<PAGE>
Dreyfus
BASIC
California Municipal
Money Market Fund
Semi-Annual
Report
December 31, 1996
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ----------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on Dreyfus BASIC California
Municipal Money Market Fund. For its semi-annual reporting period ended December
31, 1996, your Fund produced an annualized yield of 3.04% per share. Reinvesting
dividends and calculating the effect of compounding resulted in an annualized
effective yield of 3.09%.* All dividends were exempt from Federal and State of
California personal income taxes, although some income may be subject to the
Federal Alternative Minimum Tax (AMT) for certain shareholders.
THE ECONOMY
Over the reporting period, the economy grew moderately, showing little
evidence of accelerating inflation despite the robust pace of new job creation
and the low unemployment rate. It was fear of accelerating inflation that
prompted a sharp rise in long-term interest rates earlier in the year; by
year-end, however, long-term rates had fallen by one half of one percent (50
basis points) from last summer's peak. