DESCRIPTION OF ART WORK ON REPORT COVER
Small box above the funds names showing a lions face.
DEAR SHAREHOLDER,
We are pleased to provide you with performance and portfolio information
for the Premier Limited Term California, Massachusetts and New York
Municipal Funds for the semi-annual period ended December 31, 1994.
As you know from recent correspondence, The Laurel Funds are integrating
with The Dreyfus Family of Funds. As a result of this integration, the
Laurel California, Massachusetts and New York Tax-Free Bond Funds are now
known, and publicly listed, as the Premier Limited Term California, Massa-
chusetts and New York Municipal Funds. Please be assured that the new
names do not affect the value of your account nor the investment objective
or strategy of your Fund.
On December 28, 1994, the Funds, which are now part of The Premier Family
of Funds, a group of funds within The Dreyfus Family of Funds that are
sold primarily through financial professionals, adopted a new sales load
structure consisting of four classes of shares. Each Fund's Class A Shares
(formerly Investor Shares) are now subject to a maximum front-end sales
load of 3.0%. In addition, each Fund began offering Class B and Class C
Shares which are subject to a maximum contingent deferred sales charge of
3.0% and .75% if shares are redeemed within five years or one year of pur-
chase, respectively. There was no change to Class R Shares (formerly Trust
Shares). If you were a Class A shareholder of any of the Funds prior to
the implementation of the new multi-class structure, you will continue to
be exempt from all front-end sales loads when continuing to invest and re-
invest in additional Class A shares of the same Fund account. However, any
new purchase of, or any exchange into, shares of another Fund account or
other Premier Funds will not be exempt from the sales loads that apply to
each such purchase or exchange.
In the pages that follow, we have provided detailed financial statements,
a description of the market environment over the last six months, a com-
mentary on the Funds' investment management strategy and portfolio changes
for the reporting period.
We would like to extend our appreciation for your support and hope that
you will find that your Fund, which is now part of The Premier Funds, will
continue to satisfy your investment needs. As always, we welcome your
thoughts and suggestions.
Sincerely,
Marie E. Connolly
President
The Dreyfus/Laurel Tax-Free Municipal Funds --
Premier Limited Term California Municipal Fund
Premier Limited Term Massachusetts Municipal Fund
Premier Limited Term New York Municipal Fund
February 22, 1995
TABLE OF CONTENTS
Shareholder Letter .............................. 1
Economic Review ................................ 3
Portfolio Overview ............................. 5
Portfolio of Investments ........................ 6
Statement of Assets and Liabilities ............ 18
Statement of Operations ......................... 20
Statement of Changes in Net Assets ............. 21
Financial Highlights ............................ 24
Notes to Financial Statements ................... 35
ECONOMIC REVIEW
ECONOMIC EXPANSION CONTINUES
Following several years of stop-and-start recovery, the U.S. economy fi-
nally established a steady pace of expansion early in 1994 which continued
throughout the year. Major economic indicators pointed to healthy growth,
as report after government report brought confirming evidence. Both con-
sumer and industrial sectors showed strength. Consumer spending rose, as
did homebuying and home construction, which fueled strong sales of durable
goods as recent homebuyers outfitted their new homes. Manufacturing orders
were up as well. At the same time, unemployment fell to its lowest level
in nearly four years.
THE BIG CHANGE: RISING INTEREST RATES
The robust economy triggered a dramatic shift in the Federal Reserve
Board's interest rate policy which began in February and continued
throughout the semi-annual period. Determined to head off inflationary
pressures that might be building along with economic strength, the Fed
raised short-term interest rates six times between February and November,
1994. These moves represented a definitive shift away from the Fed's pre-
vious "easy money" policy and ended a nearly 5-year period of declining
short-term rates that had fueled a rally throughout the fixed-income mar-
ket.
Initially, the Fed acted in a preemptory fashion -- actual inflation had
not yet appeared, although the economy seemed to be growing a bit too rap-
idly for comfort. Later in the year, producer prices did begin to rise.
The Fed was concerned that these price increases would eventually flow
through to the consumer level unless it raised interest rates again. Rap-
idly expanding foreign markets pose yet another challenge for the Fed,
since their growth creates demand for U.S. goods and services which puts
inflationary pressure on our economy.
LESS IMPACT ON MUNICIPALS THAN OTHER BONDS
Financial markets, especially the bond market, had trouble adjusting to
higher interest rates. Along with the Fed's actions, other interest rates
rose and the prices of lower yielding bonds fell to bring their yields in
line with those of comparable new issues. Investors had been enjoying ex-
ceptional returns during the past two years of declining rates. This new
rising rate environment dealt investor confidence a heavy blow, especially
since people did not know when rates would level off and some stability
would return to the market. Many investors sold off their bond holdings.
While municipal bonds felt the negative effects of higher interest rates,
their prices held up better than those of many taxable bonds. In fact,
munis continued to maintain their relative yield advantage over comparable
taxable securities for investors in moderate and higher tax brackets.
YEAR-END SELLING ADDS TO THE DECLINE
In addition to rising interest rates, the municipal bond market had to
deal with the cyclical phenomenon of year-end selling. As the year drew to
a close, many investors began to sell their municipal securities in order
to take losses for tax purposes. 1994 was a particularly robust year for
this normal, seasonal selling, since falling bond prices meant there were
many more losses to take. While this year-end selling pushed down prices
on all fixed-income securities, munis fared better than their taxable
counterparts since their prices fell less.
FAVORABLE SUPPLY/DEMAND DYNAMICS
During most of the last six months, investors weathered excessive market
volatility that eroded the value of their municipal securities. At the
same time, however, municipal bond supply declined by more than 40%, com-
pared with last year's new issuance and refinancings. Higher interest
rates and tightened budgets quelled the surge of municipal refinancing and
new issuance of recent years.
While rising interest rates and tax considerations motivated investors to
sell municipal holdings in recent months, we expect that summer should
bring a rise in demand for these securities. On July 1, 1995, more bonds
will mature or reach their call dates than ever before in the history of
the municipal market. In addition, coupon payments will be among the larg-
est ever made. The investors holding these bonds will be looking for
places to reinvest their cash, and demand for municipal securities should
rise accordingly.
ORANGE COUNTY: CALIFORNIA FUND IMPACTED MINIMALLY
In early December, Orange County, California initiated the largest bank-
ruptcy filing ever to occur in the municipal bond market. Even the most
seasoned municipal investors were shocked, and the muni market experienced
a dramatic but temporary setback. The Premier Limited Term California Mu-
nicipal Fund had minimal exposure to this event, with less than 1% of its
assets invested within the Orange County pool. Portfolio managers believe
that given the particular issuer involved, the issuer will continue to
meet its obligations as to repayment of interest and principal on a timely
basis and that the credit rating of the securities will not be materially
impacted.
Fortunately, the Orange County bankruptcy was an isolated incident brought
about by a number of circumstances unique to that municipality. In fact,
December turned out to be an excellent month for the municipal market,
with prices rising in anticipation of the demand surge expected next sum-
mer.
CAUTIOUSLY OPTIMISTIC FOR 1995
If economic growth shows no signs of abating, the Fed may continue to
raise interest rates in the coming months, although not as dramatically as
in 1994. Still, we are optimistic that the municipal market will once
again offer positive returns in 1995. Municipal securities are one of the
last viable tax shelters for investment income, and with no tax relief in
sight for investors in higher tax brackets, demand should remain strong.
The huge number of bonds being called out of market this year should also
spur demand, and while there can be no assurance, the resulting shift to-
ward higher demand with diminished supply could lead to a strong perfor-
mance and rising municipal bond prices. This could be of real benefit to
investors in municipal bond funds like the California, Massachusetts, and
New York Municipal Funds.
PORTFOLIO OVERVIEW
The entire municipal bond market felt the effect of rising interest rates
during the semi-annual period, although securities with longer maturities
bore the brunt of the negative impact. Anticipating this, the portfolio
managers shortened the average weighted maturity of each of the Funds dur-
ing the last six months. The managers also continued to emphasize high
quality holdings and diversification among many different issuers and mar-
ket sectors. All three moves helped to minimize the negative effects of
rising rates on share values, and in the case of the Premier Limited Term
California Municipal Fund, resulted in extremely minimal exposure to the
Orange County investment pool.
In the months ahead, the managers expect to maintain their focus on diver-
sification, moderate average maturities, and high quality holdings, al-
though in this time of scarce bond supply, it is becoming a significant
challenge to find high quality issues with solid income levels. We remain
confident of our ability to do so, however, and remain optimistic about
the municipal market's performance prospects ahead.
