<PAGE>
Annual Report
---------------------------------------------------
Dreyfus Premier
Managed Income
Fund
---------------------------------------------------
December 31, 1997
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Premier Managed
Income Fund for its annual reporting period ended December 31, 1997.
Approximate Distribution Rate
Total Return* Income Dividends Per Share**
------------- ---------------- -----------------
Class A 9.80% $0.723 6.27%
Class B 8.97% $0.641 5.82%
Class C 8.96% $0.640 5.81%
Class R 9.97% $0.750 6.81%
Lehman Brothers Aggregate
Bond Index *** 9.65%
The Economy
Inflation seems to be under control. Not since the oil price collapse in 1986
has it been so restrained. As the economy approached the end of its seventh
uninterrupted year of expansion, inflation seemed to become even more subdued.
During the last quarter of 1997, the 12-month pace of consumer price increases
fell below the 2% level. Producer prices actually fell at an annual rate of 1.2%
over the first 11 months of the year.
The ongoing fear in the financial markets has been that the Federal Reserve
Board's (the "Fed") unremitting fight against inflation could lead to further
increases in interest rates. Yet the Federal Open Market Committee (F.O.M.C.),
the policy-making arm of the Fed, has raised interest rates just once in over
two years, a period roughly coinciding with the latest surge of economic growth.
The last increase occurred on March 25, 1997 when the F.O.M.C. increased the
Federal Funds rate by a modest one quarter of a percentage point to 5.50%. (The
Federal Funds rate is the rate of interest that banks charge one another for
overnight loans.) Investor concern about additional monetary restraint centers
on the low unemployment rate of just 4.6% as of December 31, 1997, a 24-year
low. In particular, there were fears that wages would rise at a rate that could
rekindle inflation. Over the last year, the gain in wages after adjusting for
inflation was 2%, the sharpest increase in 20 years.
Not surprisingly, an almost ideal economic climate -- plentiful jobs, low
interest rates and dwindling inflation -- has put consumers in an ebullient
mood. Though holiday retail sales were below expectations, spending in the third
quarter grew at the strongest pace in five years. Since consumer spending
accounts for two thirds of all economic activity, consumer attitudes are
important indicators of future economic conditions. The Conference Board (a
business-sponsored research group) reported in December that its Index of
Consumer Confidence rose to its highest level since 1969. So far, the serious
economic developments in Asia have not had an inhibiting effect on consumer
attitudes.
The Asian financial crisis, while bound to affect the import/export segment
of our economy, may also afford the Fed additional flexibility in implementing
monetary policy. While the Fed is concerned about the potential resurgence of
inflation, lower-priced Asian imports may counteract upward pressure on the rate
of U.S. inflation. Moreover, with our economic expansion mature by any
historical precedent (it's the second longest peacetime expansion in this
century), a slackening in overseas demand for U.S. products, combined with the
lower-priced imports, may help contain economic growth without additional
monetary tightening by the Fed. Regardless, we believe that it is unlikely that
the Fed would raise interest rates and further unsettle the international
financial markets while Asian countries struggle to stabilize their
<PAGE>
currencies in relation to the U.S. dollar. Perhaps the biggest uncertainty ahead
is the extent to which the Asian turmoil will affect the U.S. economy. We are
particularly vigilant for developments abroad that might have either negative or
positive consequences for the Portfolio. The trouble in Asia shows the close and
sensitive relationship between our economy and the economies around the globe.
Market Environment/Portfolio Activity
Bond prices surged higher during the second half of 1997 as longer-term
yields fell 85 basis points. By year-end, the 30-year Treasury bond yielded
5.92%, its lowest level in four years. The yield curve flattened significantly
during the reporting period, with the difference between 2- and 30-year rates
narrowing from 72 basis points to 28 basis points. The major fixed income
indices posted strong returns for both the second half of 1997 and the full
calendar year. The Lehman Brothers Aggregate Bond Index returned 6.36% and 9.65%
for the 6-month and 12-month periods ended December 31, 1997, respectively.***
Similarly, the Lehman Brothers Government/Corporate Bond Index returned 6.83%
and 9.76% for the 6-month and 12-month periods ended December 31, 1997,
respectively.+
The decline in interest rates was driven by a combination of the favorable
economic news mentioned above as well as the unfolding Asian financial crisis.
Most supportive to the fixed income markets was the continued lack of inflation
within the U.S. economy. Although low rates of unemployment have caused fears of
future wage pressures, all indications during the second half of 1997 seemed to
point toward a continuation of the benign inflation environment. Longer-term
interest rates were also driven lower by investors seeking safety from the Asian
capital markets.
While credit fundamentals in the U.S. remained stable, the Asian financial
turmoil put severe pressure on bonds of that region and, to a lesser extent,
domestic corporates. The corporate yield premium to government securities
generally increased 10 to 20 basis points, resulting in the corporate market
underperforming during the fourth quarter. This reversed the very strong
performance of corporates during the first nine months of the year, resulting in
the sector performing in line with government securities for the year. The Fund
benefited from the credit upgrades of its holdings in USG, Niagara Mohawk Power
and Interpool. With corporate issues attractively valued in an environment where
we expect credit quality to remain strong, we believe this sector is poised to
provide attractive relative returns in the first half of 1998.
Mortgage-backed securities and asset-backed issues had an excellent first
nine months but also underperformed Treasury bonds in the fourth quarter 1997.
These sectors were affected adversely by the combination of the spread-widening
of corporate issues and increased prepayment fears because of the general
decline in interest rates. In addition, heavy issuance of new securities in
these sectors resulted in further price pressure. Despite the difficulties
during the last quarter, residential mortgages still provided the highest
risk-adjusted returns of all the major fixed income sectors during 1997. We are
currently defensive with respect to the residential mortgage sector and continue
to emphasize seasoned collateral and low loan balance mortgage pools. We have
increased our exposure to manufactured housing issues as well as commercial
mortgage issues, which enjoy stronger prepayment protection.
Looking forward to 1998, we are concerned about the effect of the Asian
crisis on the domestic economy. Any slowing of activity resulting from the
situation is likely to start showing itself during the early stages of the new
year. This is certain to be a major focus of both investors and the Fed alike.
We will continue to pay close attention to this matter as well as focus on
security selection across all fixed income sectors, which is our primary
strategy for adding value.
