<PAGE>
Dryefus
BASIC
California Municipal
Money Market Fund
Annual Report
June 30, 1997
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
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Letter to Shareholders
Dear Shareholder:
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<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
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Statement of Investments June 30, 1997
<S> <C> <C>
Principal
Tax Exempt Investments--100.0% Amount Value
- -------------------------------------------------------------------------------- ------------- ---------
Abag Finance Authority, For Non-Profit Corporations, VRDN
(University of California Project) 4.10% (LOC; Union Bank of Switzerland)(a,b) $1,000,000 $1,000,000
Alameda-Contra Costa School Finance Authority, COP, VRDN
(Capital Improvements Financing Project):
4%, Series A (LOC; Canadian Imperial Bank of Commerce) (a,b)............ 1,000,000 1,000,000
4%, Series C (LOC; National Westminster Bank) (a,b)..................... 1,000,000 1,000,000
Alameda County, VRDN:
Industrial Development Authority, Revenue (Ply Properties Project)
4.25%, Series A (LOC; Wells Fargo Bank) (a,b)........................... 1,700,000 1,700,000
MFMR, Refunding (Quail)
4%, Series A (LOC; Federal National Mortgage Association) (a,b)......... 200,000 200,000
Anaheim Housing Authority, MFHR, VRDN (Bel Age Project)
4.10%, Series A (LOC; Federal National Mortgage Association) (a,b)........ 1,800,000 1,800,000
California Economic Development Finance Authority, IDR, VRDN
(Volk Enterprises Inc. Project) 4.05% (LOC; Harris Trust and Savings Bank)(a,b) 500,000 500,000
California Educational Facilities Authority, Revenue, VRDN
(Foundation for Educational Achievement)
4.15%, Series A (LOC; Banque Nationale de Paris) (a,b).................... 4,000,000 4,000,000
California Health Facilities Finance Authority, Revenue, VRDN:
(Catholic Health Care)
4.05%, Series B (Insured; MBIA and SBPA; Morgan Guaranty Trust Co.) (a). 200,000 200,000
(Pooled Loan Program)
4.05%, Series B (Insured; FGIC) (a)..................................... 200,000 200,000
(Saint Francis Memorial Hospital)
4.05%, Series B (LOC; Bank of America) (a,b)............................ 200,000 200,000
California Housing Finance Agency, Refunding:
Home Mortgage Revenue
4%, Series A, 8/1/97 (Insured; MBIA).................................... 735,000 735,119
Multi-Family Revenue, VRDN
4%, Series C (LOC; Federal National Mortgage Association) (a,b)......... 1,000,000 1,000,000
California Pollution Control Financing Authority:
PCR (Chevron USA Inc. Project) 4%, 5/15/98 (LOC; Chevron USA Inc.) (b).... 700,000 700,884
VRDN:
IDR (Southdown Inc.) 3.90% (LOC; Societe Generale) (a,b)................ 300,000 300,000
PCR:
Refunding (Pacific Gas and Electric)
4%, Series B (LOC; Rabobank Nederland) (a,b)........................ 1,500,000 1,500,000
(Southdown Inc.):
3.90% (LOC; Societe Generale) (a,b)................................. 400,000 400,000
3.90%, Series B (LOC; Societe Generale) (a,b)....................... 600,000 600,000
RRR:
(Burney Forest Products Project) 3.95% (LOC; Fleet Bank) (a,b)........ 500,000 500,000
Refunding (Ultra Power Malaga) 5.35%, Series A (LOC; Bank of America) (a,b) 1,000,000 1,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
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Statement of Investments (continued) June 30, 1997
<S> <C> <C>
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------------------------------- ------------ --------
California Statewide Communities Development Corporation, Revenue, VRDN:
(Ahnnn Project)
4.10%, (LOC; California State Teacher Retirement System) (a,b).......... $ 505,000 $ 505,000
(Johanson Project)
4.10%, Series E (LOC; California State Teacher Retirement System) (a,b). 300,000 300,000
(Karcher Property Project) 4.05%, Series C (LOC; Bayerische Vereinsbank) (a,b) 500,000 500,000
(Peets Coffee) 4.10% (LOC; California State Teacher Retirement System) (a,b) 700,000 700,000
(Tri-Valley Growers) 4.05%, Series F (LOC; ABN-Amro Bank) (a,b)........... 300,000 300,000
Clovis Unified School District, TRAN 4.25%, 6/30/98.......................... 2,000,000 2,008,640
Concord, MFMR, VRDN (Crossroads)
4%, Series B (LOC; Federal National Mortgage Association) (a,b)........... 1,000,000 1,000,000
Conejo Valley Union School District, TRAN 4.25%, 7/2/98...................... 2,000,000 2,008,640
Contra Costa County:
CP 3.55%, 8/4/97 (LOC; Westdeutsche Landesbank) (b)....................... 500,000 500,000
MFMR, Housing Authority, VRDN (Lakeshore)
4%, Series A (LOC; Federal National Mortgage Association) (a,b)......... 325,000 325,000
Contra Costa Water Authority, Water Treatment Revenue, Refunding
4.30%, Series A, 10/1/97 (Insured; FGIC).................................. 500,000 500,732
Glendale Revenue Reliance Development, VRDN (Public Parking)
3.90% (LOC; Barclays Bank) (a,b).......................................... 1,900,000 1,900,000
Kern County, COP, VRDN (Kern Public Facilities Project)
4%, Series C (LOC; Union Bank of Switzerland) (a,b)....................... 700,000 700,000
Los Angeles, MFHR, VRDN (Masselin Manor)
4.05% (LOC; Bank of America) (a,b)........................................ 700,000 700,000
Los Angeles County, Pension Obligation, VRDN
3.90%, Series C (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a)........ 600,000 600,000
Los Angeles County Metropolitan Transportation Authority:
Sales Tax Revenue, VRDN
(Property C) 4%, Series A (Insured; MBIA and SBPA; Credit Local de France)(a) 2,600,000 2,600,000
Tax Exempt Revenue, CP
3.55%, 8/7/97 (LOC: ABN-Amro Bank, Bank of California, Banque Nationale de
Paris, Canadian Imperial Bank of Commerce and National Westminster Bank)(b) 1,000,000 1,000,000
Los Angeles County Community Development Commission, COP, VRDN
(Willowbrook Project)
3.90% (LOC; Wells Fargo Bank) (a,b)....................................... 500,000 500,000
Los Angeles County Public Works Finance Authority, LR
(Multi-Capital Facilities Project) 3.80%, 12/1/97 (Insured; MBIA)......... 1,000,000 1,000,139
Los Angeles Regional Airports Improvement Corporation, LR, VRDN
(American Airlines):
4.10%, Series B (LOC; Wachovia Bank and Trust Co.) (a,b)................ 100,000 100,000
5.50%, Series A (LOC; Wachovia Bank and Trust Co.) (a,b)................ 200,000 200,000
5.50%, Series E (LOC; Wachovia Bank and Trust Co.) (a,b)................ 1,100,000 1,100,000
Los Angeles Union School District, TRAN:
4.50%, Series B, 9/30/97 (LOC; California State Aid Withholding) (b)...... 1,400,000 1,402,704
4.50%, Series A, 7/1/98................................................... 2,000,000 2,013,480
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) June 30, 1997
<S> <C> <C>
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------------------------------- ------------ -------
Los Angeles Waste Water System, Revenue:
CP 3.85%, 9/12/97......................................................... $ 1,500,000 $ 1,500,000
Prerefunded 8.125%, 11/1/97 (Escrowed in; U.S. Government Securities)..... 700,000 723,625
Metropolitan Water District, CP
3.85%, Series B, 9/12/97 (Liquidity Facility; Westdeutsche Landesbank).... 2,000,000 2,000,000
Modesto, MFHR, Refunding, VRDN (Shadowbrook)
4.10%, Series A (LOC; Bank of America) (a,b).............................. 1,000,000 1,000,000
Moorpark, Multi-Family Revenue, VRDN (LeClub Apartments Project)
4.05%, Series A (LOC; Citibank) (a,b)..................................... 1,500,000 1,500,000
Northern Power Agency, Public Power Revenue, Refunding, VRDN
(Geothermal Project #3)
3.90%, Series A (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a)........ 1,000,000 1,000,000
Oakland, Revenue, Refunding 6.90%, Series A, 8/1/97 (Insured; FGIC).......... 300,000 300,848
Ontario, Multi-Family Revenue, VRDN (Vineyard Village Project)
4.10% (LOC; Federal Home Loan Banks) (a,b)................................ 1,100,000 1,100,000
Orange County, VRDN:
Apartment Development Revenue, Refunding (Pointe Niguel Project)
4.35%, Series C (LOC; Wells Fargo Bank) (a,b)........................... 1,000,000 1,000,000
COP (Florence Crittendoc Services)
3.90% (LOC; Swiss Bank Corp.) (a,b)..................................... 600,000 600,000
Otay Water District, COP, VRDN
(Capital Project) 3.90% (LOC; Landesbank Hessen) (a,b).................... 800,000 800,000
Palm Springs Community Redevelopment Agency, COP, VRDN (Headquarters Hotel)
3.90%, Series 6 (LOC; Citibank) (a,b)..................................... 1,300,000 1,300,000
3.90%, Series 8 (LOC; Citibank) (a,b)..................................... 2,700,000 2,700,000
3.90%, Series 10 (LOC; Citibank) (a,b).................................... 1,100,000 1,100,000
3.90%, Series 11 (LOC; Citibank) (a,b).................................... 300,000 300,000
Regional Airports Improvement Corporation, Terminal Facilities Completion,
Revenue
VRDN (Los Angeles International Airport) 5.50% (LOC;
Societe Generale) (a,b)............................................... 5,100,000 5,100,000
Riverside County, MFHR, VRDN (Sierra Pines Apartments Project)
4.10%, Series A (LOC; Swiss Bank Corp.) (a,b)............................. 2,300,000 2,300,000
Sacramento County:
COP, VRDN (Administration Center and Court House Project)
3.90% (LOC; Union Bank of Switzerland) (a,b)............................ 800,000 800,000
TRAN 4.50%, 9/30/97....................................................... 1,000,000 1,001,527
Sacramento Municipal Utilities District, Electric Revenue, CP
3.65%, 9/24/97 (LOC: Bayerische Landesbank) (b)........................... 1,400,000 1,400,000
San Diego County:
MFHR, VRDN:
(Country Hills)
4%, Series A (LOC; Federal National Mortgage Association) (a,b)....... 1,800,000 1,800,000
(Lusk Mira Mesa Apartments)
3.85%, Series E (LOC; Swiss Bank Corp.) (a,b)......................... 300,000 300,000
Regional Building Authority, LR, Prerefunded (Mountain Tower Project)
7.75%, Series A, 11/1/97 (Escrowed in; U.S. Government Securities)...... 1,800,000 1,859,784
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
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Statement of Investments (continued) June 30, 1997
<S> <C> <C>
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------------------------------- ------------ --------
San Diego County (continued):
Regional Transmission Community, Sales Tax Revenue
5%, Series A, 4/1/98 (Insured; FGIC).................................... $ 585,000 $ 589,987
TRAN 4.375%, 9/30/97 (LOC: Bank of Nova Scotia, Canadian Imperial Bank
of Commerce, and Commerz Bank) (b)...................................... 3,000,000 3,004,314
San Francisco City and County, Sewer Revenue, Prerefunded
7.25%, Series B, 10/1/97 (Insured; AMBAC)................................. 400,000 406,521
San Francisco City and County Housing Authority, MFHR, VRDN (737 Post Project)
3.95%, Series D (LOC; Banque Nationale de Paris) (a,b).................... 200,000 200,000
San Francisco City and County Redevelopment Financing Authority, Revenue,
Refunding
VRDN (Yerba Buena Garden) 4.05% (LOC; Bank of Tokyo-Mitsubishi
and National Westminster Bank) (a,b)................................... 215,000 215,000
San Jose, MFHR, VRDN (Foxchase)
4%, Series B (Insured; FGIC and Liquidity Facility; FGIC) (a)............. 100,000 100,000
Santa Rosa, Waste Water Revenue 4.10%, Series A, 9/1/97 (Insured; FGIC)...... 500,000 500,327
Southern California Public Power Authority, Revenue, Refunding:
(Power Project) 6.60%, Series A, 7/1/97 (Insured; AMBAC).................. 500,000 500,000
VRDN:
(Palo Verde Project)
3.90%, Series C (Insured; AMBAC and SBPA; Morgan Guaranty Trust Co.) (a) 1,700,000 1,700,000
(Transmission Project)
3.90% (Insured; AMBAC and LOC; Swiss Bank Corp.) (a,b)................ 200,000 200,000
State of California, 11%, 3/1/98............................................. 1,500,000 1,568,609
Stockton, MFHR, VRDN (Mariners Pointe Association)
3.90%, Series A (LOC; Lasalle National Bank) (a,b)........................ 3,200,000 3,200,000
Tulare County, COP, Public Facilities Corporation, Prerefunded
8.10%, 11/1/97 (Escrowed in; U.S. Government Securities and Insured; MBIA) 500,000 517,090
University of California, Revenue, Board of Regents, CP
3.70%, Series A, 9/10/97 (Line of Credit: Bank of America, Bank of Montreal,
Canadian Imperial Bank of Commerce, Credit Agricole and Societe Generale). 1,500,000 1,500,000
-------------
TOTAL INVESTMENTS (cost $86,687,970)......................................... $86,687,970
=============
</TABLE>
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<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
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Summary of Abbreviations
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<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
COP Certificate of Participation MFMR Multi-Family Mortgage Revenue
CP Commercial Paper PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
IDR Industrial Development Revenue SBPA Standby Bond Purchase Agreement
LOC Letter of Credit TRAN Tax and Revenue Anticipation Notes
LR Lease Revenue VRDN Variable Rate Demand Notes
MBIA Municipal Bond Investors Assurance
Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
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Moody's or Standard & Poor's Percentage of Value
- ------- -------------------- -------------------
<S> <C> <C>
VMIG1/MIG1, P1 (c) SP1+/SP1, A1+/A1 (c) 91.2%
Aaa/Aa (d) AAA/AA (d) 8.8
-------
100.0%
=======
<FN>
Notes to Statement of Investments:
- --------------------------------------------------------------------------------
(a) Securities payable on demand. The interest rate, which is subject to change,
is based upon bank prime rates or an index of market interest rates.
(b) Secured by letters of credit. At June 30, 1997, 73.3% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign
banks, government agencies and corporations.
(c) P1 and A1 are the highest ratings assigned tax exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(d) Notes which are not MIG or SP rated are represented by bond ratings of the
issuers.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
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Statement of Assets and Liabilities June 30, 1997
<S> <C> <C>
Cost Value
------------ ------------
ASSETS: Investments in securities--See Statement of Investments $86,687,970 $86,687,970
Interest receivable......................................... 566,609
-----------
87,254,579
-----------
LIABILITIES: Due to The Dreyfus Corporation.............................. 30,861
Cash overdraft due to Custodian............................. 611,185
Payable for investment securities purchased................. 6,030,760
Interest payable--Note 3.................................... 1,289
-----------
6,674,095
-----------
NET ASSETS...................................................................... $80,580,484
===========
REPRESENTED BY: Paid-in capital............................................. $80,616,881
Accumulated net realized gain (loss) on investments......... (36,397)
-----------
NET ASSETS...................................................................... $80,580,484
===========
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized).................. 80,616,890
NET ASSET VALUE, offering and redemption price per share........................ $1.00
======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
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Statement of Operations Year Ended June 30, 1997
<S> <C> <C>
INVESTMENT INCOME
INCOME Interest Income................................... $2,098,341
EXPENSES: Management fee--Note 2(a)......................... $269,555
Interest--Note 3.................................. 1,289
----------
Total Expenses............................... 270,844
Less--reduction in management fee due to
undertaking--Note 2(a).......................... (20,799)
----------
Net Expenses................................. 250,045
------------
INVESTMENT INCOME--NET.......................................................... 1,848,296
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b).............................. (36,397)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............................ $1,811,899
============
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
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Statement of Changes in Net Assets Year Ended June 30, 1997
Year Ended Year Ended
June 30, 1997 June 30, 1996*
<S> <C> <C>
-------------- ----------------
OPERATIONS:
Investment income--net............................................... $ 1,848,296 $ 827,721
Net realized gain (loss) on investments.............................. (36,397) 4,282
------------- ------------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 1,811,899 832,003
------------- ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares.................................................... (1,848,296) (703,677)
Class R shares..................................................... -- (124,044)
Net realized gain on investments:
Investor shares.................................................... (3,500) (549)
-------------- --------------
Total Dividends.................................................. (1,851,796) (828,270)
------------- ------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares.................................................... 189,667,243 102,593,225
Class R shares..................................................... -- 14,319,110
Dividends reinvested:
Investor shares.................................................... 1,332,586 443,530
Class R shares..................................................... -- 65,137
Cost of shares redeemed:
Investor shares.................................................... (147,107,129) (81,850,739)
Class R shares..................................................... -- (21,813,892)
------------- ------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 43,892,700 13,756,371
------------- -------------
Total Increase (Decrease) in Net Assets........................ 43,852,803 13,760,104
NET ASSETS:
Beginning of Period.................................................. 36,727,681 22,967,577
------------- -------------
End of Period........................................................ $ 80,580,484 $ 36,727,681
============= =============
<FN>
- --------------------
*Effective November 21, 1995, the Fund converted to a single Class Fund, with
the existing Class R shares converted into Investor shares.
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
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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.
Period Ended Year Ended
Year Ended June 30, June 30, November 30,
----------------------------- ------------ ---------------------
PER SHARE DATA: 1997 1996(1) 1995(2) 1994(3)(4) 1993(3)(5) 1992(3)(5)
------- ------- ------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net................. .031 .031 .031 .012 .023 .031
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net.. (.031) (.031) (.031) (.012) (.023) (.031)
------ ------ ------ ------ ------ ------
Net asset value, end of period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN.................. 3.11% 3.19% 3.10% 1.25% 2.41% 3.10%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .42% .44% .60% .47%(6) .32% .32%
Ratio of net investment income
to average net assets.............. 3.09% 3.36% 3.07% 2.11%(6) 2.40% 3.03%
Decrease reflected in above expense ratios
due to undertakings by the Manager. .03% .07% -- .38%(6) .76% .51%
Net Assets, end of period (000's Omitted) $80,580 $36,728 $15,538 $17,170 $15,490 $26,987
<FN>
- -------------------
(1) Effective November 21, 1995, the Fund converted to a single Class Fund, with
the existing Class R shares converted into Investor shares.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(3) 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 Investor shares. The Financial Highlights for the year ended June 30,
1995 are based upon an Investor 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 outstanding from April 4, 1994 to June 30,
1994. The Financial Highlights for the year ended November 30, 1993 and
prior periods are based upon a Retail share outstanding.
(4) The Fund changed its fiscal year end to June 30. Prior to this, the Fund`s
fiscal year end was November 30. 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.
(5) The per share amounts have been calculated using the monthly
average shares method, which more appropriately presents per share data for
the period since use of the undistributed net investment income method did
not accord with results of operations.
(6) Annualized.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC California Municipal Money Market Fund (the "Fund") is a
series of the Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is
registered under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company and operates as a series company
currently offering seven series including the Fund. The Fund's investment
objective is to provide a high level of current income exempt from Federal and
state of California personal income taxes to the extent consistent with the
preservation of capital and the maintenance of liquidity by investing in high
quality, short-term municipal securities. The Dreyfus Corporation ("Manager")
serves as the Fund's investment adviser. The Manager is a direct subsidiary of
Mellon Bank, N.A. Premier Mutual Fund Services, Inc. is the distributor of the
Fund's shares.
Prior to the conversion of the Fund to a single class Fund, investment
income, net of expenses (other than class specific expenses), realized and
unrealized gains and losses were 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. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Trustees to represent the fair value of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per share
of $1.00 for the Fund; the Fund has adopted certain investment, portfolio
valuation and dividend and distribution policies to enable it to do so. There is
no assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Interest income, adjusted for amortization
of premiums and original issue discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis.
Cost of investments represents amortized cost.
(c) Concentration of risk: The Fund follows an investment policy of
investing primarily in municipal obligations of one state. Economic changes
affecting the state and certain of its public bodies and municipalities may
affect the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Fund.
(d) 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.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal Revenue
Code, and to make distributions of income and net realized capital gain
sufficient to relieve it from substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $16,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to June 30, 1997. The
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (continued)
carryover does not include net realized securities losses from November 1,
1996 through June 30, 1997 which are treated, for Federal income tax purposes,
as arising in fiscal 1998. If not applied, the carryover expires in fiscal 2005.
At June 30, 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 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 .45% 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, 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.
The Manager had undertaken from July 1, 1996 through November 19, 1996 to
limit its fee to an annual rate of .35% of the value of the Fund's average daily
net assets (exclusive of certain expenses as described above). The reduction in
management fee, pursuant to the undertaking, amounted to $20,799 during the
period ended June 30, 1997.
NOTE 3--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings. At June 30, 1997, there were no outstanding borrowings under the
line of credit.
The average daily amount of borrowings outstanding during the period ended
June 30, 1997 was approximately $20,800, with a related weighted average
annualized interest rate of 6.20%. The maximum amount borrowed during the period
ended June 30, 1997 was $1.8 million.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Independent Auditors' Report
The Board of Trustees and Shareholders
The Dreyfus/Laurel Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus BASIC California Municipal
Money Market Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30,
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 or period 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 each of the years in the two-year
period ended November 30, 1993 were audited by other auditors whose report
thereon, dated January 18, 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 June 30, 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 BASIC California Municipal Money Market Fund of The Dreyfus/Laurel
Tax-Free Municipal Funds as of June 30, 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 or
period in the four-year period then ended, in conformity with generally accepted
accounting principles.
KPMG PEAT MARWICK LLP
New York, New York
August 8, 1997
IMPORTANT TAX INFORMATION (Unaudited)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended June 30,
1997 as "exempt-interest dividends" (not subject to regular Federal and for
individuals who are California residents, California personal income taxes).
<PAGE>
Dreyfus
BASIC California
Municipal Money Market 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. 307AR976
BASIC New York
Municipal
Money Market Fund
Annual Report
June 30, 1997
Dreyfus BASIC New York Municipal Money Market Fund
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus BASIC New
York Municipal Money Market Fund. For its fiscal year ended June 30, 1997,
your Fund produced a yield of 3.07% per share. Reinvesting dividends and
calculating the effect of compounding resulted in an effective yield of
3.11%.* All dividends were exempt from Federal, State of New York and New
York City personal income taxes, although some income may be subject to the
Federal Alternative Minimum Tax (AMT) for certain shareholders.
THE ECONOMY
Despite recent moderation in the rate of new job creation, the latest
reported unemployment rate was 5% in June. When the unemployment rate was
last at that level, the inflation rate was heading toward double-digit
territory. Now, inflation is subdued; the Consumer Price Index rose at an
annual rate of just 1.4% for the 12-month period through May. Producer prices
have risen a minuscule 0.6% over the same time. It has been unprecedented for
the economy to have seven years of expansion, low unemployment and low
inflation at the same time.
Ever alert for signs of incipient inflation, the Federal Open Market
Committee, the policy-making arm of the Federal Reserve, has raised interest
rates just once in over two years. That hike came in March 1997 when the
Federal Funds rate was increased by 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.) While there have been some signs that wages are
increasing (an area of particular concern to the Federal Reserve), there have
also been indications that the economy may be slowing from its torrid first
quarter pace when it surged at a 5.9% annual rate, the biggest advance since
the fourth quarter of 1987.
Indicating possible moderation in the rate of economic growth, retail
sales have been in decline all spring despite record levels of consumer
optimism about the economy. The latest report on retail sales through March,
April, and May showed a decline at an annual rate of 5% over the previous
three months. This marked the first three-month decline since the fall of
1981. Yet, despite their sluggish spending at checkout counters, consumers'
confidence in the economy continues to climb, heavily influenced by increased
job security and low inflation.
Throughout the current seven-year economic expansion, the pattern of
consumer spending has been stop-and-go, alternating between spurts of
spending and retrenchment. The 5% decline in retail sales for the three
months through May was preceded by a 15% advance over the previous
three-month period. On the production side of the economy, a survey of
corporate buyers compiled by the National Association of Purchasing
Management reported that growth in factory activity eased slightly during
June. The much observed supplier-delivery component of the survey, a measure
of how quickly orders are being satisfied and a possible sign of production
bottlenecks, also fell modestly. In further evidence of a slowing economy
during the second quarter, the Commerce Department recently reported that
factory orders fell in May.
Rising incomes, low unemployment and quiescent inflation have all
contributed to a feeling of confidence, as measured by the Conference Board's
Index of Consumer Sentiment, that has been unmatched for 28 years. Many
economists feel that the optimistic consumer sentiment indicators provide a
floor to economic growth and will spur consumer spending later in the year,
particularly if the unemployment rate remains low and job security worries
recede further. We are mindful of the potent role that consumers play in the
economy _ their spending accounts for about two-thirds of economic output. So
we remain alert to signs of any strain on productive capacity caused by
increases in consumer spending that might, in turn, lead to another
tightening in monetary policy by the Federal Reserve.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
From a general credit quality standpoint, New York credits improved over
the reporting period. Yet the improvement was less significant compared to
other states because of New York's difficulty in retaining and attracting
industry. Better
than expected economic performance during this fiscal year has contributed to
a projected surplus of more than $1 billion. The bulk of this surplus will be
used to balance the fiscal 1998 budget. The third phase of the 20% personal
income tax reduction is expected to contribute $6.1 billion in tax relief to
State residents in 1998. Employment continues to expand slowly after large
job losses during the recession in the early 1990's. Unemployment is down but
remains above the national average. Wealth in the State remains well above
average.
The credit status of New York securities improved in particular. Wall
Street's booming profitability has inflated tax receipts to the city and has
provided a welcome reduction in one-time measures to achieve budgetary
balance. Interestingly, the largest percentage gain in jobs was in motion
picture services. Office vacancies in Manhattan are down from 17% in 1992 to
just above 11% and rental rates have finally begun to rise after a prolonged
and significant downward trend stemming from the late 1980s.
Demand for tax-exempt money market securities was generally strong
throughout the reporting period. However, following the Fed's move to tighten
monetary policy in late March by 25 basis points, investor appetites seemed
to wane during the second quarter of 1997. Yields on one-year tax-exempt
notes ranged between 3.50% and 4.00% for the reporting period, ending
essentially unchanged at 3.85% (on average) from their June 30, 1996 level.
