470 G.I.B. Group SA (BE) 496,990
5,200 LG Home Shopping,
Inc. (KR) 494,355
1,096,300 QXL Limited (UK)* 1,659,803
145,300 Shimachu Company,
Limited (JA) 3,089,985
196,500 Ted Baker PLC (UK) 1,579,735
9,700 Xebio Company,
Limited (JA) 228,286
------------
12,045,423
------------
SEMICONDUCTORS & EQUIPMENT-4.4%
37,300 ASM International NV
Sponsored ADR (NE)* 988,450
82,350 BE Semiconductor
Industries NV (NE)* 1,290,666
9,000 Custom Silicon
Configuration
Services (BE)* 142,350
39,131 Dialog Semiconductor
PLC 144A (UK)*+ 1,988,059
1,330 ESEC Holding AG (SZ) 3,287,990
28,050 M-Systems Flash Disk
Pioneers Limited
Sponsored ADR (IS)* 2,182,641
1,035,225 Parthus Technologies
PLC (IE)* 2,977,937
103,450 Riber SA (FR)* 2,132,070
157,800 Robotic Technology
Systems PLC (UK)* 1,605,475
6,475 Silicon-On-Insulator
Technologies (FR)* 1,520,682
------------
18,116,320
------------

TELECOMMUNICATION SERVICES-2.3%
50,775 Comptel Oyj 144A
(FI)*+ $ 1,026,987
244,140 ERG Limited Sponsored
ADR (AU) 1,901,228
43,730 Future Integrated
Telephony PLC (UK)* 158,898
2,875 Glocalnet AB (SW)* 4,130
22,925 GT Group Telecom,
Inc. (CA)* 361,273
30,025 International Quantum
Epitaxy PLC (UK)* 2,462,050
195,800 Redstone Telecom PLC
(UK)* 781,332
357,875 Telemetrix PLC (UK) 1,769,057
28,875 TTI Team Telecom
International Limited
Sponsored ADR (IS)* 1,028,672
------------
9,493,627
------------
TELECOMMUNICATIONS EQUIPMENT-4.9%
68,650 Technomen Oyj (FI)* 592,264
104,400 BreezeCom Limited
Sponsored ADR (IS)* 4,528,350
8,330 Comroad AG (GE)* 1,293,577
20,550 Ericsson SPA (IT) 1,203,609
187,825 ITG Group PLC 144A
(IE)*+ 1,975,115
117,269 Netgem (FR)* 4,486,394
33,750 Sierra Wireless (CA)* 1,822,231
85,540 SwitchCore AB (SW)* 713,978
85,950 Teleste Corporation
(FI)* 2,100,963
10,275 Wavecom SA (FR)* 1,251,463
------------
19,967,944
------------
TRANSPORTATION-0.8%
125,000 Bergesen d.y. ASA
(NW) 2,573,852
35,275 DSV, DeSammensluttede
Vognmaend af
13-7-1976 AS (DE) 793,236
------------
3,367,088
------------
</TABLE>

18
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
UTILITIES-1.0%
5,830,000 Beijing Datang Power
Generation Company H
Shares 144A (HK)*+ $ 1,308,852
6,396,000 Huaneng Power
International, Inc. H
Shares (CN) 2,092,341
3,488,000 Shandong
International Power
Development Company
Limited H Shares (CN) 514,586
------------
3,915,779
------------
TOTAL COMMON STOCKS (FOREIGN)
(COST-$373,007,164) 383,762,711
------------
PREFERRED STOCKS (FOREIGN)-0.6%
APPAREL-0.6%
13,120 Hugo Boss AG Non-
Voting Preferred (GE) 2,326,687
------------
TOTAL PREFERRED STOCKS (FOREIGN)
(COST-$2,006,030) 2,326,687
------------
</TABLE>

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------
<C> <S> <C>
CORPORATE SHORT-TERM NOTES-5.5%
FINANCIAL SERVICES-5.5%
$21,000,000 Associates
Corporation N.A.
6.93%
07/03/00 $ 20,991,915
1,400,000 Morgan Stanley Dean
Witter 6.85%
07/05/00 1,398,934
------------
TOTAL CORPORATE SHORT-TERM NOTES
(AMORTIZED COST-$22,390,849) 22,390,849
------------
TOTAL INVESTMENTS-99.9%
(COST-$397,404,043) 408,480,247
OTHER ASSETS AND
LIABILITIES-0.1% 475,222
------------
NET ASSETS-100.0% $408,955,469
============
</TABLE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

19
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS
Investment securities, at cost.............................. $397,404,043
------------
Investment securities, at market............................ 408,480,247
Cash........................................................ 1,072,723
Foreign currency (cost $3,697,901).......................... 3,710,184
Receivables:
Investment securities sold................................ 22,348,449
Capital shares sold....................................... 4,512,733
Dividends and interest.................................... 60,994
Other assets................................................ 97,018
------------
Total Assets............................................ 440,282,348
------------

LIABILITIES
Payables:
Investment securities purchased........................... 30,000,801
Capital shares redeemed................................... 535,480
Advisory fees............................................. 304,809
Shareholder servicing fees................................ 40,526
Accounting fees........................................... 7,580
Distribution fees......................................... 209,805
Other..................................................... 227,878
------------
Total Liabilities....................................... 31,326,879
------------
Net Assets.................................................. $408,955,469
============
</TABLE>

20
<PAGE>

<TABLE>
<S> <C>
Net Assets--Class A......................................... $ 52,790,896
Shares Outstanding--Class A................................. 2,561,061
Net Asset Value and Redemption Price Per Share.............. $ 20.63
Maximum offering price per share (net asset value plus sales
charge of 5.75% of offering price)........................ $ 21.89

Net Assets--Class B......................................... $ 47,340,082
Shares Outstanding--Class B................................. 2,302,000
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share.... $ 20.58

Net Assets--Class C......................................... $ 22,246,190
Shares Outstanding--Class C................................. 1,083,200
Net Asset Value, Offering and Redemption Price (excluding
applicable contingent deferred sales charge) Per Share.... $ 20.55

Net Assets--Class F......................................... $285,030,850
Shares Outstanding--Class F................................. 13,835,327
Net Asset Value, Offering and Redemption Price Per Share.... $ 20.61

Net Assets--Class R......................................... $ 266,805
Shares Outstanding--Class R................................. 12,922
Net Asset Value, Offering and Redemption Price Per Share.... $ 20.66

Net Assets--Class T......................................... $ 1,280,646
Shares Outstanding--Class T................................. 62,177
Net Asset Value and Redemption Price Per Share.............. $ 20.61
Maximum offering price per share (net asset value plus sales
charge of 4.50% of offering price)........................ $ 21.58
</TABLE>

See notes to financial statements.

21
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................ $ 934,503
Interest................................................. 381,101
Foreign taxes withheld................................... (131,048)
--------------
Total Investment Income................................ 1,184,556
--------------
Expenses:
Advisory fees............................................ 1,938,702
Shareholder servicing fees--Note 2....................... 170,184
Accounting fees.......................................... 48,737
Distribution fees--Note 2................................ 599,257
Transfer agency fees--Note 2............................. 108,607
Registration fees........................................ 104,110
Postage and mailing expenses............................. 65,879
Custodian fees and expenses.............................. 533,235
Printing expenses........................................ 76,441
Legal and audit fees..................................... 37,840
Directors' fees and expenses............................. 45,776
Line of Credit expenses.................................. 46,518
Other expenses........................................... 67,851
--------------
Total Expenses......................................... 3,843,137
Earnings Credits....................................... (71,870)
--------------
Net Expenses........................................... 3,771,267
--------------
Net Investment (Loss).................................... (2,586,711)
--------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net Realized Gain (Loss) from Security Transactions:
Proceeds from long-term securities sold.................. 1,058,978,356
Proceeds from long-term U.S. Government Obligations...... 0
Cost of securities sold.................................. 1,099,741,930
--------------
Net Realized (Loss) from Security Transactions............. (40,763,574)
Net Realized (Loss) from Foreign Currency Transactions..... (198,686)
Net Change in Unrealized Appreciation/Depreciation......... (48,401,279)
--------------
Net Realized and Unrealized Gain on Investments and
Foreign Currency Transactions.......................... (89,363,539)
--------------
Net (Decrease) in Net Assets Resulting from Operations..... $ (91,950,250)
==============
Purchases of long-term securities.......................... $1,256,359,621
==============
Purchases of long-term U.S. Government Obligations......... $ 0
==============
</TABLE>

See notes to financial statements.

22
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (2,586,711) $ (1,236,397)
Net Realized Gain (Loss) from Security
Transactions............................... (40,763,574) 77,830,326
Net Realized (Loss) from Foreign Currency
Transactions............................... (198,686) (67,544)
Net Change in Unrealized
Appreciation/Depreciation.................. (48,401,279) 28,880,978
------------- -------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ (91,950,250) 105,407,363
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (42,827,453)
Class R.................................... 0 0
Class T.................................... 0 0
------------- -------------
Net Increase (Decrease) from Dividends and
Distributions............................ $ 0 $ (42,827,453)
------------- -------------
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

23
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS Proceeds from
shares sold
Class A.................................... $169,049,391 $ 1,000
Class B.................................... 68,441,995 1,000
Class C.................................... 31,495,728 1,000
Class F.................................... 488,589,960 306,249,149
Class R.................................... 562,258 1,000
Class T.................................... 1,995,187 1,000
Reinvested dividends and distributions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 40,314,448
Class R.................................... 0 0
Class T.................................... 0 0
------------- -------------
760,134,519 346,568,597
Cost of shares redeemed
Class A.................................... (100,932,292) 0
Class B.................................... (3,945,146) 0
Class C.................................... (1,435,785) 0
Class F.................................... (413,882,610) (272,279,102)
Class R.................................... (180,000) 0
Class T.................................... (294,523) 0
------------- -------------
(520,670,356) (272,279,102)
------------- -------------
Net Increase from Capital Share
Transactions............................. 239,464,163 74,289,495
------------- -------------
Net Increase in Net Assets................. 147,513,913 136,869,405
</TABLE>

24
<PAGE>

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
NET ASSETS
Beginning of period........................ $261,441,556 $ 124,572,151
------------- -------------
End of period.............................. $408,955,469 $ 261,441,556
============= =============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $406,766,843 $ 167,302,680
Accumulated undistributed (distribution in
excess of) net investment income........... (2,626,122) (39,411)
Accumulated undistributed net realized gain
(loss) from security transactions.......... (6,266,861) 34,695,399
Unrealized appreciation on investments and
foreign currency transactions.............. 11,081,609 59,482,888
------------- -------------
Total...................................... $408,955,469 $ 261,441,556
============= =============
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS A SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 22.93
Income from investment operations:
Net investment (loss)................................ (0.08)
Net (losses) on securities (both realized and
unrealized)........................................ (2.22)
--------
Total from investment operations................ (2.30)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
--------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 20.63
========
Total Return/Ratios
Total return......................................... (10.03%)*
Net assets, end of period (000s)..................... $ 52,791
Net expenses to average net assets#.................. 1.82%**
Gross expenses to average net assets#................ 1.85%**
Net investment (loss) to average net assets.......... (1.14%)**
Portfolio turnover rate@............................. 542%
</TABLE>

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS B SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 22.93
Income from investment operations:
Net investment (loss)................................ (0.13)
Net (losses) on securities (both realized and
unrealized)........................................ (2.22)
--------
Total from investment operations................ (2.35)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
--------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 20.58
========
Total Return/Ratios
Total return......................................... (10.25%)*
Net assets, end of period (000s)..................... $ 47,340
Net expenses to average net assets#.................. 2.60%**
Gross expenses to average net assets#................ 2.64%**
Net investment (loss) to average net assets.......... (1.89%)**
Portfolio turnover rate@............................. 542%
</TABLE>

See notes to financial statements.