<PAGE>
Included in this report is a series of detailed statements about your Fund's
holdings and its financial condition. We hope they are informative. Please know
that we appreciate greatly your continued confidence in the Fund and in The
Dreyfus Corporation.
Very truly yours,
/S/ ARTHUR J. MACBRIDE
Arthur J. MacBride
Portfolio Manager
January 15, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid,
and does not take into consideration the maximum initial sales charge in
the case of Class A shares or the applicable contingent deferred sales
charge imposed on redemptions in the case of Class B and Class C shares.
** Distribution rate per share is based upon dividends per share paid from net
investment income during the period, divided by the maximum offering price
per share at the end of the period in the case of Class A shares or net
asset value per share in the case of Class B, Class C and Class R shares.
*** SOURCE: LEHMAN BROTHERS -- The Lehman Brothers Aggregate Bond Index is a
widely accepted, unmanaged index of corporate, government and government
agency debt instruments, mortgage-backed securities and asset-backed
securities.
+ SOURCE: LIPPER ANALYTICAL SERVICES, INC. -- The Lehman Brothers
Government/Corporate Bond Index is an unmanaged index of domestic,
fixed-rate investment grade debt, including U.S. government treasury
and agency securities, corporate and Yankee bonds.
<PAGE>
Dreyfus Premier Managed Income Fund December 31, 1997
- -------------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER MANAGED
INCOME FUND CLASS A SHARES AND THE LEHMAN BROTHERS AGGREGATE BOND INDEX
Dollars
$24,061
Lehman Brothers
Aggregate Bond Index*
$21,342
Dreyfus Premier Managed Income Fund
(Class A Shares)
*Source: Lehman Brothers
Average Annual Total Returns
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A Shares Class B Shares
- ------------------------------------------------------- --------------------------------------------------------
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 12/31/97 Sales Charge Sales Charge (4.5%) Period Ended 12/31/97 Redemption Redemption*
- --------------------- ------------------- --------------- --------------------- ----------- --------------------
<S> <C> <C> <C> <C> <C>
1 Year 9.80% 4.81% 1 Year 8.97% 4.97%
5 Years 7.68 6.69 From Inception (12/19/94) 8.90 8.06
10 Years 8.37 7.88
Class C Shares Class R Shares
- ---------------------------------------------------------- ---------------------------------------------------------
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 12/31/97 No Redemption Redemption** Period Ended 12/31/97
- --------------------- ------------- -------------------- ---------------------
1 Year 8.96% 7.96% 1 Year 9.97%
From Inception (12/19/94) 8.88 8.88 From Inception (2/1/93) 7.65
<FN>
- -------------------
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of Dreyfus
Premier Managed Income Fund on 12/31/87 to a $10,000 investment made in the
Lehman Brothers Aggregate Bond Index on that date. All dividends and capital
gain distributions are reinvested. Performance for Class B, Class C and Class R
shares will vary from the performance of Class A shares shown above due to
differences in charges and expenses.
Dreyfus Premier Managed Income Fund seeks high current income consistent with
what is believed to be prudent risk of capital primarily through investments in
investment-grade corporate and U.S. Government obligations and in obligations
having maturities of 10 years or less. The Fund's performance shown in the line
graph takes into account the maximum initial sales charge on Class A shares and
all other applicable fees and expenses. The Lehman Brothers Aggregate Bond Index
is a widely accepted, unmanaged index of corporate, government and government
agency debt instruments, mortgage-backed securities, and asset-backed
securities. The Index does not take into account charges, fees and other
expenses. Further information relating to Fund performance, including expense
reimbursements, if applicable, is contained in the Financial Highlights section
of the Prospectus and elsewhere in this report.
* The maximum contingent deferred sales charge for Class B shares is 4%
and is reduced to 0% after six years.
** The maximum contingent deferred sales
charge for Class C shares is 1% for shares redeemed within one year of the date
of purchase.
</FN>
</TABLE>
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Investments December 31, 1997
<TABLE>
<CAPTION>
Principal
Bonds and Notes--102.2% Amount Value
- ------------------------------------------------------------------------------ ------------ -----------
<S> <C> <C>
Aircraft & Aerospace--.3% BE Aerospace,
Sr. Sub. Notes, 9 7/8%, 2006............... $ 300,000 $ 318,000
-----------
Asset-Backed--10.2% Access Financial Manufactured Housing
Contract Trust, Sr. Pass-Through Ctfs.,
Ser. 1995-1, Cl. A-2, 6 3/8%, 2021......... 750,000 752,527
Asset Securitization,
Commercial Mortgage Pass-Through Ctfs.:
Ser. 1996-MD VI, Cl. A-1C, 7.04%, 2026.. 780,000 809,981
Ser. 1997-D IV, Cl. A-1D, 7.49%, 2029... 693,000 739,777
Capita Equipment Receivables Trust,
Receivable-Backed Notes,
Ser. 1996-1, Cl. A-4, 6.28%, 2000.......... 1,279,000 1,281,942
Centrex Auto Trust,
Asset Backed Notes,
Ser. 1996-B, Cl. A, 6.15%, 2004............ 412,693 (a) 412,500
EQCC Home Equity Loan Trust,
Asset Backed Ctfs.,
Ser. 1993-3, 5.15%, 2008................... 464,469 451,269
Fleetwood Credit 1997-A Grantor Trust,
Asset Backed Ctfs.,
Cl. A, 6.64%, 2012......................... 325,197 328,754
Green Tree HIL/HE Loan Trust,
Home Equity Pass-Through Ctfs.,
Ser. 1997-C, Cl. HE-A2, 6.38%, 2028........ 527,000 529,177
Morgan Stanley Capital I,
Asset Backed Ctfs.,
Ser. 1997-Cl, Cl. A1C, 7.63%, 2020......... 978,000 1,048,294
TMS Home Equity Trust,
Asset Backed Ctfs.:
Ser. 1994-B, Cl. A-4, 7.60%, 2021....... 359,000 371,019
Ser. 1994-C, Cl. A-4, 7.80%, 2021....... 245,000 254,124
Ser. 1996-C, Cl. A-6, 7.69%, 2024....... 637,000 57,304
Ser. 1997-A, Cl. A-4, 6.89%,2016........ 236,000 237,770
World Omni Automobile Lease
Securitization Trust,
Automobile Lease Asset Backed Ctfs.:
Ser. 1997-A, Cl. A-3, 6.85%, 2003....... 749,000 758,012
Ser. 1997-B, Cl. A-4, 6.20%, 2003....... 703,000 708,053
-----------
- -
9,340,503
-----------
- -
Automotive--1.2% Advanced Accessory Systems LLC,
Sr. Sub. Notes, 9 3/4%, 2007............... 580,000 (a) 572,750
Delco Remy International,
Sr. Notes, 8 5/8%, 2007.................... 325,000 329,875
Ford Motor,
Deb., 7.40%, 2046.......................... 210,000 226,550
-----------
1,129,175
-----------
</TABLE>
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------ ------------- --------------
<S> <C> <C> <C>
Banking--5.7% BB&T,
Sub. Notes, 7 1/4%, 2007 .................. $ 730,000 $ 769,349
BankAmerica,
Sub. Notes, 6 5/8%, 2007 .................. 290,000 292,435
Capital One Bank,
Medium-Term Bank Notes, 6.83%, 1999........ 375,000 378,115
First National Bank of Boston,
Sub. Notes, 7 3/8%, 2006................... 758,000 801,264
First Nationwide Holdings,
Sr. Sub. Notes, 10 5/8%, 2003.............. 395,000 444,375
First Security,
Sr. Notes, 6 7/8%, 2006.................... 380,000 389,119
First Union Institutional Capital II,
Gtd. Capital Securities, 7.85%, 2027....... 445,000 470,417
Fleet Financial Group,
Sub. Notes, 7 1/8%, 2006................... 720,000 746,384
Great Western Financial Trust II,
Gtd. Capital Securities, Ser. A, 8.206%, 2027 550,000 590,148
NationsBank Capital Trust IV,
Gtd. Sub. Notes, 8 1/4%, 2027 ............... 308,000 341,100
-----------
5,222,706
-----------
Broadcasting & Media--4.5% American Lawyer Media,
Sr. Notes, 9 3/4%, 2007.................... 275,000 (a) 279,125
Brill Media,
Sr. Notes, 7 1/2%, 2007.................... 540,000 (a,b) 503,550
Century Communications,
Sr. Notes, 9 1/2%, 2000.................... 600,000 634,500
Chancellor Media,
Sr. Sub. Notes:
9 3/8%, 2004............................ 400,000 417,000
8 1/8%, 2007............................ 340,000 (a) 331,500
Jacor Communications,
Sr. Sub. Notes, 8 3/4%, 2007............... 700,000 (a) 715,750
LodgeNet Entertainment,
Sr. Notes, 10 1/4%, 2006................... 300,000 311,250
News America Holdings,
Gtd. Sr. Notes, 7 1/2%, 2000............... 270,000 276,395
RCN,
Sr. Discount Notes, Zero Coupon, 2002 ..... 1,000,000 (a,c) 630,000
-----------
4,099,070
-----------
Building & Construction--.3% Building Materials Corp. of America,
Sr. Notes, 8 5/8%, 2006.................... 280,000 289,800
-----------
Consumer--7.9% Brunswick,
Notes, 7 1/8%, 2027........................ 635,000 646,217
</TABLE>
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ----------- -------------
<S> <C> <C> <C>
Consumer (continued) E&S Holdings,
Sr. Sub. Notes, 10 3/8%, 2006.............. $ 400,000 $ 368,000
Federated Department Stores,
Sr. Notes, 8 1/8%, 2002.................... 125,000 133,654
Hilton Hotels,
Sr. Notes, 7 3/8%, 2002.................... 152,000 155,906
KinderCare Learning Centers,
Sr. Sub. Notes, 9 1/2%, 2009............... 630,000 630,000
Lamar Advertising,
Gtd. Sr. Sub. Notes, 8 5/8%, 2007.......... 500,000 516,250
Muzak L.P./Capital,
Sr. Notes, 10%, 2003....................... 400,000 422,000
Perkins Family Restaurants/Finance,
Sr. Notes, 10 1/8%, 2007................... 520,000 (a) 529,100
Prime Succession Acquisition,
Sr. Sub. Notes, 10 3/4%, 2004.............. 130,000 143,000
Protection One Alarm Monitoring,
Sr. Sub. Discount Notes, Zero Coupon 1998.. 550,000 (d) 594,000
Rayovac,
Sr. Sub. Notes, 10 1/4%, 2006.............. 195,000 213,525
Regal Cinemas,
Sr. Sub. Notes, 8 1/2%, 2007............... 500,000 (a) 506,250
Reliant Building Products,
Sr. Sub. Notes, 10 7/8%, 2004.............. 570,000 595,650
Revlon Consumer Products,
Sr. Notes, 9 1/2%, 1999.................... 185,000 191,013
Revlon Worldwide,
Sr. Secured Discount Notes,
Zero Coupon, 2001.......................... 940,000 653,300
Sealy Mattress,
Sr. Sub. Notes, 9 7/8%, 2007............... 400,000 (a) 412,000
Standard Commercial Tobacco,
Gtd. Sr. Notes, 8 7/8%, 2005............... 580,000 (a) 588,700
-----------
7,298,565
-----------
Energy--4.3% Avon Energy Partners Holdings,
Sr. Notes, 6.73%, 2002..................... 950,000 (a) 956,555
Chesapeake Energy,
Sr. Notes, 7 7/8%, 2004.................... 425,000 421,813
Cliffs Drilling,
Gtd. Sr. Notes, Ser. B, 10 1/4%, 2003 ..... 375,000 410,156
Coastal,
Sr. Notes, 8 1/8%, 2002.................... 420,000 450,235
Ferrellgas Partners Finance/Partners, L.P.,
Sr. Secured Notes, 9 3/8%, 2006............ 485,000 518,950
Gulf Canada Resources, Ltd.,
Sr. Sub. Deb., 9 5/8%, 2005................ 400,000 436,000
HS Resources,
Sr. Sub. Notes, 9 1/4%, 2006............... 205,000 210,894
</TABLE>
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ------------ ------------
<S> <C> <C> <C>
Energy (continued) Niagara Mohawk Power,
First Mortgage Notes, 8%, 2004............. $ 175,000 $ 184,123
Noble Drilling,