PORTFOLIO OF INVESTMENTS
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
(UNAUDITED) DECEMBER 31, 1994
<TABLE>
<CAPTION>
FACE VALUE
VALUE (NOTE 1)
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 93.2%
CALIFORNIA -- 93.2%
$ 500,000 Alameda County, California, Transportation
Authority,
5.500% due 05/01/01 $ 487,500
150,000 Anaheim, California, Electric Revenue,
6.800% due 10/01/99 150,375
500,000 California Educational Facilities Author-
ity, Series J,
5.700% due 11/01/02 499,375
150,000 California Health Facilities Authority,
(Unihealth America), Series A,
7.100% due 10/01/99, Prerefunded 10/01/98 160,875
100,000 California Pollution Control Financing Au-
thority, Pollution Control Revenue,
(Union Oil Company), Project A,
7.375% due 05/15/98, Prerefunded 12/01/95 101,375
125,000 California State, Department of Water Re-
sources, Series A
7.200% due 12/01/01 129,687
California State Public Works, Board Lease
Revenue:
200,000 (Corcoran Prison),
7.000% due 09/01/98 207,500
150,000 High Technology, (Berkeley Campus),
7.200% due 03/01/01 160,312
750,000 Contra Costa, California, Water District 1,
Revenue Bonds, Series 1992E,
5.800% due 10/01/02 741,562
Franklin-McKinley, California, Unified Free
School District:
350,000 5.100% due 07/01/03 328,562
375,000 5.200% due 07/01/04 350,156
100,000 Long Beach, California, Redevelopment
Agency,
Project A,
7.125% due 11/01/99, Prerefunded 11/01/98 107,500
125,000 Los Angeles, California, Water and Power
Department, Electric Revenue,
7.000% due 05/01/00 131,875
Los Angeles, California, Wastewater Systems
Revenue:
150,000 7.100% due 11/01/98, Prerefunded 08/01/98 157,687
1,000,000 6.800% due 08/01/19 1,062,500
400,000 Series B,
6.600% due 06/01/98 412,000
250,000 Series D,
6.000% due 12/01/98 255,313
200,000 Los Angeles County, California, Certifi-
cates of Participation,
6.900% due 03/01/01 205,500
150,000 Los Angeles County, California, Health Fa-
cilities Authority, (Oliveview Medical
Center),
6.800% due 03/01/98 156,000
100,000 Los Angeles County, California, (Multifam-
ily Housing Project), Series A
7.625% due 12/01/29 98,000
150,000 Los Angeles County, California, Transporta-
tion Sales Tax Revenue, Series A,
6.800% due 07/01/99 157,313
Metropolitan Water District, California:
835,000 6.375% due 07/01/02 851,700
500,000 Southern California,
5.000% due 03/01/03 465,625
750,000 Modesto, California, High School District
Revenue,
5.200% due 08/01/03 706,875
Northern California Power Agency:
1,000,000 (Geothermal Project 3-A),
9.500% due 07/01/00, Prerefunded 07/01/95 1,043,750
360,000 (Transmission Project 1-A),
6.250% due 08/15/00 367,200
100,000 Riverside County, California, Certificates
of Participation, Series A,
7.400% due 11/01/99 105,375
520,000 Riverside County, California, Transporation
Authority, Series A,
6.500% due 06/01/01 540,800
Sacramento, California, Municipal Utilities
District, Electric Revenue Bonds:
500,000 6.300% due 09/01/01 513,750
100,000 Series Z,
5.850% due 07/01/00 100,375
500,000 Sacramento County, California, Sanitation
District,
4.800% due 12/01/04 445,000
440,000 San Bernardino County, California Transpo-
ration Authority, Series A,
6.000% due 03/01/02 441,650
600,000 San Diego, California, Redevelopment
Agency,
(Center Project),
5.500% due 09/01/01 587,250
300,000 San Diego, California, Water Authority, Se-
ries A,
6.000% due 05/01/01 301,125
500,000 San Francisco, California, Bay Area Rapid
Transit, Sales Tax Revenue,
6.700% due 07/01/00 521,875
San Francisco, California, City & County,
Series A:
1,000,000 6.500% due 02/01/96 1,013,750
750,000 6.000% due 11/01/03 749,063
500,000 6.375% due 11/01/06 500,625
150,000 San Francisco, California, City & County
Parking,
6.900% due 12/01/98 155,625
500,000 San Jose, California, Redevelopment Agency,
Tax Revenue,
4.750% due 08/01/03 443,750
100,000 San Mateo County, California, Sales Tax
Revenue, Series A,
6.200% due 06/01/99 104,125
Santa Rosa, California, Water Revenue:
Series A:
480,000 6.600% due 09/01/00, Prerefunded 09/01/99 508,800
350,000 6.200% due 09/01/03 353,500
250,000 Series B,
5.500% due 09/01/01 244,688
150,000 Santa Rosa, California, Wastewater Ser-
vices,
7.400% due 07/02/97 157,500
420,000 Southern California, Public Power Author-
ity,
(South Transmission Project),
6.300% due 10/01/02 435,225
300,000 Southern California, Rapid Transportation
District,
5.750% due 09/01/05 287,625
West and Central Basin Financing Author-
ity:
500,000 5.000% due 08/01/05 446,875
620,000 6.000% due 08/01/05 608,375
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $19,200,247) 19,062,843
SHORT-TERM INVESTMENTS -- 5.4%
CALIFORNIA -- 5.4%
100,000 California Pollution Control Financing Au-
thority, Pollution Control Revenue,
(Southdown Project),
4.350% due 02/15/99+++ 100,000
400,000 Concord, California, Multifamily Mortgage
Revenue,
5.300% due 07/15/18++ 400,000
400,000 Glendale, California, Revenue Refunding,
4.350% due 12/01/14+++ 400,000
200,000 San Francisco, California, Housing, Series
737-D,
5.250% due 12/01/07++ 200,000
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,100,000) 1,100,000
TOTAL INVESTMENTS
(Cost $20,300,247*) 98.6% 20,162,843
OTHER ASSETS AND LIABILITIES
(NET) 1.4 282,680
NET ASSETS 100.0% $20,445,523
<FN>
* Aggregate cost for Federal tax purposes.
++ Variable rate demand bonds and notes that are payable upon not more
than seven business days' notice.
+++ Variable rate demand bonds and notes that are payable upon not more
than one month's notice.
</TABLE>
See Notes to Financial Statements.
PORTFOLIO OF INVESTMENTS
PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
(UNAUDITED) DECEMBER 31, 1994
<TABLE>
<CAPTION>
FACE VALUE
VALUE (NOTE 1)
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 91.4%
MASSACHUSETTS -- 83.5%
$ 200,000 Amherst, Massachusetts, General Obligation
Bonds,
6.000% due 01/15/03 $ 203,000
Boston, Massachusetts, General Obligation
Bonds,
Refunding, Series A:
750,000 5.000% due 02/01/03 705,000
1,000,000 5.200% due 02/01/04 938,750
Boston, Massachusetts, Water and Sewer Com-
mission, Revenue Bonds:
100,000 9.250% due 01/01/11 125,375
Series A:
160,000 7.875% due 11/01/13, Prerefunded 11/01/96 170,400
290,000 Principal Only,
7.875% due 11/01/13 306,675
675,000 Cambridge, Massachusetts, General Obliga-
tion Bonds,
6.600% due 06/15/00 711,281
Cohasset, Massachusetts, General Obligation
Bonds:
160,000 6.700% due 11/01/98 167,400
150,000 6.900% due 11/01/00 159,562
500,000 Dedham-Westwood, Massachusets, Water and
Sewer Commission, Revenue Bonds, Series
A,
6.400% due 12/01/05, Prerefunded 12/01/96 520,000
105,000 Easton, Massachusetts, General Obligation
Bonds,
6.000% due 09/15/06 103,556
Massachusetts Bay Transporation Authority,
Revenue Bonds:
100,000 8.600% due 03/01/03, Prerefunded 03/01/95 103,743
900,000 5.300% due 03/01/04 840,375
550,000 5.900% due 03/01/04 541,062
Massachusetts Consolidated Loan:
Series A:
115,000 7.375% due 12/01/08, Prerefunded 12/01/98 124,775
400,000 7.625% due 06/01/08, Prerefunded 06/01/02 446,500
500,000 Series B,
7.000% due 07/01/06 528,125
135,000 Series C,
7.375% due 12/01/08, Prerefunded 12/01/98 146,475
Massachusetts Health and Educational Facil-
ities Authority:
(Bay State Medical Center), Revenue
Bonds, Series D:
500,000 4.600% due 07/01/02 453,750
500,000 4.750% due 07/01/03 453,125
500,000 (Beth Israel Hospital), Revenue Bonds,
7.800% due 07/01/14 525,625
100,000 (Beverly Hospital), Revenue Bonds,
9.500% due 07/01/04, Prerefunded 07/01/95 104,516
150,000 (Brandeis University), Revenue Bonds, Se-
ries F,
(FGIC Insured),
9.000% due 10/01/15, Prerefunded 10/01/95 156,938
400,000 (Dana Farber Cancer Institute), Series F,
5.550% due 12/01/03 390,000
1,000,000 (Harvard University), Series M,
6.200% due 12/01/01 1,037,450
35,000 (Malden Hospital), Revenue Bonds, (FHA
Insured),
9.500% due 08/01/08 35,044
(Massachusetts General Hospital):
500,000 Series G,
4.750% due 07/01/03 451,250
1,000,000 Series F,
5.350% due 07/01/01 977,500