27
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS C SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 22.93
Income from investment operations:
Net investment (loss)................................ (0.12)
Net (losses) on securities (both realized and
unrealized)........................................ (2.26)
--------
Total from investment operations................ (2.38)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
--------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 20.55
========
Total Return/Ratios
Total return......................................... (10.38%)*
Net assets, end of period (000s)..................... $ 22,246
Net expenses to average net assets#.................. 2.63%**
Gross expenses to average net assets#................ 2.67%**
Net investment (loss) to average net assets.......... (1.90%)**
Portfolio turnover rate@............................. 542%
</TABLE>

28
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ---------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- -------- -------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period........................... $ 22.93 $ 14.93 $ 13.64 $ 13.91 $ 11.68 $ 9.42
Income from investment operations:
Net investment income (loss)... (0.13) (0.11) 0.00 0.02 0.04 0.04
Net gains (losses) on securities
(both realized and
unrealized).................... (2.19) 12.94 1.68 0.22 2.30 2.26
-------- -------- -------- -------- -------- -------
Total from investment
operations................ (2.32) 12.83 1.68 0.24 2.34 2.30
Less distributions:
From net investment income..... 0.00 0.00 (0.01) (0.03) (0.02) (0.04)
From net realized gains........ 0.00 (4.83) (0.38) (0.48) (0.09) 0.00
-------- -------- -------- -------- -------- -------
Total distributions......... 0.00 (4.83) (0.39) (0.51) (0.11) (0.04)
Net Asset Value, end of period.... $ 20.61 $ 22.93 $ 14.93 $ 13.64 $ 13.91 $ 11.68
======== ======== ======== ======== ======== =======
Total Return/Ratios
Total return................... (10.12%) 87.44% 12.50% 1.70% 20.05% 24.39%
Net assets, end of period
(000s)........................ $285,031 $261,437 $124,572 $122,646 $177,921 $49,922
Net expenses to average net
assets#....................... 1.71%* 1.63% 1.52% 1.53% 1.57% 1.76%
Gross expenses to average net
assets#....................... 1.75%* 1.64% 1.54% 1.55% 1.59% 1.84%
Net investment income (loss) to
average net assets............ (1.19%)* (0.91%) 0.09% 0.20% 0.40% 0.60%
Portfolio turnover rate@......... 542% 330% 34% 51% 58% 37%
</TABLE>

See notes to financial statements.

29
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS R SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $22.93
Income from investment operations:
Net investment (loss)................................ (0.09)
Net (losses) on securities (both realized and
unrealized)........................................ (2.18)
------
Total from investment operations................ (2.27)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $20.66
======
Total Return/Ratios
Total return......................................... (9.90%)
Net assets, end of period (000s)..................... $ 267
Net expenses to average net assets#.................. 1.45%*
Gross expenses to average net assets#................ 1.49%*
Net investment (loss) to average net assets.......... (0.84%)*
Portfolio turnover rate@............................. 542%
</TABLE>

30
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS T SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $ 22.93
Income from investment operations:
Net investment (loss)................................ (0.08)
Net (losses) on securities (both realized and
unrealized)........................................ (2.24)
-------
Total from investment operations................ (2.32)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
-------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $ 20.61
=======
Total Return/Ratios
Total return......................................... (10.12%)*
Net assets, end of period (000s)..................... $ 1,281
Net expenses to average net assets#.................. 2.15%**
Gross expenses to average net assets#................ 2.19%**
Net investment (loss) to average net assets.......... (1.41%)**
Portfolio turnover rate@............................. 542%
</TABLE>

See notes to financial statements.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Passport Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations. Foreign currency
held

32
<PAGE>

33
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

distributor of the Fund's shares. The Distributor retained $64,014 during the
six months ended June 30, 2000 from commissions earned on sales of Fund shares.
Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $8,035
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $45,637, $39,732, $17,289, and $881, respectively, for shareholder
servicing fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of the Funds from $0 to
$500 million and 0.02% of the net assets of the Funds in excess of $500 million,
plus reasonable out-of-pocket expenses. The fee so computed is allocated to each
of the Funds on a pro rata basis based on relative average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and

34
<PAGE>

Class T shares. Under the plan, Class B and Class C shares pay the Distributor
for distributing their shares at an annual rate of 0.75% of the value of the
average daily net assets of Class B and Class C shares and 0.25% of the average
daily net assets of Class T shares. During the six months ended June 30, 2000,
Class B, Class C, and Class T shares were charged $119,196, $51,867, and $881,
respectively, pursuant to this Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

35
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS
PASSPORT FUND
----------------
<S> <C>
Net Capital Loss Carryovers.............................. $ 0
Post-October Capital Loss Deferral....................... $ 0
Post-October Currency Loss Deferral...................... $ 67,550
Federal Tax Cost......................................... $402,553,870
Unrealized Appreciation.................................. $ 33,037,991
Unrealized (Depreciation)................................ $(21,112,317)
Net Appreciation......................................... $ 11,925,674
</TABLE>

36
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 400 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED 6/30/00 ENDED 12/31/99*
------------- ---------------
<S> <C> <C>
CLASS A
Shares sold........................... 6,977,987 44
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (4,416,970) 0
NET INCREASE IN SHARES OUTSTANDING.... 2,561,017 44
CLASS B
Shares sold........................... 2,473,276 44
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (171,320) 0
NET INCREASE IN SHARES OUTSTANDING.... 2,301,956 44
CLASS C
Shares sold........................... 1,145,273 44
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (62,117) 0
NET INCREASE IN SHARES OUTSTANDING.... 1,083,156 44
CLASS F
Shares sold........................... 18,031,282 16,115,124
Shares issued for dividends
reinvested.......................... 0 1,840,962
Shares redeemed....................... (15,599,532) (14,895,211)
NET INCREASE IN SHARES OUTSTANDING.... 2,431,750 3,060,875
CLASS R
Shares sold........................... 20,680 44
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (7,802) 0
NET INCREASE IN SHARES OUTSTANDING.... 12,878 44
CLASS T
Shares sold........................... 73,629 44
Shares issued for dividends
reinvested.......................... 0 0
Shares redeemed....................... (11,496) 0
NET INCREASE IN SHARES OUTSTANDING.... 62,133 44
</TABLE>

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R, and Class T shares.

37
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

38
<PAGE>

DREYFUS FOUNDERS FUNDS
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

Date of first use: August 28, 2000

<PAGE>

DREYFUS FOUNDERS
PASSPORT FUND

SEMIANNUAL REPORT
June 30, 2000

[GRAPHIC]
<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
-------------------------------------------------------------------------------
A Message from Founders 4
-------------------------------------------------------------------------------
Management Overview 6
-------------------------------------------------------------------------------
Statement of Investments 12
-------------------------------------------------------------------------------
Statement of Assets and Liabilities 20
-------------------------------------------------------------------------------
Statement of Operations 22
-------------------------------------------------------------------------------
Statements of Changes in Net Assets 23
-------------------------------------------------------------------------------
Financial Highlights 26
-------------------------------------------------------------------------------
Notes to Financial Statements 32
-------------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of Investments to
indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

--------------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
--------------------------------------------------------------

<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

All total returns mentioned in this report account for both the change in the
Fund's per-share price and reinvestment of any dividends or capital gain
distributions made by the Fund. If your account is set up to pay out Fund
distributions rather than reinvest them, your return may differ from the
figures listed here. The Fund's portfolio composition is subject to change and
there is no assurance the Fund will continue to hold any particular security.
Opinions regarding sectors, industries, companies, and/or themes are subject to
change at any time, based on market and other conditions, and should not be
construed as a recommendation of any specific security.

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Part of the Fund's historical
performance is due to the Fund's purchase of securities sold in initial public
offerings (IPOs). There is no guarantee that the Fund's investments in IPOs, if
any, will continue to have a similar impact on performance. Investments in
foreign securities may entail unique risks, including political, market, and
currency risks. There are risks associated with small-cap investing such as
limited product lines and small market share.

COMPARATIVE INDEXES

The comparative indexes included with the Fund's performance chart are meant to
provide a basis for judging its performance against its peer group and/or a
specific unmanaged securities index. Each benchmark shown accounts for both
change in security price and reinvestment of any dividends or coupon payments.
The securities indexes are unmanaged groups of securities; they do not reflect
the costs of managing a mutual fund.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

<PAGE>

MANAGEMENT OVERVIEW

[PHOTO]

A discussion with portfolio manager Tracy Stouffer, CFA

HOW DID THE PASSPORT FUND PERFORM DURING THE FIRST HALF OF 2000?

WHAT CAUSED THE EXTREME MARKET VOLATILITY FOR INTERNATIONAL SMALL-CAP STOCKS IN
THE FIRST HALF?

--------------------------------------------------------------------------------
FUND AT A GLANCE

This fund invests primarily in common stocks of small, rapidly growing
companies outside the U.S.
--------------------------------------------------------------------------------

GROWTH OF $10,000 INVESTMENT

<PAGE>

PORTFOLIO COMPOSITION

[PIE CHART]

<PAGE>

WHICH STRATEGIES DID YOU EMPLOY FOR PASSPORT FUND IN THE FIRST HALF?

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION YEAR-TO- 1 5 SINCE
DATE DATE* YEAR YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS F SHARES 11/16/93 (10.12%) 54.12% 20.73% 16.28%
</TABLE>

* Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00

<TABLE>
<CAPTION>
INCEPTION 1 5 SINCE
DATE YEAR YEARS INCEPTION
<S> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- (15.20)%
Without sales charge 12/31/99 -- -- (10.03)%

CLASS B SHARES
With redemption** 12/31/99 -- -- (13.84)%
Without redemption 12/31/99 -- -- (10.25)%

CLASS C SHARES
With redemption*** 12/31/99 -- -- (11.28)%
Without redemption 12/31/99 -- -- (10.38)%

CLASS R SHARES 12/31/99 -- -- (9.90)%

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- (14.15)%
Without sales charge 12/31/99 -- -- (10.12)%
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is 1% for
shares redeemed within one year of the date of purchase.

<PAGE>

WHICH AREAS OF THE INTERNATIONAL SMALL-CAP MARKET DO YOU EXPECT TO PERFORM WELL
GOING FORWARD?

WHAT IS YOUR INVESTMENT STRATEGY FOR PASSPORT FUND LOOKING AHEAD?

/s/ TRACY STOUFFER

Tracy Stouffer, CFA
Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

12
<PAGE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

14
<PAGE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

15
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

16
<PAGE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

17
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

18
<PAGE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

19
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

20
<PAGE>

See notes to financial statements.

21
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

See notes to financial statements.

22
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
SIX MONTHS YEAR OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (2,586,711) $ (1,236,397)
Net Realized Gain (Loss) from Security
Transactions............................... (40,763,574) 77,830,326
Net Realized (Loss) from Foreign Currency
Transactions............................... (198,686) (67,544)
Net Change in Unrealized
Appreciation/Depreciation.................. (48,401,279) 28,880,978
------------- -------------
Net Increase (Decrease) in Net Assets
Resulting from Operations................ (91,950,250) 105,407,363
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (42,827,453)
Class R.................................... 0 0
Class T.................................... 0 0
------------- -------------
Net Increase (Decrease) from Dividends and
Distributions............................ $ 0 $ (42,827,453)
------------- -------------
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

23
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

24
<PAGE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital stock
outstanding throughout each period.

See notes to financial statements.

27
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

28
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

29
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

30
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Passport Fund (the
"Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R, and Class
T shares. Class A and Class T shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred sales
charge ("CDSC") imposed on Class B share redemptions made within six years of
purchase, Class C shares are subject to a CDSC imposed on Class C shares
redeemed within one year of purchase, and Class F and Class R shares are sold at
net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations. Foreign currency
held

32
<PAGE>

33
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

34
<PAGE>

Class T shares. Under the plan, Class B and Class C shares pay the Distributor
for distributing their shares at an annual rate of 0.75% of the value of the
average daily net assets of Class B and Class C shares and 0.25% of the average
daily net assets of Class T shares. During the six months ended June 30, 2000,
Class B, Class C, and Class T shares were charged $119,196, $51,867, and $881,
respectively, pursuant to this Distribution Plan.
The board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

35
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

36
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 400 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

* From December 30, 1999 (commencement of initial offering) to December 31, 1999
for Class A, Class B, Class C, Class R, and Class T shares.

37
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

38
<PAGE>

FOR MORE INFORMATION

Dreyfus Founders
Passport Fund
2930 East Third Avenue
Denver, CO 80206

MANAGER

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

Founders and Founders Funds are registered trademarks of
Founders Asset Management LLC.

<PAGE>

DREYFUS FOUNDERS
WORLDWIDE GROWTH FUND

SEMIANNUAL REPORT
JUNE 30, 2000

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
--------------------------------------------------------------------------------
A Message from Founders 4
--------------------------------------------------------------------------------
Management Overview 6
--------------------------------------------------------------------------------
Statement of Investments 12
--------------------------------------------------------------------------------
Statement of Assets and Liabilities 16
--------------------------------------------------------------------------------
Statement of Operations 18
--------------------------------------------------------------------------------
Statements of Changes in Net Assets 19
--------------------------------------------------------------------------------
Financial Highlights 22
--------------------------------------------------------------------------------
Notes to Financial Statements 28
--------------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of
Investments to indicate the country of origin of non-U.S. holdings:

<TABLE>
<S> <C> <C> <C> <C> <C>
AU Australia GE Germany MA Malaysia
AT Austria HK Hong Kong MX Mexico
BE Belgium ID Indonesia NE Netherlands
BR Brazil IE Ireland NW Norway
CA Canada IS Israel SP Spain
CN China IT Italy SW Sweden
DE Denmark JA Japan SZ Switzerland
FI Finland KR South Korea UK United Kingdom
FR France LU Luxembourg
</TABLE>

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

---------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
---------------------------------------------------------
<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Part of the Fund's historical
performance is due to the Fund's purchase of securities sold in initial public
offerings (IPOs). There is no guarantee that the Fund's investments in IPOs, if
any, will continue to have a similar impact on performance. Investments in
foreign securities may entail unique risks, including political, market, and
currency risks.

COMPARATIVE INDEXES

o The Morgan Stanley Capital International (MSCI) World Index is an
arithmetical average of the performance of selected securities listed on
the stock exchanges of the United States, Europe, Canada, Australia, New
Zealand, and the Far East.

o The Lipper Global Fund Index is an average of the performance of the 30
largest global funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

3
<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

5
<PAGE>

MANAGEMENT OVERVIEW

[PHOTOS]

A discussion with portfolio managers Thomas Arrington, CFA, left, Scott Chapman,
CFA, center, and Doug Loeffler, CFA.

HOW DID THE FUND PERFORM IN THE FIRST HALF?

In the first three months of 2000, Worldwide Growth Fund performed admirably,
but by the end of the half its gains had fallen prey to a second-quarter market
correction. The Fund finished the first half in negative territory, slipping
beneath its benchmark, the Morgan Stanley Capital International (MSCI) World
Index, which also concluded the year-to-date period ended June 30 in the red.

WHAT AFFECTED GLOBAL INVESTORS DURING THE FIRST SIX MONTHS OF 2000?

The start of the new millennium began with a continuation of what we saw in the
fourth quarter of 1999: booming market conditions. Initially, investors showed
the utmost confidence in rapid-growth, technology-oriented "New

--------------------------------------------------------------------------
FUND AT A GLANCE

This fund invests primarily in stocks of both emerging and established
growth companies throughout the world.
--------------------------------------------------------------------------
6
<PAGE>

Economy" equities, especially in February, which was an outstanding month for
the Fund.

However, by mid-March, this bullish attitude began to erode. Investors
around the globe became concerned about the frenetic pace of the markets, and
started questioning stock valuations and the United States' rapid economic
growth. Meanwhile, investors everywhere witnessed the U.S. Federal Reserve
Board's repeated interest rate increases, and the general sentiment became
negative. Throughout the remainder of March and well through May, we saw heavy
profit-taking, which spurred a sharp decline in the once-buoyant technology,
telecommunications, and media sectors.

Overseas, Europe's common currency, the euro, struggled to assert itself,
adding to the global downturn. Uncertainty about the euro's future on top of
investors' sudden apprehension toward growth opportunities combined to

[GRAPH]

GROWTH OF $10,000 INVESTMENT

<TABLE>
<CAPTION>
MSCI LIPPER
WORLDWIDE WORLD GLOBAL FD. CPI
<S> <C> <C> <C> <C>
06/30/1990 10,000.00 10,000.00 10,000.00 10,000.00
07/31/1990 10,316.74 10,088.11 10,302.97 10,046.15
08/31/1990 9,656.11 9,140.78 9,330.37 10,130.77
09/30/1990 9,185.52 8,173.82 8,382.43 10,200.00
10/31/1990 9,384.62 8,933.72 8,785.61 10,269.23
11/30/1990 9,402.71 8,783.85 8,760.11 10,292.31
12/31/1990 9,653.21 8,964.60 8,797.81 10,330.77
01/31/1991 10,118.20 9,289.28 9,118.04 10,369.23
02/28/1991 10,694.79 10,146.01 9,810.05 10,376.92
03/31/1991 11,020.29 9,843.88 9,625.65 10,376.92
04/30/1991 10,722.69 9,917.78 9,708.46 10,400.00
05/31/1991 11,280.68 10,139.46 9,962.79 10,438.46
06/30/1991 10,676.19 9,510.45 9,434.80 10,461.54
07/31/1991 11,355.08 9,956.55 9,909.36 10,484.62
08/31/1991 11,587.57 9,921.83 9,943.04 10,515.38
09/30/1991 11,857.27 10,178.95 10,137.90 10,546.15
10/31/1991 12,145.56 10,340.91 10,259.59 10,561.54
11/30/1991 11,894.47 9,887.15 9,884.06 10,607.69
12/31/1991 13,012.74 10,603.72 10,582.87 10,638.46
01/31/1992 12,966.00 10,404.28 10,613.57 10,646.15
02/28/1992 13,349.28 10,221.64 10,700.61 10,669.23
03/31/1992 12,909.91 9,737.00 10,391.33 10,707.69
04/30/1992 12,788.39 9,869.56 10,529.58 10,730.77
05/31/1992 13,283.84 10,258.99 10,943.36 10,753.85
06/30/1992 12,750.99 9,912.15 10,694.93 10,784.62
07/31/1992 12,657.51 9,934.21 10,573.03 10,815.38
08/31/1992 12,377.06 10,172.52 10,555.08 10,838.46
09/30/1992 12,451.85 10,076.00 10,398.81 10,861.54
10/31/1992 12,545.33 9,799.84 10,287.59 10,907.69
11/30/1992 13,078.18 9,972.08 10,449.06 10,938.46
12/31/1992 13,209.06 10,049.54 10,589.11 10,953.85
01/31/1993 13,040.79 10,080.14 10,668.52 10,984.62
02/28/1993 12,582.72 10,315.91 10,816.82 11,015.38
03/31/1993 13,078.18 10,910.96 11,289.51 11,030.77
04/30/1993 13,283.84 11,413.63 11,533.37 11,069.23
05/31/1993 13,695.16 11,673.65 11,860.88 11,100.00
06/30/1993 13,648.42 11,572.71 11,737.52 11,107.69
07/30/1993 13,554.94 11,808.13 11,992.27 11,123.08
08/31/1993 14,573.90 12,346.48 12,709.37 11,146.15
09/30/1993 14,882.39 12,115.41 12,765.29 11,161.54
10/29/1993 15,639.60 12,445.83 13,341.03 11,207.69
11/30/1993 15,508.72 11,739.57 12,998.14 11,230.77
12/31/1993 17,156.97 12,311.25 14,061.38 11,261.54
01/31/1994 17,778.60 13,119.84 14,734.97 11,261.54
02/28/1994 17,539.51 12,947.45 14,391.66 11,292.31
03/31/1994 16,277.13 12,385.77 13,720.99 11,323.08
04/29/1994 16,248.44 12,766.16 13,932.28 11,330.77
05/31/1994 16,219.75 12,796.19 13,932.28 11,353.85
06/30/1994 16,018.91 12,757.26 13,602.07 11,384.62
07/29/1994 16,783.99 12,997.50 14,052.31 11,423.08
08/31/1994 17,596.89 13,385.67 14,634.07 11,469.23
09/30/1994 17,463.00 13,030.87 14,375.03 11,492.31
10/31/1994 17,692.53 13,399.01 14,603.65 11,500.00
11/30/1994 17,080.46 12,815.09 13,918.70 11,530.77
12/30/1994 16,787.02 12,936.33 13,755.85 11,561.54
01/31/1995 16,384.29 12,738.35 13,301.94 11,584.62
02/28/1995 16,629.86 12,920.76 13,453.57 11,615.38
03/31/1995 17,199.57 13,541.38 13,733.39 11,638.46
04/28/1995 17,916.63 14,009.63 14,181.13 11,676.92
05/31/1995 18,230.96 14,126.41 14,488.82 11,707.69
06/30/1995 18,771.21 14,118.63 14,764.14 11,730.77
07/31/1995 20,008.87 14,821.55 15,487.55 11,746.15
08/31/1995 19,635.61 14,489.00 15,300.17 11,769.23
09/29/1995 20,107.10 14,907.20 15,584.78 11,784.62
10/31/1995 19,586.49 14,669.18 15,210.70 11,823.08
11/30/1995 19,832.06 15,175.24 15,464.75 11,830.77
12/29/1995 20,250.50 15,615.69 15,766.27 11,853.85
01/31/1996 20,474.71 15,895.97 16,231.40 11,900.00
02/29/1996 21,208.50 15,989.39 16,401.81 11,930.77
03/29/1996 21,626.35 16,251.88 16,652.81 11,969.23
04/30/1996 22,492.63 16,630.04 17,205.67 12,015.38
05/31/1996 22,727.03 16,641.16 17,360.48 12,046.15
06/28/1996 22,553.77 16,722.35 17,315.37 12,053.85
07/31/1996 21,269.65 16,128.42 16,563.90 12,092.31
08/30/1996 21,881.14 16,309.72 16,989.60 12,107.69
09/30/1996 22,105.35 16,944.80 17,468.66 12,215.38
10/31/1996 21,809.80 17,060.47 17,473.93 12,176.92
11/29/1996 22,513.01 18,012.54 18,300.45 12,215.38
12/31/1996 23,076.30 17,721.13 18,329.70 12,238.46
01/31/1997 23,224.56 17,931.34 18,738.49 12,261.54
02/28/1997 23,298.70 18,133.77 18,852.76 12,292.31
03/31/1997 23,108.07 17,772.30 18,626.57 12,300.00
04/30/1997 23,468.14 18,349.54 18,863.09 12,315.38
05/30/1997 24,887.24 19,478.45 20,015.66 12,315.38
06/30/1997 25,543.84 20,447.20 20,872.33 12,330.77
07/31/1997 26,677.01 21,385.93 21,915.90 12,353.85
08/29/1997 25,374.40 19,951.15 20,701.79 12,376.92
09/30/1997 26,698.19 21,032.24 21,991.50 12,407.69
10/31/1997 25,490.89 19,922.23 20,608.23 12,423.08
11/28/1997 25,215.54 20,270.36 20,651.48 12,446.15
12/31/1997 25,510.81 20,515.05 20,897.28 12,446.15
01/31/1998 26,139.22 21,082.29 21,131.30 12,453.85
02/27/1998 27,746.48 22,505.94 22,557.67 12,469.23
03/31/1998 28,809.94 23,452.45 23,692.30 12,469.23
04/30/1998 29,124.14 23,678.23 24,038.24 12,500.00
05/29/1998 29,692.12 23,377.93 23,831.52 12,530.77
06/30/1998 29,365.84 23,929.04 23,905.39 12,538.46
07/31/1998 29,244.99 23,887.09 23,914.96 12,561.54
08/31/1998 24,858.24 20,698.10 20,432.91 12,576.92
09/30/1998 24,447.36 21,060.61 20,445.17 12,584.62
10/30/1998 25,402.05 22,960.87 21,798.65 12,607.69
11/30/1998 26,598.44 24,322.74 22,999.80 12,630.77
12/31/1998 27,966.49 25,507.33 23,954.25 12,646.15
01/29/1999 28,879.27 26,062.16 24,454.93 12,661.54
02/26/1999 28,220.04 25,365.17 23,750.58 12,669.23
03/31/1999 29,107.46 26,417.57 24,565.26 12,692.31
04/30/1999 29,639.92 27,455.28 25,680.52 12,784.62
05/31/1999 29,044.07 26,448.33 24,925.51 12,784.62
06/30/1999 29,589.21 27,678.21 26,181.76 12,784.62
07/30/1999 29,944.17 27,591.45 26,252.45 12,823.08
08/31/1999 30,070.95 27,538.65 26,226.20 12,853.85
09/30/1999 30,045.59 27,267.88 25,998.02 12,915.38
10/29/1999 31,883.83 28,681.52 27,009.35 12,938.46
11/30/1999 35,737.78 29,484.68 28,824.38 12,953.85
12/31/1999 41,607.04 31,867.55 32,026.76 12,984.62
01/31/2000 39,458.08 30,038.95 30,774.52 13,007.69
02/29/2000 44,499.86 30,116.36 32,676.38 13,076.92
03/31/2000 43,474.97 32,194.23 33,490.02 13,169.23
04/28/2000 38,829.93 30,829.29 31,818.87 13,169.23
05/31/2000 37,259.54 30,045.11 30,873.86 13,176.92
06/30/2000 40,020.12 31,053.07 32,096.46 13,253.85
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. The above graph compares a
$10,000 investment made in Class F shares of Dreyfus Founders Worldwide Growth
Fund on 6/30/90 to a $10,000 investment made in unmanaged securities indexes and
the Consumer Price Index on that date. On December 31, 1999, the Fund adopted a
multiclass structure. Existing Fund shares were designated as Class F shares and
Class F shares are available only to grandfathered investors. All dividends and
capital gain distributions are reinvested. Performance for Class A, B, C, R and
T shares will vary from the performance of Class F shares shown above due to
differences in charges and expenses. The Fund's performance shown in the line
graph takes into account all applicable fees and net expenses of Class F shares.
More complete information about the indexes shown may be found on page 3.
Further information related to Fund performance is contained elsewhere in this
report.

7
<PAGE>

create extremely challenging market conditions for companies of all sizes,
regardless of geographic location.

Perhaps even more interesting is what didn't influence global investors
during the first half. Throughout the six-month period we saw growing earnings
and sound fundamentals in the overwhelming majority of Worldwide Growth Fund's
holdings, yet because investors failed to acknowledge these positive signs, the
Fund stumbled.

HOW DID THE FUND RESPOND TO THE EXTREME MARKET VOLATILITY OF THE FIRST HALF?

The market volatility was a strain on the Fund, as evidenced by its
underperformance. Several stocks--both domestic and international--posted
disappointing returns in spite of strong earnings reports. Our philosophy, which
emphasizes growth and a long-term perspective, was tested by the conditions, but
we remained steadfast in our conviction that earnings per share should guide
company-by-company investment decisions rather than investors' attitudes.
Therefore, we retained the growth companies in which

[PIE CHART]
PORTFOLIO COMPOSITION
--------------------------------------------------------------------------------
39.68% United States
13.75% Japan
8.68% Other Countries
6.81% United Kingdom
6.64% France
6.49% Netherlands
4.60% Sweden
4.51% Finland
3.06% Italy
2.20% South Korea
1.89% Spain
1.69% Other Assets & Liabilities
--------------------------------------------------------------------------------
Portfolio composition is subject to change.

8
<PAGE>

we had the greatest conviction, even though they were hurt by the sell-off. In
the short-term, this impacted the Fund negatively, but we believe it may
ultimately prove beneficial.

We also made some minor positioning adjustments to temper the Fund's risk
profile. On the domestic front, we applied our bottom-up research to reduce the
Fund's exposure to the technology sector and add some strong consumer staples
companies to the portfolio. Looking abroad, we carefully analyzed our holdings
and sold some European technology stocks in order to transfer assets to more
promising Japanese growth firms. Additionally, we sold some mid-cap and
expensive Internet-related stocks and enlarged those existing positions in which
we had the greatest confidence, such as PHILIPS and mobile phone manufacturers
NOKIA and ERICSSON. Finally, we increased our weightings in a number of
attractive finance and consumer cyclicals companies.

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

INCEPTION YEAR-TO- 1 5 10 SINCE
DATE DATE* YEAR YEARS YEARS INCEPTION

<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 12/31/89 (3.81%) 35.25% 16.35% 14.88% 15.21%
</TABLE>
*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00
<TABLE>
<CAPTION>

INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- (9.08%)
Without sales charge 12/31/99 -- -- -- (3.53%)

CLASS B SHARES
With redemption** 12/31/99 -- -- -- (7.93%)
Without redemption 12/31/99 -- -- -- (4.09%)

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- (5.13%)
Without redemption 12/31/99 -- -- -- (4.17%)

CLASS R SHARES 12/31/99 -- -- -- (3.65%)

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- (8.28%)
Without sales charge 12/31/99 -- -- -- (3.97%)
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

<PAGE>

WHAT WERE SOME OF THE FUND'S BEST STRATEGIES?

First, we feel that the Fund continued to benefit from its dual U.S./foreign
allocation. With approximately 40% of its monies in domestic holdings, and 59%
invested overseas (as of June 30, 2000), the Fund enjoyed ample diversity and
the opportunity to pursue growth opportunities anywhere in the world.

Our dedication to intensive, bottom-up research is another of the Fund's
strong points, and this approach served us well in the first half. We identified
a number of companies with the solid earnings-per-share growth and visionary
management teams that historically have made for successful investments, and
some of these firms turned in noteworthy first-half performances in spite of the
unfavorable market conditions.

For example, domestic large-cap concern ELI LILLY offset some of the Fund's
losses by returning 59.9% in the second half alone. The company discovers,
develops, manufactures, and sells pharmaceutical products, and is particularly
well-known for its development of novel therapeutics.

Another pharmaceutical company that did well for the Fund was Danish firm
NOVO-NORDISK. In the particularly difficult month of May, Novo rose 27%. The
company's management has created significant shareholder value with its decision
to split Novo into two parts, one a pure pharmaceutical company and the other an
industrial enzymes business. Novo is also

--------------------------------------------------------------------------------
LARGEST EQUITY HOLDINGS
<S> <C> <C>
1. Koninklyke (Royal) Philips Electronics Sponsored ADR 3.00%
2. Pioneer Corporation 2.73%
3. Mitsubishi Electric Corporation 2.36%
4. Intel Corporation 2.34%
5. NEC Corporation 2.24%
6. Samsung Electronics 2.20%
7. Pfizer, Inc. 2.18%
8. Viacom, Inc. Class B 1.93%
9. Ericsson LM Telephone Company ADR Class B 1.85%
10. JDS Uniphase Corporation 1.80%
--------------------------------------------------------------------------------
</TABLE>

Portfolio holdings are subject to change.

<PAGE>

succeeding in upgrading its product portfolio for diabetes treatment, and has
launched successful new products such as NovoSeven, used to treat hemophelia.

HOW HAVE YOU POSITIONED WORLDWIDE GROWTH FUND FOR THE SECOND HALF OF THE YEAR?

Although the downturn in global markets was largely negative for the Fund, it
did have a positive side, allowing us to purchase or add to several reasonably
valued, quality companies. Specifically, we see strong growth prospects in many
Japanese firms, and we are heartened by the potential five-year earnings growth
we believe the Fund's holdings are capable of attaining. We also feel that our
commitment to diversification, growth, and in-depth research should help the
Fund maintain its course, no matter what lies ahead for global equities.

/s/ THOMAS ARRINGTON

Thomas Arrington, CFA
Co-Portfolio Manager

/s/ SCOTT CHAPMAN

Scott Chapman, CFA
Co-Portfolio Manager

/s/ DOUG LOEFFLER

Doug Loeffler, CFA
Co-Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
COMMON STOCKS (DOMESTIC)-39.7%
AUTOMOTIVE-0.5%
17,200 General Motors
Corporation Class H* $ 1,509,300
------------
BANKING-2.2%
72,925 Citigroup, Inc. 4,393,731
19,775 Fifth Third Bancorp 1,250,769
14,300 The Bank of New York
Company, Inc. 664,950
------------
6,309,450
------------
BIOTECHNOLOGY-0.5%
18,325 Amgen, Inc.* 1,287,331
------------
BUSINESS SERVICES-0.2%
7,500 Omnicom Group, Inc. 667,969
------------
COMPUTER EQUIPMENT-2.1%
58,550 EMC Corporation* 4,504,691
16,000 Sun Microsystems,
Inc.* 1,455,000
------------
5,959,691
------------
COMPUTER NETWORKING-1.6%
60,475 Cisco Systems, Inc.* 3,843,942
9,500 Network Appliance,
Inc.* 764,156
------------
4,608,098
------------
COMPUTER SOFTWARE/SERVICES-2.9%
19,025 Automatic Data
Processing, Inc. 1,019,027
13,500 Oracle Corporation* 1,134,000
12,450 Redback Networks,
Inc.* 2,231,663
7,675 VeriSign, Inc.* 1,353,198
13,200 VERITAS Software
Corporation* 1,491,600
7,700 Yahoo!, Inc.* 953,838
------------
8,183,326
------------
CONSUMER PRODUCTS-0.3%
13,850 Colgate-Palmolive
Company 829,269
------------
</TABLE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
DIVERSIFIED-1.2%
400 Berkshire Hathaway,
Inc.* $ 704,000
10,525 Corning, Inc. 2,840,434
------------
3,544,434
------------
ELECTRONICS-1.6%
78,600 General Electric
Company 4,165,800
11,525 Jabil Circuit, Inc.* 571,928
------------
4,737,728
------------
FINANCIAL SERVICES-0.2%
12,750 American Express
Company 664,594
------------
FOOD & BEVERAGE-1.0%
50,225 The Coca-Cola Company 2,884,798
------------
INSURANCE-0.5%
11,800 American International
Group, Inc. 1,386,500
------------
LEISURE & ENTERTAINMENT-2.4%
37,100 The Walt Disney
Company 1,439,944
81,450 Viacom, Inc. Class B* 5,553,872
------------
6,993,816
------------
MANUFACTURING-0.5%
32,075 Tyco International
Limited 1,519,553
------------
MEDICAL SUPPLIES & EQUIPMENT-0.9%
27,000 Baxter International,
Inc. 1,898,438
11,325 Guidant Corporation* 560,588
------------
2,459,026
------------
PHARMACEUTICALS-4.6%
34,000 Abbott Laboratories 1,515,125
18,000 Eli Lilly and Company 1,797,750
28,500 Merck & Company, Inc. 2,183,813
130,763 Pfizer, Inc. 6,276,600
27,000 Schering-Plough
Corporation 1,363,500
------------
13,136,788
------------
</TABLE>

12
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
PUBLISHING & BROADCASTING-4.4%
74,850 AMFM, Inc.* $ 5,164,650
31,550 AT&T Corporation-
Liberty Media Group 765,088
48,500 Comcast Corporation
Special Class A 1,967,281
62,800 Time Warner, Inc. 4,772,800
------------
12,669,819
------------
RETAIL-2.1%
27,150 Costco Wholesale
Corporation* 895,950
28,800 Kohl's Corporation* 1,602,000
13,500 Lowe's Companies, Inc. 554,344
30,000 Walgreen Company 965,625
35,500 Wal-Mart Stores, Inc. 2,045,688
------------
6,063,607
------------
SEMICONDUCTORS & EQUIPMENT-6.3%
18,500 Analog Devices, Inc.* 1,406,000
5,300 Broadcom Corporation* 1,160,369
50,300 Intel Corporation 6,721,338
43,200 JDS Uniphase
Corporation* 5,175,900
52,283 Texas Instruments,
Inc. 3,591,189
------------
18,054,796
------------
TELECOMMUNICATION SERVICES-1.2%
7,150 Juniper Networks,
Inc.* 1,040,325
29,000 SBC Communications,
Inc. 1,254,250
10,125 VoiceStream Wireless
Corporation* 1,177,664
------------
3,472,239
------------
TELECOMMUNICATIONS EQUIPMENT-2.5%
9,650 Comverse Technology,
Inc.* 897,450
67,925 Lucent Technologies,
Inc. 4,024,556
7,075 RF Micro Devices,
Inc.* 619,063
23,500 Tellabs, Inc.* 1,608,281
------------
7,149,350
------------
</TABLE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
TOTAL COMMON STOCKS
(DOMESTIC)
(COST-$95,432,779) $114,091,482
------------
COMMON STOCKS (FOREIGN)-58.0%
BANKING-3.6%
192,600 Banco Santander
Central Hispano SA
(SP) 2,040,098
191,000 ForeningsSparbanken AB
(SW) 2,809,240
410,000 Nordic Baltic Holding
AB (SW) 3,110,068
135,000 San Paolo-IMI SPA (IT) 2,405,723
------------
10,365,129
------------
COMPUTER SOFTWARE/SERVICES-2.1%
19,825 Tietoenator Oyj (FI) 664,191
9,100 Check Point Software
Technologies Limited
Sponsored ADR (IS) 1,931,475
24,500 Dassault Systemes SA
(FR) 2,294,526
464,875 Scoot.com PLC (UK) 1,083,887
------------
5,974,079
------------
CONSUMER PRODUCTS-2.6%
197,000 Altadis SA (SP) 3,038,468
128,000 Electrolux AB-Series B
(SW) 1,992,087
1,925 The Swatch Group AG
(SZ) 2,455,230
------------
7,485,785
------------
</TABLE>

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
ELECTRONICS-13.1%
181,400 Koninklyke (Royal)
Philips Electronics NV
New York Shares
Sponsored ADR (NE) $ 8,616,500
626,000 Mitsubishi Electric
Corporation (JA) 6,792,418
11,000 Murata Manufacturing
Company, Limited (JA) 1,582,397
205,000 NEC Corporation (JA) 6,452,177
201,000 Pioneer Corporation
(JA) 7,846,108
19,080 Samsung Electronics
(KR) 6,314,435
------------
37,604,035
------------
ENVIRONMENTAL SERVICES-1.7%
54,550 Vivendi SA (FR) 4,834,306
------------
FOOD & BEVERAGE-1.7%
197,000 Ajinomoto Company,
Inc. (JA) 2,532,289
37,000 Heineken NV (NE)* 2,261,072
------------
4,793,361
------------
INSURANCE-1.2%
272,900 Alleanza Assicurazioni
(IT) 3,649,305
------------
LEISURE & ENTERTAINMENT-0.8%
59,000 Accor SA (FR) 2,427,981
------------
MANUFACTURING-1.5%
135,150 Perlos Oyj (FI)* 4,288,214
------------
MEDICAL SUPPLIES & EQUIPMENT-1.8%
288,650 Nycomed Amersham PLC
(UK)* 2,866,834
4,950 Synthes-Stratec, Inc.
144A (SZ)*+ 2,264,805
------------
5,131,639
------------
OIL & GAS-2.1%
37,500 BP Amoco PLC Sponsored
ADR (UK) 2,121,094
25,825 Total Fina Elf SA (FR) 3,975,743
------------
6,096,837
------------
</TABLE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
OIL SERVICES-1.0%
460,000 Saipem SPA (IT) $ 2,733,896
------------
PAPER & FOREST PRODUCTS-0.7%
110,400 Aracruz Celulose SA
Sponsored ADR (BR) 2,132,100
------------
PHARMACEUTICALS-1.6%
17,000 Novo Nordisk AS
B Shares (DE) 2,905,348
24,000 Takeda Chemical
Industries, Limited
(JA) 1,578,806
------------
4,484,154
------------
PUBLISHING & BROADCASTING-3.1%
15,600 Grupo Prisa SA 144A
(SP)*+ 363,382
4,450 Nippon Television
Network Corporation
(JA) 2,902,133
52,000 NTL, Inc. Sponsored
ADR (UK)* 3,113,500
15,000 Societe Europeenne des
Satellites (LU) 2,530,675
------------
8,909,690
------------
RETAIL-1.5%
11,652 Don Quijote Company,
Limited (JA) 2,037,419
35,000 Taiyo Yuden Company,
Limited (JA)* 2,196,566
------------
4,233,985
------------
SEMICONDUCTORS & EQUIPMENT-1.7%
72,475 ASM Lithography
Holding NV Sponsored
ADR (NE)* 3,193,430
25,425 STMicroelectronics NV
(NE) 1,608,560
------------
4,801,990
------------
</TABLE>

14
<PAGE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
TELECOMMUNICATION SERVICES-8.4%
69,800 HPY Holding-HTF
Holding Oyj (SZ) $ 3,211,656
1,900 Bouygues SA (FR) 1,274,923
201,000 Cable & Wireless PLC
(UK) 3,405,284
367,000 China Telecom Limited
(HK)* 3,236,851
33,000 Energis PLC (UK)* 1,238,062
93,000 Global TeleSystems,
Inc. Sponsored ADR
(GE)* 1,121,813
224 Nippon Telegraph &
Telephone Corporation
(JA) 2,985,213
160,400 Partner Communications
Company Limited
Sponsored ADR (IS)* 1,503,750
55,000 Telefonos de Mexico SA
de CV Sponsored ADR
(MX) 3,141,875
763,253 Vodafone Airtouch PLC
(UK) 3,085,368
------------
24,204,795
------------
TELECOMMUNICATIONS EQUIPMENT-5.9%
65,000 Alcatel (FR) 4,280,579
205,100 Marconi PLC (UK) 2,670,492
96,175 Nokia Oyj Sponsored
ADR (FI) 4,802,739
266,025 Telefonaktiebolaget LM
Ericsson AB Class B
Sponsored ADR (SW) 5,320,500
------------
17,074,310
------------
TRANSPORTATION-1.0%
110,000 TNT Post Group NV (DE) 2,978,815
------------
</TABLE>

<TABLE>
<CAPTION>
Shares Market Value
-----------------------------------------------
<C> <S> <C>
UTILITIES-0.9%
930,000 Tokyo Gas Company,
Limited (JA) $ 2,619,434
------------
TOTAL COMMON STOCKS
(FOREIGN)
(COST-$150,885,731) 166,823,840
------------
PREFERRED STOCKS (FOREIGN)-0.6%
FINANCIAL SERVICES-0.6%
3,400 Marschollek,
Lautenschlaeger und
Partner AG non-voting
preferred (MLP
preferred) (GE) 1,707,822
------------
TOTAL PREFERRED STOCKS
(FOREIGN)
(COST-$1,973,244) 1,707,822
------------
</TABLE>

<TABLE>
<CAPTION>
Principal Amount Amortized Cost
-----------------------------------------------------
<C> <S> <C>
CORPORATE SHORT-TERM NOTES-0.5%
FINANCIAL SERVICES-0.5%
$1,500,000 Associates
Corporation N.A.
6.93% 07/03/00 1,499,423
------------
TOTAL CORPORATE SHORT-TERM NOTES
(AMORTIZED COST-$1,499,423) 1,499,423
TOTAL INVESTMENTS-98.8%
(COST-$249,791,177) 284,122,567
OTHER ASSETS AND LIABILITIES-1.2%
3,372,504
------------
NET ASSETS-100.0% $287,495,071
============
</TABLE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
ASSETS
Investment securities, at cost.............................. $249,791,177
------------
Investment securities, at market............................ 284,122,567
Cash........................................................ 724,917
Foreign currency (cost $726,198)............................ 751,143
Receivables:
Investment securities sold................................ 770,156
Capital shares sold....................................... 3,876,082
Dividends and interest.................................... 125,946
Other assets................................................ 124,830
------------
Total Assets............................................ 290,495,641
------------

LIABILITIES
Payables:
Investment securities purchased........................... 1,676,289
Capital shares redeemed................................... 853,065
Advisory fees............................................. 226,596
Shareholder servicing fees................................ 17,597
Accounting fees........................................... 5,333
Distribution fees......................................... 132,395
Other..................................................... 89,295
------------
Total Liabilities....................................... 3,000,570
------------
Net Assets.................................................. $287,495,071
============
</TABLE>

16
<PAGE>

<TABLE>
<S> <C>
Net Assets--Class A................................................. $ 3,026,681
Shares Outstanding--Class A......................................... 124,595
Net Asset Value and Redemption Price Per Share...................... $ 24.29
Maximum offering price per share (net asset value plus sales charge
of 5.75% of offering price)....................................... $ 25.77

Net Assets--Class B................................................. $ 1,322,545
Shares Outstanding--Class B......................................... 54,764
Net Asset Value, Offering and Redemption Price (excluding applicable
contingent deferred sales charge) Per Share....................... $ 24.15

Net Assets--Class C................................................. $ 234,594
Shares Outstanding--Class C......................................... 9,720
Net Asset Value, Offering and Redemption Price (excluding applicable
contingent deferred sales charge) Per Share....................... $ 24.13

Net Assets--Class F................................................. $ 282,878,512
Shares Outstanding--Class F......................................... 11,683,409
Net Asset Value, Offering and Redemption Price Per Share............ $ 24.21

Net Assets--Class R................................................. $ 971
Shares Outstanding--Class R......................................... 40
Net Asset Value, Offering and Redemption Price Per Share............ $ 24.26

Net Assets--Class T................................................. $ 31,768
Shares Outstanding--Class T......................................... 1,313
Net Asset Value and Redemption Price Per Share...................... $ 24.18
Maximum offering price per share (net asset value plus sales charge
of 4.50% of offering price)....................................... $ 25.32
</TABLE>

See notes to financial statements.

17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Income:
Dividends................................................. $ 1,429,608
Interest.................................................. 88,859
Foreign taxes withheld.................................... (161,700)
------------
Total Investment Income................................. 1,356,767
------------
Expenses:
Advisory fees............................................. 1,377,238
Shareholder servicing fees--Note 2........................ 93,544
Accounting fees........................................... 32,395
Distribution fees--Note 2................................. 352,684
Transfer agency fees--Note 2.............................. 55,220
Registration fees......................................... 28,449
Postage and mailing expenses.............................. 15,282
Custodian fees and expenses............................... 109,085
Printing expenses......................................... 58,351
Legal and audit fees...................................... 12,080
Directors' fees and expenses.............................. 32,140
Other expenses............................................ 22,889
------------
Total Expenses.......................................... 2,189,357
Earnings Credits........................................ (33,484)
------------
Net Expenses.......................................... 2,155,873
------------
Net Investment (Loss)..................................... (799,106)
------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS AND
FOREIGN CURRENCY TRANSACTIONS
Net Realized Gain (Loss) from Security Transactions:
Proceeds from long-term securities sold................... 360,658,673
Proceeds from long-term U.S. Government Obligations....... 0
Cost of securities sold................................... 328,837,035
------------
Net Realized Gain from Security Transactions................ 31,821,638
Net Realized (Loss) from Foreign Currency Transactions...... (1,603)
Net Change in Unrealized Appreciation/Depreciation.......... (41,248,714)
------------
Net Realized and Unrealized (Loss) on Investments and
Foreign Currency Transactions........................... (9,428,679)
------------
Net (Decrease) in Net Assets Resulting from Operations...... $(10,227,785)
============
Purchases of long-term securities........................... $378,942,543
============
Purchases of long-term U.S. Government Obligations.......... $ 0
============
</TABLE>

See notes to financial statements.

18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

<TABLE>
<CAPTION>
YEAR
SIX MONTHS OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
OPERATIONS
Net Investment (Loss)........................ $ (799,106) $ (672,719)
Net Realized Gain from Security
Transactions............................... 31,821,638 89,995,527
Net Realized Gain (Loss) from Foreign
Currency Transactions...................... (1,603) 0
Net Change in Unrealized
Appreciation/Depreciation.................. (41,248,714) 12,136,204
-------------- --------------
Net Increase (Decrease) in Net Assets
Resulting from Operations.................. (10,227,785) 101,459,012
-------------- --------------
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
From Net Investment Income
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 0
Class R.................................... 0 0
Class T.................................... 0 0
From Net Realized Gains from Security
Transactions and Foreign Currency
Transactions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 (64,912,499)
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
Net (Decrease) from Dividends and
Distributions............................ 0 (64,912,499)
-------------- --------------
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

<TABLE>
<CAPTION>
YEAR
SIX MONTHS OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS
Proceeds from shares sold
Class A.................................... $ 63,270,673 $ 1,000
Class B.................................... 1,383,559 1,000
Class C.................................... 240,087 1,000
Class F.................................... 90,942,840 211,860,533
Class R.................................... 0 1,000
Class T.................................... 33,475 1,000

Reinvested dividends and distributions
Class A.................................... 0 0
Class B.................................... 0 0
Class C.................................... 0 0
Class F.................................... 0 60,370,428
Class R.................................... 0 0
Class T.................................... 0 0
-------------- --------------
155,870,634 272,235,961
Cost of shares redeemed
Class A.................................... (60,999,460) 0
Class B.................................... (19,399) 0
Class C.................................... (6,543) 0
Class F.................................... (81,966,164) (295,991,476)
Class R.................................... 0 0
Class T.................................... (600) 0
-------------- --------------
(142,992,166) (295,991,476)
-------------- --------------
Net Increase (Decrease) from Capital Share
Transactions............................. 12,878,468 (23,755,515)
-------------- --------------
Net Increase in Net Assets................. 2,650,683 12,790,998
</TABLE>

20
<PAGE>

<TABLE>
<CAPTION>
YEAR
SIX MONTHS OR PERIOD
ENDED ENDED
6/30/00 12/31/99*
-------------- --------------
<S> <C> <C>
NET ASSETS
Beginning of period........................ $ 284,844,388 $ 272,053,390
-------------- --------------
End of period.............................. $ 287,495,071 $ 284,844,388
============== ==============
Net Assets consist of:
Capital (par value and paid-in surplus)...... $ 195,496,505 $ 182,618,037
Accumulated undistributed (distribution in
excess of) net investment income........... (812,326) (13,220)
Accumulated undistributed net realized gain
from security transactions................. 58,457,421 26,637,386
Unrealized appreciation on investments and
foreign currency transactions.............. 34,353,471 75,602,185
-------------- --------------
Total...................................... $ 287,495,071 $ 284,844,388
============== ==============
</TABLE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS A SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $25.18
Income from investment operations:
Net investment (loss)................................ (0.01)
Net (losses) on securities (both realized and
unrealized)........................................ (0.88)
------
Total from investment operations................ (0.89)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $24.29
======
Total Return/Ratios
Total return......................................... (3.53%)*
Net assets, end of period (000s)..................... $3,027
Net expenses to average net assets#.................. 1.36%**
Gross expenses to average net assets#................ 1.38%**
Net investment (loss) to average net assets.......... (0.21%)**
Portfolio turnover rate@............................. 276%
</TABLE>

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS B SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $25.18
Income from investment operations:
Net investment (loss)................................ (0.04)
Net (losses) on securities (both realized and
unrealized)........................................ (0.99)
------
Total from investment operations................ (1.03)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $24.15
======
Total Return/Ratios
Total return......................................... (4.09%)*
Net assets, end of period (000s)..................... $1,323
Net expenses to average net assets#.................. 2.25%**
Gross expenses to average net assets#................ 2.27%**
Net investment (loss) to average net assets.......... (0.89%)**
Portfolio turnover rate@............................. 276%
</TABLE>

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS C SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $25.18
Income from investment operations:
Net investment (loss)................................ (0.03)
Net (losses) on securities (both realized and
unrealized)........................................ (1.02)
------
Total from investment operations................ (1.05)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $24.13
======
Total Return/Ratios
Total return......................................... (4.17%)*
Net assets, end of period (000s)..................... $ 235
Net expenses to average net assets#.................. 2.27%**
Gross expenses to average net assets#................ 2.29%**
Net investment (loss) to average net assets.......... (0.65%)**
Portfolio turnover rate@............................. 276%
</TABLE>

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period.......................... $ 25.17 $ 22.06 $ 21.11 $ 21.79 $ 19.87 $ 17.09
Income from investment
operations:
Net investment income
(loss)....................... (0.07) (0.06) 0.08 0.02 0.10 0.09
Net gains (losses) on
securities (both realized and
unrealized).................. (0.89) 10.11 1.90 2.22 2.64 3.43
-------- -------- -------- -------- -------- --------
Total from investment
operations............... (0.96) 10.05 1.98 2.24 2.74 3.52
Less distributions:
From net investment income*... 0.00 0.00 (0.09) (0.04) (0.07) (0.09)
From net realized gains....... 0.00 (6.94) (0.94) (2.88) (0.75) (0.65)
-------- -------- -------- -------- -------- --------
Total distributions........ 0.00 (6.94) (1.03) (2.92) (0.82) (0.74)
Net Asset Value, end of period... $ 24.21 $ 25.17 $ 22.06 $ 21.11 $ 21.79 $ 19.87
======== ======== ======== ======== ======== ========
Total Return/Ratios
Total return.................. (3.81%) 48.78% 9.63% 10.60% 13.95% 20.63%
Net assets, end of period
(000s)....................... $282,879 $284,839 $272,053 $308,877 $342,079 $228,595
Net expenses to average net
assets#...................... 1.53% ** 1.53% 1.47% 1.45% 1.53% 1.56%
Gross expenses to average net
assets#...................... 1.55% ** 1.55% 1.49% 1.47% 1.55% 1.65%
Net investment income (loss)
to average net assets........ (0.57%)** (0.27%) 0.33% 0.18% 0.50% 0.61%
Portfolio turnover rate@...... 276% 157% 86% 82% 72% 54%
</TABLE>

See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS R SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $25.18
Income from investment operations:
Net investment (loss)................................ (0.05)
Net (losses) on securities (both realized and
unrealized)........................................ (0.87)
------
Total from investment operations................ (0.92)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $24.26
======
Total Return/Ratios
Total return......................................... (3.65%)
Net assets, end of period (000s)..................... $ 1
Net expenses to average net assets#.................. 1.33%*
Gross expenses to average net assets#................ 1.34%*
Net investment (loss) to average net assets.......... (0.39%)*
Portfolio turnover rate@............................. 276%
</TABLE>

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 2000
CLASS T SHARES ----------------
<S> <C>
Net Asset Value, beginning of period..................... $25.18
Income from investment operations:
Net investment (loss)................................ (0.02)
Net (losses) on securities (both realized and
unrealized)........................................ (0.98)
------
Total from investment operations................ (1.00)
Less distributions:
From net investment income........................... 0.00
From net realized gains.............................. 0.00
------
Total distributions............................. 0.00
Net Asset Value, end of period........................... $24.18
======
Total Return/Ratios
Total return......................................... (3.97%)*
Net assets, end of period (000s)..................... $ 32
Net expenses to average net assets#.................. 1.77%**
Gross expenses to average net assets#................ 1.80%**
Net investment (loss) to average net assets.......... (0.27%)**
Portfolio turnover rate@............................. 276%
</TABLE>

See notes to financial statements.