Sr. Notes, 9 1/8%, 2006.................... 98,000 108,803
Norcen Energy Resources, Ltd.,
Deb., 7 3/8%, 2006......................... 165,000 172,772
Oryx Energy,
Notes, 10%, 2001........................... 80,000 87,902
------------
3,958,203
------------
Entertainment--1.0% AMC Entertainment,
Sr. Sub. Notes, 9 1/2%, 2009............... 290,000 302,325
KSL Recreation Group,
Sr. Sub. Notes, 10 1/4%, 2007.............. 300,000 320,250
Paramount Communications,
Sr. Notes, 5 7/8%, 2000.................... 300,000 294,790
------------
917,365
------------
Environmental--1.3% Allied Waste Industries,
Sr. Discount Notes, Zero Coupon, 2002...... 410,000 (a,e) 289,050
USA Waste Services,
Sr. Notes, 7 1/8%, 2007.................... 340,000 351,228
WMX Technologies:
Notes, 7.70%, 2002......................... 360,000 376,006
Notes, 6 5/8%, 2002........................ 160,000 162,040
------------
1,178,324
------------
Finance--11.5% CIT RV Trust 1997-A,
Asset-Backed Notes, Cl. A-4, 6.20%, 2006... 1,241,000 1,244,338
Dollar Financial Group,
Sr. Notes, 10 7/8%, 2006................... 300,000 325,500
Finova Capital,
Medium-Term Notes, 6.22%, 2000 ............ 810,000 811,381
H.F. Ahmanson & Co.,
Medium-Term Notes, Ser. A, 7.65%, 2000..... 630,000 651,085
Household Finance,
Medium-Term Notes,
Ser. A, 6.58%, 1999........................ 510,000 512,870
Jefferson-Pilot Capital Trust A,
Gtd. Capital Securities,
8.14%, 2046................................ 385,000 (a) 403,857
Jefferson-Pilot Capital Trust B,
Gtd. Capital Securities,
Ser. B, 8.285%, 2046....................... 190,000 (a) 202,240
Lehman Brothers Holdings:
Notes, 8 1/2%, 2007........................ 610,000 681,938
Sr. Sub. Notes, 6 1/8%, 2001............... 400,000 397,815
McDonnell Douglas Financial Services,
Medium-Term Notes, Ser. B, 6.53%, 1998..... 245,000 (a) 245,213
</TABLE>
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- -------------------------------------------------------------------------------- ------------- -------------
<S> <C> <C> <C>
Finance (continued) Paine Webber Group:
Medium-Term Sr. Notes, Ser. C:
7.39%, 2017 ............................ $ 675,000 $ 681,750
7.81%, 2017............................. 435,000 463,434
8.06%, 2017............................. 730,000 797,089
Notes, 7 5/8%, 2008........................ 135,000 144,233
Salomon,
Medium-Term Notes,
Ser. D, 7.59%, 2000........................ 445,000 458,008
Smith Barney Holdings,
Notes, 7 1/8%, 2006........................ 325,000 337,204
Sun Hung Kai Properties Finance Cayman Ltd.,
Gtd. Bonds, 5 5/8%, 1998................... 585,000 570,375
UNICCO Service/Finance,
Gtd. Sr. Sub. Notes, 9 7/8%, 2007.......... 600,000 (a) 600,750
Zurich Capital Trust I,
Gtd. Capital Securities, 8.376%, 2037...... 950,000 (a) 1,041,752
------------
10,570,832
------------
Foreign--4.2% Canadian Forest Oil Ltd.,
Sr. Sub. Notes, 8 3/4%, 2007............... 525,000 530,250
China International Trust and Investment,
Bonds, 6 7/8%, 2003........................ 1,000,000 967,494
Embotelladora Andina S.A.
Notes, Ser. A, 7%, 2007 ................... 490,000 482,814
Hanson Overseas B.V.,
Gtd. Sr. Notes, 6 3/4%, 2005............... 939,000 961,462
Province De Quebec,
Deb., Ser. NN, 7 1/8%, 2024................ 290,000 300,440
Republic of Colombia,
Bonds, 7 5/8%, 2007........................ 375,000 353,303
Rogers Communications,
Conv. Sub. Deb., 2%, 2005 ................. 475,000 284,406
------------
3,880,169
------------
Healthcare--.6% Loewen Group International,
Gtd. Sr. Notes, Ser. 3, 7 3/4%, 2001....... 250,000 260,615
Physician Sales & Service,
Sr. Sub. Notes, 8 1/2%, 2007............... 300,000 (a) 307,500
------------
568,115
------------
Industrial--6.0% ICN Pharmaceuticals,
Sr. Notes, Ser. B, 9 1/4%, 2005 ........... 750,000 798,750
Ingersoll-Rand,
Sr. Notes, 6.255%, 2001 ................... 875,000 877,008
Insilco,
Sr. Sub. Notes, 10 1/4%, 2007 ............. 610,000 642,025
International Semi-Tech Microelectronics,
Sr. Secured Discount Notes,
Zero Coupon, 2000.......................... 450,000 (f) 173,250
</TABLE>
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ------------- --------------
<S> <C> <C> <C>
Industrial (continued) Lockheed Martin,
Gtd. Deb., 7 3/4%, 2026.................... $ 930,000 $ 1,027,233
Neenah,
Sr. Sub. Notes, 11 1/8%, 2007.............. 440,000 482,900
Pioneer,
Sr. Secured Notes, 9 1/4%, 2007............ 230,000 232,875
Plastic Containers,
Sr. Secured Notes, 10%, 2006............... 325,000 346,125
Tracor,
Sr. Sub. Notes, 8 1/2%, 2007............... 300,000 309,000
United Defense Industries,
Sr. Sub. Notes, 8 3/4%, 2007............... 600,000 (a) 606,750
------------
5,495,916
------------
Insurance--3.3% Lincoln National,
Deb., 7 1/4%, 2005......................... 770,000 800,234
Safeco Capital Trust 1,
Gtd. Capital Securities , 8.072%, 2037..... 750,000 789,217
Sun Life of Canada (U.S.) Capital Trust 1,
Gtd. Cum. Capital Securities, 8.526%, 2049 1,265,000 (a) 1,397,742
------------
2,987,193
------------
Metals--1.5% Keystone Consolidated Industries,
Sr. Secured Notes, 9 5/8%, 2007............ 450,000 (a) 453,937
U.S. Can,
Sr. Sub. Notes, Ser.B, 10 1/8%, 2006....... 350,000 372,750
Wyman-Gordon,
Sr. Notes, 8%, 2007........................ 560,000 567,000
------------
1,393,687
------------
Mortgage Backed--.8% First Union-Lehman Brothers Commercial Mortgage
Trust, Pass-Through Ctfs.,
Ser. 1997-C1, Cl. IO, 1.306%, 4/18/2027
(Interest Only Obligation)................. 8,979,097 (b,g) 698,686