(Massachusetts Institute of Technology),
Series H:
575,000 4.800% due 07/01/05 512,469
460,000 4.900% due 07/01/06 407,100
1,000,000 (Northeastern University), Series C,
6.800% due 10/01/99 1,052,450
(South Shore Hospital), Revenue Bonds,
Series C:
350,000 7.500% due 07/01/10, Prerefunded 07/01/00 386,313
500,000 7.500% due 07/01/20, Prerefunded 07/01/00 551,875
(Wentworth Institute of Technology), Se-
ries A:
225,000 7.150% due 04/01/00 240,469
220,000 7.400% due 04/01/10, Prerefunded 04/01/00 240,900
500,000 (Williams College), Series D,
5.000% due 07/01/02 465,625
1,000,000 (Winchester Hospital), Series D,
3.750% due 07/01/95 990,000
170,000 (Youville Hospital), Revenue Bonds, (FHA
Insured),
9.100% due 08/01/15, Prerefunded 02/01/96 180,413
Massachusetts Housing Finance Agency,
Revenue Bonds:
105,000 Series A,
5.150% due 10/01/01 101,456
Single Family:
160,000 7.900% due 12/01/01 162,000
30,000 9.500% due 12/01/16 30,750
Massachusetts Industrial Finance Agency,
Revenue Bonds:
(Brooks School):
260,000 5.700% due 07/01/06 242,125
275,000 5.750% due 07/01/07 254,031
290,000 5.800% due 07/01/08 265,713
305,000 5.850% due 07/01/09 280,981
(Milton Academy):
300,000 4.900% due 09/01/04 271,875
250,000 Series B,
4.900% due 09/01/03 230,000
(Museum of Science):
435,000 4.700% due 11/01/04 384,431
700,000 4.800% due 11/01/05 613,375
Massachusetts Municipal Wholesale Electric
Power Authority:
500,000 6.300% due 07/01/00 511,875
500,000 5.000% due 07/01/04 455,000
1,000,000 Massachusetts Port Authority, Revenue
Bonds, Series A,
7.000% due 07/01/00 1,057,450
1,500,000 Massachusetts State, General Obligation
Bonds,
6.000% due 03/01/95 1,503,933
880,000 Massachusetts State, Special Obligation
Revenue Bonds, Series A,
5.800% due 06/01/00 886,600
600,000 Massachusetts Water Pollution Authority,
(Abatement Program),
4.850% due 08/01/03 543,750
Massachusetts Water Resource Authority:
725,000 6.900% due 04/01/97 753,094
500,000 5.875% due 11/01/04 491,875
100,000 Plymouth-Carver, Massachusetts, Regional
School District, Revenue Bonds,
8.750% due 10/01/05, Prerefunded 10/01/95 105,875
1,000,000 Rockport, Massachusetts, General Obligation
Bonds,
6.900% due 12/15/07 1,063,700
600,000 Springfield, Massachusetts, School Project
Loan,
Series B,
6.100% due 09/01/02 606,000
Whitman, Massachusetts, General Obligation
Bonds:
180,000 7.750% due 06/01/07, Prerefunded 06/01/98 197,100
250,000 7.750% due 06/01/08, Prerefunded 06/01/98 273,750
100,000 Yarmouth, Massachusetts, General Obligation
Bonds,
8.600% due 10/01/00 114,000
27,855,605
PUERTO RICO -- 5.6%
400,000 Commonwealth of Puerto Rico, General
Obligation Bonds,
6.700% due 07/01/98 417,500
150,000 Puerto Rico, Electric Power Authority,
Revenue Bonds,
9.125% due 07/01/15, Prerefunded 07/01/95 158,043
Puerto Rico, Public Education and Health
Facilities Authority, Series M:
760,000 5.100% due 07/01/01 713,450
655,000 5.200% due 07/01/02 609,969
1,898,962
GUAM -- 2.3%
750,000 Guam, Government, Limited Obligation High-
way Bonds, Series A,
6.000% due 05/01/03 764,062
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $31,045,075) 30,518,629
SHORT-TERM INVESTMENTS -- 7.5%
MASSACHUSETTS -- 6.0%
Massachusetts Health and Educational
Facilities Authority:
200,000 5.900% due 08/01/14+ 200,000
500,000 5.300% due 07/01/24++ 500,000
100,000 Capital Asset, Series B,
5.200% due 07/01/05+ 100,000
100,000 Project A, Series C,
5.200% due 07/01/05+ 100,000
1,100,000 (Wellesley College), Series B,
4.900% due 07/01/22++ 1,100,000
2,000,000
PUERTO RICO -- 1.5%
100,000 Commonwealth of Puerto Rico, Government De-
velopment Bank,
5.150% due 12/01/15++ 100,000
400,000 Puerto Rico, Industrial, Medical &
Environmental Agency,
5.300% due 12/01/15++ 400,000
500,000
TOTAL SHORT-TERM INVESTMENTS
(Cost $2,500,000) 2,500,000
TOTAL INVESTMENTS
(Cost $33,545,075*) 98.9% 33,018,629
OTHER ASSETS AND LIABILITIES
(NET) 1.1 353,316
NET ASSETS 100.0% $33,371,945
<FN>
* Aggregate cost for Federal tax purposes.
+ Variable rate demand bonds and notes that are payable upon not more
than one business day's notice.
++ Variable rate demand bonds and notes that are payable upon not more
than seven business days' notice.
</TABLE>
See Notes to Financial Statements.
PORTFOLIO OF INVESTMENTS
PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
(UNAUDITED) DECEMBER 31, 1994
<TABLE>
<CAPTION>
FACE VALUE
VALUE (NOTE 1)
<S> <C> <C>
MUNICIPAL BONDS AND NOTES -- 81.3%
NEW YORK -- 71.0%
$125,000 Albany County, New York, General Obligation
Bonds,
7.000% due 10/01/00, Prerefunded 10/01/99 $ 135,625
150,000 Amherst, New York, General Obligation
Bonds,
6.200% due 04/01/02 153,750
Erie County, New York, Water Authority,
Revenue Bonds:
200,000 Series A,
7.000% due 12/01/00, Escrowed 214,000
250,000 Series B,
6.650% due 12/01/99, Escrowed 262,187
150,000 Hempstead Town, New York, General Obliga-
tion Bonds, Series B,
6.300% due 01/01/02 154,125
100,000 Metropolitan Transportation Facilities, New
York, Series K,
7.000% due 07/01/98 105,500
100,000 Municipal Assistance Corporation, New York,
Series 68,
7.100% due 07/01/00 107,625
100,000 Nassau County, New York, Bond Anticipation
Notes, Series G,
7.000% due 07/01/02, Prerefunded 07/01/00 107,250
New York State, Dormitory Authority Reve-
nue:
100,000 (City University), Series A,
7.400% due 07/01/98 107,000
250,000 (Columbia University),
4.500% due 07/01/05 219,375
100,000 (Cornell University), Series A,
6.600% due 07/01/99 105,000
155,000 New York State, Housing Finance Agency,
(City University), Series A,
7.150% due 11/01/97 162,556
100,000 New York State, Medical Care Facilities Fi-
nance Authority, Improvement Revenue,
(Mental Health),
6.600% due 08/15/96 102,125
45,000 New York State, Mortgage Agency, Revenue
Bonds, Series AA,
7.500% due 10/01/98 46,350
100,000 New York State, Power Authority, Revenue
Bonds,
4.800% due 01/01/05 86,625
500,000 North Hempstead, New York, General Obliga-
tion Bonds, Series C,
4.900% due 08/01/04 461,250
180,000 Oyster Bay, New York, General Obligation
Bonds,
7.125% due 04/15/00, Escrowed 192,375
125,000 Port Washington, New York, Unified Free
School District,
6.000% due 08/01/01 127,030
150,000 Smithtown, New York, Refunding Revenue, Se-
ries A,
5.050% due 04/01/04 138,375
Suffolk County, New York, General Obliga-
tion Bonds, Series B:
125,000 6.875% due 07/15/99, Prerefunded 07/15/97 132,030
150,000 7.000% due 04/01/02, Prerefunded 01/01/99 161,625
Triborough, New York, Bridge and Tunnel Au-
thority, Revenue Bonds:
250,000 5.000% due 01/01/07 222,812
150,000 Series P,
7.000% due 01/01/11 159,937
250,000 Westchester County, New York, General
Obligation Bonds,
6.625% due 11/01/04 266,875
3,931,402
PUERTO RICO -- 10.3%
180,000 Commonwealth of Puerto Rico, Electric Power
Authority, Series N,
6.400% due 07/01/99 187,425
300,000 Commonwealth of Puerto Rico, Public Build-
ings Authority, Series M,
5.200% due 07/01/02 279,375
100,000 Commonwealth of Puerto Rico, Public
Improvement Bonds,
6.600% due 07/01/97 103,375
570,175
TOTAL MUNICIPAL BONDS AND NOTES
(Cost $4,504,766) 4,501,577
SHORT-TERM INVESTMENTS -- 16.3%
NEW YORK -- 16.3%
100,000 Metropolitan Transportation Authority, New
York,
5.150% due 07/01/21++ 100,000
200,000 New York City, New York, Housing Develop-
ment Corporation, Special Obligation
Bonds, Series 96-A,
5.200% due 08/01/15++ 200,000
100,000 New York City, New York, Municipal Water
Finance Agency, Series G,
6.150% due 06/15/24+ 100,000
200,000 New York State Energy Research and
Development Authority,
3.550% due 10/01/14+++ 200,000
200,000 New York State, Housing Finance Agency
(Liberty Project),
5.500% due 11/01/05++ 200,000
100,000 New York State, Job Development Authority,
Series C1,
3.650% due 03/01/00+++ 100,000
TOTAL SHORT-TERM INVESTMENTS
(Cost $900,000) 900,000
TOTAL INVESTMENTS
(Cost $5,404,766*) 97.6% 5,401,577
OTHER ASSETS AND LIABILITIES
(NET) 2.4 134,061
NET ASSETS 100.0% $5,535,638
<FN>
* Aggregate cost for Federal tax purposes.
+ Variable rate demand bonds and notes that are payable upon not more
than one business day's notice.
++ Variable rate demand bonds and notes that are payable upon not more
than seven business days' notice.
+++ Variable rate demand bonds and notes that are payable upon not more
than one month's notice.
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
(UNAUDITED) DECEMBER 31, 1994
<TABLE>
<CAPTION>
PREMIER PREMIER PREMIER
LIMITED TERM LIMITED TERM LIMITED TERM
CALIFORNIA MASSACHUSETTS NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
<S> <C> <C> <C>
ASSETS
Investments, at value ( Cost $20,300,247,
$33,545,075, and $5,404,766, respec-
tively) (Note 1)
See accompanying schedules $20,162,843 $33,018,629 $ 5,401,577
Cash 94,409 7,524 57,665
Interest receivable 391,604 603,124 102,073
Receivable for Fund shares sold 138,355 103,938 17,787
Receivable from investment manager -- -- 5,805
TOTAL ASSETS 20,787,211 33,733,215 5,584,907
LIABILITIES
Payable for investment securities purchased -- 100,300 --
Dividends payable 85,710 209,115 30,559
Investment management fee payable (Note 2) 9,782 15,806 2,330
Payable for Fund shares redeemed 230,000 12,730 2,585
Audit fee payable 5,000 6,000 8,017
Accrued shareholder reports expense 8,647 13,106 5,000
Accrued Trustees' fees and expenses (Note
2) 2,256 3,736 705
Distribution fee payable (Note 3) 293 477 73
TOTAL LIABILITIES 341,688 361,270 49,269
NET ASSETS $20,445,523 $33,371,945 $ 5,535,638
NET ASSETS consist of:
Undistributed net investment income/
(distributions in excess of net invest-
ment income earned to date) $ (201) $ 1,579 $ (12)
Accumulated net realized loss on invest-
ments (9,665) (18,801) (8)
Unrealized depreciation of investments (137,404) (526,446) (3,189)
Paid-in capital 20,592,793 33,915,613 5,538,847
TOTAL NET ASSETS $20,445,523 $33,371,945 $ 5,535,638
</TABLE>
See Notes to Financial Statements.
STATEMENT OF ASSETS AND LIABILITIES (CONTINUED)
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
(UNAUDITED) DECEMBER 31, 1994
<TABLE>
<CAPTION>
PREMIER PREMIER PREMIER
LIMITED TERM LIMITED TERM LIMITED TERM
CALIFORNIA MASSACHUSETTS NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
<S> <C> <C> <C>
NET ASSETS:
Class A Shares $ 10,707,349 $ 17,388,812 $ 2,450,735
Class B Shares $ 15 $ 15 $ 15
Class C Shares $ 15 $ 15 $ 15
Class R Shares $ 9,738,144 $ 15,983,103 $ 3,084,873
SHARES OUTSTANDING:
Class A Shares 872,354 1,520,646 200,825
Class B Shares 1.222 1.311 1.230
Class C Shares 1.222 1.311 1.230
Class R Shares 793,398 1,397,629 252,773
NET ASSET VALUE:
Class A Shares
Net asset value and redemption price per
share of beneficial interest outstanding $ 12.27 $ 11.44 $ 12.20
Maximum offering price per share (based on
maximum sales charge of 3% of the offer-
ing price on December 31, 1994) $ 12.65 $ 11.79 $ 12.58
Class B Shares
Net asset value and offering price per
share of beneficial interest outstanding+ $ 12.27 $ 11.44 $ 12.20
Class C Shares
Net asset value and offering price per
share of beneficial interest outstanding+ $ 12.27 $ 11.44 $ 12.20
Class R Shares
Net asset value, offering and redemption
price per share of beneficial interest
outstanding $ 12.27 $ 11.44 $ 12.20
<FN>
+ Redemption price per share is equal to net asset value less any applica-
ble contingent deferred sales charge.
</TABLE>
See Notes to Financial Statements.
STATEMENT OF OPERATIONS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
PREMIER PREMIER PREMIER
LIMITED TERM LIMITED TERM LIMITED TERM
CALIFORNIA MASSACHUSETTS NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
<S> <C> <C> <C>
INVESTMENT INCOME
Interest $ 577,203 $ 930,301 $ 152,461
EXPENSES
Investment management fee (Note 2) 51,388 83,643 13,166
Distribution fee (Note 3) 13,277 24,870 3,485
Trustees' fees and expenses (Note 2) 2,142 3,485 548
Total expenses 66,807 111,998 17,199
NET INVESTMENT INCOME 510,396 818,303 135,262
NET REALIZED AND UNREALIZED GAIN/(LOSS) ON
INVESTMENTS (Notes 1 and 4):
Net realized gain/(loss) on investments
sold during the period (9,716) (16,836) 11,095
Net unrealized depreciation of investments
during the period (546,938) (767,662) (161,098)
NET REALIZED AND UNREALIZED LOSS ON INVEST-
MENTS (556,654) (784,498) (150,003)
NET INCREASE/(DECREASE) IN NET ASSETS RE-
SULTING FROM OPERATIONS $ (46,258) $ 33,805 $ (14,741)
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1994 (UNAUDITED)
<TABLE>
<CAPTION>
PREMIER PREMIER PREMIER
LIMITED TERM LIMITED TERM LIMITED TERM
CALIFORNIA MASSACHUSETTS NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL
FUND FUND FUND
<S> <C> <C> <C>
Net investment income $ 510,396 $ 818,303 $ 135,262
Net realized gain/(loss) on investments
sold during the period (9,716) (16,836) 11,095
Net unrealized depreciation of investments
during the period (546,938) (767,662) (161,098)
Net increase/(decrease) in net assets re-
sulting from operations (46,258) 33,805 (14,741)
Distributions to shareholders from net in-
vestment income:
Class A Shares (246,905) (455,925) (67,302)
Class R Shares (263,491) (362,354) (67,972)
Distributions to shareholders from net re-
alized capital gains:
Class A Shares (7,839) (54,707) (10,254)
Class R Shares (7,022) (49,756) (9,508)
Net increase/(decrease) in net assets from
Fund share transactions (Note 5):
Class A Shares 864,158 (3,372,799) (388,040)
Class B Shares 15 15 15
Class C Shares 15 15 15
Class R Shares (2,225,173) 676,775 783,085
Net increase/(decrease) in net assets (1,932,500) (3,584,931) 225,298
NET ASSETS:
Beginning of period 22,378,023 36,956,876 5,310,340
End of period (including undistributed net
investment income/(distributions in ex-
cess of net investment income earned to
date) of $(201), $1,579 and $(12), re-
spectively.) $ 20,445,523 $ 33,371,945 $ 5,535,638
</TABLE>
See Notes to Financial Statements.
STATEMENT OF CHANGES IN NET ASSETS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS
FOR THE YEAR OR PERIOD ENDED JUNE 30, 1994
<TABLE>
<CAPTION>
PREMIER PREMIER PREMIER
LIMITED TERM LIMITED TERM LIMITED TERM
CALIFORNIA MASSACHUSETTS NEW YORK
MUNICIPAL MUNICIPAL MUNICIPAL
FUND* FUND FUND*
<S> <C> <C> <C>
Net investment income $ 582,685 $ 1,615,135 $ 189,458
Net realized gain on investments sold dur-
ing the period 14,912 152,764 8,675
Net unrealized depreciation of investments
during the period (827,931) (1,343,936) (252,695)
Net increase/(decrease) in net assets re-
sulting from operations (230,334) 423,963 (54,562)
Distributions to shareholders from net in-
vestment income:
Investor Shares (277,045) (989,756) (82,208)
Trust Shares (289,738) (540,681) (73,607)
Institutional Class (14,494) (84,698) (33,423)
Distributions to shareholders from net re-
alized capital gains:
Investor Shares (677) (565,152) --
Trust Shares (696) (249,144) --
Institutional Class (35) -- --
Net increase/(decrease) in net assets from
Fund share transactions (Note 5):
Investor Shares (1,238,421) 246,341 (1,055,142)
Trust Shares 4,363,934 6,980,604 (56,058)
Net increase/(decrease) in net assets 2,312,494 5,221,477 (1,355,000)
NET ASSETS:
Beginning of period 20,065,529 31,735,399 6,665,340
End of period (including undistributed net
investment income/(distributions in ex-
cess of net investment income) of $(201),
$1,555, and $0, respectively.) $ 22,378,023 $ 36,956,876 $ 5,310,340
<FN>
* The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
</TABLE>
See Notes to Financial Statements.
[This Page Intentionally Left Blank]
FINANCIAL HIGHLIGHTS
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.*
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
12/31/94## 6/30/94@ ##
(UNAUDITED)
<S> <C> <C>
Net Asset Value, beginning of period $ 12.61 $ 13.07
Income from investment operations:
Net investment income*** 0.30 0.34
Net realized and unrealized gain/(loss) on
investments (0.33) (0.46)
Total from investment operations (0.03) (0.12)
Less distributions:
Distributions from net investment income (0.30) (0.34)
Distributions from net realized capital
gains (0.01) 0.00****
Total distributions (0.31) (0.34)
Net Asset Value, end of period $ 12.27 $ 12.61
Total return+++ (0.32)% (0.95)%
Ratios to average net assets/ supplemental
data:
Net assets, end of period (000's) $10,707 $10,143
Ratio of expenses to average net assets+ 0.75%** 0.58%**
Ratio of net investment income to average
net assets 4.64%** 4.51%**
Portfolio turnover rate 21% 5%
<FN>
* The Fund commenced operations on March 7, 1988. On February 1, 1993
existing shares of the Fund were designated the Retail Class and the
Fund began offering the Institutional Class and 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. Effective October 17, 1994, the Investor Class was redesig-
nated Class A. The Financial Highlights for the six months ended De-
cember 31, 1994 are based upon a Class A Share outstanding. The
amounts shown for the period ended June 30, 1994 were calculated
using the performance of a Retail Share outstanding from December 1,
1993 to April 3, 1994, and the performance of an Investor Share out-
standing from April 4, 1994 to June 30, 1994. The Financial High-
lights for the year ended November 30, 1993 and prior years are based
upon a Retail Share outstanding.
** Annualized.
*** Net investment income per share before waiver of fees and reimburse-
ment of expenses by the investment adviser and/or custodian and/or
transfer agent for the period ended June 30, 1994, for the years
ended November 30, 1993, 1992, 1991, 1990, 1989 and for the period
ended November 30, 1988 were $0.31, $0.67, $ 0.64, $0.66, $0.66,
$0.59, and $0.33, respectively.
**** Amount represents less than $0.01 per share.
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
11/30/93 11/30/92 11/30/91 11/30/90 11/30/89 11/30/88*
<S> <C> <C> <C> <C> <C>
$ 12.81 $ 12.53 $ 12.29 $ 12.16 $11.84 $12.00
0.67 0.07 0.73 0.73 0.76 0.47
0.66 0.44 0.24 0.20 0.32 (0.16)
1.33 1.14 0.97 0.93 1.08 0.31
(0.67) (0.70) (0.73) (0.73) (0.76) (0.47)
(0.40) (0.16) -- (0.07) -- --
(1.07) (0.86) (0.73) (0.80) (0.76) (0.47)
$ 13.07 $ 12.81 $ 12.53 $ 12.29 $12.16 $11.84
10.58% 9.27% 8.07% 7.96% 9.38% 2.61%
$10,971 $21,831 $16,203 $12,481 $5,132 $3,202
0.45%++ 0.45% 0.45% 0.45% 0.45% 0.68%**
5.09% 5.38% 5.84% 6.07% 6.28% 5.43%**
38% 41% 27% 75% 59% --
<FN>
+ Annualized expense ratios before voluntary waiver of fees and reim-
bursement of expenses by the investment adviser and/or custodian
and/or transfer agent for the period ended June 30, 1994, for the
years ended November 30, 1993, 1992, 1991, 1990, 1989 and for the pe-
riod ended November 30, 1988 were 0.95%, 1.10%, 0.93%, 1.03%, 1.03%,
1.85% and 2.33%, respectively.
++ The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense was 0.46% for the year ended
November 30, 1993.
+++ Total return represents aggregate total return for the periods indi-
cated and does not reflect the deduction of any applicable sales
charge.
@ The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
## Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manger. From April 4, 1994 through October 16,
1994, Mellon Bank, N.A. served as the Fund's investment manager.
Prior to April 4, 1994, The Boston Company Advisors, Inc. served as
the Fund's investment adviser.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.*
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD PERIOD
ENDED ENDED ENDED
12/31/94## 6/30/94@ ## 11/30/93*
(UNAUDITED)
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 12.61 $ 13.07 $12.96
Income from investment operations:
Net investment income*** 0.31 0.35 0.55
Net realized and unrealized gain/(loss) on
investments (0.33) (0.46) 0.52
Total from investment operations (0.02) (0.11) 1.07
Less distributions:
Distributions from net investment income (0.31) (0.35) (0.56)
Distributions from net realized capital
gains (0.01) 0.00**** (0.40)
Total distributions (0.32) (0.35) (0.96)
Net Asset Value, end of period $ 12.27 $ 12.61 $13.07
Total return+++ (0.20)% (0.87)% 8.32%
Ratios to average net assets/supplemental
data:
Net assets, end of period (000's) $ 9,738 $12,235 $8,291
Ratio of expenses to average net assets+ 0.50%** 0.42%** 0.40%**++
Ratio of net investment income to average
net assets 4.89%** 4.68%** 5.04%**
Portfolio turnover rate 21% 5% 38%
<FN>
* The Fund commenced selling Investment Class shares on February 1,
1993. Effective April 4, 1994 the Investment Class was reclassified
as the Trust Shares. Effective October 17, 1994 Trust Shares were re-
designated Class R Shares.
** Annualized.
*** Net investment income per share before waiver of fees and reimburse-
ment of expenses by the investment adviser and/or custodian and/or
transfer agent for the periods ended June 30, 1994 and November 30,
1993 were $0.32 and $0.49, respectively.
**** Amount represents less than $0.01 per share.
+ Annualized expense ratios before voluntary waiver of fees and reim-
bursement of expenses by the investment adviser and/or custodian
and/or transfer agent for the periods ended June 30, 1994 and Novem-
ber 30, 1993 were 0.79% and 1.06%, respectively.
++ The operating expense ratio excludes interest expense. The operation
expense ratio including interest expense was 0.41% for the year ended
November 30, 1993.
+++ Total return represents aggregate total return for the periods indi-
cated.
@ The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
## Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manger. From April 4, 1994 through October 16,
1994, Mellon Bank, N.A. served as the Fund's investment manager.
Prior to April 4, 1994, The Boston Company Advisors, Inc. served as
the Fund's investment adviser.
</TABLE>
See Notes to Financial Statements.
[This Page Intentionally Left Blank]
FINANCIAL HIGHLIGHTS
PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD.*
<TABLE>
<CAPTION>
SIX
MONTHS YEAR YEAR
ENDED ENDED ENDED
12/31/94## 6/30/94## 6/30/93
(UNAUDITED)
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 11.74 $ 12.38 $ 11.83
Income from investment operations:
Net investment income*** 0.27 0.54 0.64
Net realized and unrealized gain/(loss) on
investments (0.26) (0.36) 0.55
Total from investment operations 0.01 0.18 1.19
Less distributions:
Distributions from net investment income (0.27) (0.54) (0.64)
Distributions from net realized capital
gains (0.04) (0.28) --
Total distributions (0.31) (0.82) (0.64)
Net Asset Value, end of period $ 11.44 $ 11.74 $ 12.38
Total return++ 0.04% 1.38% 10.27%
Ratios to average net assets/supplemental
data:
Net assets, end of period (000's) $17,389 $21,276 $20,106
Ratio of expenses to average net assets+ 0.75%** 0.76% 0.75%
Ratio of net investment income to average
net assets 4.59%** 4.40% 5.30%
Portfolio turnover rate 7% 19% 60%
<FN>
* The Fund commenced operations on September 24, 1985. On February 1,
1993 existing shares of the Fund were designated the Retail Class and
the Fund began offering the Institutional Class and Investment Class
of shares. Effective April 4, 1994 the Retail and Institutional
Classes were reclassified as a single class of shares known as the In-
vestor Shares. Effective October 17, 1994 the Investor Class was rede-
signated Class A. The Financial Highlights for the six months ended
December 31, 1994 are based upon a Class A Share outstanding. The
amounts shown for the year ended June 30, 1994 were calculated using
the performance of a Retail Share outstanding from July 1, 1993 to
April 3, 1994, and the performance of an Investor Share outstanding
from April 4, 1994 to June 30, 1994. The Financial Highlights for the
year ended June 30, 1993 and prior years are based upon a Retail Share
outstanding.
** Annualized.
*** Net investment income per share before waiver of fees and reimburse-
ment of expenses by the investment adviser and/or custodian and/or
transfer agent for the years ended June 30, 1994, 1993, 1987 and for
the period ended June 30, 1986 were $0.53, $0.62, $0.70 and $0.55, re-
spectively.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED ENDED
6/30/92 6/30/91 6/30/90 6/30/89 6/30/88 6/30/87 6/30/86*
<S> <C> <C> <C> <C> <C> <C>
$ 11.23 $ 11.09 $ 11.25 $ 10.89 $ 10.74 $ 10.78 $10.00
0.73 0.73 0.72 0.74 0.72 0.72 0.58
0.60 0.14 (0.16) 0.36 0.15 (0.04) 0.78
1.33 0.87 0.56 1.10 0.87 0.68 1.36
(0.73) (0.73) (0.72) (0.74) (0.72) (0.72) (0.58)
-- -- -- -- -- -- --
(0.73) (0.73) (0.72) (0.74) (0.72) (0.72) (0.58)
$ 11.83 $ 11.23 $ 11.09 $ 11.25 $ 10.89 $ 10.74 $10.78
12.21% 8.13% 5.13% 10.44% 8.37% 6.27% 13.75%
$20,513 $16,337 $16,093 $14,957 $14,702 $15,355 $7,708
0.76% 0.88% 0.92% 0.96% 0.96% 0.79% 0.75%**
6.34% 6.59% 6.45% 6.70% 6.69% 6.45% 7.00%**
23% 41% 99% 93% 104% 127% 33%
<FN>
+ Annualized expense ratios before voluntary waiver of fees and reim-
bursement of expenses by the investment adviser and/or custodian
and/or transfer agent for the years ended June 30, 1994, 1993 and 1987
and the period ended June 30, 1986 were 0.89%, 0.92%, 0.95% and 1.15%,
respectively.
++ Total return represents aggregate total return for the periods indi-
cated and does not reflect the deduction of any applicable sales
charges.
## Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manger. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to
April 4, 1994, The Boston Company Advisors, Inc. served as the Fund's
investment adviser.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.*
<TABLE>
<CAPTION>
SIX
MONTHS YEAR PERIOD
ENDED ENDED ENDED
12/31/94## 6/30/94## 6/30/93*
(UNAUDITED)
<S> <C> <C> <C>
Net Asset Value, beginning of period $11.74 $12.38 $12.08
Income from investment operations:
Net investment income*** 0.28 0.55 0.25
Net realized and unrealized gain/(loss) on
investments (0.26) (0.35) 0.29
Total from investment operations 0.02 0.20 0.54
Less distributions:
Distributions from net investment income (0.28) (0.56) (0.24)
Distributions from net realized capital
gains (0.04) (0.28) --
Total distributions (0.32) (0.84) (0.24)
Net Asset Value, end of period $11.44 $11.74 $12.38
Total return++ 0.17% 1.53% 4.53%
Ratios to average net assets/supplemental
data:
Net assets, end of period (000's) $15,983 $15,681 $9,411
Ratio of expenses to average net assets+ 0.50%** 0.62% 0.65%*
Ratio of net investment income to average
net assets 4.84%** 4.54% 4.84%*
Portfolio turnover rate 7% 19% 60%
<FN>
* The Fund commenced selling Investment Class shares on February 1,
1993. Effective April 4, 1994 the Investment Class was reclassified as
the Trust Shares. Effective October 17, 1994 Trust Shares were redes-
ignated Class R Shares.
** Annualized.
*** Net investment income per share before waiver of fees and reimburse-
ment of expenses by the investment adviser and/or custodian and/or
transfer agent for the year ended June 30, 1994 and for the period
ended June 30, 1993 were $0.54 and $0.24, respectively.
+ Annualized expense ratios before voluntary waiver of fees and reim-
bursement of expenses by the investment adviser and/or custodian
and/or transfer agent for the year ended June 30, 1994 and for the pe-
riod ended June 30, 1993 were 0.75% and 0.87%, respectively.
++ Total return represents aggregate total return for the periods indi-
cated.
## Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manger. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to
April 4, 1994, The Boston Company Advisors, Inc. served as the Fund's
investment adviser.
</TABLE>
See Notes to Financial Statements.
[This Page Intentionally Left Blank]
FINANCIAL HIGHLIGHTS
PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
FOR A CLASS A SHARE OUTSTANDING THROUGHOUT EACH PERIOD*.
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD
ENDED ENDED
12/31/94## 6/30/94@ ##
(UNAUDITED)
<S> <C> <C>
Net Asset Value, beginning of period $ 12.59 $ 13.04
Income from investment operations:
Net investment income*** 0.30 0.35
Net realized and unrealized gain/(loss) on
investments (0.34) (0.45)
Total from investment operations (0.04) (0.10)
Less distributions:
Distributions from net investment income (0.30) (0.35)
Distributions from net realized capital
gains (0.05) --
Total distributions (0.35) (0.35)
Net Asset Value, end of period $ 12.20 $ 12.59
Total return++ (0.29)% (0.80)%
Ratios to average net assets/ supplemental
data:
Net assets, end of period (000's) $ 2,451 $ 2,922
Ratio of expenses to average net assets+ 0.75%** 0.57%**
Ratio of net investment income to average
net assets 4.81%** 4.66%**
Portfolio turnover rate 6% 13%
<FN>
* The Fund commenced operations on March 7, 1988. On February 1, 1993
existing shares of the Fund were designated the Retail Class and the
Fund began offering the Institutional Class and 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. Effective October 17, 1994, the Investor Class was redesig-
nated Class A Shares. The Financial Highlights for the six months
ended December 31, 1994 are based upon a Class A Share outstanding.
The amounts shown for the period ended June 30, 1994 were calculated
using the performance of a Retail Share outstanding from December 1,
1993 to April 3, 1994, and the performance of an Investor Share out-
standing from April 4, 1994 to June 30, 1994. The Financial Highlights
for the year ended November 30, 1993 and prior years are based upon a
Retail Share outstanding.
** Annualized.
*** Net investment income per share before waiver of fees and reimburse-
ment of expenses by the investment adviser and/or custodian and/or
transfer agent for the period ended June 30, 1994, for the years ended
November 30, 1993, 1992, 1991, 1990, 1989 and for the period ended No-
vember 30, 1988 were $0.28, $0.42. $0.52, $0.52, $0.59, $0.45, and
$0.31, respectively.
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
YEAR YEAR YEAR YEAR YEAR PERIOD
ENDED ENDED ENDED ENDED ENDED ENDED
11/30/93 11/30/92 11/30/91 11/30/90 11/30/89 11/30/88*
<S> <C> <C> <C> <C> <C>
$12.70 $12.34 $12.02 $11.90 $11.75 $12.00
0.66 0.68 0.70 0.73 0.72 0.47
0.46 0.36 0.32 0.11 0.15 (0.24)
1.12 1.04 1.02 0.84 0.87 0.23
(0.66) (0.68) (0.70) (0.72) (0.72) (0.48)
(0.12) -- -- -- -- --
(0.78) (0.68) (0.70) (0.72) (0.72) (0.48)
$13.04 $12.70 $12.34 $12.02 $11.90 $11.75
9.00% 8.65% 8.71% 7.35% 7.60% 1.95%
$2,100 $5,308 $5,202 $3,959 $3,535 $2,315
0.46% 0.45% 0.45% 0.45% 0.44% 0.70%**
5.11% 5.43% 5.74% 6.14% 6.30% 5.54%**
32% 0% 0% 45% 7% 74%
<FN>
+ Annualized expense ratios before voluntary waiver of fees and reim-
bursement of expenses by the investment adviser and/or custodian
and/or transfer agent for the period ended June 30, 1994, for the
years ended November 30, 1993, 1992, 1991, 1990, 1989 and for the pe-
riod ended November 30, 1988 were 1.51%, 2.32%, 1.70%, 1.88%, 1.61%,
2.67% and 2.61%, respectively.
++ Total return represents aggregate total return for the period indi-
cated and does not reflect the deduction of any applicable sales
charge.
@ The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
## Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manger. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to
April 4, 1994, The Boston Company Advisors, Inc. served as the Fund's
investment adviser.
</TABLE>
See Notes to Financial Statements.
FINANCIAL HIGHLIGHTS
PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
FOR A CLASS R SHARE OUTSTANDING THROUGHOUT EACH PERIOD.