The Fund's average maturity fluctuated within a range of 35 to 60 days
throughout the reporting period. However, given our outlook for limited
monetary policy activity by the Fed, the Fund typically maintained an average
maturity of approximately 50 days.
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,
[Angela Deni signature logo]
Angela Deni
Portfolio Manager
July 15, 1997
New York, N.Y.
*Effective yield is based upon dividends declared daily and reinvested
monthly.
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS JUNE 30, 1997
Principal
Tax Exempt Investments_100.0% Amount Value
__________ __________
<S> <C> <C>
New York_99.0%
Albany Industrial Development Agency, IDR, VRDN (Newkirk Products Inc.,
Project)
4.40%, Series A (LOC; Fleet Bank) (a,b)................................... $ 1,620,000 $ 1,620,000
Babylon Industrial Development Agency, RRR, VRDN (Equity Babylon Project)
5.50% (LOC; Union Bank of Switzerland) (a,b).............................. 1,000,000 1,000,000
Broome County Industrial Development Agency, IDR, Refunding, VRDN
(Bing Realty Co. Project) 4.25% (LOC; Meridian Bank Corp.) (a,b).......... 2,100,000 2,100,000
Buffalo, RAN 4.25%, Series A, 7/15/97 (LOC; Landesbank Hessen) (a).......... 2,800,000 2,800,685
Chemung County Industrial Development Agency, Civic Facility Revenue, VRDN
(Arnot Ogden Medical Center) 4.15% (LOC; Chase Manhattan Bank) (a,b)...... 2,565,000 2,565,000
Erie County Water Authority, Water Revenue, VRDN
4.05%, Series A (Insured; AMBAC and SBPA; National Bank of Australia) (b). 2,000,000 2,000,000
Franklin County Industrial Development Agency, IDR, VRDN
(Kes Chateaugay Limited Partnership Project)
4.25%, Series A (LOC; Bank of Tokyo-Mitsubishi) (a,b)..................... 500,000 500,000
Great Neck North Water Authority, Water System Revenue, Refunding, VRDN
4.05%, Series A (Insured; FGIC and SBPA; FGIC) (b)........................ 8,800,000 8,800,000
Housing Corporation, Revenue, Prerefunded
9%, Series A, 11/1/97 (Escrowed in; U.S. Government Securities)........... 10,000,000 10,369,413
Jefferson County Industrial Development Agency, IDR, VRDN (Watertown-Carthage TV)
3.75% (LOC; First National Bank of Chicago) (a,b)......................... 100,000 100,000
Middletown City School District 5%, 11/1/97 (Insured; FGIC)................. 2,304,000 2,314,185
Montgomery Industrial Development Agency, IDR, VRDN (Service Merchandise Co.)
3.85% (LOC; Canadian Imperial Bank of Commerce) (a,b)..................... 200,000 200,000
Municipal Assistance Corporation:
CP 3.65%, Series 2, 8/1/97 (Insured; AMBAC and SBPA: Bank of Nova Scotia and
National Westminster Bank).............................................. 8,000,000 8,000,000
Refunding 4.20%, Series D, 7/1/98 (Insured; AMBAC)........................ 5,025,000 5,047,867
Nassau County General Improvement:
5%, Series Q, 8/1/97 (Insured; FGIC)...................................... 7,000,000 7,007,615
5.125%, Series V, 3/1/98 (Insured; AMBAC)................................. 3,000,000 3,029,039
Nassau County Industrial Development Agency, Research Facility Revenue, VRDN
(Cold Spring Harbor Laborotory Project) 5.50% (LOC; Morgan Guaranty Trust Co.) (a,b) 1,500,000 1,500,000
New York City:
Prerefunded 8.50%, Series A, 11/1/97 (Escrowed in; U.S. Government Securities) 2,500,000 2,582,985
VRDN 4.05%, Series A-6 (LOC; Landesbank Hessen) (a,b)..................... 2,530,000 2,530,000
New York City Health and Hospital Corporation, Revenue, VRDN (Health Systems):
4.05%, Series B (LOC; Canadian Imperial Bank of Commerce) (a,b)........... 5,000,000 5,000,000
4.10%, Series D (LOC; Bank of Nova Scotia) (a,b).......................... 9,000,000 9,000,000
New York City Housing Development Corporation, VRDN:
MFMR:
(Tribeca Towers) 4.05%, Series A (LOC; Federal National Mortgage Association) (a,b) 4,300,000 4,300,000
(West 89th Street) 4.20%, Series A (LOC; Midland Bank) (a,b)............ 10,000,000 10,000,000
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Tax Exempt Investments (continued) Amount Value
___________ ___________
New York (continued)
New York City Housing Development Corporation, VRDN (continued):
Special Obligation Revenue (East 96th Street Project)
4.15%, Series A (LOC; Bank of Tokyo-Mitsubishi) (a,b)................... $ 1,200,000 $ 1,200,000
New York City Industrial Development Agency, VRDN:
Civic Facility Revenue (National Audobon Society) 5.45% (LOC; Swiss Bank Corp.) (a,b) 1,400,000 1,400,000
IDR (Brooklyn Navy Yard Cogen) 4.20%, Series A (LOC; Bank of America) (a,b) 2,400,000 2,400,000
New York City Municipal Water Finance Authority, Water and Sewer Systems Revenue, VRDN:
5.50%, Series C (Insured; FGIC and SBPA; FGIC) (b)........................ 2,600,000 2,600,000
5.50%, Series G (Insured; FGIC) (b)....................................... 4,100,000 4,100,000
New York City Trust, Cultural Resource Revenue, Refunding, VRDN
(American Museum of Natural History)
4.05%, Series A (Insured; MBIA and SBPA; Credit Suisse) (b)............... 3,800,000 3,800,000
New York State, CP:
3.60%, Series H-4, 8/7/97 (Insured; AMBAC and Liqudity Facility; Krediet Bank) 2,000,000 2,000,000
3.80%, Series S, 8/11/97 (LOC; Westdeutsche Landesbank) (a)............... 5,600,000 5,600,000
New York State Bridge Authority, Revenue, Refunding 5%, 1/1/98.............. 2,260,000 2,275,642
New York State Dormitory Authority, Revenues:
CP:
(Columbia University)
3.80%, Series 1997, 8/8/97 (Guaranty; Columbia University)............ 2,345,000 2,345,000
(Memorial Sloan Kettering)
3.60%, Series A, 9/10/97 (LOC; Morgan Guaranty Trust Co.) (a)......... 4,000,000 4,000,000
Prerefunded:
(City University Systems)
8.125%, Series A, 7/1/97 (Escrowed in; U.S. Government Securities).... 1,050,000 1,071,000
(Skidmore College)
7.75%, 7/1/97 (Insured; MBIA and Escrowed in; U.S. Government Securities) 1,250,000 1,275,000
VRDN:
(New York Public Library)
4%, Series B (LOC; Canadian Imperial Bank of Commerce) (a,b).......... 4,000,000 4,000,000
(Metropolitan Museum of Art):
4%, Series A (Guaranty; Metropolitan Museum of Art) (b)............... 3,200,000 3,200,000
4%, Series B (Guaranty; Metropolitan Museum of Art) (b)............... 2,050,000 2,050,000
New York State Energy, Research and Development Authority:
PCR:
(LILCO Project) 3.60%, Series A, 3/1/98 (LOC; Deutsche Bank) (a)........ 3,000,000 3,000,000
(New York State Electric and Gas):
3.65%, 3/15/98 (LOC; Morgan Bank) (a)................................. 2,000,000 2,000,000
3.85%, Series B, 10/15/97 (LOC; Union Bank of Switzerland) (a)........ 3,250,000 3,250,000
VRDN:
Electric Facilities Revenue (LILCO Project)
4.20%, Series A (LOC; Toronto-Dominion Bank) (a,b).................... 500,000 500,000
Gas Facilities Revenue (Brooklyn Union Gas Project)
4.05%, Series A-1 (Insured; MBIA and SBPA; United Bank of Switzerland) (b) 4,900,000 4,900,000
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) Principal
Tax Exempt Investments (continued) Amount Value
___________ ___________
New York (continued)
New York State Energy, Research and Development Authority (continued):
PCR:
(Rochester Gas and Electric) 3.55% (LOC; The Bank of New York) (a,b).... $ 700,000 $ 700,000
(Central Hudson Gas and Electric) 3.90%, Series B (LOC; Deutsche Bank) (a,b) 5,700,000 5,700,000
New York State Environmental Facilities Corporation, SWDR, Refunding, CP
(General Electric Co. Project):
3.70%, Series A, 8/14/97 (LOC; General Electric Co.) (a)................ 7,550,000 7,550,000
3.75%, Series A, 8/20/97 (LOC: Bayerische Landesbank and Landesbank Hessen) (a) 8,000,000 8,000,000
New York State Housing Finance Agency:
Refunding, Prerefunded (State University Construction)
7.90%, Series A, 11/1/97 (Escrowed in U.S. Government Securities)....... 1,905,000 1,968,276
VRDN:
HR:
(East 84th Street) 4.20%, Series A (LOC; Fleet Bank) (a,b)............ 1,600,000 1,600,000
(Liberty View Apartments) 4.20% (LOC; Chase Manhattan Bank) (a,b)..... 4,100,000 4,100,000
Revenue (250 West 50th Street) 4.20%, Series A (LOC; Fleet Bank) (a,b).. 3,000,000 3,000,000
New York State Job Development Authority, VRDN:
3.85%, Series A-1 to A-9 (LOC; Sumitomo Bank) (a,b)....................... 740,000 740,000
3.85%, Series B-1 to B-6 (LOC; Sumitomo Bank) (a,b)....................... 110,000 110,000
3.85%, Series C-1 to C-34 (LOC; Sumitomo Bank) (a,b)...................... 595,000 595,000
4.05%, Series D-1 to D-9 (LOC; Sumitomo Bank) (a,b)....................... 145,000 145,000
5.50%, Series A-1 to A-13 (Guaranty; New York State and SBPA; Fuji Bank) (b) 770,000 770,000
5.50%, Series B-1 to B-21 (Guaranty; New York State and SBPA; Fuji Bank) (b) 6,500,000 6,500,000
New York State Local Governmental Assistance Corporation, VRDN:
4.05%, Series D (LOC; Societe Generale) (a,b)............................. 5,800,000 5,800,000
4.05%, Series E (LOC; Canadian Imperial Bank of Commerce) (a,b)........... 2,000,000 2,000,000
4.05%, Series F (LOC; Toronto-Dominion Bank) (a,b)........................ 1,400,000 1,400,000
New York State Medical Care Facilities Finance Agency, Revenue:
Refunding, Prerefunded:
(Mental Health Services Facility)
8.875%, Series A, 8/15/97 (Escrowed in; U.S. Government Securities)... 14,430,000 14,808,019
(Mortgage Hospital)
8%, Series A, 8/15/97 (Escrowed in; U.S. Government Securities and
Guaranty; Federal Housing Authority)................................ 1,250,000 1,281,341
VRDN (Pooled Equipment Loan Program II) 4.10% (LOC; Chase Manhattan Bank) (a,b) 3,900,000 3,900,000
New York State Urban Development Corporation, Revenue, Prerefunded
(Correctional Facilities) 7.75%, Series C, 1/1/98
(Escrowed in; U.S. Government Securities and Insured; AMBAC).............. 1,200,000 1,246,634
Niagara Falls Bridge Commission, Toll Revenue, VRDN
4.05%, Series A (Insured; FGIC and SBPA; Credit Locale De France) (b)..... 6,000,000 6,000,000
Onondaga County Industrial Development Agency, IDR, VRDN
(First Republic Corp. American) 4.15% (LOC; Chase Manhattan Bank) (a,b)... 900,000 900,000
Rensselaer County Industrial Development Agency, Civic Facility, Revenue,
VRDN
(Polytech Institute Project) 4.25%, Series A (LOC; Rennselaer Polytech Institute) (a,b) 4,400,000 4,400,000
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Tax Exempt Investments (continued) Amount Value
__________ __________
New York (continued)
Saint Lawrence Industrial Development Agency, Environment Improvement, Revenue, VRDN
4.20% (LOC; Royal Bank of Canada) (a,b)................................... $ 1,100,000 $ 1,100,000
Schenectady Industrial Development Agency, VRDN (Union College Project)
4.25%, Series A (b)....................................................... 5,980,000 5,980,000
Seneca County Industrial Development Agency, Civic Facilities Revenue, VRDN
(New York Chiropractic College) 4.05% (LOC; Barclays Bank) (a,b).......... 1,000,000 1,000,000
Suffolk County:
4.875%, Series D, 8/1/97 (Insured; FGIC).................................. 2,700,000 2,702,803
TAN 4%, Series I, 8/14/97 (LOC: National Westminster and Westdeutsche Landesbank) (a) 7,000,000 7,004,075
Suffolk County Industrial Development Agency, Civic Facility Revenue, VRDN
(Suffolk Child Care Center Project) 4.10% (LOC; Barclays Bank) (a,b)...... 3,200,000 3,200,000
Westchester County 4.60%, 11/15/97.......................................... 7,945,000 7,976,047
Yonkers Industrial Development Agency, Civil Facility Revenue, VRDN
(Consumers Union Facility)
3.95% (Insured; AMBAC and SBPA; Credit Locale De France) (b).............. 3,500,000 3,500,000
U.S. Related_1.0%
Commonwealth of Puerto Rico Government Development Bank, Refunding, VRDN
3.75% (LOC; Credit Suisse) (a,b).......................................... 1,500,000 1,500,000
Puerto Rico Electric Power Authority, Electric Revenue, Refunding,
Prerefunded
8.35%, 7/1/97 (Insured; MBIA and Escrowed in; U.S. Government Securities). 1,000,000 1,020,000
Puerto Rico Industrial Medical and Environmental Pollution Control Facility
Finance Authority,
Revenue, VRDN (AGMEF Project) 4.20% (LOC; Bank of Tokyo-Mitsubishi) (a,b). 200,000 200,000
_____________
TOTAL INVESTMENTS (cost $267,730,626)....................................... $267,730,626
==============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MFMR Multi Family Mortgage Revenue
CP Commercial Paper PCR Pollution Control Revenue
FGIC Financial Guaranty Insurance Company RAN Revenue Anticipation Notes
HR Hospital Revenue RRR Resources Recovery Revenue
IDR Industrial Development Revenue SBPA Standby Bond Purchase Agreement
LOC Letter of Credit SWDR Solid Waste Disposal Revenue
MBIA Municipal Bond Investors Assurance TAN Tax Anticipation Notes
Insurance Corporation VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
____ _______ __________________ ___________________
<S> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 75.0%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 25.0
_______
100.0%
========
</TABLE>
Notes to Statement of Investments:
(a) Secured by letters of credit. At June 30, 1997, 49.6% of the Fund's
net assets are backed by letters of credit issued by domestic banks,
foreign banks, government agencies and corporations.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) P1 and A1 are the highest ratings assigned tax exempt commercial
paper by Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond
ratings of the issuers.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997
Cost Value
______________ ______________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $267,730,626 $267,730,626
Cash....................................... 2,511,678
Interest receivable........................ 2,403,204
______________
272,645,508
______________
LIABILITIES: Due to The Dreyfus Corporation............. 99,718
Interest payable_Note 3.................... 1,796
______________
101,514
______________
NET ASSETS.................................................................. $272,543,994
===============
REPRESENTED BY: Paid-in capital............................ $272,542,970
Accumulated net realized gain (loss) on investments 1,024
______________
NET ASSETS.................................................................. $272,543,994
===============
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized).............. 272,542,970
NET ASSET VALUE, offering and redemption price per share.................... $1.00
=======
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1997
INVESTMENT INCOME
INCOME Interest income................................ $8,286,384
EXPENSES: Management fee_Note 2(a)....................... $1,069,299
Interest_Note 3................................ 1,796
____________
Total Expenses 1,071,095
Less_reduction in management fee due to
undertaking_Note 2(a) (94,701)
____________
Net Expenses 976,394
____________
INVESTMENT INCOME_NET....................................................... 7,309,990
NET REALIZED GAIN (LOSS) ON INVESTMENTS_Note 1(b)........................... 1,425
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $7,311,415
============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1997 June 30, 1996*
_______________ ________________
OPERATIONS:
Investment income_net...................................................... $ 7,309,990 $ 2,250,574
Net realized gain (loss) on investments.................................... 1,425 (391)
_______________ ______________
Net Increase (Decrease) in Net Assets Resulting from Operations........ 7,311,415 2,250,183
_______________ ______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Investor shares.......................................................... (7,309,990) (2,138,509)
Class R shares........................................................... ____ (112,065)
Net realized gain on investments:
Investor shares.......................................................... ____ (349)
_______________ ______________
Total Dividends........................................................ (7,309,990) (2,250,923)
_______________ ______________
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares.......................................................... 404,312,797 224,508,939
Class R shares........................................................... ____ 4,827,833
Dividends reinvested:
Investor shares.......................................................... 6,613,748 1,957,795
Class R shares........................................................... ____ 23,917
Cost of shares redeemed:
Investor shares.......................................................... (294,875,277) (91,714,099)
Class R shares........................................................... ____ (12,901,810)
_______________ ______________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 116,051,268 126,702,575
_______________ ______________
Total Increase (Decrease) in Net Assets.............................. 116,052,693 126,701,835
NET ASSETS:
Beginning of Period........................................................ 156,491,301 29,789,466
_______________ ______________
End of Period.............................................................. $ 272,543,994 $ 156,491,301
=============== ===============
* Effective December 8, 1995, the Fund converted to a single class Fund,
with the existing Class R shares converted into Investor shares.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET 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.
Period Ended Year Ended
Year Ended June 30, June 30, November 30,
______________________________ ____________ ________________
PER SHARE DATA: 1997 1996(1) 1995(2,3) 1994(2,4) 1993(2) 1992(2)
_______ _______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period........... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______ _______ _______ _______ _______ ________
Investment Operations:
Investment income_net................. .031 .031 .029 .012 .021 .031
_______ _______ _______ _______ _______ ________
Distributions:
Dividends from investment income_net.......... (.031) (.031) (.029) (.012) (.021) (.031)
_______ _______ _______ _______ _______ ________
Net asset value, end of period................ $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______ _______ _______ _______ _______ ________
TOTAL INVESTMENT RETURN...................... 3.11% 3.14% 2.95% 1.23% 2.15% 3.11%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets....... .41% .43% .60% .44%(5) .31% .32%
Ratio of net investment income
to average net assets...................... 3.08% 3.43% 2.97% 2.12%(5) 2.13% 3.08%
Decrease reflected in above expense ratios
due to undertakings by the Manager........... .04% .09% -- .53%(5) .98% .71%
Net Assets, end of period (000's Omitted)..... $272,544 $156,491 $21,739 $8,011 $9,356... $11,183
(1) Effective December 8, 1995, the Fund's Investor shares became a
single class Fund without a class designation.
(2) 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 Investor shares. The Financial
Highlights for the year ended June 30, 1995 are based upon an Investor 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 outstanding from April
4, 1994 to June 30, 1994. The Financial Highlights for the year ended November
30, 1993 and prior periods are based upon a Retail Share outstanding.
(3) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(4) The Fund changed its fiscal year end to June 30. Prior to this, the Fund's
fiscal year end was November 30. 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.
(5) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC New York Municipal Money Market Fund (the "Fund") is a
series of The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is
registered under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company and operates as a
series company currently offering seven series including the Fund. The Fund's
investment objective is to provide a high level of current income exempt from
Federal income taxes and New York State and New York City personal income
taxes to the extent consistent with the preservation of capital and the
maintenance of liquidity by investing in high quality, short-term municipal
securities. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
Premier Mutual Fund Services, Inc. is the distributor of the Fund's shares.
Prior to the conversion of the Fund to a single class Fund, investment
income, net of expenses (other than class specific expenses), realized and
unrealized gains and losses were 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 are valued at
amortized cost in accordance with Rule 2a-7 of the Act, which has been
determined by the Fund's Board of Trustees to represent the fair value of the
Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00 for the Fund; the Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable it to do
so. There is no assurance, however, that the Fund will be able to maintain a
stable net asset value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Interest income, adjusted
for amortization of premiums and original issue discounts on investments, is
earned from settlement date and recognized on the accrual basis. Realized
gain and loss from securities transactions are recorded on the identified
cost basis. Cost of investments represents amortized cost.
(C) CONCENTRATION OF RISK: The Fund follows an investment policy of
investing primarily in municipal obligations of one state. Economic changes
affecting the state and certain of its public bodies and municipalities may
affect the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Fund.
(D) 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, if any, it is the policy of the Fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
At June 30, 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 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,
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
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 .45% 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, 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.
The Manager had undertaken from July 1, 1996 through December 8, 1996 to
limit its fee to an annual rate of .35% of the value of the Fund's average
daily net assets (exclusive of certain expenses as described above). The
reduction in management fee, pursuant to the undertaking, amounted to $94,701
during the period ended June 30, 1997.
NOTE 3_BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. At June 30, 1997, there were no outstanding borrowings
under the line of credit.
The average daily amount of borrowings outstanding during the period
ended June 30, 1997 was approximately $31,000, with a related weighted
average annualized interest rate of 5.83%. The maximum amount borrowed at any
time during the period ended June 30, 1997 was $8.7 million.
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus BASIC New York Municipal
Money Market Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June
30, 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 or
period 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 each
of the years in the two-year period ended November 30, 1993 were audited by
other auditors whose report thereon, dated January 18, 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 June 30, 1997, by correspondence with the custodian.
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 BASIC New York Municipal Money Market Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 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 or period in the four-year period then ended, in conformity
with generally accepted accounting principles.
[KPMG LLP signature logo]
New York, New York
August 8, 1997
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended June
30, 1997 as "exempt-interest dividends" (not subject to regular Federal and
for individuals who are New York residents, New York State and New York City
personal income taxes).
[Dreyfus lion "d" logo]
Registration Mark
DREYFUS BASIC NEW YORK
MUNICIPAL MONEY MARKET 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. 316AR976
[Dreyfus logo]
Registration Mark
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus BASIC
Massachusetts Municipal Money Market Fund. For its fiscal year ended June 30,
1997, your Fund produced a yield of 3.08% per share. Reinvesting dividends
and calculating the effect of compounding resulted in an effective yield of
3.13%.* All dividends were exempt from Federal and Commonwealth of
Massachusetts personal income taxes, although some income may be subject to
the Federal Alternative Minimum Tax for certain shareholders.
THE ECONOMY
Despite recent moderation in the rate of new job creation, the latest
reported unemployment rate was 5% in June. When the unemployment rate was
last at that level, the inflation rate was heading toward double-digit
territory. Now, inflation is subdued; the Consumer Price Index rose at an
annual rate of just 1.4% for the 12-month period through May. Producer prices
have risen a minuscule 0.6% over the same time. It has been unprecedented for
the economy to have seven years of expansion, low unemployment and low
inflation at the same time.
Ever alert for signs of incipient inflation, the Federal Open Market
Committee, the policy-making arm of the Federal Reserve, has raised interest
rates just once in over two years. That hike came in March 1997 when the
Federal Funds rate was increased by 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.) While there have been some signs that wages are
increasing (an area of particular concern to the Federal Reserve), there have
also been indications that the economy may be slowing from its torrid first
quarter pace when it surged at a 5.9% annual rate, the biggest advance since
the fourth quarter of 1987.
Indicating possible moderation in the rate of economic growth, retail
sales have been in decline all spring despite record levels of consumer
optimism about the economy. The latest report on retail sales through March,
April, and May showed a decline at an annual rate of 5% over the previous
three months. This marked the first three-month decline since the fall of
1981. Yet, despite their sluggish spending at checkout counters, consumers'
confidence in the economy continues to climb, heavily influenced by increased
job security and low inflation.
Throughout the current seven-year economic expansion, the pattern of
consumer spending has been stop-and-go, alternating between spurts of
spending and retrenchment. The 5% decline in retail sales for the three
months through May was preceded by a 15% advance over the previous
three-month period. On the production side of the economy, a survey of
corporate buyers compiled by the National Association of Purchasing
Management reported that growth in factory activity eased slightly during
June. The much observed supplier-delivery component of the survey, a measure
of how quickly orders are being satisfied and a possible sign of production
bottlenecks, also fell modestly. In further evidence of a slowing economy
during the second quarter, the Commerce Department recently reported that
factory orders fell in May.
Rising incomes, low unemployment and quiescent inflation have all
contributed to a feeling of confidence, as measured by the Conference Board's
Index of Consumer Sentiment, that has been unmatched for 28 years. Many
economists feel that the optimistic consumer sentiment indicators provide a
floor to economic growth and will spur consumer spending later in the year,
particularly if the unemployment rate remains low and job security worries
recede further. We are mindful of the potent role that consumers play in the
economy _ their spending accounts for about two-thirds of economic output. So
we remain alert to signs of any strain on productive capacity caused by
increases in consumer spending that might, in turn, lead to another
tightening in monetary policy by the Federal Reserve.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Massachusetts' economy continued to improve throughout the annual
reporting period. So too did the Commonwealth's financial position.
Employment and population growth were strong relative to surrounding New
England states, but still lag national growth rates. Massachusetts remains a
leading employer in the rapidly growing high technology industries: computer
software, biotechnology and internet-related companies. However, further
consolidation in the banking and insurance industries could dampen job
growth. Because of strong job growth, the Commonwealth experienced a surge in
tax revenues. The fiscal 1997 tax collections were 8.3% higher through
February than for the same period in 1996, and were also well above
Commonwealth estimates. Yet while tax revenues are strong, the budget is
constrained by a debt level that is among the highest in the nation. Debt is
expected to expand further from Commonwealth contribution to the Central
Artery Project. Additionally, the Commonwealth is considering its funding
options for a proposed Convention Center in Boston.
We believe that towns and cities in Massachusetts have also shown strong
improvement in credit quality as property values have risen along with tax
receipts. The exceptions are the counties in Massachusetts, the majority of
which have exhibited deteriorating financial health. In response, the
Commonwealth has passed a law to assume the governing functions, all valid
liabilities and debts, and abolish three financially weak counties. The
legislation abolished the Middlesex County government as of June 30, 1997,
and set a date of July 1, 1998 to abolish Worcester and Hampden Counties. The
Commonwealth will continue to levy taxes within Middlesex County to pay for
operations, and annually appropriate sufficient funds to pay debt service on
outstanding debt. This seems to have set the stage for all counties within
the Commonwealth to be abolished in the near future.