------------
Paper--.3% Fort James,
Sr. Notes, 6 7/8%, 2007.................... 275,000 278,487
------------
Railroad--.3% Union Pacific,
Notes, 6.70%, 2006......................... 268,000 269,745
------------
Retailers--.7% Fedders North America,
Gtd. Sr. Sub. Notes, 9 3/8%, 2007 ......... 600,000 (a) 615,000
------------
Technology--1.7% Amphenol,
Sr. Sub. Notes, 9 7/8%, 2007............... 330,000 351,450
DynCorp,
Sr. Sub. Notes, 9 1/2%, 2007............... 520,000 530,400
Iron Mountain,
Sr. Sub. Notes, 10 1/8%, 2006.............. 600,000 663,000
------------
1,544,850
------------
</TABLE>
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ------------- --------------
<S> <C> <C> <C>
Telecommunications--3.7% Comcast Cellular,
Sr. Notes, 9 1/2%, 2007.................... $ 450,000 $ 471,375
Crown Castle International,
Sr. Discount Notes, Zero Coupon, 2002 ..... 1,000,000 (a,h) 627,500
GCI,
Sr. Notes, 9 3/4%, 2007 ................... 400,000 417,000
Iridium LLC/Capital,
Sr. Notes, 11 1/4%, 2005................... 200,000 (a) 197,000
McLeod USA
Sr. Notes, 9 1/4%, 2007.................... 350,000 (a) 368,375
Nextel Communications,
Sr. Discount Notes, Zero Coupon, 2002...... 1,150,000 (a,i) 707,250
Orion Network Systems,
Sr. Notes, 11 1/4%, 2007 (Units) .......... 550,000 (j) 622,875
------------
3,411,375
------------
Textiles--1.9% Burlington Industries,
Deb., 7 1/4%, 2007 ........................ 875,000 917,983
Dominion Textiles (USA),
Gtd. Sr. Notes, 8 7/8%, 2003 .............. 400,000 427,000
Pillowtex,
Sr. Sub. Notes, 9%, 2007................... 415,000 (a) 427,450
------------
1,772,433
------------
Transportation--.2% Interpool,
Notes, 7.35%, 2007 ........................ 225,000 (a) 225,125
------------
U.S. Government Agencies/
Mortgage Backed--22.4% Federal Home Loan Mortgage Corp.:
7%, 12/1/2027.............................. 2,309,395 2,331,750
8 1/2%, 5/1/2025........................... 886,269 935,564
9 1/2%, 7/25/2022.......................... 611,503 653,544
Federal National Mortgage Association:
6%, 8/1/2010............................... 641,322 634,506
6 1/2%, 11/1/2003.......................... 510,154 517,643
7%, 7/1/2003-7/1/2023...................... 2,154,584 2,182,473
7 1/2%, 4/1/2005-10/1/2011................. 2,786,144 2,873,385
7.536%, 6/1/2016........................... 954,460 974,437
9%, 6/1/2026 .............................. 247,672 263,772
Gtd. REMIC Pass-through Ctfs.,
Ser. 1996-M7, Cl. B, 6.865%, 6/17/2011.. 320,000 (b) 325,800
Government National Mortgage Association I:
7%, 12/15/23 .............................. 1,635,049 1,655,487
7 1/2%, 12/15/2023......................... 1,731,458 1,781,774
8%, 7/15/2027.............................. 976,676 1,013,605
8 1/2%, 12/15/2021......................... 821,946 866,890
9%, 12/15/2021............................. 3,326,760 3,577,795
------------
20,588,425
------------
</TABLE>
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997
<TABLE>
<CAPTION>
Principal
Bonds and Notes (continued) Amount Value
- ------------------------------------------------------------------------------- ------------ -------------
<S> <C> <C> <C>
U.S. Government Agency--1.0% Federal National Mortgage Association:
Medium-Term Notes,
5.98%, 11/12/2027 ......................... $ 920,000 $ 877,856
------------
U.S. Government--5.4% U.S. Treasury Notes:
6 3/4%, 5/31/1999.......................... 4,806,000 4,876,588
6 3/8%, 8/15/2002.......................... 40,000 41,025
------------
4,917,613
------------
TOTAL BONDS AND NOTES
(cost $91,555,009)......................... $93,847,218
============
Short-Term Investments--2.2%
- -------------------------------------------------------------------------------
Commercial Paper; General Electric Credit Corp.,
6.65%, 1/2/1998
(cost $1,988,000).......................... $1,988,000 $ 1,988,000
============
TOTAL INVESTMENTS (cost $93,543,009)........................................... 104.4% $95,835,218
======= ============
LIABILITIES, LESS CASH AND RECEIVABLES......................................... (4.4%) $(4,023,857)
======= ============
NET ASSETS..................................................................... 100.0% $91,811,361
======= ============
<FN>
Notes to Statement of Investments:
- -----------------------------------------------------------------
(a) Securities exempt from registration under Rule 144A of the Securities Act
of 1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At December
31, 1997, these securities amounted to $15,154,271 or 16.5% of net assets.
(b) Variable rate security-interest rate subject to periodic change.
(c) Zero Coupon until 10/15/2002, date on which a stated coupon rate of 11 1/8%
becomes effective; the stated maturity date is 10/15/2007.
(d) Zero Coupon until 6/30/1998, date on which a stated coupon rate of 13 5/8%
becomes effective; the stated maturity date is 6/30/2005.
(e) Zero Coupon until 6/1/2002, date on which a stated coupon rate of 11.30%
becomes effective; the stated maturity date is 6/1/2007.
(f) Zero Coupon until 8/15/2000, date on which a stated coupon rate of 11 1/2%
becomes effective; the stated maturity date is 8/15/2003.
(g) Notional face amount shown.
(h) Zero Coupon until 11/15/2002, date on which a stated coupon rate of 10 5/8%
becomes effective; the stated maturity date is 11/15/2007.
(i) Zero Coupon until 10/31/2002, date on which a stated coupon rate of 9 3/4%
becomes effective; the stated maturity date is 10/31/2007.