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Worldwide Growth
Fund (the "Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R,
and Class T shares. Class A and Class T shares are subject to a sales charge
imposed at the time of purchase, Class B shares are subject to a contingent
deferred sales charge ("CDSC") imposed on Class B share redemptions made within
six years of purchase, Class C shares are subject to a CDSC imposed on Class C
shares redeemed within one year of purchase, and Class F and Class R shares are
sold at net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations. Foreign currency
held

28
<PAGE>

29
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

2. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
In accordance with an investment advisory agreement between the Company and
Founders Asset Management LLC ("Founders"), the Fund compensates Founders for
its services as investment adviser by the payment of fees computed daily and
paid monthly at the annual rate equal to a percentage of the average daily value
of the Fund's net assets. The fee is 1% of the first $250 million of net assets,
0.80% of the next $250 million of net assets, and 0.70% of net assets in excess
of $500 million.
Effective March 22, 2000, Dreyfus Service Corporation (the "Distributor"), a
wholly-owned subsidiary of The Dreyfus Corporation (an affiliate of Founders),
became the distributor of the Fund's shares. The Distributor retained $453
during the six months ended June 30, 2000 from commissions earned on sales of
Fund shares.
Investors Fiduciary Trust Company ("IFTC") is the transfer and dividend
disbursing agent for the Class F shares of the Fund. With the exception of
out-of-pocket charges, the fees charged by IFTC are paid by Founders. The
out-of-pocket charges from IFTC are paid by the Fund. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of The Dreyfus Corporation, is the transfer and dividend
disbursing agent for Class A, Class B, Class C, Class R, and Class T shares of
the Fund. During the six months ended June 30, 2000, the Fund was charged $116
pursuant to this transfer agent agreement. State Street Bank and Trust Company
("State Street") serves as custodian for the Fund. The fees for the custody
services are subject to reduction by credits earned on the cash balances of the
Fund held by State Street as custodian.
The Fund has agreed to compensate Founders for providing certain shareholder
servicing functions to holders of Class F shares in addition to those currently
provided by IFTC. The Fund paid Founders a monthly fee equal on an annual basis
to $26 per Class F shareholder account of the Fund considered to be an open
account at any time during a given month. The Fund also has adopted a
Shareholder Services Plan applicable to its Class A, Class B, Class C, and Class
T shares. Under the Shareholder Services Plan, Class A, Class B, Class C, and
Class T shares pay the Distributor at an annual rate of 0.25% of the value of
their average daily net assets for the provision of certain services. During the
six months ended June 30, 2000, Class A, Class B, Class C, and Class T shares
were charged $1,379, $566, $115, and $20, respectively, for shareholder
servicing fees under the plan.
The Funds have also agreed to compensate Founders for providing accounting
services, administration, compliance monitoring, regulatory and shareholder
reporting, as well as facilities, equipment and clerical help as shall be
necessary to provide these services to the Funds. The fee is computed at the
annual rate of 0.06% of the average daily net assets of

30
<PAGE>

the Funds from $0 to $500 million and 0.02% of the net assets of the Funds in
excess of $500 million, plus reasonable out-of-pocket expenses. The fee so
computed is allocated to each of the Funds on a pro rata basis based on relative
average daily net assets.
The Fund has adopted a Distribution Plan pursuant to Rule 12b-1 under the
Investment Company Act of 1940 applicable to its Class F shares. Under the plan,
the Fund is authorized to reimburse the Distributor for expenses paid for
distributing its Class F shares at an annual rate of up to 0.25% of the value of
the average daily net assets of the Fund's Class F shares. The Fund also has
adopted a Distribution Plan pursuant to Rule 12b-1 under the Investment Company
Act of 1940 applicable to its Class B, Class C, and Class T shares. Under the
plan, Class B and Class C shares pay the Distributor for distributing their
shares at an annual rate of 0.75% of the value of the average daily net assets
of Class B and Class C shares and 0.25% of the average daily net assets of Class
T shares. During the six months ended June 30, 2000, Class B, Class C, and Class
T shares were charged $1,698, $344, and $20, respectively, pursuant to this
Distribution Plan.
The Board of directors has adopted a deferred compensation plan for Company
directors that enables directors to elect to defer receipt of all or a portion
of the annual compensation that they are entitled to receive from the Company.
Under the plan, the compensation deferred is periodically adjusted as though an
equivalent amount had been invested for the director in shares of one or more of
the Funds. The amount paid to the director under the plan will be determined
based upon the performance of the selected Funds. Deferral of directors' fees
under the plan will not affect the net assets of the Fund, and will not
materially affect the Fund's assets, liabilities or net income per share.
The officers of the Funds are also officers and/or directors of Founders.
Founders serves as investment adviser to the Fund. Founders is a
majority-owned subsidiary of Mellon Bank, N.A., with a minority interest held by
certain Founders executives and portfolio managers. Mellon Bank, N.A. is a
wholly-owned subsidiary of Mellon Financial Corporation, a publicly-owned
multibank holding company which provides a comprehensive range of financial
products and services in domestic and selected international markets. The
affairs of the Fund, including services provided by Founders, are subject to the
supervision and general oversight of the Company's board of directors.

31
<PAGE>

NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

<TABLE>
<CAPTION>
DREYFUS FOUNDERS
WORLDWIDE
GROWTH FUND
----------------
<S> <C>
Net Capital Loss Carryovers................................ $ 0
Post-October Capital Loss Deferral......................... $ 0
Post-October Currency Loss Deferral........................ $ 0
Federal Tax Cost........................................... $253,108,199
Unrealized Appreciation.................................... $ 39,695,643
Unrealized (Depreciation).................................. $ (5,058,809)
Net Appreciation........................................... $ 34,636,834
</TABLE>

32
<PAGE>

4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 450 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

<TABLE>
<CAPTION>
YEAR OR PERIOD
SIX MONTHS ENDED
ENDED 6/30/00 12/31/99*
------------- --------------
<S> <C> <C>
CLASS A
Shares sold............................. 2,612,590 40
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (2,488,035) 0
NET INCREASE IN SHARES OUTSTANDING...... 124,555 40
CLASS B
Shares sold............................. 55,545 40
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (821) 0
NET INCREASE IN SHARES OUTSTANDING...... 54,724 40
CLASS C
Shares sold............................. 9,963 40
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (283) 0
NET INCREASE IN SHARES OUTSTANDING...... 9,680 40
CLASS F
Shares sold............................. 3,695,434 20,277,568
Shares issued for dividends
reinvested............................ 0 2,643,189
Shares redeemed......................... (3,328,760) (23,937,706)
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING........................... 366,674 (1,016,949)
CLASS R
Shares sold............................. 0 40
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... 0 0
NET INCREASE (DECREASE) IN SHARES
OUTSTANDING........................... 0 40
CLASS T
Shares sold............................. 1,298 40
Shares issued for dividends
reinvested............................ 0 0
Shares redeemed......................... (25) 0
NET INCREASE IN SHARES OUTSTANDING...... 1,273 40
</TABLE>

* From December 30, 1999 (commencement of initial offering) to December 31,
1999, for Class A,
Class B, Class C, Class R, and Class T shares.

33
<PAGE>

This page intentionally left blank.
<PAGE>

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

1-800-525-2440
www.founders.com

FUND DIRECTORS
Alan S. Danson
Joan D. Manley
Robert P. Mastrovita
Trygve E. Myhren
George W. Phillips
Jay A. Precourt
Eugene H. Vaughan, Jr.

Date of first use: August 28, 2000

A-636-WWG

<PAGE>

DREYFUS FOUNDERS
WORLDWIDE GROWTH FUND

SEMIANNUAL REPORT
JUNE 30, 2000

DREYFUS FOUNDERS FUNDS(R)
The Growth Specialists

[GRAPHIC]

<PAGE>

TABLE OF CONTENTS

<TABLE>
<S> <C>
About this Report 3
--------------------------------------------------------------------------------
A Message from Founders 4
--------------------------------------------------------------------------------
Management Overview 6
--------------------------------------------------------------------------------
Statement of Investments 12
--------------------------------------------------------------------------------
Statement of Assets and Liabilities 16
--------------------------------------------------------------------------------
Statement of Operations 18
--------------------------------------------------------------------------------
Statements of Changes in Net Assets 19
--------------------------------------------------------------------------------
Financial Highlights 22
--------------------------------------------------------------------------------
Notes to Financial Statements 28
--------------------------------------------------------------------------------
</TABLE>

GUIDE TO UNDERSTANDING FOREIGN HOLDINGS OF THE DREYFUS FOUNDERS FUNDS

The following abbreviations are used throughout the Statement of
Investments to indicate the country of origin of non-U.S. holdings:

The views expressed herein are current to the date of this report. The views and
the composition of the Fund's portfolio are subject to change at any time based
on market and other conditions.

---------------------------------------------------------
o NOT FDIC-INSURED o NOT BANK-GUARANTEED o MAY LOSE VALUE
---------------------------------------------------------
<PAGE>

ABOUT THIS REPORT

HISTORICAL RETURNS

Past performance is no guarantee of future results. Investment return and
principal value will fluctuate, so that an investor's shares, when redeemed, may
be worth more or less than their original cost. Part of the Fund's historical
performance is due to the Fund's purchase of securities sold in initial public
offerings (IPOs). There is no guarantee that the Fund's investments in IPOs, if
any, will continue to have a similar impact on performance. Investments in
foreign securities may entail unique risks, including political, market, and
currency risks.