<TABLE>
<CAPTION>
SIX
MONTHS PERIOD PERIOD
ENDED ENDED ENDED
12/31/94## 6/30/94@ ## 11/30/93*
(UNAUDITED)
<S> <C> <C> <C>
Net Asset Value, beginning of period $ 12.59 $ 13.04 $12.85
Income from investment operations:
Net investment income*** 0.32 0.37 0.57
Net realized and unrealized gain/(loss) on
investments (0.34) (0.45) 0.31
Total from investment operations (0.02) (0.08) 0.88
Less distributions:
Distributions from net investment income (0.32) (0.37) (0.57)
Distributions from net realized capital
gains (0.05) -- (0.12)
Total distributions (0.37) (0.37) (0.69)
Net Asset Value, end of period $ 12.20 $ 12.59 $13.04
Total return++ (0.17)% (0.67)% 6.95%
Ratios to average net assets/supplemental
data:
Net assets, end of period (000's) $ 3,085 $ 2,388 $2,542
Ratio of expenses to average net assets+ 0.50%** 0.29%** 0.25%**
Ratio of net investment income to average
net assets 5.06%** 4.94%** 5.20%**
Portfolio turnover rate 6% 13% 32%
<FN>
* The Fund commenced selling Investment Class shares on February 1,
1993. Effective April 4, 1994 the Investment Class was reclassified as
the Trust Shares. Effective October 17, 1994 Trust Shares were redes-
ignated Class R Shares.
** Annualized.
*** Net investment income per share before waiver of fees and reimburse-
ment of expenses by the investment adviser and/or custodian and/or
transfer agent for the periods ended June 30, 1994 and November 30,
1993 were $0.30 and $0.36, respectively.
+ Annualized expense ratios before voluntary waiver of fees and reim-
bursement of expenses by the investment adviser and/or custodian
and/or transfer agent for the periods ended June 30, 1994 and November
30, 1993 were 1.23% and 2.22%, respectively.
++ Total return represents aggregate total return for the periods indi-
cated.
@ The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
## Effective October 17, 1994, The Dreyfus Corporation serves as the
Fund's investment manger. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to
April 4, 1994, The Boston Company Advisors, Inc. served as the Fund's
investment adviser.
</TABLE>
See Notes to Financial Statements.
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust"), The Dreyfus/
Laurel Funds, Inc., The Dreyfus/Laurel Funds Trust and The Dreyfus/Laurel
Investment Series are all registered open-end investment companies that
are now part of The Dreyfus Family of Funds. The Trust is an investment
company which consists of seven funds: the Dreyfus/ Laurel California Tax-
Free Money Fund, the Dreyfus/Laurel Massachusetts Tax-Free Money Fund, the
Dreyfus/Laurel New York Tax-Free Money Fund, the Premier Limited Term Cal-
ifornia Municipal Fund, the Premier Limited Term Massachusetts Municipal
Fund, the Premier Limited Term New York Municipal Fund and the Premier
Limited Term Municipal Fund. These financial statements report on the Pre-
mier Limited Term California Municipal Fund, the Premier Limited Term
Massachusetts Municipal Fund and the Premier Limited Term New York Munici-
pal Fund (collectively the "Funds"). The Trust is a "Massachusetts busi-
ness trust" and is registered with the Securities and Exchange Commission
under the Investment Company Act of 1940, as amended (the "1940 Act"), as
an open-end management investment company. The Funds seek current income
exempt from Federal income tax and state personal income tax. Each Fund
currently offers four classes of shares: Class A, Class B, Class C and
Class R Shares (effective October 17, 1994, the Investor Shares were rede-
signated Class A Shares and the Trust Shares were redesignated Class R
Shares). Class A, Class B and Class C Shares are sold primarily to retail
investors through financial intermediaries and bear a distribution 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 service fees. Class R Shares are designed for clients of financial in-
stitutions, such as banks, trust companies or thrift institutions who have
qualified accounts at such institutions and bear no sales charges or dis-
tribution or service fees. Each class of shares has identical rights and
privileges except with respect to the distribution fees and voting rights
on matters affecting a single class. The following is a summary of signif-
icant accounting policies consistently followed by each Fund in the prepa-
ration of its financial statements in accordance with generally accepted
accounting principals.
(A) PORTFOLIO VALUATION
The portfolio securities of the Fund, except as otherwise noted, listed or
traded on a national securities exchange, are valued at the mean of the
latest bid and asked prices. Securities traded over-the-counter are priced
at the mean of the latest bid and asked prices but will be valued at the
last sale price as required by regulations of the SEC. When market quota-
tions are not readily available, securities and other assets are valued at
fair value as determined in good faith in accordance with procedures es-
tablished by the Board of Trustees. Short-term debt securities with matu-
rities of 60 days or less from the valuation day are valued on the basis
of amortized cost.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME
Securities transactions are recorded as of the trade date. Interest income
is recorded on the accrual basis. Realized gains and losses from securi-
ties transactions are recorded on the identified cost basis. Investment
income and realized and unrealized gains and losses are allocated based
upon the relative average daily net assets of each class of shares.
(C) EXPENSE ALLOCATION
Expenses of each Fund not directly attributable to the operations of any
class of shares are pro rated among the classes based upon the relative
average daily net assets of each class. Distribution expense is directly
attributable to a particular class of shares and is charged only to that
class' operations.
(D) DISTRIBUTIONS TO SHAREHOLDERS
Distributions from net investment income of the Fund, if any, are declared
on a class level on each day the Fund is open for business and are paid no
later than the first business day of the next month. Distributions from
net realized capital gains, if any, are determined on a Fund level and are
declared and paid annually. Distributions to shareholders are recorded on
ex-dividend date. Each Fund is subject to a 4% nondeductible excise tax
measured with respect to certain undistributed amounts of net investment
income and capital gain. Each Fund expects to make such additional distri-
butions as are necessary to avoid the application of this tax. Income dis-
tributions and capital gain distributions on a Fund level are determined
in accordance with income tax regulations which may differ from generally
accepted accounting principles. These differences are primarily due to
differing treatments of income and gains on various investment securities
held by the Fund, timing differences and differing characterization of
distributions made by the Fund as a whole.
(E) FEDERAL INCOME TAXES
Each Fund intends to qualify as a regulated investment company by comply-
ing with the requirements of the Internal Revenue Code applicable to regu-
lated investment companies and by distributing substantially all of its
taxable income to shareholders. Therefore, no Federal income tax provision
is required.
2. INVESTMENT MANAGEMENT FEE, TRUSTEES' FEES AND
OTHER RELATED PARTY TRANSACTIONS
Effective as of October 17, 1994 the Trust's investment management agree-
ment with Mellon Bank, N.A. ("Mellon Bank") was transferred to The Dreyfus
Corporation (the "Manager"), a wholly-owned subsidiary of Mellon Bank. The
Manager provides, or arranges for one or more third parties to provide in-
vestment advisory, administrative, custody, fund accounting and transfer
agency services to the Trust. The Manager also directs the investments of
each Fund in accordance with its investment objectives, policies and limi-
tations. For these services, each Fund is contractually obligated to pay
the Manager a fee, calculated daily and paid monthly, at the annual rate
of .50% of the value of each Fund's average daily net assets. Out of its
fee, the Manager pays all of the expenses of each Fund except brokerage
fees, taxes, interest, Rule 12b-1 distribution fees and expenses, fees and
expenses of the non-interested Trustees (including counsel fees) and ex-
traordinary expenses. In addition, the Manager is required to reduce its
fee in an amount equal to each Fund's allocable portion of fees and ex-
penses of the non- interested Trustees (including counsel).
Prior to October 16, 1994, Mellon Bank served as the Trust's investment
manager pursuant to the investment management agreement described above.
This agreement provided for custody, accounting, and transfer agent ser-
vices to each Fund.
Prior to September 23, 1994, Frank Russell Investment Management Company
(the "Administrator") served as each Fund's administrator and provided,
pursuant to an administration agreement, various administrative and corpo-
rate secretarial services to each Fund. Mellon Bank, as investment man-
ager, paid the Administrator's fee out of the management fee described
above.
Prior to October 17, 1994, Funds Distributor, Inc. served as distributor
of the Trust's shares. Effective as of October 17, 1994, Premier Mutual
Fund Services, Inc. ("Premier") serves as the Trust's distributor. Premier
also serves as the Trust's sub-administrator and, pursuant to a sub-
administration agreement with the Manager, provides various administrative
and corporate secretarial services to the Trust.
No officer or employee of Premier (or of any parent, subsidiary or affili-
ate thereof) receives any compensation from The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Funds Trust, The Dreyfus/Laurel Tax-Free Munici-
pal Funds or The Dreyfus/Laurel Investment Series (collectively, "The
Dreyfus/Laurel Funds") for serving as an officer, Director or Trustee of
The Dreyfus/Laurel Funds. In addition, no officer or employee of the
Manager (or of any parent, subsidiary or affiliate thereof) serves as an
officer, Director or Trustee of the Dreyfus/Laurel Funds. The Dreyfus/Lau-
rel Funds pay each Director or Trustee who is not an officer or employee
of Premier (or of any parent, subsidiary or affiliate thereof) or of the
Manager, $27,000 per annum, $1,000 for each Board meeting attended and
$750 for each Audit Committee meeting attended, and reimburse each Direc-
tor or Trustee for travel and out-of-pocket expenses.