(j) With warrants to purchase common stock.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $93,543,009 $95,835,218
Cash............................................. 422,417
Interest receivable.............................. 1,254,847
-----------
97,512,482
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 69,914
Due to Distributor............................... 8,472
Payable for shares of Beneficial Interest redeemed 3,670,539
Payable for investment securities purchased...... 1,952,196
-----------
5,701,121
-----------
NET ASSETS..................................................................... $91,811,361
===========
REPRESENTED BY: Paid-in capital.................................. $96,812,813
Accumulated undistributed investment income--net. 40,343
Accumulated net realized gain (loss) on investments (7,334,004)
Accumulated net unrealized appreciation (depreciation) on
investments--Note 3............................ 2,292,209
-----------
NET ASSETS..................................................................... $91,811,361
===========
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
-------------------------
Class A Class B Class C Class R
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net Assets.................................... $72,877,536 $6,896,041 $1,007,074 $11,030,710
Shares Outstanding............................. 6,618,242 626,266 91,426 1,001,876
NET ASSET VALUE PER SHARE...................... $11.01 $11.01 $11.02 $11.01
====== ====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Operations Year Ended December 31, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME: Interest................................... $7,198,314
Cash Dividends............................. 11,261
-----------
Total Income.......................... $7,209,575
EXPENSES: Management fee--Note 2(a).................. 656,463
Distribution and service fees--Note 2(b)... 251,999
Loan commitment fees--Note 4............... 1,062
-----------
Total Expenses........................ 909,524
-----------
INVESTMENT INCOME--NET................................................... 6,300,051
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments.... $ 919,974
Net unrealized appreciation (depreciation)
on investments........................... 1,470,433
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 2,390,407
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $8,690,458
===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1997 December 31, 1996
------------------ ------------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 6,300,051 $ 6,146,602
Net realized gain (loss) on investments................................ 919,974 (576,926)
Net unrealized appreciation (depreciation) on investments.............. 1,470,433 (2,599,839)
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 8,690,458 2,969,837
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares...................................................... (4,956,835) (5,098,797)
Class B shares...................................................... (351,138) (204,999)
Class C shares...................................................... (45,681) (9,243)
Class R shares...................................................... (906,054) (832,063)
----------- -----------
Total Dividends.................................................. (6,259,708) (6,145,102)
----------- -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares...................................................... 9,538,076 11,645,529
Class B shares...................................................... 3,306,776 3,058,864
Class C shares...................................................... 704,099 417,763
Class R shares...................................................... 4,188,843 5,288,706
Dividends reinvested:
Class A shares...................................................... 3,927,349 4,086,892
Class B shares...................................................... 165,637 94,447
Class C shares...................................................... 20,653 2,065
Class R shares...................................................... 805,637 747,833
Cost of shares redeemed:
Class A shares...................................................... (19,780,145) (16,479,953)
Class B shares...................................................... (1,719,546) (359,304)
Class C shares...................................................... (160,373) (65,122)
Class R shares...................................................... (6,881,617) (4,614,714)
----------- -----------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions (5,884,611) 3,823,006
----------- -----------
Total Increase (Decrease) in Net Assets....................... (3,453,861) 647,741
NET ASSETS:
Beginning of Period.................................................... 95,265,222 94,617,481
----------- -----------
End of Period.......................................................... $91,811,361 $95,265,222
=========== ===========
Undistributed investment income--net...................................... $ 40,343 --
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Shares
-----------------------------------
Year Ended Year Ended
December 31, 1997 December 31, 1996
----------------- -----------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Class A
--------
Shares sold............................................................ 885,615 1,074,433
Shares issued for dividends reinvested................................. 363,709 383,665
Shares redeemed........................................................ (1,837,421) (1,542,448)
----------- ----------
Net Increase (Decrease) in Shares Outstanding..... (588,097) (84,350)
=========== ==========
Class B
-------
Shares sold............................................................ 306,677 286,510
Shares issued for dividends reinvested................................. 15,300 8,877
Shares redeemed........................................................ (159,287) (33,651)
----------- ----------
Net Increase (Decrease) in Shares Outstanding..... 162,690 261,736
=========== ==========
Class C
Shares sold............................................................ 65,104 39,075
Shares issued for dividends reinvested................................. 1,907 193
Shares redeemed........................................................ (14,740) (6,124)
----------- ----------
Net Increase (Decrease) in Shares Outstanding..... 52,271 33,144
=========== ==========
Class R
Shares sold............................................................ 386,896 493,176
Shares issued for dividends reinvested................................. 74,624 70,200
Shares redeemed........................................................ (631,385) (432,290)
----------- ----------
Net Increase (Decrease) in Shares Outstanding..... (169,865) 131,086
=========== ==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------
Year Ended December 31,
------------------------------------------------------
PER SHARE DATA: 1997 1996 1995 1994(1,2) 1993(1,3)
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $10.73 $11.08 $10.12 $11.38 $11.45
------ ------ ------ ------ ------
Investment Operations:
Investment income--net............................. .73 .69 .75 .69(4) .78(4)
Net realized and unrealized gain (loss) on investments .27 (.35) .96 (1.26) .83
------ ------ ------ ------ ------
Total from Investment Operations.................. 1.00 .34 1.71 (.57) 1.61
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net.............. (.72) (.69) (.75) (.69) (.75)
Dividends from net realized gain on investments... -- -- -- -- (.57)
Dividends in excess of net realized gain on investments -- -- -- -- (.36)
------ ------ ------ ------ ------
Total Distributions............................... (.72) (.69) (.75) (.69) (1.68)
------ ------ ------ ------ ------
Net asset value, end of period.................... $11.01 $10.73 $11.08 $10.12 $11.38
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(5)........................... 9.80% 3.42% 17.32% (5.14%) 14.54%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........... .95% .95% .95% .98%(6) 1.14%(6)
Ratio of net investment income to average net assets 6.74% 6.48% 7.08% 6.32% 6.55%
Portfolio Turnover Rate........................... 244.44% 251.66% 236.10% 270.00% 333.00%
Net Assets, end of period (000's Omitted)......... $72,878 $77,305 $80,782 $79,548 $58,052
<FN>
- ----------------------------------------------------------------
(1) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and the Fund began offering the Institutional Class and the
Investment Class of shares. Effective April 4, 1994 the Retail and
Institutional Classes were reclassified as a single class of shares
known as the Investor shares. On October 17, 1994 Investor shares were
redesignated Class A shares. The amounts shown for the year ended
December 31, 1994 were calculated using the performance of a Retail
Class share outstanding from January 1, 1994 to April 3, 1994 and
the performance of an Investor (now Class A) share outstanding from
April 4, 1994 to December 31, 1994. The Financial Highlights for the year
ended December 31, 1993 are based upon a Retail Class share outstanding.