Demand for tax-exempt money market securities was generally strong
throughout the reporting period. However, following the Fed's move to tighten
monetary policy in late March by 25 basis points, investor appetites seemed
to wane during the second quarter of 1997. Yields on one-year tax-exempt
notes ranged between 3.50% and 4.00% for the reporting period, ending
essentially unchanged at 3.85% (on average) from their June 30, 1996 level.
The Fund's average maturity fluctuated within a range of 35 to 60 days
throughout the reporting period. However, given our outlook for limited
monetary policy activity by the Fed, the Fund typically maintained an average
maturity of approximately 50 days.
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,
[Angela Deni signature logo]
Angela Deni
Portfolio Manager
July 15, 1997
New York, N.Y.
* Effective yield is based upon dividends declared daily and reinvested
monthly.
<TABLE>
<CAPTION>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS JUNE 30, 1997
Principal
Tax Exempt Investments_100.0% Amount Value
_____________ ___________
<S> <C> <C>
Town of Attleboro, BAN 3.91%, 7/3/97........................................ $ 1,000,000 $ 1,000,000
City of Boston, Revenue 5.25%, Series A, 10/1/97 (Insured; MBIA)............ 500,000 501,962
Boston Water and Sewer Commission, Revenue, VRDN
3.90%, Series A (LOC; State Street Bank and Trust Co.) (a,b).............. 3,680,000 3,680,000
Town of Brookline, Revenue 6%, 6/15/98...................................... 700,000 714,109
Town of Concord, GO Notes 6%, Series 97, 5/15/98............................ 240,000 242,636
Town of Easton, Revenue 6%, 6/1/98 (Insured; MBIA).......................... 400,000 407,022
Town of Fairhaven, BAN 3.75%, 10/10/97...................................... 2,000,000 2,001,193
Town of Gloucester, SAAN:
4.15%, 7/18/97............................................................ 676,087 676,145
4.25%, 7/18/97............................................................ 1,000,000 1,000,063
Town of Holbrook, Revenue 6.25%, 5/15/98 (Insured; FSA)..................... 365,000 371,942
Holyoke, PCR, Refunding, VRDN (Holyoke Water Power Project)
3.80% (LOC; Union Bank of Switzerland) (a,b).............................. 660,000 660,000
Town of Lenox, Revenue 7.25%, 11/1/97....................................... 550,000 556,124
Town of Lowell, Municipal Purpose Loan Revenue 5%, 12/15/97 (Insured; AMBAC) 1,000,000 1,006,247
Town of Mansfield, BAN 4.15%, 8/21/97....................................... 1,675,000 1,675,545
Town of Marlborough, BAN 3.60%, 12/18/97.................................... 865,000 866,166
Town of Mashpee, Municipal Purpose Loan Revenue 3.60%, 2/1/98 (Insured; MBIA) 1,000,000 1,005,154
Commonwealth of Massachusetts:
Revenue:
(Consolidated Loan) 7%, Series C, 12/1/97............................... 1,000,000 1,013,266
Refunding 4.10%, Series A, 2/1/98....................................... 800,000 801,830
VRDN:
5.50%, Series B (LOC; National Westminster Bank) (a,b).................. 1,400,000 1,400,000
5.50%, Series E (LOC; ABN-Amro Bank) (a,b).............................. 1,000,000 1,000,000
Massachusetts Bay Transportation Authority:
CP:
3.70%, Series C, 7/21/97 (LOC; West Deutsche Landesbank) (b)............ 2,600,000 2,600,000
3.70%, Series C, 8/12/97 (LOC; West Deutsche Landesbank) (b)............ 2,900,000 2,900,000
Notes 4.25%, Series A, 2/27/98............................................ 1,000,000 1,004,078
Revenue (General Transportation System)
3.45%, Series 84A,9/1/97 (LOC; State Street Bank and Trust Co.) (b)..... 1,575,000 1,575,000
Massachusetts Health and Educational Facilities Authority, Revenue:
CP:
(Boston University) 3.85%, Series H, 8/19/97 (LOC; Landesbank Hessen) (b) 2,000,000 2,000,000
(Harvard University) 3.75%, Series L, 8/14/97 (Guaranteed by; Harvard University) 1,640,000 1,640,000
Prerefunded (Salem Hospital)
7.25%, Series A, 7/1/97 (Escrowed in; U.S. Securities and Insured; MBIA) 750,000 750,000
VRDN:
(Capital Asset Program):
3.75%, Series A (LOC; First National Bank of Chicago) (a,b)........... 900,000 900,000
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Tax Exempt Investments (continued) Amount Value
__________ __________
Massachusetts Health and Educational Facilities Authority, Revenue (continued):
VRDN (continued)
(Capital Asset Program) (continued):
3.75%, Series G-1 (SBPA; Credit Suisse and Insured; MBIA) (a)......... $ 2,000,000 $ 2,000,000
5.50%, Series E (LOC; First Chicago Corp.) (a,b)...................... 1,500,000 1,500,000
(Falmouth Assistance For Living) 4.25%, Series A (LOC; Bank of Boston) (a,b) 1,000,000 1,000,000
(Harvard University):
4% (Guaranteed by; Harvard University) (a)............................ 1,235,000 1,235,000
4% (Guaranteed by; Harvard University) (a)............................ 1,915,000 1,915,000
(Newton-Wellesley Hospital) 4.10%, Series F (Insured; MBIA and SBPA; Credit Suisse) (a) 1,000,000 1,000,000
(Wellesley College) 3.90%, Series B (Guaranteed by; Wellesley College) (a) 3,115,000 3,115,000
(Williams College) 3.95%, Series E (Guaranteed by; Williams College) (a) 3,095,000 3,095,000
Massachusetts Industrial Finance Agency:
Industrial Revenue, VRDN:
(General Signal Corp.) 4.25% (LOC; Wachovia Bank and Trust Co.) (a,b)... 500,000 500,000
Refunding:
(Cabot Newburyport Limited) 4.05% (LOC; Bank of Boston) (a,b)......... 1,315,000 1,315,000
(First Healthcare Corp.) 4.20%, Series B (LOC; Wachovia Bank and Trust Co.) (a,b) 2,690,000 2,690,000
(Quamco Inc.):
4.05%, Series A (LOC; Bank of Nova Scotia) (a,b).................... 2,340,000 2,340,000
4.05%, Series B (LOC; Banca Commerciale Italia) (a,b)............... 940,000 940,000
Mortgage Revenue, Refunding, VRDN (Chestnut House Apartments)
3.95% (LOC; Sumitomo Bank) (a,b)........................................ 580,000 580,000
PCR, VRDN, Refunding (Holyoke Water Power Co.)
3.85%, Series A (LOC; Canadian Imperial Bank of Commerce) (a,b)......... 660,000 660,000
Revenue:
Refunding (Worchester Polytechnic Institute) 4.25%, 9/1/97.............. 1,060,000 1,061,386
VRDN:
(Berkshire Project) 4%, Series A (LOC; National Westminster Bank) (a,b) 1,600,000 1,600,000
(Goodard House) 4.15% (LOC; Fleet Bank) (a,b)......................... 2,860,000 2,860,000
(Groton School Project) 4% (LOC; State Street Bank and Trust Co.) (a,b) 2,000,000 2,000,000
(Milton Academy) 4% (Liquidity; Fleet Bank and Insured; MBIA) (a)..... 2,000,000 2,000,000
(Showa Womens Institute) 5.25% (LOC; Bank of America) (a,b)........... 2,600,000 2,600,000
RRR, Refunding, VRDN (Ogden Haverhill Project)
4.10%, Series A (LOC; Union Bank of Switzerland) (a,b).................. 995,000 995,000
Massachusetts Municipal Wholesale Electric Company, Power Supply Systems Revenue, VRDN
4.10%, Series C (LOC; Canadian Imperial Bank of Commerce) (a,b)........... 1,735,000 1,735,000
Massachusetts Port Authority, Revenue, CP
3.70%, Series B, 7/11/97 (LOC; Canadian Imperial Bank of Commerce) (b).... 2,000,000 2,000,000
Massachusetts Water Resource Authority:
CP:
3.70%, 8/1/97 (LOC; Morgan Guaranty Trust Co.) (b)...................... 1,000,000 1,000,000
3.65%, 9/10/97 (LOC; Morgan Guaranty Trust Co.) (b)..................... 2,000,000 2,000,000
VRDN 4.10%, Series A (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a)... 2,000,000 2,000,000
Mendon Upton Regional School District, Revenue 7%, 6/1/98 (Insured; FGIC)... 691,000 710,088
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Tax Exempt Investments (continued) Amount Value
__________ __________
Middlesex County, HR 3.69%, 12/13/96 (g).................................... $ 979,842 $ 979,84
2
Mohawk Trail Regional School District, BAN 4.50%, 7/25/97................... 1,100,000 1,100,222
Town of Natick:
BAN 3.75%, 2/27/98........................................................ 1,000,000 1,001,397
Revenue 6.25%, 5/15/98.................................................... 905,000 923,150
Town of Newton, Municipal Purpose Loan Revenue 6.25%, 3/1/98................ 610,000 620,489
Town of North Andover, Revenue 3.99%, 9/11/97 (Insured; MBIA)............... 505,000 505,276
Town of Northampton, Revenue 4.50%, 5/15/98................................. 385,000 386,955
Town of Pittsfield, Revenue 3.75%, 10/1/97 (Insured; FSA)................... 875,000 875,000
Town of Quincy, Revenue 5.80%, 5/1/98 (Insured; FSA)........................ 500,000 507,596
Town of Saugus, Revenue 3.90%, Series 95, 8/15/97 (Insured; FSA)............ 150,000 150,043
Town of Somerville, Revenue 7%, 2/15/98..................................... 623,000 635,820
Town of Westborough, Revenue 6.125%, 5/15/98................................ 545,000 554,791
Town of Westfield, BAN 3.95%, 3/26/98....................................... 400,000 400,421
Town of Weymouth, Revenue 6.75%, 7/15/97 (Insured; AMBAC)................... 675,000 675,691
_____________
TOTAL INVESTMENTS (cost $89,711,649)........................................ $89,711,649
==============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
BAN Bond Anticipation Notes Insurance Corporation
CP Commercial Paper PCR Pollution Control Revenue
GO General Obligation RRR Resources Recovery Revenue
FGIC Financial Guaranty Insurance Company SAAN State Aid Anticipation Notes
FSA Financial Security Assurance SBPA Standby Bond Purchase Agreement
HR Hospital Revenue VRDN Variable Rate Demand Notes
LOC Letter of Credit
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
____ _______ __________________ ___________________
<S> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 71.2%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 17.4
Not Rated (f) Not Rated (f) Not Rated (f) 11.4
____
100.0%
========
</TABLE>
Notes to Statement of Investments:
(a) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(b) Secured by letters of credit. At June 30, 1997, 52.1% of the Fund's
net assets are backed by letters of credit issued by domestic banks and
foreign banks.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) P1 and A1 are the highest ratings assigned tax exempt commercial
paper by Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond
ratings of the issuers.
(f) Securities which, while not rated by Fitch, Moody's and Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
(g) See Note 4_Defaulted Security in notes to financial statements.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997
Cost Value
_____________ _____________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $89,711,649 $89,711,649
Interest receivable........................ 665,290
Other assets............................... 11,614
____________
90,388,553
____________
LIABILITIES: Due to The Dreyfus Corporation............. 34,553
Cash overdraft due to Custodian............ 86,978
Interest payable_Note 3.................... 2,617
____________
124,148
____________
NET ASSETS.................................................................. $90,264,405
=============
REPRESENTED BY: Paid-in capital............................ $90,275,632
Accumulated net realized gain (loss) on investments (11,227)
____________
NET ASSETS.................................................................. $90,264,405
=============
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized).............. 90,273,580
NET ASSET VALUE, offering and redemption price per share.................... $1.00
========
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1997
INVESTMENT INCOME
INCOME Interest Income................................ $2,911,614
EXPENSES: Management fee_Note 2(a)....................... $ 378,201
Interest_Note 3................................ 2,617
Legal fees_Note 4.............................. 5,313
____________
Total Expenses 386,131
Less_reduction in management fee due to
undertaking_Note 2(a) (72,296)
____________
Net Expenses 313,835
____________
INVESTMENT INCOME_NET....................................................... 2,597,779
NET REALIZED GAIN (LOSS) ON INVESTMENTS_Note 1(b)........................... 3,415
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,601,194
=============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1997 June 30, 1996*
_________________ _________________
OPERATIONS:
Investment income_net..................................................... $ 2,597,779 $ 3,129,672
Net realized gain (loss) on investments................................... 3,415 (7,461)
_________________ _________________
Net Increase (Decrease) in Net Assets Resulting from Operations....... 2,601,194 3,122,211
_________________ _________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Investor shares......................................................... ____ (1,993,334)
Class R shares.......................................................... (2,597,779) (1,136,338)
_________________ _________________
Total Dividends....................................................... (2,597,779) (3,129,672)
_________________ _________________
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares......................................................... ____ 90,074,035
Class R shares.......................................................... 227,213,640 129,504,181
Dividends reinvested:
Investor shares......................................................... ____ 1,339,526
Class R shares.......................................................... 965,646 365,421
Cost of shares redeemed:
Investor shares......................................................... ____ (167,147,872)
Class R shares.......................................................... (190,235,596) (103,041,570)
_________________ _________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 37,943,690 (48,906,279)
_________________ _________________
Total Increase (Decrease) in Net Assets............................. 37,947,105 (48,913,740)
NET ASSETS:
Beginning of Period....................................................... 52,317,300 101,231,040
_________________ _________________
End of Period............................................................. $ 90,264,405 $ 52,317,300
=============== =================
*Effective May 8, 1996, the Fund's Investor class became shares of Dreyfus
Massachusetts Municipal Money Market Fund and Class R designates were
eliminated and the Fund became a single class Fund.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET 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.
Period Ended
Year Ended June 30, June 30,
_________________________________________
PER SHARE DATA: 1997 1996(1) 1995(2) 1994(3,4) 1993(3)
_______ ________ _______ _______ ______________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______ ________ _______ _______ _______
Investment Operations:
Investment income_net....................... .031 .033 .032 .019(5) .007(5)
_______ _______ ____
Distributions:
Dividends from investment income_net......... (.031) (.033) (.032) (.019) (.007)
_______ _______ ____
Net asset value, end of period............. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
_______ _______ ____
_______ _______ ____
TOTAL INVESTMENT RETURN........................... 3.12% 3.31% 3.25% 1.97% .73%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......... .37% .35% .35% .56%(7) .57%(6, 7)
Ratio of net investment income
to average net assets........................ 3.09% 3.24% 3.19% 1.94% 1.78%(6)
Decrease reflected in above expense ratios
due to undertakings by the Manager............ .09% .02% __ __ __
Net Assets, end of period (000's Omitted)...... $90,264 $52,317 $25,485 $19,830 $19,645
(1) Effective May 8, 1996, the Fund's Investor class became shares of
Dreyfus Massachusetts Municipal Money Market Fund and
Class R designates were eliminated and the Fund became a single class
Fund.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving
as the Fund's investment manager.
(3) 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 redesignated as Class R shares. The above is based upon an
Investment Class share outstanding from February 1, 1993 to April 3, 1994
and a Trust share outstanding from April 4, 1994 to October 16, 1994.
(4) 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.
(5) Net investment income per share before waiver of fees and/or
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the year ended June 30, 1994 and
period ended June 30, 1993 were $.019 and $.007, respectively.
(6) Annualized.
(7) Annualized expense ratios before voluntary waiver of fees and/or
reimbursement of expenses by the investment adviser
and/or custodian and/or transfer agent for the year ended June 30, 1994
and period ended June 30, 1993 were .64% and .62%, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC Massachusetts Municipal Money Market Fund (the "Fund") is a
series of The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is
registered under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company and operates as a
series company currently offering seven series including the Fund. The Fund's
investment objective is to provide a high level of current income exempt from
Federal income taxes and Massachusetts personal income taxes to the extent
consistent with the preservation of capital and the maintenance of liquidity
by investing in high quality, short-term municipal securities. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services,
Inc. is the distributor of the Fund's shares.
Prior to the conversion of the Fund to a single class Fund, investment
income, net of expenses (other than class specific expenses), realized and
unrealized gains and losses were allocated daily to each class of shares
based upon the relative portion 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 are valued at
amortized cost in accordance with Rule 2a-7 of the Act, which has been
determined by the Fund's Board of Trustees to represent the fair value of the
Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00 for the Fund; the Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable it to do
so. There is no assurance, however, that the Fund will be able to maintain a
stable net asset value per share of $1.00.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Interest income, adjusted
for amortization of premiums and original issue discounts on investments, is
earned from settlement date and recognized on the accrual basis. Realized
gain and loss from securities transactions are recorded on the identified
cost basis. Cost of investments represents amortized cost.
(c) Concentration of risk: The Fund follows an investment policy of
investing primarily in municipal obligations of one state. Economic changes
affecting the commonwealth and certain of its public bodies and
municipalities may affect the ability of issuers within the state to pay
interest on, or repay principal of, municipal obligations held by the Fund.
(d) 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.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately $11,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to June 30, 1997. If not
applied, $7,000 of the carryover expires in fiscal 1998, $1,000 expires in
fiscal 1999, $2,000 expires in fiscal 2000 and $1,000 expires in fiscal 2002.
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
At June 30, 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 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 .45% 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, 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.
The Manager had undertaken from July 1, 1996 through May 8, 1997 to limit
its fee to an annual rate of .35% of the value of the Fund's average daily
net assets (exclusive of certain expenses as described above). The reduction
in management fee, pursuant to the undertaking, amounted to $72,296 during
the period ended June 30, 1997.
NOTE 3_BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the
time of borrowings. At June 30, 1997, there were no outstanding borrowings
under the line of credit.
The average daily amount of borrowings outstanding during the period
ended June 30, 1997 was approximately $46,000, with a related weighted
average annualized interest rate of 5.68%. The maximum amount borrowed at any
time during the period ended June 30, 1997 was $2.3 million.
NOTE 4_DEFAULTED SECURITY:
On December 13, 1996, Middlesex County, Massachusetts defaulted on
payment of principal and interest on $1,500,000 (principal amount) County
Hospital Revenue Anticipation Notes held by the Fund. On June 17, 1997, the
Fund received $575,269 from Middlesex County, consisting of a $520,159
principal payment and a $55,110 payment for interest accrued as of 12/13/96.
Subsequent to year end, the Fund received the remaining principal balance of
$979,842 plus $106,856 in interest charges for late payment. In connection
with the above, legal fees of $5,313 were incurred.
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus BASIC Massachusetts
Municipal Money Market Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as
of June 30, 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
period ended June 30, 1993 were audited by other auditors whose report
thereon, dated August 11, 1993, 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 June 30, 1997, by correspondence with the custodian.
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 BASIC Massachusetts Municipal Money Market Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 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 signature logo]
New York, New York
August 8, 1997
DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby designates all the
dividends paid from investment income-net during the fiscal year ended June
30, 1997 as "exempt-interest dividends" (not subject to regular Federal and
for individuals who are Massachusetts residents, Massachusetts personal
income taxes).
[Dreyfus lion "d" logo]
Registration Mark
DREYFUS BASIC MASSACHUSETTS
MUNICIPAL MONEY MARKET 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. 715AR976
[Dreyfus logo]
Registration Mark
BASIC Massachusetts
Municipal
Money Market Fund
Annual Report
June 30, 1997
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Premier
Limited Term California Municipal Fund for its annual reporting period ended
June 30, 1997. For this twelve-month period, the Fund provided the following
total returns, income dividends and distribution rates:
<TABLE>
<CAPTION>
Approximate
Total Return* Income Dividends** Distribution Rate***
____________ __________________ _____________________
<S> <C> <C> <C>
Class A 6.79% $0.591 4.36%
Class B 6.25% $0.524 3.99%
Class C 6.25% $0.527 4.00%
Class R 7.04% $0.622 4.73%
</TABLE>
ECONOMIC REVIEW
Despite recent moderation in the rate of new job creation, the latest
reported unemployment rate (5% in June) was the lowest since 1973. When the
unemployment rate was last at that level, the inflation rate was heading
toward double-digit territory. Now, inflation is subdued; the Consumer Price
Index rose at an annual rate of just 1.4% for the twelve-month period through
May. Producer prices rose a minuscule 0.6% over the same time period. It has
been unprecedented for the economy to have seven years of expansion, low
unemployment and low inflation at the same time.
Ever alert for signs of incipient inflation, the Federal Open Market
Committee, the policy-making arm of the Federal Reserve Board (the "Fed") has
raised interest rates just once in more than two years. That hike came in
March 1997 when the Federal Funds rate was increased by 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.) While there have been
some signs that wages are increasing (an area of particular concern to the
Fed), there have also been indications that the economy may be slowing from
its torrid first quarter pace when it surged at a 5.9% annual rate, the
biggest advance since the fourth quarter of 1987.
Indicating possible moderation in the rate of economic growth, retail
sales declined this spring despite record levels of consumer optimism about
the economy. The latest report on retail sales through June showed a decline
at an annual rate of 5% over the previous three months. This marked the first
three-month decline since the fall of 1981. Yet, despite their sluggish
spending at retail counters, consumers' confidence in the economy continues
to climb, heavily influenced by increased job security and low inflation.
Throughout the current seven-year economic expansion, the pattern of
consumer spending has been stop-and-go, alternating between spurts of
spending and retrenchment. The 5% decline for the three months through May
was preceded by a 15% advance over the previous three-month period. On the
production side of the economy, a survey of corporate buyers compiled by the
National Association of Purchasing Management reported that growth in factory
activity eased slightly during June. The much-observed supplier-delivery
component of the survey, a measure of how quickly orders are being satisfied
and a possible sign of production bottlenecks, also fell modestly. In further
evidence of a slowing economy during the second quarter, the Commerce
Department recently reported that factory orders fell in May.
Rising incomes, low unemployment and quiescent inflation have all
contributed to a feeling of confidence, as measured by the Conference Board's
Index of Consumer Sentiment, that has been unmatched for 28 years. Many
economists feel that the optimistic consumer sentiment indicators provide a
floor to economic growth and will spur consumer spending later in the year,
particularly if the unemployment rate remains low and job security worries
recede further. We are mindful of the potent role that consumers play in the
economy _ their spending accounts for about two
thirds of economic output. So, we remain alert to signs of any strain on
productive capacity caused by increases in consumer spending that might, in
turn, lead to another tightening in monetary policy by the Fed.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
California's economy continued to improve. Jobs grew at a 3% rate, higher
than the U.S. as a whole. More than a million jobs have been created since
April, 1993 and in March the unemployment rate dropped to the mid-6% range,
well above the national average. Foreign trade boomed, particularly with
Southeast Asia. Yet, the State's financial performance has not been as robust
as the general economic statistics indicate. The projected surplus, which
might have helped to pay down a portion of the State's huge accumulated
deficit, has been reduced. Heavy spending requirements of Proposition 98
school funding remain. Federal funding will again fall short of projections.
Still, the growing economy and the State's improving cash flow position have
allowed a reduction in short-term note issuance. The stable outlook for the
State is reflected in its A+ credit rating from Standard & Poor's.
With talk of tax reform a distant memory, municipal bonds performed very
well over the past twelve months. Interest rates declined in the last half of
1996 due to investor perceptions that the economy was becoming sluggish and
that the Fed would ease monetary policy. Instead, after warnings by Fed
Chairman Greenspan about the "irrational exuberance" present in financial
markets, the Federal Open Market Committee increased short-term interest
rates by 25 basis points in March, 1997. In anticipation of tightening of
monetary policy by the Fed, fixed-income yields rose during the first quarter
of 1997. The rise was fueled by expectations that the Fed might continue to
tighten monetary policy. However, low supply and strong demand cushioned the
losses in the municipal bond market with yields generally increasing by 25
basis points.
The lack of further tightening in the second quarter of 1997, combined
with quiescent inflation, resulted in a rebound in bond prices and a recovery
of losses incurred during the first quarter of 1997. Yields were only
slightly higher at the end of the second quarter compared to the end of 1996.
Ten-year AAA rated municipal securities ended the reporting period at 4.85%
versus 4.80% at year-end.
Municipal bonds outperformed comparable maturity taxable securities
during the first quarter of 1997, but underperformed during the second
quarter. However, the total return on the Lehman Brothers 10-Year Municipal
Bond Index for the semi-annual period still significantly outperformed the
Ten-Year Treasury Note (3.27% vs. 2.44%) highlighting the strong demand for
municipal securities throughout the period.
Lower rated fixed income securities significantly outperformed higher
credit quality securities during the first half of 1997. Stronger economic
performance has enhanced revenue generation capabilities of weaker
jurisdictions and corporations. Notable fiscal improvements have occurred in
cyclical industries such as airlines. Improving credit quality and stronger
demand from yield-hungry investors has pushed yield spreads between Baa and
AAA rated securities to their narrowest levels in recent memory. The
additional yield spread for thirty-year Baa rated bonds was less than 50
basis points higher than AAA rated municipal bonds as of the end of the
reporting period.
The Fund continued to emphasize high quality securities; over 65% of the
portfolio was rated AA or higher as of the end of the reporting period. The
weighted average portfolio maturity was extended during the latter half of
1996 due to a falling interest rate environment. It was then cautiously
shortened in anticipation of a potential rise in interest rates to preserve
principal in the first quarter of 1997. However, as yields become more
attractive, the Fund's weighted average maturity was slightly extended to
lock into the attractive interest rate environment in the second quarter.
Throughout the reporting period, the Fund's maturity varied in a 6.5- to
8-year range and ended the reporting period at approximately 7.39.
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 greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Collette O'Brien signature logo]
Collette O'Brien
Portfolio Manager
July 15, 1997
New York, New York
* 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.
**Income dividends per share were exempt from Federal and State of California
personal income taxes. Some income may be subject to the Federal Alternative
Minimum Tax for certain shareholders.
*** 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
the net asset value per share at the end of the period in the case of Class
B, Class C and Class R shares, adjusted for capital gain distributions.