COMPARATIVE INDEXES

o The Lipper Global Fund Index is an average of the performance of the 30
largest global funds tracked by Lipper, Inc.

o The Consumer Price Index (CPI) of the U.S. Department of Labor is a "market
basket" of commonly consumed items and is used to measure inflation.

3
<PAGE>

A MESSAGE FROM FOUNDERS

[PHOTO]

A CHALLENGING FIRST HALF

<PAGE>

A TEST OF FORTITUDE

THE BIG PICTURE IN SIGHT

Respectfully,

/s/ RICHARD W. SABO

Richard W. Sabo
President and Chief Executive Officer
Founders Asset Management LLC

5
<PAGE>

MANAGEMENT OVERVIEW

[PHOTOS]

A discussion with portfolio managers Thomas Arrington, CFA, left, Scott Chapman,
CFA, center, and Doug Loeffler, CFA.

HOW DID THE FUND PERFORM IN THE FIRST HALF?

WHAT AFFECTED GLOBAL INVESTORS DURING THE FIRST SIX MONTHS OF 2000?

--------------------------------------------------------------------------
FUND AT A GLANCE

This fund invests primarily in stocks of both emerging and established
growth companies throughout the world.
--------------------------------------------------------------------------
6
<PAGE>

Economy" equities, especially in February, which was an outstanding month for
the Fund.

[GRAPH]

GROWTH OF $10,000 INVESTMENT

7
<PAGE>

create extremely challenging market conditions for companies of all sizes,
regardless of geographic location.

HOW DID THE FUND RESPOND TO THE EXTREME MARKET VOLATILITY OF THE FIRST HALF?

8
<PAGE>

we had the greatest conviction, even though they were hurt by the sell-off. In
the short-term, this impacted the Fund negatively, but we believe it may
ultimately prove beneficial.

AVERAGE ANNUAL AND YEAR-TO-DATE TOTAL RETURNS AS OF 6/30/00

INCEPTION YEAR-TO- 1 5 10 SINCE
DATE DATE* YEAR YEARS YEARS INCEPTION

<S> <C> <C> <C> <C> <C> <C>
CLASS F SHARES 12/31/89 (3.81%) 35.25% 16.35% 14.88% 15.21%
</TABLE>
*Total return is not annualized.

AGGREGATE TOTAL RETURN AS OF 6/30/00
<TABLE>
<CAPTION>

INCEPTION 1 5 10 SINCE
DATE YEAR YEARS YEARS INCEPTION
<S> <C> <C> <C> <C> <C>
CLASS A SHARES
With sales charge (5.75%) 12/31/99 -- -- -- (9.08%)
Without sales charge 12/31/99 -- -- -- (3.53%)

CLASS B SHARES
With redemption** 12/31/99 -- -- -- (7.93%)
Without redemption 12/31/99 -- -- -- (4.09%)

CLASS C SHARES
With redemption*** 12/31/99 -- -- -- (5.13%)
Without redemption 12/31/99 -- -- -- (4.17%)

CLASS R SHARES 12/31/99 -- -- -- (3.65%)

CLASS T SHARES
With sales charge (4.50%) 12/31/99 -- -- -- (8.28%)
Without sales charge 12/31/99 -- -- -- (3.97%)
</TABLE>

PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS.

**The maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years, at which time the Class B shares convert to Class
A shares.

***The maximum contingent deferred sales charge for Class C shares is
1% for shares redeemed within one year of the date of purchase.

<PAGE>

WHAT WERE SOME OF THE FUND'S BEST STRATEGIES?

Portfolio holdings are subject to change.

<PAGE>

succeeding in upgrading its product portfolio for diabetes treatment, and has
launched successful new products such as NovoSeven, used to treat hemophelia.

HOW HAVE YOU POSITIONED WORLDWIDE GROWTH FUND FOR THE SECOND HALF OF THE YEAR?

/s/ THOMAS ARRINGTON

Thomas Arrington, CFA
Co-Portfolio Manager

/s/ SCOTT CHAPMAN

Scott Chapman, CFA
Co-Portfolio Manager

/s/ DOUG LOEFFLER

Doug Loeffler, CFA
Co-Portfolio Manager

<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited)

12
<PAGE>

* Non-income producing.
See notes to financial statements.

13
<PAGE>

STATEMENT OF INVESTMENTS
June 30, 2000 (unaudited) (continued)

14
<PAGE>

* Non-income producing.
+ Securities were acquired pursuant to Rule 144A and may be deemed to be
restricted for resale.
See notes to financial statements.

15
<PAGE>

STATEMENT OF ASSETS AND LIABILITIES
June 30, 2000 (unaudited)

16
<PAGE>

See notes to financial statements.

17
<PAGE>

STATEMENT OF OPERATIONS
For the six months ended
June 30, 2000 (unaudited)

See notes to financial statements.

18
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited)

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

19
<PAGE>

STATEMENTS OF CHANGES IN NET ASSETS
(unaudited) (continued)

20
<PAGE>

* Inception date December 31, 1999 for Class A, Class B, Class C, Class R, and
Class T shares.
See notes to financial statements.

21
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

22
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

23
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

24
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
SIX MONTHS ENDED ----------------------------------------------------
JUNE 30, 2000 1999 1998 1997 1996 1995
CLASS F SHARES ---------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, beginning of
period.......................... $ 25.17 $ 22.06 $ 21.11 $ 21.79 $ 19.87 $ 17.09
Income from investment
operations:
Net investment income
(loss)....................... (0.07) (0.06) 0.08 0.02 0.10 0.09
Net gains (losses) on
securities (both realized and
unrealized).................. (0.89) 10.11 1.90 2.22 2.64 3.43
-------- -------- -------- -------- -------- --------
Total from investment
operations............... (0.96) 10.05 1.98 2.24 2.74 3.52
Less distributions:
From net investment income*... 0.00 0.00 (0.09) (0.04) (0.07) (0.09)
From net realized gains....... 0.00 (6.94) (0.94) (2.88) (0.75) (0.65)
-------- -------- -------- -------- -------- --------
Total distributions........ 0.00 (6.94) (1.03) (2.92) (0.82) (0.74)
Net Asset Value, end of period... $ 24.21 $ 25.17 $ 22.06 $ 21.11 $ 21.79 $ 19.87
======== ======== ======== ======== ======== ========
Total Return/Ratios
Total return.................. (3.81%) 48.78% 9.63% 10.60% 13.95% 20.63%
Net assets, end of period
(000s)....................... $282,879 $284,839 $272,053 $308,877 $342,079 $228,595
Net expenses to average net
assets#...................... 1.53% ** 1.53% 1.47% 1.45% 1.53% 1.56%
Gross expenses to average net
assets#...................... 1.55% ** 1.55% 1.49% 1.47% 1.55% 1.65%
Net investment income (loss)
to average net assets........ (0.57%)** (0.27%) 0.33% 0.18% 0.50% 0.61%
Portfolio turnover rate@...... 276% 157% 86% 82% 72% 54%
</TABLE>

See notes to financial statements.

25
<PAGE>

FINANCIAL HIGHLIGHTS
(unaudited) (continued)

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

26
<PAGE>

Per Share Income and Capital Changes
Selected data for each share of capital
stock outstanding throughout each period.

See notes to financial statements.

27
<PAGE>

NOTES TO FINANCIAL STATEMENTS
June 30, 2000 (unaudited)

1. ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Dreyfus Founders Funds, Inc. (the "Company") is an open-end management
investment company registered under the Investment Company Act of 1940. Eleven
series of shares are currently issued: Balanced, Discovery, Focus, Government
Securities, Growth, Growth and Income, International Equity, Mid-Cap Growth,
Money Market, Passport, and Worldwide Growth Funds (the "Funds"). All of the
Company's series Funds, with the exception of Focus Fund, are diversified
portfolios. The following notes pertain to Dreyfus Founders Worldwide Growth
Fund (the "Fund"). The Fund offers Class A, Class B, Class C, Class F, Class R,
and Class T shares. Class A and Class T shares are subject to a sales charge
imposed at the time of purchase, Class B shares are subject to a contingent
deferred sales charge ("CDSC") imposed on Class B share redemptions made within
six years of purchase, Class C shares are subject to a CDSC imposed on Class C
shares redeemed within one year of purchase, and Class F and Class R shares are
sold at net asset value per share (with Class R shares sold only to eligible
institutional investors). Other differences between the classes include services
offered to and the expenses borne by each class. The following significant
accounting policies have been consistently followed by the Fund in the
preparation of its financial statements.
SECURITIES VALUATION--The market value of investments is determined from
closing quotations on national security exchanges or at the last current bid
price in the case of securities traded over-the-counter or by quotes from
dealers making a market for securities not listed on an exchange or traded
over-the-counter. In the event that the closing price of a foreign security is
not available in time to calculate the Fund's net asset value on a particular
day, the Company's board of directors has authorized the use of the market price
for the security obtained from an approved pricing service at an established
time during the day which may be prior to the close of regular trading in the
security. If market quotations are not readily available, securities will be
valued at their fair value as determined in good faith by the Company's board of
directors or pursuant to procedures approved by the board of directors. London
closing quotes for exchange rates are used to convert foreign security values
into U.S. dollars. Short-term securities, with maturities of less than 60 days
are valued at amortized cost, which approximates market.
FOREIGN SECURITIES--Foreign securities may carry more risk than U.S.
securities, such as political and currency risks. The Fund may invest at least a
portion of its assets in foreign securities. In the event that the Fund executes
a foreign security transaction, the Fund may enter into a foreign currency
contract to settle the foreign security transaction. The resultant foreign
currency gain or loss from the contract is recorded as foreign currency gain or
loss and is presented as such in the Statement of Operations. Foreign currency
held

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NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

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NOTES TO FINANCIAL STATEMENTS
(unaudited) (continued)

3. FEDERAL INCOME TAXES
Net investment income distributions and capital gains distributions are
determined in accordance with income tax regulations which may differ from
generally accepted accounting principles. These differences are due to differing
treatments for items such as deferral of wash sales, foreign currency
transactions, net operating losses, and capital loss carryforwards.
Net capital loss carryovers and post-October 31 capital losses noted below, if
any, as of December 31, 1999, are available to offset future realized capital
gains and thereby reduce future taxable gains distributions. Post-October 31
foreign currency losses noted below, if any, will offset future net investment
income and thereby reduce future ordinary income distributions. The aggregate
cost of investments and the composition of unrealized appreciation and
depreciation of investment securities for federal income tax purposes as of June
30, 2000 are as follows:

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4. FUND SHARE TRANSACTIONS
The Fund is authorized to issue 450 million shares of $0.01 par value capital
stock. Transactions in shares of the Fund for the periods indicated were as
follows:

* From December 30, 1999 (commencement of initial offering) to December 31,
1999, for Class A,
Class B, Class C, Class R, and Class T shares.

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FOR MORE INFORMATION

Dreyfus Founders
Worldwide Growth Fund
2930 East Third Avenue
Denver, CO 80206

MANAGER

Founders Asset Management LLC
2930 East Third Avenue
Denver, CO 80206

Founders and Founders Funds are registered trademarks of
Founders Asset Management LLC.