(2) Prior to April 4, 1994, The Boston Company Advisors, Inc. served as the
Fund's investment adviser. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Effective
October 17, 1994, The Dreyfus Corporation serves as the Fund's investment
manager.
(3) Per share amounts have been calculated using the monthly average share
method, which more appropriately presents the per share data for this
year since the use of the undistributed net investment income method did
not accord with results of operations.
(4) Net investment income before voluntary waiver of fees or reimbursement of
expenses by the investment adviser for the year ended December 31, 1994
was $.69. Net investment income before waiver of fees and/or reimbursement
of expenses by the investment adviser, transfer agent, and distributor,
for the year ended December 31, 1993 was $.77.
(5) Exclusive of sales load.
(6) Without the voluntary reimbursement of expenses and/or waiver of fees by
the investment adviser and/or transfer agent, and/or distributor, the ratio
of expenses to average net assets for the years ended December 31, 1994 and
1993 would have been .99% and 1.27%, respectively.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.(1)
<TABLE>
<CAPTION>
Class B Shares Class C Shares
---------------------------------- -----------------------------------
Year Ended December 31, Year Ended December 31,
---------------------------------- -----------------------------------
PER SHARE DATA: 1997 1996 1995 1997 1996 1995
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.73 $11.08 $10.12 $10.73 $11.08 $10.12
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net.............. .65 .61 .67 .64 .61 .67
Net realized and unrealized gain (loss)
on investments................... .27 (.35) .96 .29 (.35) .96
------ ------ ------ ------ ------ ------
Total from Investment Operations.... .92 .26 1.63 .93 .26 1.63
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net (.64) (.61) (.67) (.64) (.61) (.67)
------ ------ ------ ------ ------ ------
Net asset value, end of period...... $11.01 $10.73 $11.08 $11.02 $10.73 $11.08
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)............. 8.97% 2.54% 16.55% 8.96% 2.49% 16.54%
RATIOS/SUPPLEMENTALDATA:
Ratios of expenses to average net assets 1.70% 1.70% 1.69% 1.70% 1.68% 1.66%
Ratio of net investment income to average
net assets....................... 5.98% 5.77% 6.41% 5.95% 5.69% 6.03%
Portfolio Turnover Rate............. 244.44% 251.66% 236.10% 244.44% 251.66% 236.10%
Net Assets, end of period (000's Omitted) $6,896 $4,973 $2,236 $1,007 $420 $67
<FN>
- --------------------------
(1) The Fund commenced offering Class B and Class C shares onDecember 19, 1994.
Financial Highlights for the period ended December 31, 1994 for Class B and
Class C shares are not present because no shares had been issued to the
public as of that date.
(2) Exclusive of sales load.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class R Shares
-------------------------------------------------------
Year Ended December 31, Period Ended
--------------------------------------- December 31,
PER SHARE DATA: 1997 1996 1995 1994(1,2) 1993(1,3)
------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.............. $10.73 $11.08 $10.12 $11.38 $11.62
------ ------ ------ ------ ------
Investment Operations:
Investment income--net............................ .76 .72 .78 .72(4) .74(4)
Net realized and unrealized gain (loss) on investments .27 (.35) .96 (1.26) .67
------ ------ ------ ------ ------
Total from Investment Operations.................. 1.03 .37 1.74 (.54) 1.41
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net............. (.75) (.72) (.78) (.72) (.71)
Dividends from net realized gain on investments... -- -- -- -- (.61)
Dividends in excess of net realized gain on investments -- -- -- -- (.33)
------ ------ ------ ------ ------
Total Distributions............................... (.75) (.72) (.78) (.72) (1.65)
------ ------ ------ ------ ------
Net asset value, end of period.................... $11.01 $10.73 $11.08 $10.12 $11.38
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(5)........................... 9.97% 3.58% 17.71% (4.88%) 12.59%(6)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........... .70% .70% .70% .71%(7) .83%(6,7)
Ratio of net investment income to average net assets 6.99% 6.74% 7.31% 6.59% 6.86%(6)
Portfolio Turnover Rate........................... 244.44% 251.66% 236.10% 270.00% 333.00%
Net Assets, end of period (000's Omitted)......... $11,031 $12,567 $11,532 $9,588 $1,338
<FN>
- -------------------
(1) On February 1, 1993, the Fund commenced selling Investment Class shares.
Effective April 4, 1994 the Investment Class shares were redesignated as
the Trust shares. On October 17, 1994 the Trust shares were redesignated
Class R shares.
(2) Prior to April 4, 1994, The Boston Company Advisors, Inc. served as
the Fund's investment adviser. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Effective
October 17, 1994, The Dreyfus Corporation serves as the Fund's investment
manager.
(3) Per share amounts have been calculated using the monthly average share
method, which more appropriately presents the per share data for
this period since the use of the undistributed net investment income
method did not accord with results of operations.
(4) Net investment income before voluntary waiver of fees or reimbursement
of expenses by the investment adviser for the year ended December
31, 1994 was $.71. Net investment income before waiver of fees and/or
reimbursement of expenses by the investment adviser, transfer agent,
and distributor, for the period ended December 31, 1993 was $.74.
(5) Exclusive of sales load.
(6) Annualized.
(7) Without the voluntary reimbursement of expenses and/or waiver of fees
by the investment adviser and transfer agent, the ratio of expenses
to average net assets for the years ended December 31, 1994 and 1993
would have been .72% and .87%, respectively.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Managed Income Fund (the "Fund") is a series of The
Dreyfus/Laurel Funds Trust (the "Trust") which is registered under the
Investment Company Act of 1940 ("Act") as a diversified open-end management
investment company and operates as a series company currently offering three
series including the Fund. The Fund's investment objective is to seek high
current income consistent with what is believed to be prudent risk of capital
primarily through investments in investment-grade corporate and U.S. Government
obligations and in obligations having maturities of 10 years or less. The
Dreyfus Corporation ("Manager") serves as the Fund's investment manager. The
Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
On January 31, 1997 the Fund's Trustees approved, effective March 31, 1997, a
change to the Fund's name from "Premier Managed Income Fund" to "Dreyfus Premier
Managed Income Fund".