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND JUNE 30, 1997
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER
LIMITED TERM CALIFORNIA MUNICIPAL FUND CLASS A SHARES WITH THE LEHMAN
BROTHERS 10-YEAR MUNICIPAL BOND INDEX AND THE LEHMAN BROTHERS
7-YEAR MUNICIPAL BOND INDEX
$20,419
Lehman Brothers 10-Year
Municipal Bond Index*
Dollars
$19,281
Lehman Brothers 7-Year
Municipal Bond Index*
$18,240
Dreyfus Premier Limited Term
California Municipal Fund
(Class A Shares)
*Source: Lehman Brothers
[Exhibit A]
<TABLE>
<CAPTION>
Average Annual Total Returns
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 6/30/97 Sales Charge Sales Charge (3.0%) PERIOD ENDED 6/30/97 Redemption Redemption*
__________ ________________ ____________________ _____________________ ____________ __________________
<S> <C> <C> <C> <C> <C>
1 Year 6.79% 3.57% 1 Year 6.25% 3.25%
5 Year 6.21 5.56 From Inception (12/28/94) 7.10 6.38
From Inception (3/7/88) 7.01 6.66
CLASS C SHARES CLASS R SHARES
__________________________________________________________________ __________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
PERIOD ENDED 6/30/97 No Redemption Redemption** PERIOD ENDED 6/30/97
_________ _______________ ____________________ _____________________
1 Year 6.25% 5.50% 1 Year 7.04%
From Inception (12/28/94) 7.21 7.21 From Inception (2/1/93) 6.09
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Fund's Class A
shares on 3/7/88 (Inception Date) to a $10,000 investment made in the Lehman
Brothers 10-Year Municipal Bond Index (the "Lehman 10-Year Index") on that
date, as well as to the Lehman Brothers 7-Year Municipal Bond Index (the
"Lehman 7-Year Index") which are described below. For comparative purposes,
the value of the Lehman 10-Year Index on 2/29/88 is used as the beginning
value on 3/7/88. The Lehman 7-Year Index began in January of 1990. This
investment assumes a beginning value of $11,333 which is equal to the value
of the $10,000 investment in the Fund at the starting point of this Index,
without taking into account the Fund's maximum initial sales charge on Class
A shares. 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.
The Fund invests primarily in California investment-grade municipal bonds
with intermediate maturities and expects to maintain an average maturity of
less than 10 years. 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. Unlike the Fund, the Lehman 10-Year Index is an
unmanaged total return performance benchmark for the investment-grade,
geographically unrestricted 10-year tax exempt bond market, consisting of
municipal bonds with maturities of 9-12 years. The Lehman 7-Year Index
consists of bonds with similar characteristics, with maturities of 6-8 years.
The Indices do not take into account charges, fees and other expenses and are
not limited to investments principally in California municipal obligations.
These factors can contribute to the Indices potentially outperforming the
Fund. 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 3% and
is reduced to 0% after five years.
**The maximum contingent deferred sales charge for Class C shares is .75% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF INVESTMENTS JUNE 30, 1997
Principal
Long-Term Municipal Investments_94.2% Amount Value
___________ ___________
<S> <C> <C>
California_78.6%
State of California:
6.80%, 10/1/2005.......................................................... $ 700,000 $ 802,886
6.60%, 10/1/2005.......................................................... 510,000 582,287
California Housing Finance Agency, Home Mortgage Revenue
5.65%, 8/1/2006 (Insured; MBIA)........................................... 655,000 670,569
California Public Works Board, Lease Revenue:
(Corcoran State Prison) 7%, 9/1/1998...................................... 200,000 204,460
High Technology Facilities (Berkeley Campus) 7.20%, 3/1/2001.............. 150,000 156,150
California Rural Home Mortgage Finance Authority, Single Family Mortgage Revenue
5.75%, 8/1/2009 (Guaranteed; FNMA)........................................ 595,000 608,501
Elk Grove Unified School District, Special Tax Revenue, Refunding
(Community Facilities District No. 1) 6.50%, 12/1/2006 (Insured; AMBAC)... 400,000 456,072
Franklin-McKinley School District, Refunding 5.20%, 7/1/2004 (Insured; MBIA) 375,000 390,274
Kern High School District, Refunding 6.40%, 2/1/2012 (Insured; MBIA)........ 750,000 843,233
Los Angeles, Wastewater System Revenue:
6.60%, 6/1/1998........................................................... 400,000 409,844
7.10%, 11/1/1998.......................................................... 150,000 154,511
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
8%, 7/1/2000 (Insured; AMBAC)............................................. 500,000 552,855
Los Angeles County Transportation Commission, Sales Tax Revenue, Refunding
6.80%, 7/1/1999........................................................... 150,000 157,712
Metropolitan Water District of Southern California, Waterworks Revenue 6.375%, 7/1/2002 835,000 911,661
Modesto, Wastewater Treatment Facilities Revenue 6%, 11/1/2009 (Insured; MBIA) 500,000 546,790
Northern California, Transmission Revenue, Refunding (Project No. 1)
6.25%, 8/15/2000 (Insured; MBIA).......................................... 360,000 375,318
Redding JT Powers Financing Authority, Electrical Systems Revenue
5.25%, 6/1/2015 (Insured; MBIA)........................................... 670,000 659,655
Rio Linda Unified School District, Refunding 6%, 8/1/2007 (Insured; FSA).... 400,000 438,840
Riverside County Transportation Commission, Sales Tax Revenue:
6.50%, 6/1/2001 (Insured; AMBAC).......................................... 520,000 562,104
Refunding, 6%, 6/1/2009 (Insured; FGIC)................................... 500,000 547,055
Sacramento Municipal Utilities District, Electrical Revenue:
6.30%, 9/1/2001 (Insured; MBIA)........................................... 500,000 538,455
Refunding, 5.85%, 7/1/2000 (Insured; FGIC)................................ 100,000 104,796
San Bernardino Transportation Authority, Sales Tax Revenue 6%, 3/1/2002 (Insured; FGIC) 440,000 470,061
San Diego County Regional Transportation Commission, Sales Tax Revenue
6%, 4/1/2004 (Insured; FGIC).............................................. 750,000 814,147
San Diego Redevelopment Agency, Tax Allocation, Refunding (Center City Project)
5.50%, 9/1/2001 (Insured; AMBAC).......................................... 600,000 628,458
San Francisco Bay Area Rapid Transit District, Sales Tax Revenue, Refunding
6.70%, 7/1/2000........................................................... 500,000 535,430
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
____________ ____________
California (continued)
San Francisco City and County Airport Commission, International Airport Revenue
5.625%, 5/1/2006 (Insured; FGIC).......................................... $ 500,000 $ 530,495
San Francisco City and County Public Utilities Commission, Water Revenue, Refunding:
6%, 11/1/2003............................................................. 750,000 815,025
6.375%, 11/1/2006......................................................... 500,000 547,510
San Mateo County Transit District, Sales Tax Revenue, Refunding
6.20%, 6/1/1999 (Insured; MBIA)........................................... 100,000 104,114
Santa Margarita-Dana Point Authority, Revenue, Refunding
7.25%, 8/1/2007 (Insured; MBIA)........................................... 500,000 598,560
Santa Rosa, Wastewater Revenue
6.20%, 9/1/2003 (Prerefunded 9/1/2002) (Insured; FGIC) (a)................ 350,000 384,976
Simi Valley Unified School District, Refunding 6.25%, 8/1/2004 (Insured; FGIC) 700,000 771,141
Southern California Public Power Authority, Power Project Revenue, Refunding
(Hydroelectric-Hoover Uprating Project) 6.30%, 10/1/2002.................. 420,000 457,750
Tri-City Hospital District, Revenue, Refunding 6%, 2/15/2005 (Insured; MBIA) 500,000 542,720
West and Central Basin Financing Authority, Revenue 6%, 8/1/2005 (Insured; AMBAC) 620,000 668,044
Westside Unified School District, Refunding 6%, 8/1/2014 (Insured; AMBAC)... 385,000 417,063
U.S. Related_15.6%
Commonwealth of Puerto Rico, Refunding 6.25%, 7/1/2011 (Insured; MBIA)...... 750,000 835,965
Puerto Rico Electric Power Authority, Power Revenue, Refunding
6.50%, 7/1/2006 (Insured; MBIA)........................................... 625,000 708,531
Puerto Rico Highway and Transportation Authority, Highway Revenue
6.25%, 7/1/2004 (Insured; MBIA)........................................... 500,000 551,590
Puerto Rico Public Buildings Authority, Government Guaranteed Facilities
6.25%, 7/1/2010 (Insured; AMBAC) (Guaranteed; Commonwealth of Puerto Rico) 750,000 835,418
University of Puerto Rico, University Revenue, Refunding
6.25%, 6/1/2008 (Insured; MBIA)........................................... 750,000 837,832
_____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $21,735,946)........................................................ $22,728,858
=============
Short-Term Municipal Investments_5.8%
California:
California Health Facilities Financing Authority, Revenue, Refunding, VRDN
4.05% (Insured; MBIA) (SBPA; Morgan Guaranty Trust) (b)................... $ 100,000 $ 100,000
Irvine Ranch Water District, Revenue, Refunding, VRDN
3.80% (LOC; Landesbank Hessen) (b,c)...................................... 300,000 300,000
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Short-Term Municipal Investments (continued) Amount Value
___________ ___________
California (continued)
Los Angeles Regional Airports Improvement Corp., Lease Revenue, VRDN
American Airlines Inc.:
5.50% (LOC; Wachovia Bank of Georgia) (b,c)............................. $ 100,000 $ 100,000
5.50% (LOC; Wachovia Bank of Georgia) (b,c)............................. 200,000 200,000
5.50% (LOC; Wachovia Bank of Georgia) (b,c)............................. 100,000 100,000
Palm Springs Community Redevelopment Agency, COP, Lease Revenue, VRDN:
3.90% (LOC; Citibank N.A.) (b,c).......................................... 200,000 200,000
3.90% (LOC; Citibank N.A.) (b,c).......................................... 300,000 300,000
San Diego County, MFHR, VRDN 4% (b)......................................... 100,000 100,000
_____________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $1,400,000)......................................................... $ 1,400,000
==============
TOTAL INVESTMENTS_100.0%
(cost $23,135,946)........................................................ $24,128,858
==============
</TABLE>
<TABLE>
<CAPTION>
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FNMA Federal National Mortgage Association SBPA Standby Bond Purchase Agreement
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
LOC Letter of Credit
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
____ ____ ____________ ___________________
<S> <C> <C> <C>
AAA Aaa AAA 70.4%
AA Aa AA 14.2
A A A 9.6
F1 MIGI SP1 5.8
_______
100.0%
========
Notes to Statement of Investments:
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(c) Secured by letter of credit.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) At June 30, 1997, 33.8% of the Fund's net assets are insured by
MBIA.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997
Cost Value
_____________ ___________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $23,135,946 $24,128,858
Cash....................................... 18,739
Interest receivable........................ 434,850
_____________
24,582,447
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 11,464
Due to Distributor......................... 150
_____________
11,614
_____________
NET ASSETS.................................................................. $24,570,833
==============
REPRESENTED BY: Paid-in capital............................ $23,538,440
Accumulated net realized gain (loss) on investments 39,481
Accumulated gross unrealized appreciation
.............................. on investments 992,912
_____________
NET ASSETS.................................................................. $24,570,833
==============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
_______________________________
Class A Class B Class C Class R
____________ __________ __________ __________
<S> <C> <C> <C> <C>
Net Assets................................. $8,011,829 $255,923 $25,425 $16,277,656
Shares Outstanding......................... 611,302 19,522 1,935 1,242,088
NET ASSET VALUE PER SHARE.................. $13.11 $13.11 $13.14 $13.11
======= ======= ======= =======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1997
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $1,212,137
EXPENSES: Management fee_Note 2(a)................... $ 114,490
Distribution and service fees_Note 2(b).... 20,875
Loan commitment fees_Note 4................ 204
____________
Total Expenses....................... 135,569
__________
INVESTMENT INCOME_NET....................................................... 1,076,568
__________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 3:
Net realized gain (loss) on investments.... $ 97,551
Net realized gain (loss) on financial futures 29,994
____________
Net Realized Gain (Loss)............. 127,545
Net unrealized appreciation (depreciation) on investments 308,282
__________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 435,827
__________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $1,512,395
============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1997 June 30, 1996
________________ ________________
OPERATIONS:
Investment income_net................................................... $ 1,076,568 $ 928,763
Net realized gain (loss) on investments................................... 127,545 20,392
Net unrealized appreciation (depreciation) on investments................. 308,282 33,999
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations....... 1,512,395 983,154
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A shares.......................................................... (357,294) (391,455)
Class B shares.......................................................... (5,490) (867)
Class C shares.......................................................... (1,019) (890)
Class R shares.......................................................... (712,615) (535,551)
Net realized gain on investments:
Class A shares.......................................................... (20,500) (14,350)
Class B shares.......................................................... (342) (39)
Class C shares.......................................................... (68) (42)
Class R shares.......................................................... (40,475) (18,429)
________________ ________________
Total Dividends....................................................... (1,137,803) (961,623)
________________ ________________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares.......................................................... 593,180 645,645
Class B shares.......................................................... 188,135 67,799
Class C shares.......................................................... ____ 25,025
Class R shares.......................................................... 13,259,127 8,085,552
Dividends reinvested:
Class A shares.......................................................... 252,279 291,515
Class B shares.......................................................... 1,455 679
Class C shares.......................................................... ____ 815
Class R shares.......................................................... 461,303 309,750
Cost of shares redeemed:
Class A shares.......................................................... (720,697) (1,744,945)
Class B shares.......................................................... (14,494) (16)
Class C shares.......................................................... ____ (26,530)
Class R shares.......................................................... (10,055,228) (4,798,508)
________________ ________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 3,965,060 2,856,781
________________ ________________
Total Increase (Decrease) in Net Assets............................. 4,339,652 2,878,312
NET ASSETS:
Beginning of Period....................................................... 20,231,181 17,352,869
________________ ________________
End of Period............................................................. $ 24,570,833 $ 20,231,181
=============== =============
(Distribution in excess of investment income_net)........................... ____ $ (150)
________________ ________________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
___________________________________
Year Ended Year Ended
June 30, 1997 June 30, 1996
________________ ________________
CAPITAL SHARE TRANSACTIONS:
Class A
______
Shares sold............................................................. 45,900 49,480
Shares issued for dividends reinvested.................................. 19,392 22,390
Shares redeemed......................................................... (55,449) (134,672)
________________ ________________
Net Increase (Decrease) in Shares Outstanding 9,843 (62,802)
================ ================
Class B
______
Shares sold............................................................. 14,492 5,287
Shares issued for dividends reinvested.................................. 112 52
Shares redeemed......................................................... (1,116) (1)
________________ ________________
Net Increase (Decrease) in Shares Outstanding 13,488 5,338
================ ================
Class C
______
Shares sold............................................................. ___ 1,931
Shares issued for dividends reinvested.................................. ___ 62
Shares redeemed......................................................... ___ (2,019)
________________ ________________
Net Increase (Decrease) in Shares Outstanding ___ (26)
================ ================
Class R
______
Shares sold............................................................. 1,016,693 619,872
Shares issued for dividends reinvested.................................. 35,453 23,809
Shares redeemed......................................................... (771,795) (370,223)
________________ ________________
Net Increase (Decrease) in Shares Outstanding 280,351 273,458
================ ================
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL 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.
Class A Shares
__________________________________________________________________________
Period Ended
Year Ended June 30, June 30, Year Ended November 30,
____________________________ _______________________
PER SHARE DATA: 1997 1996 1995(1,2) 1994(1,2,3) 1993(1) 1992
________ ________ ________ ____________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $12.88 $12.80 $12.61 $13.07 $12.81 $12.53
________ ______ ______ _______ ______ ______
Investment Operations:
Investment income_net................ .59 .60 .59 .34(4) .67(4) .70(4)
Net realized and unrealized gain (loss)
on investments..................... .26 .10 .21 (.46) .66 .44
________ ______ ______ _______ ______ ______
Total from Investment Operations..... .85 .70 .80 (.12) 1.33 1.14
________ ______ ______ _______ ______ ______
Distributions:
Dividends from investment income_net. (.59) (.60) (.60) (.34) (.67) (.70)
Dividends from net realized gain
on investments..................... (.03) (.02) (.01) (.00)(5) (.40) (.16)
________ ______ ______ _______ ______ ______
Total Distributions.................. (.62) (.62) (.61) (.34) (1.07) (.86)
________ ______ ______ _______ ______ ______
Net asset value, end of period....... $13.11 $12.88 $12.80 $12.61 $13.07 $12.81
====== ====== ======= ======= ======= =======
TOTAL INVESTMENT RETURN (6).............. 6.79% 5.43% 6.48% (.95%) 10.58% 9.27%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .75% .75% .75% .58%(7,8) .45%(7,9) .45%(7)
Ratio of net investment income
to average net assets.............. 4.54% 4.59% 4.71% 4.51%(8) 5.09% 5.38%
Portfolio Turnover Rate.............. 25.92% 39.09% 49.00% 5.00%(10) 38.00% 41.00%
Net Assets, end of period (000's Omitted) $8,012 $7,745 $8,506 $10,143 $10,971 $21,831
(1) 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 redesignated Class A. The Financial Highlights for the year ended
June 30, 1995 are based upon a Class A share (formerly Investor shares)
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 outstanding
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.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. 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.
(3) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
(4) Net investment income per share before waiver of fees and reimbursement
of expenses by the investment adviser and/or
custodian and/or transfer agent for the period ended June 30, 1994 and for
the years ended November 30, 1993 and 1992 were $.31, $.67 and $.64,
respectively.
(5) Amount represents less than $.01 per share.
(6) Exclusive of sales load.
(7) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the period ended June 30, 1994 and for
the years ended November 30, 1993 and 1992 were .95%, 1.10% and .93%,
respectively.
(8) Annualized.
(9) The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense was .46% for
the year ended November 30, 1993.
(10) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL 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.
Class B Shares Class C Shares
________________________________________ _____________________________________
Period Ended Period Ended
Year Ended June 30, June 30, Year Ended June 30, June 30,
___________________ ___________ ___________________
PER SHARE DATA: 1997 1996 1995(1) 1997 1996 1995(1)
______ ______ ______ ______ ______ __________
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.88 $12.80 $12.28 $12.91 $12.80 $12.28
______ ______ ______ ______ ______ __________
Investment Operations:
Investment income_net.......... .52 .53 .27 .53 .53 .28
Net realized and unrealized gain (loss)
on investments............... .26 .10 .53 .26 .13 .52
______ ______ ______ ______ ______ __________
Total from Investment Operations .78 .63 .80 .79 .66 .80
______ ______ ______ ______ ______ __________
Distributions:
Dividends from investment income_net (.52) (.53) (.28) (.53) (.53) (.28)
Dividends from net realized gain
on investments............... (.03) (.02) __ (.03) (.02) __
______ ______ ______ ______ ______ __________
Total Distributions............ (.55) (.55) (.28) (.56) (.55) (.28)
______ ______ ______ ______ ______ __________
Net asset value, end of period. $13.11 $12.88 $12.80 $13.14 $12.91 $12.80
======= ====== ======= ======== ======= =======
TOTAL INVESTMENT RETURN (2)........ 6.25% 4.89% 6.51%(3) 6.25% 5.14% 6.51%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.25% 1.25% 1.25%(3) 1.25% 1.25% 1.25%(3)
Ratio of net investment income
to average net assets........ 4.00% 4.08% 4.20%(3) 4.04% 4.06% 4.22%(3)
Portfolio Turnover Rate........ 25.92% 39.09% 49.00% 25.92% 39.09% 49.00%
Net Assets, end of period
(000's Omitted) $256 $78 $9 $25 $25 $25
(1) The Fund commenced selling Class B and Class C shares on
December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL 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.
Class R Shares
_____________________________________________________________________
Period Ended Period Ended
Year Ended June 30, June 30, November 30,
____________________________
PER SHARE DATA: 1997 1996 1995(1) 1994(1,2) 1993(3)
______ ______ ________ _________ ___________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........ $12.88 $12.80 $12.61 $13.07 $12.96
______ ______ ________ ________ ________
Investment Operations:
Investment income_net....................... .62 .63 .63 .35(4) .55(4)
Net realized and unrealized gain (loss)
on investments............................ .26 .10 .20 (.46) .52
______ ______ ________ ________ ________
Total from Investment Operations............ .88 .73 .83 (.11) 1.07
______ ______ ________ ________ ________
Distributions:
Dividends from investment income_net........ (.62) (.63) (.63) (.35) (.56)
Dividends from net realized gain
on investments............................ (.03) (.02) (.01) (.00)(5) (.40)
______ ______ ________ ________ ________
Total Distributions......................... (.65) (.65) (.64) (.35) (.96)
______ ______ ________ ________ ________
Net asset value, end of period.............. $13.11 $12.88 $12.80 $12.61 $13.07
====== ======= ======== ======== ========
TOTAL INVESTMENT RETURN (6)..................... 7.04% 5.68% 6.75% (.87%)(7) 8.32%(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets..... .50% .50% .50% .42%(8,9) .40%(8,9,10)
Ratio of net investment income
to average net assets..................... 4.79% 4.84% 4.96% 4.68%(8) 5.04%(8)
Portfolio Turnover Rate..................... 25.92% 39.09% 49.00% 5.00%(7) 38.00%
Net Assets, end of period (000's Omitted)... $16,278 $12,384 $8,813 $12,235 $8,291
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. 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.
(2) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
(3) 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 redesignated Class R shares. The table above is based upon Retail share
outstanding from February 1, 1993 to April 3, 1994 and a Trust share
outstanding from April 4, 1994 to October 16, 1994.
(4) Net investment income per share before waiver of fees and reimbursement
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 $.32 and $.49, respectively.
(5) Amount represents less than $.01 per share.
(6) Exclusive of sales load.
(7) Not annualized.
(8) Annualized.
(9) Annualized expense ratios before voluntary waiver of fees and
reimbursement 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 .79% and 1.06%, respectively.
(10) The operating expense ratio excludes interest expense.
The operating expense ratio including interest expense was
.41% for the period ended November 30, 1993.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Limited Term California Municipal Fund (the "Fund") is a
series of The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is
registered under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company and operates as a
series company currently offering seven series including the Fund. The Fund's
investment objective is to maximize current income exempt from Federal income
taxes and state personal income taxes for resident shareholders of California
consistent with the prudent risk of capital by investing in municipal
securities which are of investment-grade quality and intermediate maturities.
The Dreyfus Corporation ("Manager") serves as the Fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
On January 31, 1997, the Fund's Trustees approved a change to the Fund's
name from "Premier Limited Term California Municipal Fund" to "Dreyfus
Premier Limited Term California Municipal Fund," which became effective March
31, 1997.
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 distribution and service fees. 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 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 and
service fees and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
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 options and
financial futures on municipal and U.S. treasury securities) 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
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the accrual basis. Securities purchased or sold on a when-issued or
delayed-delivery basis may be settled a month or more after the trade date.
(c) Financial futures: The Fund may invest in financial futures contracts
in order to gain exposure to or protect against changes in the market. The
Fund is exposed to market risk as a result of changes in the value of the
underlying financial instruments. Investments in financial futures require
the Fund to "mark to market" on a daily basis, which reflects the change in
the market value of the contract at the close of each day's trading.
Typically, variation margin payments are received or made to reflect daily
unrealized gains or losses. When the contracts are closed, the Fund
recognizes a realized gain or loss. These investments require initial margin
deposits with a custodian, which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded
and is subject to change. At June 30, 1997, there were no financial futures
contracts outstanding.
(d) Concentration of risk: The Fund follows an investment policy of
investing primarily in municipal obligations of one state. Economic changes
affecting the state and certain of its public bodies and municipalities may
affect the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Fund.
(e) 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, if any, it is the policy of the Fund not to distribute such gain.
(f) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
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 .50% 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.
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(b) Distribution and service plan: The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the
1940 Act relating to its Class A, B and C shares. Under the Plan, 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 .50% 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 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 or service fee. During the period ended
June 30, 1997, the distribution fee for Class A, Class B and Class C shares
were $19,656, $687 and $126, respectively. During the period ended June 30,
1997, the service fee for Class B shares and Class C shares were $343 and
$63, respectively.
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 Investment Company 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 of investment securities,
excluding short-term securities, during the period ended June 30, 1997,
amounted to $8,704,419 and $5,604,060, respectively.
At June 30, 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. For the period ended June
30, 1997, the Fund did not borrow under the Facility.
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
The Dreyfus/Laurel Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier Limited Term
California Municipal Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as
of June 30, 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 or periods 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 each of the years or periods in the two-years ended November
30, 1993 were audited by other auditors whose report thereon, dated January
18, 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 June 30, 1997, by correspondence with the custodian.
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 Limited Term California Municipal Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 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 or periods in the four-year period then ended, in
conformity with generally accepted accounting principles.
[KPMG Peat Marwick LLP signature logo]
New York, New York
August 8, 1997
DREYFUS PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended June 30, 1997:
_all the dividends paid from investment income-net are "exempt interest
dividends" (not subject to regular Federal and,
for individuals who are California residents, California personal income
taxes), and
_the Fund hereby designates $.0347 per share as a long-term capital gain
distribution paid on December 5, 1996.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
DREYFUS PREMIER LIMITED TERM
CALIFORNIA MUNICIPAL 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. 343/743AR976
Annual Report
Dreyfus Premier
Limited Term
California Municipal
Fund
June 30, 1997
[Dreyfus lion2 hres logo]
Registration Mark
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Premier
Limited Term Massachusetts Municipal Fund for its annual reporting period
ended June 30, 1997. For this twelve-month period, the Fund provided the
following total returns, income dividends and distribution rates:
<TABLE>
<CAPTION>
Approximate
Total Return* Income Dividends** Distribution Rate***
______________ ____________________ _____________________
<S> <C> <C> <C>
Class A 6.36% $0.540 4.30%
Class B 5.90% $0.479 3.93%
Class C 5.87% $0.485 3.99%
Class R 6.70% $0.570 4.68%
</TABLE>
ECONOMIC REVIEW
Despite recent moderation in the rate of new job creation, the latest
reported unemployment rate (5% in June) was the lowest since 1973. When the
unemployment rate was last at that level, the inflation rate was heading
toward double-digit territory. Now, inflation is subdued; the Consumer Price
Index rose at an annual rate of just 1.4% for the twelve-month period through
May. Producer prices rose a minuscule 0.6% over the same time period. It has
been unprecedented for the economy to have seven years of expansion, low
unemployment and low inflation at the same time.