3. DISTRIBUTION PLAN
Class A Shares are subject to a Distribution Plan adopted pursuant to Rule
12b-1 of the 1940 Act. Under this Distribution Plan, the Fund may pay an-
nually up to 0.25% of its average daily net assets attributable to Class A
Shares to compensate Premier and Dreyfus Service Corporation, an affiliate
of the Manager, for shareholder servicing activities and Premier for ac-
tivities and expenses primarily intended to result in the sale of Class A
Shares. Class B and Class C Shares are subject to a Distribution Plan
adopted pursuant to Rule 12b-1, pursuant to which the Fund pays Premier
for distributing the Fund's Class B and C Shares, at an aggregate annual
rate of 0.50% of the value of the average daily net assets of Class B and
C. Class B and Class C Shares are also subject to a Service Plan adopted
pursuant to Rule 12b-1, pursuant to which the Fund pays Dreyfus Service
Corporation or Premier for providing certain services to the holders of
Class B and C Shares a fee at the annual rate of 0.25% of the value of the
average daily net assets of Class B and C. The Class R Shares bear no
service or distribution fee.
Under their terms, the Plans shall remain in effect from year to year,
provided such continuance is approved annually by a vote of a majority of
the Trustees and a majority of those Trustees who are not "interested per-
sons" of the Trust and who have no direct or indirect financial interest
in the operation of the Plans.
4. SECURITIES TRANSACTIONS
The aggregate cost of purchases and proceeds from sales of securities, ex-
cluding short- term investments, for the six months ended December 31,
1994 were as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
<S> <C> <C>
Premier Limited Term California Municipal
Fund $5,327,661 $4,059,045
Premier Limited Term Massachusetts Munici-
pal Fund 2,268,356 2,888,372
Premier Limited Term New York Municipal
Fund 269,477 565,350
</TABLE>
At December 31, 1994, aggregate gross unrealized appreciation for all se-
curities in which there is an excess of value over tax cost and aggregate
gross unrealized depreciation for all securities in which there is an ex-
cess of tax cost over value were as follows:
<TABLE>
<CAPTION>
APPRECIATION DEPRECIATION
<S> <C> <C>
Premier Limited Term California Municipal
Fund $266,327 $ 403,731
Premier Limited Term Massachusetts Munici-
pal Fund 554,239 1,080,685
Premier Limited Term New York Municipal
Fund 142,385 145,574
</TABLE>
5. SHARES OF BENEFICIAL INTEREST
The Trust has the authority to issue an unlimited number of shares of ben-
eficial interest of each class in each separate series, without par value.
The Trust offers four classes of shares for each Fund. The tables below
summarize transactions in Fund shares.
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
December 31, 1994# June 30, 1994*@
SHARES AMOUNT SHARES+ AMOUNT++
<S> <C> <C> <C> <C>
CLASS A SHARES:
Sold 143,220 $ 1,803,142 192,095 $ 2,488,385
Issued as reinvestment of dividends and
distributions 14,880 185,419 15,522 200,024
Redeemed (89,821) (1,124,403) (304,156) (3,926,830)
Net increase/(decrease) 68,279 $ 864,158 (96,549) $(1,238,421)
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
December 31, 1994# June 30, 1994*
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS R SHARES:
Sold 133,714 $ 1,666,992 530,046 $ 6,881,437
Issued as reinvestment of dividends and
distributions 11,656 145,494 12,922 166,413
Redeemed (321,866) (4,037,659) (207,227) (2,683,916)
Net increase/(decrease) (176,496) $(2,225,173) 335,741 $ 4,363,934
<FN>
* The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
@ Effective April 4, 1994, the Retail and Institutional Classes of shares
were reclassified as a single class of shares known as Investor Shares.
# On October 17, 1994, Investors Shares are Trust Shares were redesig-
nated Class A Shares and Class R Shares, respectively.
+ Shares include 54,145 of subscriptions, 535 of reinvestments and 20,536
of redemptions for the Institutional Class up to April 4, 1994.
++ Amounts include $710,630 of subscriptions, $6,978 of reinvestments and
$267,644 of redemptions for the Institutional Class up to April 4,
1994.
</TABLE>
As of December 31, 1994, the Fund had issued 1.222 Class B shares and
1.222 Class C shares, in the amount of $15 and $15, respectively.
PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
December 31, 1994# June 30, 1994**
SHARES AMOUNT SHARES+ AMOUNT++
<S> <C> <C> <C> <C>
CLASS A SHARES:
Sold 191,751 $ 2,247,120 741,861 $ 9,177,419
Issued as reinvestment of dividends and
distributions 34,542 401,080 110,036 1,343,636
Redeemed (517,529) (6,020,999) (842,762) (10,274,714)
Net increase/(decrease) (291,236) $(3,372,799) 9,135 $ 246,341
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
December 31, 1994# June 30, 1994
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS R SHARES:
Sold 281,680 $ 3,259,237 814,611 $ 9,886,034
Issued as reinvestment of dividends and
distributions 13,192 152,670 18,592 226,333
Redeemed (232,624) (2,735,132) (257,763) (3,131,763)
Net increase 62,248 $ 676,775 575,440 $ 6,980,604
<FN>
** Effective April 4, 1994, the Retail and Institutional Classes of shares
were reclassified as a single class of shares known as Investor Shares.
# On October 17, 1994, Investors Shares are Trust Shares were redesig-
nated Class A Shares and Class R Shares, respectively.
+ Shares include 206,372 of subscriptions, 7,694 of reinvestments and
215,011 of redemptions for the Institutional Class up to April 4, 1994.
++ Amounts include $2,546,364 of subscriptions, $94,534 of reinvestments
and $2,664,797 of redemptions for the Institutional Class up to April
4, 1994.
</TABLE>
As of December 31, 1994, the Fund had issued 1.311 Class B shares and
1.311 Class C shares, in the amount of $15 and $15, respectively.
PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
December 31, 1994# June 30, 1994*@
SHARES AMOUNT SHARES+ AMOUNT++
<S> <C> <C> <C> <C>
CLASS A SHARES:
Sold 105,922 $ 1,299,471 66,553 $ 859,370
Issued as reinvestment of dividends and
distributions 4,343 53,857 4,263 54,718
Redeemed (141,582) (1,741,368) (154,814) (1,969,230)
Net decrease (31,317) $ (388,040) (83,998) $(1,055,142)
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED PERIOD ENDED
December 31, 1994# June 30, 1994*
SHARES AMOUNT SHARES AMOUNT
<S> <C> <C> <C> <C>
CLASS R SHARES:
Sold 159,869 $ 1,983,835 80,154 $ 1,033,826
Issued as reinvestment of dividends and
distributions 350 4,305 617 8,058
Redeemed (97,205) (1,205,055) (85,972) (1,097,942)
Net increase/(decrease) 63,014 $ 783,085 (5,201) $ (56,058)
<FN>
* The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
@ Effective April 4, 1994, the Retail and Institutional Classes of shares
were reclassified as a single class of shares known as Investor Shares.
# On October 17, 1994, Investors Shares are Trust Shares were redesig-
nated Class A Shares and Class R Shares, respectively.
+ Shares include 13,454 of subscriptions, 684 of reinvestments and 15,519
of redemptions for the Institutional Class up to April 4, 1994.
++ Amounts include $174,735 of subscriptions, $8,903 of reinvestments and
$204,424 of redemptions for the Institutional Class up to April 4,
1994.
</TABLE>
As of December 31, 1994, the Fund had issued 1.230 Class B shares and
1.230 Class C shares, in the amount of $15 and $15, respectively.
6. LINE OF CREDIT
The Funds and several affiliated entities participate in a $20 million
line of credit provided by Bank of America (formerly known as Continental
Bank N.A.) under a Line of Credit Agreement (the "Agreement") dated March
31, 1992, primarily for temporary or emergency purposes, including the
meeting of redemption requests that otherwise might require the untimely
disposition of securities. Under this Agreement, each Fund may borrow up
to the amount specified in its Borrowing Base Certificate. Interest is
payable at the bank's Money Market Rate or the London Interbank Offered
Rate (LIBOR) plus 0.375% on an annualized basis. The Funds and the other
affiliated entities are charged an aggregate commitment fee of $50,000,
which is allocated equally among each of the participants. The Agreement
requires, among other provisions, each participating fund to maintain a
ratio of net assets (not including funds borrowed pursuant to the Agree-
ment) to aggregate amount of indebtedness pursuant to the Agreement of no
less than 4 to 1. For the six months ended December 31, 1994, the Funds
had no borrowings under the Agreement.
7. CONCENTRATION OF CREDIT
Each Fund invests primarily in debt obligations issued by the Fund's re-
spective state (i.e., California, Massachusetts, or New York) and such
state's political subdivisions, municipalities and public authorities who
obtain funds for various public purposes. Each Fund is more susceptible to
factors adversely affecting issuers of its respective state municipal
securities than is a municipal bond fund that is not concentrated in these
issuers to the same extent.