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund's shares. The Fund is authorized to issue an unlimited number of shares
of Beneficial Interest in the following classes of shares: Class A, Class B,
Class C and Class R. Class A, Class B and Class C shares are sold primarily to
retail investors through financial intermediaries and bear a distribution fee
and/or service fee. Class A shares are sold with a front-end sales charge, while
Class B and Class C shares are subject to a contingent deferred sales charge
("CDSC") and a distribution and service fee. Class R shares are sold primarily
to bank trust departments and other financial service providers (including
Mellon Bank and its affiliates) acting on behalf of customers having a qualified
trust or investment account or relationship at such institution, and bear no
distribution fee or service fees. Class R shares are offered without a front-end
sales load or CDSC. Each class of shares has identical rights and privileges,
except with respect to distribution fees and voting rights on matters affecting
a single class.
Investment income, net of expenses (other than class specific expenses) and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding short-term
investments and U.S. Government obligations) are valued each business day by an
independent pricing service ("Service") approved by the Board of Trustees.
Investments for which quoted bid prices are readily available and are
representative of the bid side of the market in the judgment of the Service are
valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of securities of comparable quality, coupon, maturity and
type; indications as to values from dealers; and general market conditions.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Trustees.
Investments in U.S. Government obligations, including U.S. Treasury Bills, are
valued at the mean between quoted bid and asked prices. Short-term investments,
excluding U.S. Treasury Bills, are carried at amortized cost, which approximates
value.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Dividend income is
recorded on the ex-dividend date and interest income, including, where
applicable, amortization of discount on investments, is recognized on the
accrual basis.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
(c) Distributions to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, it is
the policy of the Fund not to distribute such gain.
(d) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, if such qualification is in the best
interests of its shareholders, by complying with the applicable provisions of
the Internal Revenue Code, and to make distributions of taxable income
sufficient to relieve it from substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $7,306,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to December 31, 1997. The
carryover does not include net realized securities losses from November 1, 1997
through December 31, 1997 which are treated, for Federal income tax purposes, as
arising in fiscal 1998. If not applied, $5,560,000 of the carryover expires in
fiscal 2002, $539,000 expires in fiscal 2003 and $1,207,000 expires in fiscal
2004 .
NOTE 2--Investment Management Fee and Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .70% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses,
service fees, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to reduce
its fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel). Each trustee receives
$27,000 per year, $1,000 for each Board meeting attended and $750 for each Audit
Committee meeting attended and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional annual fee of $25,000
per year. These fees pertain to the following funds: The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust. These fees and expenses are allocated to each series based on net assets.
Amounts required to be paid by the Trust directly to the non-interested
Trustees, that would be applied to offset a portion of the management fee
payable to the Manager, are in fact paid directly by the Manager to the
non-interested Trustees.
(b) Distribution and service plan: Under the Distribution plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, the Fund may pay annually up to
.25% of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the sale
of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual rate
of .75% of the value of the average daily net assets of Class B and Class C
shares. Class B and Class C shares are also subject to a service plan adopted
pursuant to Rule 12b-1, under which the Fund pays Dreyfus Service Corporation or
the Distributor for providing certain services to the holders of Class B and
Class C shares a fee
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
at the annual rate of .25% of the value of the average daily net assets of
Class B and Class C shares. Class R shares bear no distribution fee or service.
During the period ended December 31, 1997, the Fund was charged $185,099,
$44,368 and $5,807 for Class A, Class B, and Class C shares, respectively,
pursuant to the distribution plan. During the period ended December 31, 1997,
the Fund was charged $14,789 and $1,936 for Class B and Class C shares,
respectively, pursuant to the service plan.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of majority of those Trustees
who are not "interested persons" of the Trust and who have no direct or indirect
financial interest in the operation of the Plan or in any agreement related to
the Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales (including paydowns) of
investment securities, excluding short-term securities, during the period ended
December 31, 1997 amounted to $225,672,722 and $229,631,530, respectively.
At December 31, 1997, accumulated net unrealized appreciation on investments
was $2,292,209, consisting of $2,575,686 gross unrealized appreciation and
$283,477 gross unrealized depreciation.
At December 31, 1997, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 4--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
December 31, 1997, the Fund did not borrow under the Facility.
<PAGE>
Dreyfus Premier Managed Income Fund
- -------------------------------------------------------------------------------
Report of Independent Auditors
The Board of Trustees and Shareholders
The Dreyfus/Laurel Funds Trust:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier Managed Income Fund
of The Dreyfus/Laurel Funds Trust as of December 31, 1997, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the years in the two-year period then ended, and the
financial highlights for each of the years in the four-year period then ended.
These financial statements and financial highlights are the responsibility of
the Fund's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits. The financial
highlights for the year or period ended December 31, 1993 was audited by other
auditors whose report thereon, dated February 14, 1994, expressed an unqualified
opinion on those financial highlights.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
as of December 31, 1997, by correspondence with the custodian. As to securities
purchased and sold, but not received or delivered, we performed other
appropriate auditing procedures. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Premier Managed Income Fund of The Dreyfus/Laurel Funds Trust as of
December 31, 1997, the results of its operations for the year then ended,
changes in its net assets for each of the years in the two-year period then
ended and its financial highlights for each of the years in the four-year period
then ended, in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
New York, New York
February 18, 1998
<PAGE>
Dreyfus Premier Managed
Income Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 349/649AR9712
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS PREMIER MANAGED INCOME FUND CLASS A SHARES
AND THE LEHMAN BROTHERS AGGREGATE BOND INDEX
EXHIBIT A:
DREYFUS PREMIER
MANAGED LEHMAN BROTHERS
PERIOD INCOME FUND AGGREGATE
(CLASS A SHARES) BOND INDEX*
12/31/87 9,552 10,000
12/31/88 10,511 10,789
12/31/89 11,096 12,356
12/31/90 11,584 13,463
12/31/91 13,556 15,618
12/31/92 14,745 16,774
12/31/93 16,888 18,409
12/31/94 16,021 17,872
12/31/95 18,796 21,174
12/31/96 19,438 21,943
12/31/97 21,342 24,061
*Source: Lehman Brothers