Ever alert for signs of incipient inflation, the Federal Open Market
Committee, the policy-making arm of the Federal Reserve Board (the "Fed"),
has raised interest rates just once in more than two years. That hike came in
March 1997 when the Federal Funds rate was increased by 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.) While there have been
some signs that wages are increasing (an area of particular concern to the
Fed), there have also been indications that the economy may be slowing from
its torrid first quarter pace when it surged at a 5.9% annual rate, the
biggest advance since the fourth quarter of 1987.
Indicating possible moderation in the rate of economic growth, retail
sales declined this spring despite record levels of consumer optimism about
the economy. The latest report on retail sales through June showed a decline
at an annual rate of 5% over the previous three months. This marked the first
three-month decline since the fall of 1981. Yet, despite their sluggish
spending at retail counters, consumers' confidence in the economy continues
to climb, heavily influenced by increased job security and low inflation.
Throughout the current seven-year economic expansion, the pattern of
consumer spending has been stop-and-go, alternating between spurts of
spending and retrenchment. The 5% decline for the three months through May
was preceded by a 15% advance over the previous three-month period. On the
production side of the economy, a survey of corporate buyers compiled by the
National Association of Purchasing Management reported that growth in factory
activity eased slightly during June. The much-observed supplier-delivery
component of the survey, a measure of how quickly orders are being satisfied
and a possible sign of production bottlenecks, also fell modestly. In further
evidence of a slowing economy during the second quarter, the Commerce
Department recently reported that factory orders fell in May.
Rising incomes, low unemployment and quiescent inflation have all
contributed to a feeling of confidence, as measured by the Conference Board's
Index of Consumer Sentiment, that has been unmatched for 28 years. Many
economists feel that the optimistic consumer sentiment indicators provide a
floor to economic growth and will spur consumer spending later in the year,
particularly if the unemployment rate remains low and job security worries
recede further. We are mindful of the potent role that consumers play in the
economy _ their spending accounts for about two thirds of economic output.
So, we remain alert to signs of any strain on productive capacity caused by
increases in consumer spending that might, in turn, lead to another
tightening in monetary policy by the Fed.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Massachusetts' economy continued to improve throughout the annual
reporting period. So too did the Commonwealth's financial position.
Employment and population growth were strong relative to surrounding New
England states, but still lag national growth rates. Massachusetts remains a
leading employer in the rapidly growing high technology industries: computer
software, biotechnology and internet-related companies. However, further
consolidation in the banking and insurance industries could dampen job growth.
Because of increased jobs, the Commonwealth has experienced a surge in tax
revenues. The fiscal 1997 tax collections were 8.3% higher through February
than for the same period in 1996, and were also well above Commonwealth
estimates. Yet while tax revenues are strong, the budget is constrained by a
debt level that is among the highest in the nation. Debt is expected to
expand further from the Commonwealth's contribution to the Central Artery
Project. Additionally, the Commonwealth is considering its funding options
for a proposed Convention Center in Boston.
The towns and cities in Massachusetts have also shown strong improvement
in credit quality as property values have risen along with tax receipts. The
exceptions are the counties in Massachusetts, which under proposed
legislation will be dissolved. The legislation is in response to the
weakening financial position of county governments across the Commonwealth,
in particular, the bankruptcy of Middlesex County. Under the terms of the
proposed legislation, the Commonwealth will assume Middlesex County's liabilit
ies, while continuing to assess levies on county property owners to meet the
assumed liability payments. The Commonwealth's A1/A+ credit ratings from
Moody's and Standard and Poor's are considered stable.
With talk of tax reform a distant memory, municipal bonds performed very
well over the past twelve months. Interest rates declined in the last half of
1996 due to investor perceptions that the economy was becoming sluggish and
that the Fed would ease monetary policy. Instead, after warnings by Fed
Chairman Greenspan about the "irrational exuberance" present in financial
markets, the Federal Open Market Committee increased short-term interest
rates by 25 basis points in March, 1997. In anticipation of tightening of
monetary policy by the Fed, fixed-income yields rose during the first quarter
of 1997. The rise was fueled by expectations that the Federal Reserve might
continue to tighten monetary policy. However, low supply and strong demand
cushioned the losses in the municipal bond market with yields generally
increasing by 25 basis points.
The lack of further tightening in the second quarter of 1997, combined
with quiescent inflation, resulted in a rebound in bond prices and a recovery
of losses incurred during the first quarter of 1997. Yields were only
slightly higher at the end of the second quarter compared to the end of 1996.
Ten-year AAA rated municipal securities finished the reporting period at
4.85% versus 4.80% at year-end.
Municipal bonds outperformed comparable maturity taxable securities
during the first quarter of 1997, but underperformed during the second
quarter. However, the total return on the Lehman Brothers 10-Year Municipal
Bond Index for the semi-annual period still significantly outperformed the
ten-year Treasury note (3.27% vs. 2.44%), highlighting the strong demand for
municipal securities throughout the period.
Lower rated credit quality fixed income securities significantly
outperformed higher credit quality securities during the first half of 1997.
Stronger economic performance has enhanced revenue generation capabilities of
weaker jurisdictions and corporations. Notable fiscal improvements have
occurred in cyclical industries such as airlines. Improving credit quality
and stronger demand from yield-hungry investors has pushed yield spreads
between Baa and AAA rated securities to their narrowest levels in recent
memory. The additional yield spread for thirty-year Baa rated bonds was less
than 50 basis points higher than AAA rated municipal bonds as of the end of
the reporting period.
The Fund continued to emphasize high quality securities; over 65% of the
portfolio was rated AA or higher as of the end of the reporting period. The
weighted average portfolio maturity was extended during the latter half of
1996 due to a falling interest rate environment. It was then cautiously
shortened in anticipation of a potential rise in interest rates to preserve
principal in the first quarter of 1997. However, as yields became more
attractive, the Fund's weighted average maturity was slightly extended to
lock into the attractive interest rate environment in the second quarter.
Throughout the reporting period, the Fund's maturity varied in a 6.5- to
8-year range and ended the reporting period at approximately 7.17.
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 greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Kristin Lindquist signature logo]
Kristin Lindquist
Portfolio Manager
July 15, 1997
New York, New York
* 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.
** Income dividends per share were exempt from Federal and Commonwealth of
Massachusetts personal income taxes. Some income may be subject to the
Federal Alternative Minimum Tax for certain shareholders.
***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
the net asset value per share at the end of the period in the case of Class
B, Class C and Class R shares, adjusted for capital gain distributions.
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND JUNE 30, 1997
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER
LIMITED TERM MASSACHUSETTS MUNICIPAL FUND CLASS A SHARES WITH THE LEHMAN
BROTHERS 10-YEAR MUNICIPAL BOND INDEX AND THE LEHMAN BROTHERS
7-YEAR MUNICIPAL BOND INDEX
$21,759
Lehman Brothers 10-Year
Municipal Bond Index*
Dollars
$20,935
Lehman Brothers 7-Year
Municipal Bond Index*
$19,753
Dreyfus Premier Limited Term
Massachusetts Municipal Fund (Class A Shares)
*Source: Lehman Brothers
[Exhibit A]
<TABLE>
<CAPTION>
Average Annual Total Returns
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 6/30/97 Sales Charge Sales Charge (3.0%) PERIOD ENDED 6/30/97 Redemption Redemption*
__________ ________________ ____________________ _____________________ ____________ __________________
<S> <C> <C> <C> <C> <C>
1 Year 6.36% 3.16% 1 Year 5.90% 2.90%
5 Year 5.93 5.28 From Inception (12/28/94) 6.81 6.08
10 Year 7.37 7.04
CLASS C SHARES CLASS R SHARES
__________________________________________________________________ __________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
PERIOD ENDED 6/30/97 No Redemption Redemption** PERIOD ENDED 6/30/97
_________ _______________ ____________________ _____________________
1 Year 5.87% 5.12% 1 Year 6.70%
From Inception (12/28/94) 6.73 6.73 From Inception (2/1/93) 5.69
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Fund's Class A
shares on 6/30/87 to a $10,000 investment made in the Lehman Brothers 10-Year
Municipal Bond Index (the "Lehman 10-Year Index") on that date, as well as to
the Lehman Brothers 7-Year Municipal Bond Index (the "Lehman 7-Year Index")
which are described below. The Lehman 7-Year Index began in January of 1990.
This investment assumes a beginning value of $12,305 which is equal to the
value of the $10,000 investment in the Fund at the starting point of this
Index, without taking into account the Fund's maximum initial sales charge on
Class A shares. All dividends and capital gain distributions are reinvested.
Performance for Class B, Class C and Class R shares will vary from the perform
ance of Class A shares shown above due to differences in charges and
expenses.
The Fund invests primarily in Massachusetts investment-grade municipal bonds
with intermediate maturities and expects to maintain an average maturity of
less than 10 years. 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. Unlike the Fund, the Lehman 10-Year Index is an
unmanaged total return performance benchmark for the investment-grade,
geographically unrestricted 10-year tax exempt bond market, consisting of
municipal bonds with maturities of 9-12 years. The Lehman 7-Year Index
consists of bonds with similar characteristics, with maturities of 6-8 years.
The Indices do not take into account charges, fees and other expenses and are
not limited to investments principally in Massachusetts municipal
obligations. These factors can contribute to the Indices potentially
outperforming the Fund. 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 3% and is
reduced to 0% after five years.
**The maximum contingent deferred sales charge for Class C shares is .75% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
STATEMENT OF INVESTMENTS JUNE 30, 1997
Principal
Long-Term Municipal Investments_97.0% Amount Value
__________ __________
<S> <C> <C>
Massachusetts_82.7%
Amherst, GO 6%, 1/15/2003................................................... $ 200,000 $ 213,504
Andover, GO 6%, 1/15/2003................................................... 700,000 763,406
Belmont, GO 5.50%, 1/15/2005................................................ 585,000 614,987
Boston, Series A 5.25%, 10/1/2004 (Insured; MBIA)........................... 1,000,000 1,036,200
Boston, Water and Sewer Commission, Revenue 9.25%, 1/1/2011................. 100,000 136,527
Cambridge:
GO 6.60%, 6/15/2000....................................................... 675,000 719,705
Municipal Purpose Loan 5.60%, 11/1/2001................................... 500,000 525,935
Cohasset, Municipal Purpose Loan:
6.70%, 11/1/1998 (Insured; MBIA).......................................... 160,000 165,778
6.90%, 11/1/2000 (Insured; MBIA).......................................... 150,000 162,498
Easton, Municipal Purpose Loan 6%, 9/15/2006................................ 105,000 112,302
Franklin, GO 6.25%, 11/15/2005 (Insured; MBIA).............................. 430,000 473,022
Haverhill, GO 6%, 6/15/2005 (Insured; FGIC) (a)............................. 750,000 809,708
Mashpee, Municipal Purpose Loan 6.25%, 2/1/2006 (Insured; MBIA)............. 1,000,000 1,102,110
Massachusetts, Refunding 6.50%, 8/1/2008.................................... 500,000 563,440
Massachusetts Bay Transportation Authority, Massachusetts General Transportation:
5.25%, 3/1/2011 (Insured; AMBAC).......................................... 1,000,000 997,510
Refunding 5.90%, 3/1/2004................................................. 550,000 587,208
Massachusetts, Consolidated Loan:
7%, 7/1/2006 (Insured; MBIA, Prerefunded 7/1/2000) (b).................... 500,000 546,820
7.625%, 6/1/2008 (Prerefunded 6/1/2001) (b)............................... 400,000 453,400
7.375%, 12/1/2008 (Prerefunded 12/1/1998) (b)............................. 250,000 266,333
Massachusetts Education Loan Authority, Education Loan Revenue
6.20%, 7/1/2013 (Insured; AMBAC).......................................... 1,000,000 1,032,330
Massachusetts Health and Educational Facilities Authority, Revenue:
(Beth Israel Hospital) 7.80%, 7/1/2014 (Prerefunded 7/1/1998) (b)......... 500,000 528,730
(Harvard University):
6.20%, 12/1/2001........................................................ . 1,000,000 1,076,730
Refunding 6.50%, 11/1/2004.............................................. 700,000 782,656
(Malden Hospital Project) 9.50%, 8/1/2008................................. 35,000 35,114
(Northeastern University) 6.80%, 10/1/1999 (Insured; AMBAC)............... 1,000,000 1,056,680
Refunding (Dana-Farber Cancer Institute) 5.55%, 12/1/2003 (Insured; FGIC). 400,000 419,312
(Salem Hospital) 8.15%, 7/1/2014 (Prerefunded 7/1/1999) (b)............... 750,000 820,478
(South Shore Hospital):
7.50%, 7/1/2010 (Insured; MBIA, Prerefunded 7/1/2000) (b)............... 350,000 387,345
7.50%, 7/1/2020 (Insured; MBIA, Prerefunded 7/1/2000) (b)............... 500,000 553,350
(Wenworth Institute of Technology):
7.15%, 4/1/2000 (Insured; AMBAC)........................................ 225,000 241,731
7.40%, 4/1/2010 (Insured; AMBAC, Prerefunded 4/1/2000) (b).............. 220,000 241,692
Massachusetts Housing Finance Agency, SFHR:
6%, 6/1/2014 (Insured; MBIA).............................................. 1,200,000 1,234,800
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
___________ ___________
Massachusetts (continued)
Massachusetts Housing Finance Agency, SFHR (continued):
5.75%, 12/1/2029 (Insured; MBIA).......................................... $ 500,000 $ 506,445
Massachusetts Industrial Finance Agency:
Electric Revenue (Nantucket Electric Co. Project) 6.75%, 7/1/2006 (Insured; AMBAC) 1,400,000 1,572,634
Museum Revenue, Refunding (Museum of Fine Arts of Boston)
5.375%, 1/1/2007 (Insured; MBIA)........................................ 1,000,000 1,036,900
Revenue:
(Babson College) 5.75%, 10/1/2007 (Insured; MBIA) (b)................... 555,000 593,312
(Brooks School):
5.70%, 7/1/2006....................................................... 260,000 271,708
5.75%, 7/1/2007....................................................... 275,000 286,899
5.80%, 7/1/2008....................................................... 290,000 303,494
5.85%, 7/1/2009....................................................... 305,000 319,164
(Refunding_College of The Holy Cross) 5.50%, 3/1/2007 (Insured; MBIA)... 1,145,000 1,198,666
(Refunding_Worcester Polytechnic) 5.35%, 9/1/2006....................... 850,000 882,054
(Springfield College Project) 7.80%, 10/1/2009
(LOC; Fleet Bank of Massachusetts, Prerefunded 10/1/1999) (b,c)....... 1,100,000 1,215,753
Massachusetts, Port Authority Revenue 7%, 7/1/2000 (Insured; FGIC).......... 1,000,000 1,074,860
Massachusetts, Special Obligation Revenue 5.80%, 6/1/2000................... 880,000 915,693
Massachusetts, Water Pollution Abatement Trust, Revenue (Pooled Loan Program)
6.125%, 2/1/2007 (Insured; FSA)........................................... 1,000,000 1,102,820
Massachusetts Water Resource Authority:
General Revenue 5.30%, 11/1/2010 (Insured; FGIC).......................... 1,000,000 1,005,430
Refunding 5.875%, 11/1/2004............................................... 500,000 533,255
7.125%, 4/1/2000.......................................................... 500,000 535,105
Mendon Upton Regional School District 6%, 6/1/2007 (Insured; FGIC).......... 600,000 652,074
North Attleborough, GO 5.50%, 3/1/2006 (Insured; AMBAC)..................... 1,000,000 1,050,180
Northampton, School Project Loan 6.40%, 5/15/2004 (Insured; MBIA)........... 750,000 824,813
Quabbin Regional School District, Refunding 6%, 6/15/2008 (Insured; AMBAC).. 780,000 846,206
Rockport, GO 6.90%, 12/15/2007 (Prerefunded 12/15/1999) (b)................. 1,000,000 1,091,110
Somerville, GO 6%, 2/15/2007 (Insured; FSA)................................. 775,000 843,781
Southeastern University Building Authority, Project Revenue, Refunding
5.90%, 5/1/2010 (Insured; AMBAC).......................................... 500,000 525,345
Springfield, School Project Loan 6.10%, 9/1/2002 (Insured; AMBAC)........... 600,000 643,938
Uxbridge, Municipal Purpose Loan:
6.125%, 11/15/2005 (Insured; MBIA)........................................ 500,000 546,475
6.125%, 11/15/2007 (Insured; MBIA)........................................ 525,000 578,356
Whitman, GO:
7.75%, 6/1/2007 (Prerefunded 6/1/1998) (b)................................ 180,000 190,757
7.75%, 6/1/2008 (Prerefunded 6/1/1998) (b)................................ 250,000 264,940
Worchester, Municipal Purpose Loan, Refunding 6.25%, 7/1/2010 (Insured; MBIA) 755,000 838,699
Yarmouth, GO 8.60%, 10/1/2000............................................... 100,000 112,683
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
__________ __________
U.S. Related_14.3%
Commonwealth of Puerto Rico, GO, Refunding:
6.50%, 7/1/2003 (Insured; MBIA)........................................... $ 550,000 $ 609,285
6.25%, 7/1/2011 (Insured; MBIA)........................................... 1,050,000 1,170,351
Commonwealth of Puerto Rico Highway and Transportation Authority, Revenue
6.25%, 7/1/2009 (Insured; MBIA) (d)....................................... 1,000,000 1,117,070
Commonwealth of Puerto Rico, Public Improvement
7.20%, 7/1/2003 (Insured; FGIC, Prerefunded 7/1/2000) (b)................. 1,000,000 1,103,110
Puerto Rico Electric Power Authority, Power Revenue
6.50%, 7/1/2006 (Insured; MBIA)........................................... 1,000,000 1,133,650
Puerto Rico Public Buildings Authority, Revenue 6.75%, 7/1/2005 (Insured; AMBAC) 1,000,000 1,143,670
University of Puerto Rico, University Revenue 6.25%, 6/1/2005............... 750,000 832,118
__________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $46,715,698).................... $48,134,139
=============
Short-Term Municipal Investments_3.0%
Massachusetts:
Massachusetts, VRDN:
5.50% (LOC; Canadian Imperial Bank) (c,e)................................. $ 1,000,000 $ 1,000,000
5.50% (LOC; Amro Bank) (c,e).............................................. 100,000 100,000
Massachusetts Health and Educational Authority, Revenue, VRDN:
(Capital Asset Program) 3.90% (Insured; MBIA) (e)......................... 100,000 100,000
(Institute of Technology) 5.50% (e)....................................... 300,000 300,000
_____________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $1,500,000).................... . $ 1,500,000
=============
TOTAL MUNICIPAL INVESTMENTS_100.0% (cost $48,215,698)....................... $49,634,139
=============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FSA Financial Security Assurance SFHR Single Family Housing Revenue
GO General Obligation VRDN Variable Rate Demand Notes
LOC Letter of Credit
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (f) or Moody's or Standard & Poor's Percentage of Value
____ ______ _______________ ____________________
<S> <C> <C> <C>
AAA Aaa AAA 82.9%
AA Aa AA 7.4
A A A 6.7
F1, F-1+ MIG1, VMIG1 & P1 SP1, A1 3.0
________
100.0%
=========
</TABLE>
Notes to Statement of Investments:
(a) Purchased on a delayed-delivery basis.
(b) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(c) Secured by letters of credit.
(d) Wholly held by the custodian in a segregated account as collateral
for delayed-delivery securities.
(e) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index
of market interest rates..........................
(f) Fitch currently provides creditworthiness information for a limited
number of investments.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997
Cost Value
___________ ___________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $48,215,698 $49,634,139
Cash....................................... 84,706
Interest receivable........................ 863,237
_____________
50,582,082
_____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 23,236
Due to Distributor......................... 701
Payable for investment securities purchased 806,655
_____________
830,592
_____________
NET ASSETS.................................................................. $49,751,490
===============
REPRESENTED BY: Paid-in capital............................ $48,120,168
Accumulated net realized gain (loss) on investments 212,881
Accumulated net unrealized appreciation (depreciation)
....................... on investments_Note 3 1,418,441
_____________
NET ASSETS.................................................................. $49,751,490
===============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
_____________________________
Class A Class B Class C Class R
___________ ___________ ___________ ___________
<S> <C> <C> <C> <C>
Net Assets................................ $16,092,842 $463,595 $7,100 $33,187,953
Shares Outstanding................. 1,324,120 38,055 584.149 2,730,263
NET ASSET VALUE PER SHARE.......... $12.15 $12.18 $12.15 $12.16
======= ======= ======== ========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1997
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $2,360,717
EXPENSES: Management fee_Note 2(a)................... $225,861
Distribution and service fees_Note 2(b).... 43,465
Loan commitment fees_Note 4................ 386
______________
Total Expenses......................... 269,712
____________
INVESTMENT INCOME_NET....................................................... 2,091,005
____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 3:
Net realized gain (loss) on investments.... $218,635
Net realized gain (loss) on financial futures 45,900
______________
Net Realized Gain (Loss)............... 264,535
Net unrealized appreciation (depreciation) on investments 509,245
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 773,780
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,864,785
=============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1997 June 30, 1996
_______________ _______________
OPERATIONS:
Investment income_net.................................................... $ 2,091,005 $ 1,834,858
Net realized gain (loss) on investments.................................. 264,535 67,052
Net unrealized appreciation (depreciation) on investments................ 509,245 57,430
_______________ _______________
Net Increase (Decrease) in Net Assets Resulting from Operations........ 2,864,785 1,959,340
_______________ _______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A shares......................................................... (715,014) (730,953)
Class B shares......................................................... (18,156) (1,544)
Class C shares......................................................... (380) (709)
Class R shares......................................................... (1,357,455) (1,101,652)
Net realized gain on investments:
Class A shares......................................................... (32,638) (23,631)
Class B shares......................................................... (927) (14)
Class C shares......................................................... (19) (26)
Class R shares......................................................... (55,928) (32,290)
_______________ _______________
Total Dividends...................................................... (2,180,517) (1,890,819)
_______________ _______________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares......................................................... 2,771,894 1,601,368
Class B shares......................................................... ___ 450,001
Class C shares......................................................... 6,937 ___
Class R shares......................................................... 13,360,525 9,355,436
Dividends reinvested:
Class A shares......................................................... 560,539 574,790
Class B shares......................................................... 4,248 1,133
Class C shares......................................................... 364 651
Class R shares......................................................... 582,988 498,611
Cost of shares redeemed:
Class A shares......................................................... (3,176,747) (3,075,439)
Class B shares......................................................... ___ (16)
Class C shares......................................................... (16,896) (2,522)
Class R shares......................................................... (7,164,398) (3,553,482)
_______________ _______________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 6,929,454 5,850,531
_______________ _______________
Total Increase (Decrease) in Net Assets........................... 7,613,722 5,919,052
NET ASSETS:
Beginning of Period..................................................... 42,137,768 36,218,716
_______________ _______________
End of Period........................................................... $49,751,490 $42,137,768
============== ===============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
_______________________________
Year Ended Year Ended
June 30, 1997 June 30, 1996
_______________ _______________
CAPITAL SHARE TRANSACTIONS:
Class A
______
Shares sold.............................................................. 229,817 132,502
Shares issued for dividends reinvested................................... 46,407 47,482
Shares redeemed.......................................................... (262,952) (254,257)
_______________ _______________
Net Increase (Decrease) in Shares Outstanding 13,272 (74,273)
============== ===============
Class B
______
Shares sold.............................................................. __ 37,610
Shares issued for dividends reinvested................................... 351 94
Shares redeemed.......................................................... __ (1)
_______________ _______________
Net Increase (Decrease) in Shares Outstanding 351 37,703
============== ===============
Class C
______
Shares sold.............................................................. 580 __
Shares issued for dividends reinvested................................... 30 54
Shares redeemed.......................................................... (1,404) (209)
_______________ _______________
Net Increase (Decrease) in Shares Outstanding (794) (155)
============== ===============
Class R
______
Shares sold.............................................................. 1,105,028 770,353
Shares issued for dividends reinvested................................... 48,271 41,214
Shares redeemed.......................................................... (594,128) (294,159)
_______________ _______________
Net Increase (Decrease) in Shares Outstanding 559,171 517,408
============== ===============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL 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.
Class A Shares
______________________________________________________________________
Year Ended June 30,
______________________________________________________________________
PER SHARE DATA: 1997 1996 1995(1)(2) 1994(1)(2) 1993(1)
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $11.97 $11.91 $11.74 $12.38 $11.83
________ ________ ________ ________ ________
Investment Operations:
Investment income_net...................... .54 .54 .55 .54(3) .64(3)
Net realized and unrealized gain (loss)
on investments........................... .20 .08 .20 (.36) .55
________ ________ ________ ________ ________
Total from Investment Operations........... .74 .62 .75 .18 1.19
________ ________ ________ ________ ________
Distributions:
Dividends from investment income_net......... (.54) (.54) (.54) (.54) (.64)
Dividends from net realized gain on investments (.02) (.02) (.04) (.28) __
________ ________ ________ ________ ________
Total Distributions.......................... (.56) (.56) (.58) (.82) (.64)
________ ________ ________ ________ ________
Net asset value, end of period............... $12.15 $11.97 $11.91 $11.74 $12.38
====== ======== ======= ======= ========
TOTAL INVESTMENT RETURN(4).................... 6.36% 5.22% 6.60% 1.38% 10.27%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets..... .75% .75% .75% .76%(5) .75%(5)
Ratio of net investment income
to average net assets................... 4.47% 4.44% 4.65% 4.40% 5.30%
Portfolio Turnover Rate.................. 22.57% 39.16% 25.00% 19.00% 60.00%
Net Assets, end of period (000's Omitted).... $16,093 $15,689 $16,501 $21,276 $20,106
(1) 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
shares were redesignated Class A. The Financial Highlights for the
year ended June 30, 1995 are based upon a Class A share (formerly
Investor shares) 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.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. 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.
(3) Net investment income per share before waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the years ended June 30, 1994 and
1993 were $.53 and $.62, respectively.
(4) Exclusive of sales load.
(5) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the years ended June 30, 1994 and
1993 were .89% and .92 %, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL 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.
Class B Shares
__________________________
Year Ended June 30,
__________________________
PER SHARE DATA: 1997 1996(1)
_______ _______
<S> <C> <C>
Net asset value, beginning of period.............................................. $11.99 $ 11.91
_______ _______
Investment Operations:
Investment income_net............................................................. .48 .48
Net realized and unrealized gain (loss)
on investments.................................................................. .21 .10
_______ _______
Total from Investment Operations.................................................. .69 .58
_______ _______
Distributions:
Dividends from investment income_net.............................................. (.48) (.48)
Dividends from net realized gain on investments................................... (.02) (.02)
_______ _______
Total Distributions............................................................... (.50) (.50)
_______ _______
Net asset value, end of period.................................................... $12.18 $11.99
======== =========
TOTAL INVESTMENT RETURN(2)............................................................ 5.90% 4.87%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........................................... 1.25% 1.25%
Ratio of net investment income
to average net assets........................................................... 3.96% 3.67%
Portfolio Turnover Rate........................................................... 22.57% 39.16%
Net Assets, end of period (000's Omitted)......................................... $464 $452
(1) The Fund commenced selling Class B shares on December 28, 1994.
(2) Exclusive of sales load.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL 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.
Class C Shares
________________________________________
Period Ended
Year Ended June 30, June 30,
___________________
PER SHARE DATA: 1997 1996 1995(1)
______ ______ ________
<S> <C> <C> <C>
Net asset value, beginning of period............................... $11.97 $11.91 $11.45
______ ______ ________
Investment Operations:
Investment income_net.............................................. .49 .48 .26
Net realized and unrealized gain (loss)
on investments................................................... .20 .08 .45
______ ______ ________
Total from Investment Operations................................... .69 .56 .71
______ ______ ________
Distributions:
Dividends from investment income_net............................... (.49) (.48) (.25)
Dividends from net realized gain on investments.................... (.02) (.02) __
______ ______ ________
Total Distributions................................................ (.51) (.50) (.25)
______ ______ ________
Net asset value, end of period..................................... $12.15 $11.97 $11.91
======= ======== ========
TOTAL INVESTMENT RETURN(2)............................................. 5.87% 4.68% 6.24%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................ 1.25% 1.25% 1.25%(3)
Ratio of net investment income
to average net assets............................................ 4.05% 3.93% 4.15%(3)
Portfolio Turnover Rate............................................ 22.57% 39.16% 25.00%
Net Assets, end of period (000's Omitted).......................... $7 $16 $18
(1) The Fund commenced selling Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL 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.
Class R Shares
_________________________________________________________________
Period Ended
Year Ended June 30, June 30,
______________________________________________
PER SHARE DATA: 1997 1996 1995(1)(2) 1994(1)(2) 1993(1)
_______ ________ ________ _______ ____________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $11.97 $11.91 $11.74 $12.38 $12.08
_______ ________ ________ _______ ________
Investment Operations:
Investment income_net........................... .57 .57 .57 .55(3) .25(3)
Net realized and unrealized gain (loss)
on investments................................ .21 .08 .21 (.35) .29
_______ ________ ________ _______ ________
Total from Investment Operations................ .78 .65 .78 .20 .54
_______ ________ ________ _______ ________
Distributions:
Dividends from investment income_net............ (.57) (.57) (.57) (.56) (.24)
Dividends from net realized gain on investments. (.02) (.02) (.04) (.28) __
_______ ________ ________ _______ ________
Total Distributions............................. (.59) (.59) (.61) (.84) (.24)
_______ ________ ________ _______ ________
Net asset value, end of period.................. $12.16 $11.97 $11.91 $11.74 $12.38
====== ====== ======= ======= ========
TOTAL INVESTMENT RETURN(4).......................... 6.70% 5.46% 6.87% 1.53% 4.53%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......... .50% .50% .50% .62%(6) .65%(5)(6)
Ratio of net investment income
to average net assets......................... 4.73% 4.68% 4.90% 4.54% 4.84%(5)
Portfolio Turnover Rate......................... 22.57% 39.16% 25.00% 19.00% 60.00%
Net Assets, end of period (000's Omitted)....... $33,188 $ 25,981 $19,700 $15,681 $9,411
(1) 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 redesignated Class R shares. The Financial Highlights above are
based upon an Investment share outstanding from February 1, 1993 to April
3, 1994 and a Trust share outstanding from April 4, 1994 to October 16,
1994.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. 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.
(3) Net investment income per share before waiver of fees and
reimbursement 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 $.54 and $.24, respectively.
(4) Exclusive of sales load.
(5) Annualized.
(6) Annualized expense ratios before voluntary waiver of fees and
reimbursement 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 .75% and .87%, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Limited Term Massachusetts Municipal Fund (the "Fund") is
a series of the Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which
is registered under the Investment Company Act of 1940 ("Act") as a
non-diversified open-end management investment company and operates as a
series company currently offering seven series including the Fund. The Fund's
investment objective is to maximize current income exempt from Federal income
taxes and state personal income taxes for resident shareholders of
Massachusetts consistent with the prudent risk of capital by investing in
municipal obligations of the named state which are of investment-grade
quality and intermediate maturities. The Dreyfus Corporation ("Manager")
serves as the Fund's investment adviser. The Manager is a direct subsidiary
of Mellon Bank, N.A.
On January 31, 1997, the Trust's Board Members approved a change to the
Trust's name from "Premier Limited Term Massachusetts Municipal Fund" to
"Dreyfus Premier Limited Term Massachusetts Municipal Fund," which became
effective March 31, 1997.
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 shares. 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 distribution and service fees.
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
fee. 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. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) 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 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
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
the accrual basis. Securities purchased or sold on a when-issued or
delayed-delivery basis may be settled a month or more after the trade date.
(C) FINANCIAL FUTURES: The Fund may invest in trading financial futures
contracts in order to gain exposure to or protect against changes in the
market. The Fund is exposed to market risk as a result of changes in the
value of the underlying financial instruments. Investments in financial
futures require the Fund to "mark to market" on a daily basis, which reflects
the change in the market value of the contract at the close of each day's
trading. Typically, variation margin payments are received or made to reflect
daily unrealized gains or losses. When the contracts are closed, the Fund
recognizes a realized gain or loss. These investments require initial margin
deposits with a custodian, which consist of cash or cash equivalents, up to
approximately 10% of the contract amount. The amount of these deposits is
determined by the exchange or Board of Trade on which the contract is traded
and is subject to change. At June 30, 1997, there were no financial futures
contracts outstanding.
(D) CONCENTRATION OF RISK: The Fund follows an investment policy of
investing primarily in municipal obligations of one state. Economic changes
affecting the state and certain of its public bodies and municipalities may
affect the ability of issuers within the state to pay interest on, or repay
principal of, municipal obligations held by the Fund.
(E) 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, if any, it is the policy of the Fund not to distribute such gain.
(F) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
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 .50% 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, Rule 12b-1
distribution fees and expenses, 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 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.
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) DISTRIBUTION AND SERVICE PLAN: The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the
1940 Act relating to its Class A, B and C shares. Under the Plan, 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 .50% 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 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 or service fee. During the period ended
June 30, 1997, the distribution fee for Class A, Class B and Class C shares
were $39,958, $2,291 and $47, respectively. During the period ended June 30,
1997, the service fee for Class B and Class C shares were $1,145 and $24,
respectively.
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
Directors who are not "interested persons" of the Company 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 of investment securities,
excluding short-term securities, during the period ended June 30, 1997,
amounted to $15,931,358 and $9,804,848, respectively.
At June 30, 1997, accumulated net unrealized appreciation on investments
was $1,418,441, consisting of $1,451,423 gross unrealized appreciation and
$32,982 gross unrealized depreciation.
At June 30, 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 which are related
to the Federal Funds rate in effect at the time of borrowings. For the period
ended June 30, 1997, the Fund did not borrow under the Facility.
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
The Dreyfus/Laurel Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier Limited Term
Massachusetts Municipal Fund of The Dreyfus/Laurel Tax-Free Municipal Funds
as of June 30, 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 or periods 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 June 30, 1993 were audited by other
auditors whose report thereon, dated August 11, 1993, 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 June 30, 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 Limited Term Massachusetts Municipal Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 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 or periods in the four-year period then ended, in
conformity with generally accepted accounting principles.
[KPMG Peat Marwick LLP signature logo]
New York, New York
August 8, 1997
DREYFUS PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended June 30, 1997:
_ all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal income tax and, for individuals
who are Massachusetts residents, Massachusetts personal income taxes), and
_ the Fund hereby designates $.0241 per share as a long-term capital gain
distribution (49.07% of which is not subject to Massachusetts personal income
tax) of the $.0245 per share paid on December 6, 1996.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
DREYFUS PREMIER LIMITED TERM
MASSACHUSETTS MUNICIPAL 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. 346/746AR976
Annual Report
Dreyfus Premier
Limited Term
Massachusetts
Municipal Fund
June 30, 1997
[Dreyfus lion2 hres logo]
Registration Mark
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Premier
Limited Term New York Municipal Fund for its annual reporting period ended
June 30, 1997. For this twelve-month period, the Fund provided the following
total returns, income dividends and distribution rates:
<TABLE>
<CAPTION>
Approximate
Total Return* Income Dividends** Distribution Rate***
______________ ____________________ _________________
<S> <C> <C> <C>
Class A 6.17% $0.585 4.43%
Class B 5.64% $0.521 4.06%
Class C 5.63% $0.521 4.05%
Class R 6.34% $0.616 4.81%
</TABLE>
ECONOMIC REVIEW
Despite recent moderation in the rate of new job creation, the latest
reported unemployment rate (5% in June) was the lowest since 1973. When the
unemployment rate was last at that level, the inflation rate was heading
toward double-digit territory. Now, inflation is subdued; the Consumer Price
Index rose at an annual rate of just 1.4% for the twelve-month period through
May. Producer prices rose a minuscule 0.6% over the same time period. It has
been unprecedented for the economy to have seven years of expansion, low
unemployment and low inflation at the same time.
Ever alert for signs of incipient inflation, the Federal Open Market
Committee, the policy-making arm of the Federal Reserve Board (the "Fed"),
has raised interest rates just once in more than two years. That hike came in
March 1997 when the Federal Funds rate was increased by 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.) While there have been
some signs that wages are increasing (an area of particular concern to the
Fed), there have also been indications that the economy may be slowing from
its torrid first quarter pace when it surged at a 5.9% annual rate, the
biggest advance since the fourth quarter of 1987.
Indicating possible moderation in the rate of economic growth, retail
sales declined this spring despite record levels of consumer optimism about
the economy. The latest report on retail sales through June showed a decline
at an annual rate of 5% over the previous three months. This marked the first
three-month decline since the fall of 1981. Yet, despite their sluggish
spending at retail counters, consumers' confidence in the economy continues
to climb, heavily influenced by increased job security and low inflation.
Throughout the current seven-year economic expansion, the pattern of
consumer spending has been stop-and-go, alternating between spurts of
spending and retrenchment. The 5% decline for the three months through May
was preceded by a 15% advance over the previous three-month period. On the
production side of the economy, a survey of corporate buyers compiled by the
National Association of Purchasing Management reported that growth in factory
activity eased slightly during June. The much-observed supplier-delivery
component of the survey, a measure of how quickly orders are being satisfied
and a possible sign of production bottlenecks, also fell modestly. In further
evidence of a slowing economy during the second quarter, the Commerce
Department recently reported that factory orders fell in May.
Rising incomes, low unemployment and quiescent inflation have all
contributed to a feeling of confidence, as measured by the Conference Board's
Index of Consumer Sentiment, that has been unmatched for 28 years. Many
economists feel that the optimistic consumer sentiment indicators provide a
floor to economic growth and will spur consumer spending later in the year,
particularly if the unemployment rate remains low and job security worries
recede further. We are mindful of the potent role that consumers play in the
economy _ their spending accounts for about two thirds of economic output.
So, we remain alert to signs of any strain on productive capacity caused by
increases in consumer spending that might, in turn, lead to another
tightening in monetary policy by the Fed.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
From a general credit quality standpoint, we believe New York credits
have improved over the reporting period. Yet the improvement was less
significant compared to other states because of New York's difficulty in
retaining and attracting industry. The credit on general obligation bonds
improved slowly and the rosier outlook was reflected by Standard & Poor's A-
rating. Better than expected economic performance during this fiscal year has
contributed to a projected surplus of more than $1 billion. The bulk of this
surplus will be used to balance the fiscal 1998 budget. The third phase of
the 20% personal income tax reduction is expected to contribute $6.1 billion
in tax relief to State residents in 1998. Employment continues to expand
slowly after large job losses during the recession in the early 1990s.
Unemployment is down but remains above the national average. Wealth in the
State remains well above average.
The credit status of most general obligation bonds within the State has
improved in recent years, particularly securities of New York City. Wall
Street's booming profitability has inflated tax receipts to the City and has
provided a welcome reduction in one-time measures to achieve budgetary
balance. Interestingly, the largest percentage gain in jobs was in motion
picture services. Office vacancies in Manhattan are down from 17% in 1992 to
just above 11% and rental rates have finally begun to rise after a prolonged
and significant downward trend stemming from the late 1980's.
With talks of tax reform a distant memory, municipal bonds performed very
well over the past twelve months. Interest rates declined in the last half of
1996 due to investor perceptions that the economy was becoming sluggish and
that the Fed would ease monetary policy. Following warnings by Fed Chairman
Greenspan about the "irrational exuberance" present in financial markets, the
Federal Open Market Committee increased short-term interest rates by 25 basis
points in March 1997. In anticipation of this tightening of monetary policy
by the Fed, fixed-income yields rose during the first quarter of 1997. The
rise was fueled by expectations that the Fed might continue to tighten
monetary policy. However, low supply and strong demand cushioned the losses
in the municipal bond market with yields generally increasing by 25 basis
points.
The lack of further tightening in the second quarter of 1997 combined
with quiescent inflation resulted in a rebound in bond prices and a recovery
of losses incurred during the first quarter of 1997. Yields were only
slightly higher at the close of the second quarter compared to the end of
1996. Ten-year AAA rated municipal securities finished the reporting period
at 4.85% versus 4.80% at year-end.
Municipal bonds outperformed comparable maturity taxable securities
during the first quarter of 1997, but underperformed during the second
quarter. However, the total return on the Lehman Brothers 10-Year Municipal
Bond Index for the semi-annual period still significantly outperformed the
Ten-Year Treasury Note (3.27% vs. 2.44%) highlighting the strong demand for
municipal securities throughout the period.
Lower rated fixed income securities significantly outperformed higher
credit quality securities during the first half of 1997. Stronger economic
performance has enhanced revenue generation capabilities of weaker
jurisdictions and corporations. Notable fiscal improvements have occurred in
cyclical industries such as airlines. Furthermore, some prominent weaker
municipalities, such as New York City, have enjoyed a surge in revenue
collection in light of the robust economy. Improving credit quality and strong
er demand from yield-hungry investors has pushed yield spreads between Baa
and AAA rated securities to their narrowest levels in recent memory. The
additional yield spread for thirty-year Baa rated bonds is less than 50 basis
points higher than AAA rated municipal bonds as of the end of the reporting
period.
The Fund continued to emphasize high quality securities; over 65% of the
portfolio was rated AA or higher as of the end of the reporting period. The
weighted average portfolio maturity was extended during the latter half of
1996 due to a falling interest rate environment. It was then cautiously
shortened in anticipation of a potential rise in interest rates to preserve
capital in the first quarter of 1997. However, as yields became more
attractive, the Fund's weighted average maturity was
slightly extended to lock into the attractive interest rate environment in
the second quarter. Throughout the reporting period, the Fund's maturity
varied in a 6.5- to 8-year range and ended the reporting period at
approximately 6.97 years.
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 greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[Kristin Lindquist signature logo]
Kristin Lindquist
Portfolio Manager
July 15, 1997
New York, New York
* 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.
**Income dividends per share were exempt from Federal and State of New York
and New York City personal income taxes. Some income may be subject to the
Federal Alternative Minimum Tax for certain shareholders.
*** 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
the net asset value per share at the end of the period in the case of Class
B, Class C and Class R shares, adjusted for capital gain distributions.
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND JUNE 30, 1997
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER
LIMITED TERM NEW YORK MUNICIPAL FUND CLASS A SHARES WITH THE LEHMAN BROTHERS
10-YEAR MUNICIPAL BOND INDEX AND THE LEHMAN BROTHERS
7-YEAR MUNICIPAL BOND INDEX
$20,419
Lehman Brothers
10-Year Municipal Bond Index*
Dollars
$18,822
Lehman Brothers
7-Year Municipal Bond Index*
$17,181
Dreyfus Premier Limited Term
New York Municipal Fund
(Class A Shares)
*Source: Lehman Brothers
[Exhibit A]
<TABLE>
<CAPTION>
Average Annual Total Returns
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 6/30/97 Sales Charge Sales Charge (3.0%) PERIOD ENDED 6/30/97 Redemption Redemption*
__________ ________________ ____________________ _____________________ ____________ __________________
<S> <C> <C> <C> <C> <C>
1 Year 6.17% 3.00% 1 Year 5.64% 2.64%
5 Year 5.62 4.98 From Inception (12/28/94) 6.35 5.62
From Inception (3/7/88) 6.32 5.98
CLASS C SHARES CLASS R SHARES
__________________________________________________________________ __________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
PERIOD ENDED 6/30/97 No Redemption Redemption** PERIOD ENDED 6/30/97
_________ _______________ ____________________ _____________________
1 Year 5.63% 4.88% 1 Year 6.34%
From Inception (12/28/94) 6.41 6.41 From Inception (2/1/93) 5.36
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Fund's Class A
shares on 3/7/88 (Inception Date) to a $10,000 investment made in the Lehman
Brothers 10-Year Municipal Bond Index (the "Lehman 10-Year Index") on that
date, as well as to the Lehman Brothers 7-Year Municipal Bond Index (the
"Lehman 7-Year Index") which are described below. For comparative purposes,
the value of the Lehman 10-Year Index on 2/29/88 is used as the beginning
value on 3/7/88. The Lehman 7-Year Index began in January of 1990. This
investment assumes a beginning value of $11,063 which is equal to the value
of the $10,000 investment in the Fund at the starting point of this Index,
without taking into account the Fund's maximum initial sales charge on Class
A shares. 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.
The Fund invests primarily in New York investment-grade municipal bonds with
intermediate maturities and expects to maintain an average maturity of less
than 10 years. 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. Unlike the Fund, the Lehman 10-Year Index is an
unmanaged total return performance benchmark for the investment-grade,
geographically unrestricted 10-year tax exempt bond market, consisting of
municipal bonds with maturities of 9-12 years. The Lehman 7-Year Index
consists of bonds with similar characteristics with maturities of 6-8 years.
The Indices do not take into account charges, fees and other expenses and are
not limited to investments principally in New York municipal obligations.
These factors can contribute to the Indices potentially outperforming the
Fund. 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 3% and is
reduced to 0% after five years.
**The maximum contingent deferred sales charge for Class C shares is .75% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS JUNE 30, 1997
Principal
Long-Term Municipal Investments_97.4% Amount Value
__________ __________
<S> <C> <C>
New York_89.4%
Albany County 7%, 10/1/2000 (Insured; FGIC, Prerefunded 10/1/1999) (a)...... $ 125,000 $ 136,151
Amherst, Public Improvement 6.20%, 4/1/2002 (Insured; FGIC)................. 150,000 161,221
Erie County Water Authority, Water Revenue, Refunding:
6.65%, 12/1/1999 (Insured; AMBAC)......................................... 250,000 264,560
7%, 12/1/2000 (Insured; AMBAC)............................................ 200,000 217,490
Greece Central School District 6%, 6/15/2010................................ 225,000 245,029
Town of Hempstead 6.30%, 1/1/2002 (Insured; AMBAC).......................... 150,000 160,737
Metropolitan Transportation Authority, Transportation Facilities Revenue
6.30%, 7/1/2007 (Insured; MBIA)........................................... 250,000 277,520
Monroe County, Public Improvement 7%, 6/1/2003 (Insured; FGIC).............. 200,000 225,888
Municipal Assistance Corporation for New York City:
7.10%, 7/1/2000........................................................... 100,000 107,335
6%, 7/1/2005 (Insured; AMBAC)............................................. 100,000 107,587
Nassau County 7%, 7/1/2002 (Insured; AMBAC, Prerefunded 7/1/2000) (a)....... 100,000 108,631
New York City:
5.75%, 8/1/2012........................................................... 100,000 100,427
Refunding 7%, 8/1/2006.................................................... 300,000 336,384
New York City Municipal Water Finance Authority,
Water and Sewer Systems Revenue 5.50%, 6/15/2027 (Insured; MBIA).......... 250,000 244,782
New York State, Refunding 6.25%, 8/15/2004.................................. 200,000 218,068
New York State Dormitory Authority, Revenue:
(Consolidated City University) 5.75%, 7/1/2018 (Insured; FSA) (b)......... 200,000 208,858
(FIT Student Housing) 5.75%, 7/1/2006 (Insured; AMBAC).................... 130,000 138,307
Refunding:
(Mental Health Services Facilities) 6%, 8/15/2005....................... 260,000 275,566
(Vassar College) 6%, 7/1/2005........................................... 250,000 272,253
(Rochester Institute of Technology) 5.50%, 7/1/2006 (Insured; MBIA)....... 200,000 209,616
New York State Housing Finance Agency, Refunding
(State University Construction) 7.15%, 11/1/1997.......................... 155,000 156,734
New York State Local Government Assistance Corporation 6.375%, 4/1/2000..... 200,000 210,330
New York State Mortgage Agency, Homeowner Mortgage Revenue
7.50%, 10/1/1998.......................................................... 45,000 46,119
New York State Power Authority, General Purpose Revenue
7%, 1/1/2018 (Prerefunded 1/1/2010) (a)................................... 300,000 349,944
New York State Thruway Authority (Emergency Highway Construction and
Reconstruction)
6%, 3/1/2002 (Insured; FSA)............................................... 200,000 212,536
New York State Urban Development Corporation, Refunding
(Corporation Purpose) 5.50%, 7/1/2005..................................... 200,000 209,416
Orange County 5.10%, 11/15/2002............................................. 130,000 134,276
Oyster Bay 7.125%, 4/15/2000 (Insured; FGIC)................................ 180,000 193,693
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
_________ _________
New York (continued)
Port Washington Union Free School District 6%, 8/1/2001..................... $ 125,000 $ 132,376
Suffolk County, Public Improvement
7%, 4/1/2002 (Insured; MBIA, Prerefunded 4/1/2001) (a).................... 150,000 163,454
Triborough Bridge and Tunnel Authority, General Purpose Revenue:
7.40%, 1/1/2003 (Prerefunded 1/1/1999) (a)................................ 200,000 212,512
7%, 1/1/2011 (Prerefunded 1/1/1999) (a)................................... 150,000 158,519
Refunding 5.90%, 1/1/2007................................................. 100,000 107,643
Westchester County 6.625%, 11/1/2004........................................ 250,000 282,280
Western Nassau County Water Authority,
Water Systems Revenue 5.50%, 5/1/2004 (Insured; AMBAC).................... 250,000 262,530
U. S. Related_8.0%
Puerto Rico Commonwealth, Refunding 6.25%, 7/1/2011 (Insured; MBIA)......... 200,000 222,924
Puerto Rico Commonwealth Highway and Transportation Authority,
Highway Revenue 6.25%, 7/1/2009 (Insured; MBIA)........................... 150,000 167,561
University of Puerto Rico, University Revenues, Refunding
6.25%, 6/1/2006 (c)....................................................... 200,000 222,906
____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $7,215,269)..................... $7,462,163
============
Short-Term Municipal Investments_2.6%
New York;
New York City Municipal Water Finance Authority,
Water and Sewer Systems Revenue, VRDN 4.05% (d) (cost $200,000)........... $ 200,000 $ 200,000
============
TOTAL INVESTMENTS_100.0% (cost $7,415,269).................................. $7,662,163
============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (e) or Moody's or Standard & Poor's Percentage of Value
____ ______ _________________ ______________________
<S> <C> <C> <C>
AAA Aaa AAA 68.4%
AA Aa AA 10.5
A A A 14.9
BBB Baa BBB 3.6
F1+ & F1 MIG1, VMIG1 & P1 SP1 & A1 2.6
______
100.0%
==========
</TABLE>
Notes to Statement of Investments:
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Purchased on a delayed-delivery basis.
(c) Wholly held by the custodian in a segregated account as collateral
for a delayed-delivery security.
(d) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(e) Fitch currently provides creditworthiness information for a limited
number of investments.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997
Cost Value
____________ __________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $7,415,269 $7,662,163
Cash....................................... 30,529
Interest receivable........................ 137,876
__________
7,830,568
__________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 3,629
Due to Distributor......................... 167
Payable for investment securities purchased 210,150
__________
213,946
__________
NET ASSETS.................................................................. $7,616,622
============
REPRESENTED BY: Paid-in capital............................ $7,359,980
Accumulated net realized gain (loss) on investments 9,748
Accumulated net unrealized appreciation (depreciation)
....................... on investments_Note 3 246,894
__________
NET ASSETS.................................................................. $7,616,622
============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
____________________________
Class A Class B Class C Class R
_________ _________ _________ _________
<S> <C> <C> <C> <C>
Net Assets..................... $2,043,229 $117,544 $84,079 $5,371,770
Shares Outstanding....................... 160,064 9,198 6,570 420,895
NET ASSET VALUE PER SHARE...... $12.77 $12.78 $12.80 $12.76
====== ======== ========= ========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1997
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $373,665
EXPENSES: Management fee_Note 2(a)................... $ 34,851
Distribution and service fees_Note 2(b).... 6,651
Loan commitment fees_Note 4................ 53
______________
Total Expenses....................... 41,555
___________
INVESTMENT INCOME_NET....................................................... 332,110
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 3:
Net realized gain (loss) on investments.... $ 9,828
Net unrealized appreciation (depreciation) on investments 78,389
______________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 88,217
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $420,327
============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1997 June 30, 1996
_______________ _______________
OPERATIONS:
Investment income_net.................................................... $ 332,110 $ 264,764
Net realized gain (loss) on investments.................................. 9,828 36,858
Net unrealized appreciation (depreciation) on investments................ 78,389 (63,766)
_______________ _______________
Net Increase (Decrease) in Net Assets Resulting from Operations...... 420,327 237,856
_______________ _______________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A shares......................................................... (95,673) (106,844)
Class B shares......................................................... (5,389) (1,519)
Class C shares......................................................... (2,540) (2,084)
Class R shares......................................................... (228,486) (154,347)
Net realized gain on investments:
Class A shares......................................................... (9,531) ____
Class B shares......................................................... (585) ____
Class C shares......................................................... (238) ____
Class R shares......................................................... (20,591) ____
_______________ _______________
Total Dividends...................................................... (363,033) (264,794)
_______________ _______________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares......................................................... 90,003 304,803
Class B shares......................................................... 20,500 119,997
Class C shares......................................................... 29,735 127,309
Class R shares......................................................... 2,109,511 1,483,810
Dividends reinvested:
Class A shares......................................................... 78,384 76,624
Class B shares......................................................... 5,974 1,520
Class C shares......................................................... 2,770 1,925
Class R shares......................................................... 28,536 12,580
Cost of shares redeemed:
Class A shares......................................................... (251,709) (606,642)
Class B shares......................................................... (30,000) (16)
Class C shares......................................................... (585) (147,090)
Class R shares......................................................... (861,594) (262,285)
_______________ _______________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 1,221,525 1,112,535
_______________ _______________
Total Increase (Decrease) in Net Assets............................ 1,278,819 1,085,597
NET ASSETS:
Beginning of Period...................................................... 6,337,803 5,252,206
_______________ _______________
End of Period............................................................ $7,616,622 $6,337,803
============== ===============
(Distributions in excess of investment income_net)......................... ____ $ (22)
_______________ _______________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
______________________________________
Year Ended Year Ended
June 30, 1997 June 30, 1996
_______________ _______________
CAPITAL SHARE TRANSACTIONS:
Class A
______
Shares sold.............................................................. 7,056 23,900
Shares issued for dividends reinvested................................... 6,158 5,966
Shares redeemed.......................................................... (19,696) (47,503)
_______________ _______________
Net Increase (Decrease) in Shares Outstanding (6,482) (17,637)
=============== ==============
Class B
______
Shares sold.............................................................. 1,608 9,368
Shares issued for dividends reinvested................................... 469 119
Shares redeemed.......................................................... (2,366) (1)
_______________ _______________
Net Increase (Decrease) in Shares Outstanding (289) 9,486
=============== ==============
Class C
______
Shares sold.............................................................. 2,322 9,989
Shares issued for dividends reinvested................................... 217 150
Shares redeemed.......................................................... (46) (11,396)
_______________ _______________
Net Increase (Decrease) in Shares Outstanding 2,493 (1,257)
=============== ==============
Class R
____
Shares sold.............................................................. 165,819 116,482
Shares issued for dividends reinvested................................... 2,244 980
Shares redeemed.......................................................... (68,185) (20,278)
______ ______
Net Increase (Decrease) in Shares Outstanding 99,878 97,184
=============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL 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.
Class A Shares
__________________________________________________________________________
Period Ended
Year Ended June 30, June 30, Year Ended November 30,
____________________________ _______________________
PER SHARE DATA: 1997 1996 1995(1,2,3) 1994(1,2,3) 1993(1) 1992
________ ________ ________ ____________ ________ ________
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $12.65 $12.71 $12.59 $13.04 $12.70 $12.34
________ ______ ______ _______ ______ ______
Investment Operations:
Investment income_net................ .59 .59 .60 .35(4) .66(4) .68(4)
Net realized and unrealized gain (loss)
on investments..................... .18 (.06) .17 (.45) .46 .36
________ ______ ______ _______ ______ ______
Total from Investment Operations..... .77 .53 .77 (.10) 1.12 1.04
________ ______ ______ _______ ______ ______
Distributions:
Dividends from investment income_net. (.59) (.59) (.60) (.35) (.66) (.68)
Dividends from net realized gain
on investments (.06) __ (.04) __ (.12) __
Dividends in excess of net realized
gain on investments................ __ __ (.01) __ __ __
________ ______ ______ _______ ______ ______
Total Distributions.................. (.65) (.59) (.65) (.35) (.78) (.68)
________ ______ ______ _______ ______ ______
Net asset value, end of period....... $12.77 $12.65 $12.71 $12.59 $13.04 $12.70
====== ====== ======= ======= ======= =======
TOTAL INVESTMENT RETURN(5)............... 6.17% 4.23% 6.39% (.80%)(6) 9.00% 8.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .75% .75% .75% .57%(7,8) .46%(8) .45%(8)
Ratio of net investment income
to average net assets.............. 4.60% 4.62% 4.83% 4.66%(7) 5.11% 5.43%
Portfolio Turnover Rate.............. 15.00% 43.43% 32.00% 13.00%(6) 32.00% __
Net Assets, end of period (000's Omitted) $2,043 $2,106 $2,340 $2,922 $2,100 $5,308
(1) 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 redesignated Class A shares. The Financial Highlights for the year
ended June 30, 1995 are based upon a Class A (formerly Investor shares)
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 outstanding
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.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. 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.
(3) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
(4) Net investment income per share before waiver of fees and reimbursement
of expenses by the investment adviser and/or
custodian and/or transfer agent for the period ended June 30, 1994 and for
the years ended November 30, 1993 and 1992 were $.28, $.42 and $.52,
respectively.
(5) Exclusive of sales load.
(6) Not annualized.
(7) Annualized.
(8) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or
custodian and/or transfer agent for the period ended June 30, 1994 and for
the years ended November 30, 1993 and 1992 were 1.51%, 2.32% and 1.70%,
respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL 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.
Class B Shares Class C Shares
____________________ _____________________________________________
Period Ended
Year Ended June 30, Year Ended June 30, June 30,
___________________ _______________________
PER SHARE DATA: 1997 1996(1) 1997 1996 1995(1)
______ ______ ______ ________ __________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.... $12.66 $12.71 $12.68 $12.71 $12.21
______ ______ ______ ________ __________
Investment Operations:
Investment income_net................... .52 .54 .52 .54 .28
Net realized and unrealized gain (loss)
on investments...................... .18 (.05) .18 (.03) .49
______ ______ ______ ________ __________
Total from Investment Operations.... .70 .49 .70 .51 .77
______ ______ ______ ________ __________
Distributions:
Dividends from investment income_net. (.52) (.54) (.52) (.54) (.27)
Dividends from net realized gain
on investments (.06) __ (.06) __ __
______ ______ ______ ________ __________
Total Distributions................ (.58) (.54) (.58) (.54) (.27)
______ ______ ______ ________ __________
Net asset value, end of period......... $12.78 $12.66 $12.80 $12.68 $12.71
======= ======= ======= ====== ======
TOTAL INVESTMENT RETURN(2)............... 5.64% 3.85% 5.63% 4.02% 6.39%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets... 1.25% 1.25% 1.25% 1.25% 1.25%(4)
Ratio of net investment income
to average net assets.............. 4.09% 3.97% 4.08% 4.15% 4.34%(4)
Portfolio Turnover Rate............. 15.00% 43.43% 15.00% 43.43% 32.00%
Net Assets, end of period (000's Omitted) $118 $120 $84 $52 $68
(1) The Fund commenced selling Class B and Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL 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.
Class R Shares
_____________________________________________________________________
Period Ended Period Ended
Year Ended June 30, June 30, November 30,
____________________________
PER SHARE DATA: 1997 1996 1995(1) 1994(1,2) 1993(3)
______ ______ ________ _________ ___________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period........... $12.65 $12.71 $12.59 $13.04 $12.85
______ ______ ________ ________ ________
Investment Operations:
Investment income_net...................... .62 .63 .64 .37(4) .57(4)
Net realized and unrealized gain (loss)
on investments............................ .17 (.06) .17 (.45) .31
______ ______ ________ ________ ________
Total from Investment Operations.............. .79 .57 .81 (.08) .88
______ ______ ________ ________ ________
Distributions:
Dividends from investment income_net.......... (.62) (.63) (.64) (.37) (.57)
Dividends from net realized gain on investments.. (.06) __ (.04) __ (.12)
Dividends in excess of net realized gain
on investments __ __ (.01) __ __
______ ______ ________ ________ ________
Total Distributions........................... (.68) (.63) (.69) (.37) (.69)
______ ______ ________ ________ ________
Net asset value, end of period............... $12.76 $12.65 $12.71 $12.59 $13.04
====== ======= ======== ======== ========
TOTAL INVESTMENT RETURN(5)..................... 6.34% 4.49% 6.65% (.67%)(6) 6.95%(6)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets..... .50% .50% .50% .29%(7,8) .25%(7,8)
Ratio of net investment income
to average net assets.................... 4.85% 4.87% 5.08% 4.94%(6) 5.20%(7)
Portfolio Turnover Rate..................... 15.00% 43.43% 32.00% 13.00%(6) 32.00%
Net Assets, end of period (000's Omitted)...... $5,372 $4,060 $2,844 $2,388 $2,542
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. 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.
(2) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.
(3) 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 redesignated Class R shares. The table above is based upon a Retail
share outstanding from February 1, 1993 to April 3, 1994 and a Trust share
outstanding from April 4, 1994 to October 16, 1994.
(4) Net investment income per share before waiver of fees and reimbursement
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 $.30 and $.36, respectively.
(5) Exclusive of sales load.
(6) Not annualized.
(7) Annualized.
(8) Annualized expense ratios before voluntary waiver of fees and
reimbursement 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.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Limited Term New York Municipal Fund is a series of The
Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is registered
under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company and operates as a series company
currently offering seven series including the Fund. The Fund's investment
objective is to maximize current income exempt from Federal, New York State
and New York City income taxes to the extent consistent with the preservation
of capital. The Dreyfus Corporation ("Manager") serves as the Fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon Bank").
On January 31, 1997 the Fund's Trustees approved a change to the Fund's
name from "Premier Limited Term New York Municipal Fund" to "Dreyfus Premier
Limited Term New York Municipal Fund," which became effective March 31, 1997.
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 distribution and service fees. 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 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 and
service fees and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
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 require the use of management estimates.
Actual results may differ from estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) 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 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
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(b) Securities transactions and investment income: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(c) Concentration of risk: The Fund follows an investment policy of
investing primarily in municipal obligations of one
state. Economic changes affecting the state and certain of its public bodies
and municipalities may affect the ability of issuers within the state to pay
interest on, or repay principal of, municipal obligations held by the Fund.
(d) 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, if any, it is the policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
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 .50% 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: The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
Class A, B and C shares. Under the Plan, 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 .50% 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 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 or service fee. During the period ended June 30, 1997,
the
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
distribution fee for Class A, Class B and Class C shares were $5,196, $658
and $312, respectively. During the period ended June 30, 1997, the service
fee for Class B and Class C shares were $329 and $156, respectively.
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 Company 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 of investment securities,
excluding short-term securities, during the period ended June 30, 1997,
amounted to $2,504,694 and $1,004,425, respectively.
At June 30, 1997, accumulated net unrealized appreciation on investments
was $246,894, consisting of $247,000 gross unrealized appreciation and $106
gross unrealized depreciation.
At June 30, 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. For the period ended June
30, 1997, the Fund did not borrow under the Facility.
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
INDEPENDENT AUDITORS' REPORT
The Board of Trustees and Shareholders
The Dreyfus/Laurel Tax-Free Municipal Funds:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier Limited Term New
York Municipal Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June
30, 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 or
periods 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 each
of the years or period in the two-year period ended November 30, 1993 were
audited by other auditors whose report thereon, dated January 18, 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 June 30, 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 Limited Term New York Municipal Fund of The
Dreyfus/Laurel Tax-Free Municipal Funds as of June 30, 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 or periods in the four-year period then ended, in
conformity with generally accepted accounting principles.
[KPMG Peat Marwick LLP signature logo]
New York, New York
August 8, 1997
DREYFUS PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended June 30, 1997:
_all the dividends paid from investment income-net are "exempt-interest
dividends" (not subject to regular Federal and, for individuals who are New
York residents, New York State and New York City personal income taxes), and
_the Fund hereby designates $.0450 per share as a long-term capital gain
distribution of the $.0582 per share paid on December 5, 1996.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
DREYFUS PREMIER LIMITED TERM
NEW YORK MUNICIPAL 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. 348/748AR976
Annual Report
Dreyfus Premier
Limited Term
New York
Municipal Fund
June 30, 1997
[Dreyfus lion2 hres logo]
Registration Mark
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Premier
Limited Term Municipal Fund for its annual reporting period ended June 30,
1997. For the twelve-month period, the Fund provided the following total
returns, income dividends and distribution rates:
<TABLE>
<CAPTION>
Approximate
Total Return* Income Dividends** Distribution Rate***
______________ ____________________ _____________________
<S> <C> <C> <C>
Class A 6.92% $0.543 4.33%
Class B 6.38% $0.482 3.97%
Class C 6.50% $0.486 3.99%
Class R 7.17% $0.572 4.71%
</TABLE>
ECONOMIC REVIEW
Despite recent moderation in the rate of new job creation, the latest
reported unemployment rate (5% in June) was the lowest
since 1973. When the unemployment rate was last at that level, the inflation
rate was heading toward double-digit territory. Now, inflation is subdued;
the Consumer Price Index rose at an annual rate of just 1.4% for the
twelve-month period through May. Producer prices rose a minuscule 0.6% over
the same time period. It has been unprecedented for the economy to have seven
years of expansion, low unemployment and low inflation at the same time.
Ever alert for signs of incipient inflation, the Federal Open Market
Committee, the policy-making arm of the Federal Reserve Board (the "Fed"),
has raised interest rates just once in more than two years. That hike came in
March 1997 when the Federal Funds rate was increased by 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.) While there have been
some signs that wages are increasing (an area of particular concern to the
Fed), there have also been indications that the economy may be slowing from
its torrid first quarter pace when it surged at a 5.9% annual rate, the
biggest advance since the fourth quarter of 1987.
Indicating possible moderation in the rate of economic growth, retail
sales declined this spring despite record levels of consumer optimism about
the economy. The latest report on retail sales through June showed a decline
at an annual rate of 5% over the previous three months. This marked the first
three-month decline since the fall of 1981. Yet, despite their sluggish
spending at retail counters, consumers' confidence in the economy continues
to climb, heavily influenced by increased job security and low inflation.
Throughout the current seven-year economic expansion, the pattern of
consumer spending has been stop-and-go, alternating between spurts of
spending and retrenchment. The 5% decline for the three months through May
was preceded by a 15% advance over the previous three-month period. On the
production side of the economy, a survey of corporate buyers compiled by the
National Association of Purchasing Management reported that growth in factory
activity eased slightly during June. The much-observed supplier-delivery
component of the survey, a measure of how quickly orders are being satisfied
and a possible sign of production bottlenecks, also fell modestly. In further
evidence of a slowing economy during the second quarter, the Commerce
Department recently reported that factory orders fell in May.
Rising incomes, low unemployment and quiescent inflation have all
contributed to a feeling of confidence, as measured by the Conference Board's
Index of Consumer Sentiment, that has been unmatched for 28 years. Many
economists feel that the optimistic consumer sentiment indicators provide a
floor to economic growth and will spur consumer spending later in the year,
particularly if the unemployment rate remains low and job security worries
recede further. We are mindful of the potent role that consumers play in the
economy _ their spending accounts for about two thirds of economic output.
So, we remain alert to signs of any strain on productive capacity caused by
increases in consumer spending that might, in turn, lead to another
tightening in monetary policy by the Fed.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
With talk of tax reform a distant memory, municipal bonds performed very
well over the past twelve months. Interest rates declined in the last half of
1996 due to investor perceptions that the economy was becoming sluggish and
that the Fed would ease monetary policy. Instead, after warnings by Fed
Chairman Greenspan about the "irrational exuberance" present in financial
markets, the Federal Open Market Committee increased short-term interest
rates by 25 basis points in March 1997. In anticipation of this tightening of
monetary policy by the Fed, fixed-income yields rose during the first quarter
of 1997. The rise was fueled by expectations that the Fed would continue to
tighten monetary policy. However, low supply and strong demand cushioned the
losses in the municipal bond market with yields generally increasing by 25
basis points.
The lack of further tightening in the second quarter of 1997, combined
with quiescent inflation, resulted in a rebound in bond prices and a recovery
of losses incurred during the first quarter of 1997. Yields were only
slightly higher at the end of the second quarter compared to the end of 1996.
Ten-year AAA rated municipal securities finished the reporting period at
4.85% versus 4.80% at year-end.
Municipal bonds outperformed comparable maturity taxable securities
during the first quarter of 1997, but underperformed during the second
quarter. However, the total return on the Lehman Brothers 10-Year Municipal
Bond Index for the semi-annual period still significantly outperformed the
Ten-Year Treasury Note (3.27% vs. 2.44%), highlighting the strong demand for
municipal securities throughout the period.
Lower rated fixed income securities significantly outperformed higher
credit quality securities during the first half of 1997. Stronger economic
performance has enhanced revenue generation capabilities of weaker
jurisdictions and corporations. Notable fiscal improvements have occurred in
cyclical industries such as airlines. Improving credit quality and stronger
demand from yield-hungry investors has pushed yield spreads between Baa and
AAA rated securities to their narrowest levels in recent memory. The
additional yield spread for thirty-year Baa rated bonds is less than 50 basis
points higher than AAA rated municipal bonds as of the end of the reporting
period.
The Fund continued to emphasize high quality securities; over 65% of the
portfolio was rated AA or higher as of the end of the reporting period. The
weighted average portfolio maturity was extended during the latter half of
1996 due to a falling interest rate environment. It was then cautiously
shortened in anticipation of a potential rise in interest rates to preserve
principal in the first quarter of 1997. However, as yields became more
attractive, the Fund's weighted average maturity was slightly extended to
lock into the attractive interest rate environment in the second quarter.
Throughout the reporting period, the Fund's maturity varied in a 6.5- to
8-year range and ended the reporting period at approximately 7.63 years.
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 greatly appreciate your continued confidence in the Fund
and in The Dreyfus Corporation.
Very truly yours,
[John Flahive signature logo]
John Flahive
Portfolio Manager
July 15, 1997
New York, New York
* 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.
**Income dividends per share were exempt from Federal personal income taxes.
Some income may be subject to the Federal Alternative Minimum Tax for certain
shareholders.
*** 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
the net asset value per share at the end of the period in the case of Class
B, Class C and Class R shares, adjusted for capital gain distributions.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND JUNE 30, 1997
[Exhibit A]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER
LIMITED TERM MUNICIPAL FUND
CLASS A SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX AND THE
LEHMAN BROTHERS
7-YEAR MUNICIPAL BOND INDEX
$21,759
Lehman Brothers
10-Year Municipal Bond Index*
Dollars
$21,488
Lehman Brothers
7-Year Municipal Bond Index*
$20,241
Dreyfus Premier Limited Term
Municipal Fund
(Class A Shares)
*Source: Lehman Brothers
[Exhibit A]
<TABLE>
<CAPTION>
Average Annual Total Returns
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 6/30/97 Sales Charge Sales Charge (3.0%) PERIOD ENDED 6/30/97 Redemption Redemption*
__________ ________________ ____________________ _____________________ ____________ __________________
<S> <C> <C> <C> <C> <C>
1 Year 6.92% 3.69% 1 Year 6.38% 3.38%
5 Year 6.04 5.39 From Inception (12/28/94) 7.08 6.35
10 Year 7.64 7.31
CLASS C SHARES CLASS R SHARES
__________________________________________________________________ __________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
PERIOD ENDED 6/30/97 No Redemption Redemption** PERIOD ENDED 6/30/97
_________ _______________ ____________________ _____________________
1 Year 6.50% 5.75% 1 Year 7.17%
From Inception (12/28/94) 7.16 7.16 From Inception (2/1/93) 5.84
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in the Fund's Class A
shares on 6/30/87 to a $10,000 investment made in the Lehman Brothers 10-Year
Municipal Bond Index (the "Lehman 10-Year Index") on that date as well as to
the Lehman Brothers 7-Year Municipal Bond Index (the "Lehman 7-Year Index")
which are described below. The Lehman 7-Year Index began in January of 1990.
This investment assumes a beginning value of $12,630 which is equal to the
value of the $10,000 investment in the Fund at the starting point of this
Index, without taking into account the Fund's maximum initial sales charge on
Class A shares. All dividends and capital gain distributions are reinvested.
Performance for Class B, Class C and Class R shares will vary from the perform
ance of Class A shares shown above due to differences in charges and
expenses.
The Fund invests primarily in investment-grade municipal bonds with
intermediate maturities and expects to maintain an average maturity of less
than 10 years. 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. Unlike the Fund, the Lehman 10-Year Index is an
unmanaged total return performance benchmark for the investment-grade,
10-year tax exempt bond market, consisting of municipal bonds with maturities
of 9-12 years. The Lehman 7-Year Index consists of bonds with similar
characteristics with maturities of 6-8 years. The Indices do not take into
account charges, fees and other expenses which can contribute to the Indices
potentially outperforming the Fund. 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 3% and
is reduced to 0% after five years.
**The maximum contingent deferred sales charge for Class C shares is .75% for
shares redeemed within one year of the date of purchase.
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
STATEMENT OF INVESTMENTS JUNE 30, 1997
Principal
Long-Term Municipal Investments_96.5% Amount Value
___________ ___________
<S> <C> <C>
Alaska_2.8%
Anchorage, Port and Term Facilities Revenue, Refunding
6%, 2/1/2003 (Insured; MBIA).............................................. $ 1,110,000 $ 1,185,458
Arizona_5.9%
Maricopa County Unified School District Number 69 (Paradise Valley)
6.35%, 7/1/2010 (Insured; MBIA)........................................... 550,000 618,959
Mesa, Refunding 5.90%, 7/1/2000 (Insured; AMBAC)............................ 500,000 523,530
Phoenix, Refunding 6.25%, 7/1/2016.......................................... 1,250,000 1,396,750
Arkansas_1.2%
North Little Rock, Electric Revenue, Refunding 6%, 7/1/2001 (Insured; MBIA). 500,000 530,290
Connecticut_1.3%
Stamford 6.60%, 1/15/2007................................................... 500,000 570,090
Florida_6.7%
Dade County:
Public Improvement 7.125%, 10/1/2016...................................... 100,000 102,257
Sales Tax Revenue, Refunding 6%, 10/1/2002 (Insured;AMBAC)................ 1,000,000 1,071,570
Water and Sewer System Revenue 6.25%, 10/1/2008 (Insured; FGIC)........... 535,000 598,579
Miami Health Facilities Authority, Health Facilities Revenue (Mercy Hospital Project)
6.75%, 8/1/2020 (Insured; AMBAC) (Prerefunded 8/1/2001) (a)............... 1,000,000 1,105,490
Georgia_2.2%
Georgia Municipal Electric Authority, Power Revenue, Refunding 6%, 1/1/2006. 900,000 955,953
Illinois_4.8%
Chicago Metropolitan Water Reclamation District (Chicago Capital Improvement)
7.25%, 12/1/2012.......................................................... 1,000,000 1,210,750
Regional Transportation Authority 7.75%, 6/1/2012 (Insured; FGIC)........... 390,000 486,034
Sangamon County School District Number 186 (Springfield)
7.70%, 6/1/2001 (Insured; MBIA)........................................... 300,000 334,926
Indiana_1.4%
Indiana Transportation Finance Authority, Highway Revenue
7.875%, 12/1/2011 (Insured; MBIA) (Prerefunded 12/1/1998) (a)............. 50,000 53,554
Indianapolis Airport Authority, Special Facilities Revenue
(Federal Express Corp. Project) 7.10%, 1/15/2017.......................... 500,000 552,780
Iowa_2.4%
Iowa Student Loan Liquidity Corp., Student Loan Revenue, Refunding
5.65%, 12/1/2005.......................................................... 1,000,000 1,024,580
Kentucky_2.7%
Kentucky Turnpike Authority, Economic Development Road Revenue, Refunding
(Revitalization Projects) 6.50%, 7/1/2007 (Insured; AMBAC)................ 1,000,000 1,129,130
Massachusetts_4.5%
Massachusetts, Special Obligation Revenue 7%, 6/1/2002...................... 1,000,000 1,109,410
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
__________ __________
Massachusetts (continued)
Worcester, Refunding (Municipal Purpose)
6.25%, 7/1/2009 (Insured; MBIA)........................................... $ 720,000 $ 802,217
Michigan_5.8%
Berkley City School District (Qualified School Board Loan Fund)
7%, 1/1/2009 (Insured; FGIC).............................................. 1,030,000 1,208,056
Comstock Park Public Schools 6%, 5/01/2016 (Prerefunded 5/1/1999) (a)....... 50,000 52,475
Flowerville Community School District
6.50%, 5/1/2006 (Insured; MBIA)........................................... 555,000 619,075
Saint John's Public Schools (Qualified School Board Loan Fund)
6.50%, 5/1/2006 (Insured; FGIC)........................................... 525,000 588,415
Mississippi_1.5%
Mississippi Higher Education Assistance Corporation, Student Loan Revenue
6.05%, 9/1/2007........................................................... 620,000 641,595
New Jersey_6.1%
Cumberland County Improvement Authority, SWDR
6%, 1/1/2001 (Insured; FGIC).............................................. 500,000 521,510
Ocean County Utilities Authority, Wastewater Revenue, Refunding
5%, 1/1/2004.............................................................. 1,000,000 1,019,730
New Jersey Transportation Corporation, Capital Grant Anticipation Notes
5.50%, 9/1/2003 (Insured; FSA)............................................ 1,000,000 1,046,170
New York_8.1%
New York City 5.75%, 8/1/2012............................................... 445,000 446,900
New York State, Refunding 6.25%, 8/15/2004.................................. 1,000,000 1,090,340
New York State Dormitory Authority, Revenue:
Refunding (Mental Health Services Facilities) 6%, 8/15/2005............... 1,000,000 1,059,870
(State University Educational) 7.125%, 5/15/2009
(Insured; FGIC) (Prerefunded 5/15/1999) (a)............................. 200,000 213,434
New York State Environmental Facilities Corporation, PCR
(State Water Revolving Fund) 7.50%, 6/15/2012............................. 500,000 551,700
Triborough Bridge and Tunnel Authority, General Purpose Revenue
7%, 11/1/2011 (Prerefunded 1/1/1999) (a).................................. 100,000 105,679
North Carolina_3.5%
Charlotte, Refunding 5.50%, 7/1/2004........................................ 1,405,000 1,477,596
North Carolina Eastern Municipal Power Agency,
Power System Revenue, Refunding 8%, 1/1/2021 (Prerefunded 1/1/1998) (a).. 5,000 5,203
Ohio_2.3%
Clermont County, Hospital Facilities Revenue, Refunding
(Mercy Health System) 5.25%, 9/1/2003 (Insured; AMBAC).................... 685,000 706,406
Cuyahoga County, HR, Refunding (Mount Sinai Medical Center)
8.125%, 11/15/2014 (Prerefunded 11/15/1997) (a)........................... 250,000 258,878
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
___________ ___________
Oregon_.6%
Tri County Metropolitan Transportation District (Light Rail Extension)
5.60%, 7/1/2003........................................................... $ 250,000 $ 264,140
Pennsylvania_5.1%
Pennsylvania Intergovernmental Coop Authority, Special Tax Revenue
(City of Philadelphia Funding Program) 6.80%, 6/15/2022 (Prerefunded 6/15/2002) (a) 1,000,000 1,103,740
Somerset County General Authority, Commonwealth LR
6.70%, 10/15/2003 (Insured; FGIC) (Prerefunded 10/15/2001) (a)............ 1,000,000 1,090,400
South Carolina_1.2%
Anderson County, Hospital Facilities Revenue (Anderson Memorial Hospital)
7.50%, 2/1/2018 (Insured; MBIA) (Prerefunded 2/1/1998) (a)................ 500,000 520,465
Tennessee_1.2%
Louden County Industrial Development Board, SWDR
(Kimberly-Clark Corporation Project) 6.20%, 2/1/2023...................... 500,000 514,975
Texas_10.5%
Austin, Utility System Revenue
8%, 11/15/2016 (Prerefunded 5/15/2001) (a)................................ 200,000 225,494
Fort Bend Independent School District, Refunding (Permanent School Fund
Guaranteed)
6.60%, 2/15/2004.......................................................... 875,000 968,905
Lewisville Independent School District (Building Bonds):
(Permanent School Fund Guaranteed):
7.50%, 8/15/2006........................................................ 650,000 774,157
7.50%, 8/15/2007........................................................ 600,000 721,440
Red River Authority, PCR (Hoechst Celanese Corp. Project)
6.875%, 4/1/2017.......................................................... 750,000 806,835
San Antonio, Electric and Gas Revenue, Refunding 5.50%, 2/1/2020............ 1,000,000 986,590
Utah_1.3%
Intermountain Power Agency, Power Supply Revenue, Refunding
6.25%, 7/1/2009 (Insured; FSA)............................................ 500,000 553,755
Vermont_3.2%
Vermont Educational and Health Buildings Financing Agency, Revenue
(Middlebury College Project) 6%, 11/1/2003................................ 1,260,000 1,357,700
Virginia_2.5%
Virginia Transportation Board, Transportation Contract Revenue, Refunding
(Route 28 Project) 6%, 4/1/2005........................................... 1,000,000 1,068,760
Washington_6.5%
Spokane Regional Solid Waste Management System, Revenue
7.625%, 1/1/2011 (Insured; AMBAC) (Prerefunded 1/1/1999) (a).............. 1,000,000 1,069,910
Washington Public Power Supply System, Revenue, Refunding
(Nuclear Project No. 1):
6%, 7/1/2006 (Insured; MBIA)............................................ 500,000 537,764
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1997
Principal
Long-Term Municipal Investments (continued) Amount Value
___________ ___________
Washington (continued)
Washington Public Power Supply System, Revenue, Refunding (continued):
(Nuclear Project No. 1) (continued):
7%, 7/1/2008............................................................ $ 1,000,000 $ 1,147,570
Wisconsin_1.2%
Wisconsin, Health and Educational Facilities Revenue
(Aurora Medical Group Inc.) 5.75%, 11/15/2007 (Insured; FSA).............. 500,000 530,450
_____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $39,811,178)........................................................ $41,218,389
==============
Short-Term Municipal Investments_3.5%
Louisiana_1.2%
East Baton Rouge Parish, PCR, Refunding, VRDN (Rhone-Poulenc Inc. Project)
4.40% (LOC; Banque National de Paris) (b,c)............................... $ 500,000 $ 500,000
Texas_2.1%
Grand Prairie Housing Finance Corporation, MFHR, Refunding, VRDN
(Winridge Grand Prairie) 4.20% (b)........................................ 100,000 100,000
North Central Health Facilities Development Corporation, Revenue, VRDN
(Hospital, Presbyterian Medical Center):
4.10% (Insured; MBIA) (b)............................................... 700,000 700,000
4.10% (Insured; MBIA) (b)............................................... 100,000 100,000
Wyoming_.2%
Green River, PCR, Refunding, VRDN (Rhone-Poulenc Inc. Project)
4.40% (LOC; ABN AMRO Bank N.V.) (b,c)..................................... 100,000 100,000
_____________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $1,500,000)......................................................... $ 1,500,000
==============
TOTAL INVESTMENTS_100.0%
(cost $ 41,311,178)....................................................... $42,718,389
==============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FSA Financial Security Assurance MFHR Multi-Family Housing Revenue
HR Hospital Revenue PCR Pollution Control Revenue
LOC Letter of Credit SWDR Solid Waste Disposal Revenue
LR Lease Revenue VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
____ ______ _______________ ____________________
<S> <C> <C> <C>
AAA Aaa AAA 58.8%
AA Aa AA 25.1
A A A 12.6
BBB Baa BBB 1.3
F1 MIG1/P1 SP1/A1 2.1
Not Rated (e) Not Rated (e) Not Rated (e) .1
________
100.0%
========
</TABLE>
Notes to Statement of Investments:
(a) Bonds which are prerefunded are collateralized by U.S. Government
securities which are held in escrow and are used to pay principal and
interest on the municipal issue and to retire the bonds in full at the
earliest refunding date.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market interest
rates.
(c) Secured by letters of credit.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) Securities which, while not rated by Fitch, Moody's and Standard &
Poor's have been determined by the Manager to be of comparable quality to
those rated securities in which the Fund may invest.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1997
Cost Value
_____________ _____________
<S> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $41,311,178 $42,718,389
Cash....................................... 234,807
Interest receivable........................ 775,941
___________
43,729,137
___________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 20,542
Due to Distributor......................... 1,136
Payable for shares of Beneficial Interest redeemed 17,969
___________
39,647
___________
NET ASSETS.................................................................. $43,689,490
============
REPRESENTED BY: Paid-in capital............................ $42,079,206
Accumulated distributions in excess of investment
income_net (23,994)
Accumulated net realized gain (loss) on investments 227,067
Accumulated net unrealized appreciation (depreciation)
on investments_Note 3 1,407,211
___________
NET ASSETS.................................................................. $43,689,490
============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
_________________________
Class A Class B Class C Class R
_____________ _____________ _____________ _____________
<S> <C> <C> <C> <C>
Net Assets....................... $17,323,167 $551,438 $74,023 $25,740,862
Shares Outstanding.............. 1,429,514 45,510 6,096 2,124,329
NET ASSET VALUE PER SHARE................. $12.12 $12.12 $12.14 $12.12
======= ======= ======== =======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1997
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................ $2,071,591
EXPENSES: Management fee_Note 2(a)................... $196,627
Distribution and service fees_Note 2(b).... 50,495
Loan commitment fees_Note 4................ 341
______________
Total Expenses......................... 247,463
____________
INVESTMENT INCOME_NET....................................................... 1,824,128
____________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 3:
Net realized gain (loss) on investments.... $166,313
Net realized gain (loss) on financial futures 81,206
______________
Net Realized Gain (Loss)............... 247,519
Net unrealized appreciation (depreciation) on investments 586,517
____________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 834,036
____________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $2,658,164
============
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1997 June 30, 1996
________________ ________________
OPERATIONS:
Investment income_net.................................................... $ 1,824,128 $ 1,793,304
Net realized gain (loss) on investments.................................. 247,519 249,223
Net unrealized appreciation (depreciation) on investments............... 586,517 (638)
________________ ________________
Net Increase (Decrease) in Net Assets Resulting from Operations........ 2,658,164 2,041,889
________________ ________________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A shares......................................................... (814,054) (879,802)
Class B shares......................................................... (20,860) (13,817)
Class C shares......................................................... (8,596) (4,466)
Class R shares......................................................... (980,618) (895,219)
Net realized gain on investments:
Class A shares......................................................... (48,804) ___
Class B shares......................................................... (1,369) ___
Class C shares......................................................... (941) ___
Class R shares......................................................... (52,550) ___
________________ ________________
Total Dividends...................................................... (1,927,792) (1,793,304)
________________ ________________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares......................................................... 975,607 1,917,807
Class B shares......................................................... 62,023 488,218
Class C shares......................................................... 584,907 65,040
Class R shares......................................................... 10,926,144 6,442,697
Dividends reinvested:
Class A shares......................................................... 673,205 712,884
Class B shares......................................................... 17,207 10,430
Class C shares......................................................... 7,047 1,403
Class R shares......................................................... 263,230 185,865
Cost of shares redeemed:
Class A shares......................................................... (3,411,701) (5,397,222)
Class B shares......................................................... (37,406) (81,163)
Class C shares......................................................... (673,079) (239)
Class R shares......................................................... (3,698,970) (5,593,570)
________________ ________________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 5,688,214 (1,247,850)
________________ ________________
Total Increase (Decrease) in Net Assets............................ 6,418,586 (999,265)
NET ASSETS:
Beginning of Period...................................................... 37,270,904 38,270,169
________________ ________________
End of Period............................................................ $43,689,490 $37,270,904
=============== ==============
(DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME_NET)......................... $ (23,994) $ (23,994)
________________ ________________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
_____________________________________
Year Ended Year Ended
June 30, 1997 June 30, 1996
________________ ________________
CAPITAL SHARE TRANSACTIONS:
Class A
_______
Shares sold.......................................................... 81,262 159,936
Shares issued for dividends reinvested............................... 55,995 59,279
Shares redeemed...................................................... (284,307) (451,257)
________________ ________________
Net Increase (Decrease) in Shares Outstanding (147,050) (232,042)
=============== ==============
Class B
_______
Shares sold.......................................................... 5,189 40,828
Shares issued for dividends reinvested............................... 1,431 867
Shares redeemed...................................................... (3,122) (6,840)
________________ ________________
Net Increase (Decrease) in Shares Outstanding 3,498 34,855
=============== ==============
Class C
_______
Shares sold.......................................................... 48,670 5,436
Shares issued for dividends reinvested............................... 584 117
Shares redeemed...................................................... (55,812) (20)
________________ ________________
Net Increase (Decrease) in Shares Outstanding (6,558) 5,533
=============== ==============
Class R
_______
Shares sold.......................................................... 908,731 537,652
Shares issued for dividends reinvested............................... 21,887 15,459
Shares redeemed...................................................... (308,882) (465,937)
________________ ________________
Net Increase (Decrease) in Shares Outstanding 621,736 87,174
=============== ==============
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MUNICIPAL 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.
Class A Shares
______________________________________________________________________
Year Ended June 30,
______________________________________________________________________
PER SHARE DATA: 1997 1996 1995(1)(2) 1994(1)(2) 1993(2)
________ ________ ________ ________ ________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period......... $11.89 $11.82 $11.66 $12.61 $12.21
________ ________ ________ ________ ________
Investment Operations:
Investment income_net....................... .54 .54 .53 .54(3) .60(3)
Net realized and unrealized gain (loss)
on investments............................. .26 .08 .19 (.41) .68
________ ________ ________ ________ ________
Total from Investment Operations............. .80 .62 .72 .13 1.28
________ ________ ________ ________ ________
Distributions:
Dividends from investment income_net......... (.54) (.55) (.53) (.54) (.60)
Dividends from net realized gain on investments (.03) __ (.03) (.54) (.28)
________ ________ ________ ________ ________
Total Distributions.......................... (.57) (.55) (.56) (1.08) (.88)
________ ________ ________ ________ ________
Net asset value, end of period............... $12.12 $11.89 $11.82 $11.66 $12.61
======== ======= ======= ======== ========
TOTAL INVESTMENT RETURN(4)....................... 6.92% 5.25% 6.37% .96% 10.95%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets...... .75% .75% .75% .76%(5) 1.03%(5)
Ratio of net investment income
to average net assets...................... 4.52% 4.53% 4.59% 4.43% 4.91%
Portfolio Turnover Rate...................... 30.50% 55.07% 61.00% 57.00% 103.00%
Net Assets, end of period (000's Omitted).. $17,323 $18,751 $21,375 $23,715 $18,251
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. 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.
(2) 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 shares were redesignated Class A shares. The Financial
Highlights for the year ended June 30, 1995 are based upon a Class A
(formerly Investor) share outstanding. The amounts shown for the year
ended June 30, 1994 were calculated using the performance of a Retail
shares 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.
(3) Net investment income before waiver of fees and/or reimbursement of
expenses by the investment adviser and/or custodian
and/or transfer agent for the years ended June 30, 1994 and 1993 were
$.49 and $.59, respectively.
(4) Exclusive of sales load.
(5) Annualized expense ratios before voluntary waiver of fees and/or
reimbursement of expenses by the investment adviser
and/or custodian and/or transfer agent for the years ended June 30, 1994
and 1993 were 1.09% and 1.11%, respectively.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MUNICIPAL 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.
Class B Shares
___________________________________________
Period Ended
Year Ended June 30, June 30,
_____________________
PER SHARE DATA: 1997 1996 1995(1)
______ ______ ______
<S> <C> <C> <C>
Net asset value, beginning of period............................... $11.89 $11.82 $11.32
______ ______ ______
Investment Operations:
Investment income_net.............................................. .48 .48 .24
Net realized and unrealized gain (loss)
on investments................................................... .26 .07 .50
______ ______ ______
Total from Investment Operations................................... .74 .55 .74
______ ______ ______
Distributions:
Dividends from investment income_net............................... (.48) (.48) (.24)
Dividends from net realized gain on investments.................... (.03) __ __
______ ______ ______
Total Distributions................................................ (.51) (.48) (.24)
______ ______ ______
Net asset value, end of period..................................... $12.12 $11.89 $11.82
====== ====== ========
TOTAL INVESTMENT RETURN(2)............................................. 6.38% 4.71% 6.59%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................ 1.25% 1.25% 1.25%(4)
Ratio of net investment income
to average net assets............................................ 4.01% 3.98% 4.09%(4)
Portfolio Turnover Rate............................................ 30.50% 55.07% 61.00%
Net Assets, end of period (000's Omitted).......................... $551 $ 500 $85
(1) The Fund commenced selling Class B shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MUNICIPAL 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.
Class C Shares
___________________________________________
Period Ended
Year Ended June 30, June 30,
_____________________
PER SHARE DATA: 1997 1996 1995(1)
______ ______ ______
<S> <C> <C> <C>
Net asset value, beginning of period............................... $11.90 $11.82 $11.32
______ ______ ______
Investment Operations:
Investment income-net.............................................. .49 .48 .24
Net realized and unrealized gain (loss)
on investments................................................... .27 .08 .50
______ ______ ______
Total from Investment Operations................................... .76 .56 .74
______ ______ ______
Distributions:
Dividends from investment income_net............................... (.49) (.48) (.24)
Dividends from net realized gain on investments.................... (.03) __ __
______ ______ ______
Total Distributions................................................ (.52) (.48) (.24)
______ ______ ______
Net asset value, end of period..................................... $12.14 $11.90 $11.82
======== ======= ========
TOTAL INVESTMENT RETURN(2)............................................. 6.50% 4.81% 6.59%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............................ 1.27% 1.24% 1.25%(4)
Ratio of net investment income
to average net assets............................................ 4.17% 4.00% 4.09%(4)
Portfolio Turnover Rate............................................ 30.50% 55.07% 61.00%
Net Assets, end of period (000's Omitted).......................... $74 $150 $84
(1) The Fund commenced selling Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
<CAPTION>
DREYFUS PREMIER LIMITED TERM MUNICIPAL 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.
Class R Shares
______________________________________________________________
Period Ended
Year Ended June 30, June 30,
____________________________________________
PER SHARE DATA: 1997 1996 1995(1,2) 1994(1,2) 1993(2)
_______ _______ _______ _______ ___________
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period............ $11.89 $11.82 $11.66 $12.61 $12.21
_______ _______ _______ _______ ________
Investment Operations:
Investment income_net........................... .57 .57 .56 .58(3) .25(3)
Net realized and unrealized gain (loss)
on investments................................ .26 .08 .19 (.43) .40
_______ _______ _______ _______ ________
Total from Investment Operations................ .83 .65 .75 .15 .65
_______ _______ _______ _______ ________
Distributions:
Dividends from investment income_net............ (.57) (.58) (.56) (.56) (.25)
Dividends from net realized gain on investments. (.03) __ (.03) (.54) __
_______ _______ _______ _______ ________
Total Distributions............................. (.60) (.58) (.59) (1.10) (.25)
_______ _______ _______ _______ ________
Net asset value, end of period.................. $12.12 $11.89 $11.82 $11.66 $12.61
====== ======= ======== ======== ========
TOTAL INVESTMENT RETURN(4).......................... 7.17% 5.51% 6.64% 1.08% 5.36%(5)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......... .50% .50% .50% .50%(6) .68%(6,7)
Ratio of net investment income
to average net assets......................... 4.77% 4.77% 4.84% 4.69% 4.82%(7)
Portfolio Turnover Rate......................... 30.50% 55.07% 61.00% 57.00% 103.00%(5)
Net Assets, end of period (000's Omitted)....... $25,741 $17,870 $16,727 $12,581 $8,974
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager. 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.
(2) The Fund commenced selling Investment Class shares on February 1,
1993. Effective April 4, 1994 the Investment Class was
redesignated the Trust shares. Effective October 17, 1994 Trust shares
were redesignated Class R shares. The table above is based upon an
Investment share outstanding from February 1, 1993 to April 3, 1994 and a
Trust share outstanding from April 4, 1994 to October 16, 1994.
(3) Net investment income before waiver of fees and/or reimbursement 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 $.54 and $.24, respectively.
(4) Exclusive of sales load.
(5) Not annualized.
(6) Annualized expense ratios before voluntary waiver of fees and
reimbursement 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 .83% and .93%, respectively.
(7) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS
NOTE 1_SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Limited Term Municipal Fund (the "Fund") is a series of
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is registered
under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company and operates as a series company
currently offering seven series including the Fund. The Fund's investment
objective is to maximize current income exempt from Federal income taxes
consistent with the prudent risk of capital by investing in municipal
securities which are of investment-grade quality and intermediate maturities.
The Dreyfus Corporation ("Manager") serves as the Fund's investment adviser.
The Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
On January 31, 1997, the Fund's Trustees approved a change to the Fund's
name from "Premier Limited Term Municipal Fund" to "Dreyfus Premier Limited
Term Municipal Fund," which became effective March 31, 1997.
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 distribution and service fees. 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 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 and
service fees and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses),
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 require the use of management estimates.
Actual results may differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) 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
municipal securities of comparable quality, coupon, maturity and type;
indications as to values from dealers; and general market conditions. Options
and financial futures on municipal and U.S. treasury securities are valued at
the last sales price on the securities exchange on which such securities are
primarily traded or at the last sales price on the national securities market
on each business day. Investments not listed on an exchange or the national
securities market, or securities for which there were no transactions, are
valued at the average of the most recent bid and asked prices. Bid price is
used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis. Interest
income, adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual
basis. Securities purchased or sold on a when-issued or delayed-delivery
basis may be settled a month or more after the trade date.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(C) FINANCIAL FUTURES: The Fund may invest in financial futures contracts
in order to gain exposures to or protect against
changes in the market. The Fund is exposed to market risk as a result of
changes in the value of the underlying financial instruments. Investments in
financial futures require the Fund to "mark to market" on a daily basis,
which reflects the change in the market value of the contract at the close of
each day's trading. Typically, variation margin payments are received or made
to reflect daily unrealized gains or losses. When the contracts are closed,
the Fund recognizes a realized gain or loss. These investments require
initial margin deposits with a custodian, which consist of cash or cash
equivalents, up to approximately 10% of the contract amount. The amount of
these deposits is determined by the exchange or Board of Trade on which the
contract is traded and is subject to change. At June 30, 1997, there were no
financial futures contracts outstanding.
(D) 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, if any, it is the policy of the Fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax exempt
dividends, by complying with the applicable provisions of the Internal
Revenue Code, and to make distributions of income and net realized capital
gain sufficient to relieve it from substantially all Federal income and
excise taxes.
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 .50% 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: The Fund has adopted a Distribution
Plan (the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its
Class A, B and C shares. Under the Plan, 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
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
distributing the Fund's Class B and Class C shares at an aggregate annual
rate of .50% 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 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 or service fee. During the period ended June 30, 1997,
the distribution fee for Class A, Class B and Class C shares were $45,049,
$2,600 and $1,031, respectively. During the period ended June 30, 1997, the
service fee for Class B and Class C shares were $1,300 and $515,
respectively.
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 Company 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 of investment securities,
excluding short-term securities, during the period ended June 30, 1997,
amounted to $16,784,193 and $11,470,526, respectively.
At June 30, 1997, accumulated net unrealized appreciation on investments
was $1,407,211, consisting of $1,449,611 gross unrealized appreciation and
$42,400 gross unrealized depreciation.
At June 30, 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. For the period ended June
30, 1997, the Fund did not borrow under the Facility.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier Limited Term
Municipal Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30,
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 or
period 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 June 30, 1993 were audited by other auditors whose
report thereon, dated August 11, 1993, 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 June 30, 1997, by correspondence with the custodian.
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 Limited Term Municipal Fund of The Dreyfus/Laurel
Tax-Free Municipal Funds as of June 30, 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 or period in the four-year period then ended, in conformity with
generally accepted accounting principles.
[KPMG Peat Marwick LLP signature logo]
New York, New York
August 8, 1997
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
IMPORTANT TAX INFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended June 30, 1997:
_all the dividends paid from investment income_net are "exempt-interest
dividends" (not generally subject to regular Federal income tax), and
_the Fund hereby designates $.0321 per share as a long-term capital gain
distribution paid on December 5, 1996.
As required by Federal tax law rules, shareholders will receive
notification of their portion of the Fund's' taxable ordinary dividends (if
any) and capital gain distributions (if any) paid for the 1997 calendar year
on Form 1099-DIV which will be mailed by January 31, 1998.
DREYFUS PREMIER LIMITED TERM
MUNICIPAL 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. 347/747AR976
Annual Report
Dreyfus Premier
Limited Term
Municipal Fund
June 30, 1997
[Dreyfus lion2 hres logo]
Registration Mark
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND CLASS A
SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND
INDEX AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
PREMIER
LIMITED TERM LEHMAN LEHMAN
CALIFORNIA BROTHERS BROTHERS
MUNICIPAL 10-YEAR 7-YEAR
PERIOD FUND MUNICIPAL MUNICIPAL
(CLASS A SHARES) BOND INDEX* BOND INDEX*
3/7/88 9,701 10,000 -
6/30/88 9,835 10,033 -
6/30/89 10,654 10,997 -
12/31/89 - - 11,333
6/30/90 11,245 11,779 11,643
6/30/91 12,249 12,868 12,679
6/30/92 13,494 14,325 14,064
6/30/93 14,934 16,128 15,575
6/30/94 15,203 16,287 15,773
6/30/95 16,201 17,716 17,071
6/30/96 17,080 18,848 18,015
6/30/97 18,240 20,419 19,281
*Source: Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER LIMITED TERM MASSACHUSETTS MUNICIPAL FUND
CLASS A SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL
BOND INDEX AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND
INDEX
EXHIBIT A:
PREMIER
LIMITED LEHMAN LEHMAN
TERM BROTHERS BROTHERS
MASSACHUSETTS 10-YEAR 7-YEAR
PERIOD MUNICIPAL FUND MUNICIPAL MUNICIPAL
(CLASS A SHARES) BOND INDEX* BOND INDEX*
6/30/87 9,702 10,000 -
6/30/88 10,514 10,691 -
6/30/89 11,612 11,719 -
12/31/89 - - 12,305
6/30/90 12,208 12,552 12,642
6/30/91 13,200 13,712 13,766
6/30/92 14,812 15,265 15,271
6/30/93 16,333 17,186 16,911
6/30/94 16,559 17,356 17,125
6/30/95 17,652 18,879 18,535
6/30/96 18,573 20,084 19,560
6/30/97 19,753 21,759 20,935
*Source: Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER LIMITED TERM NEW YORK MUNICIPAL FUND CLASS A
SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND
INDEX AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
LEHMAN LEHMAN
PREMIER LIMITED BROTHERS BROTHERS
TERM NEW YORK 10-YEAR 7-YEAR
PERIOD MUNICIPAL FUND MUNICIPAL MUNICIPAL
(CLASS A SHARES) BOND INDEX* BOND INDEX*
3/7/88 9,701 10,000 -
6/30/88 9,718 10,033 -
6/30/89 10,405 10,997 -
12/31/89 - - 11,063
6/30/90 11,010 11,779 11,366
6/30/91 11,923 12,868 12,376
6/30/92 13,071 14,325 13,729
6/30/93 14,411 16,128 15,204
6/30/94 14,592 16,287 15,397
6/30/95 15,525 17,716 16,664
6/30/96 16,182 18,848 17,586
6/30/97 17,181 20,419 18,822
*Source: Lehman Brothers
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN PREMIER LIMITED TERM MUNICIPAL FUND CLASS A SHARES
WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND INDEX
AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
PREMIER
LIMITED LEHMAN LEHMAN
TERM BROTHERS BROTHERS
MUNICIPAL 10-YEAR 7-YEAR
PERIOD FUND MUNICIPAL MUNICIPAL
(CLASS A SHARES) BOND INDEX* BOND INDEX*
6/30/87 9,698 10,000 -
6/30/88 10,494 10,691 -
6/30/89 11,888 11,719 -
12/31/89 - - 12,630
6/30/90 12,490 12,552 12,976
6/30/91 13,486 13,712 14,130
6/30/92 15,096 15,265 15,674
6/30/93 16,748 17,186 17,357
6/30/94 16,909 17,356 17,578
6/30/95 17,987 18,879 19,024
6/30/96 18,931 20,084 20,076
6/30/97 20,241 21,759 21,488
*Source: Lehman Brothers
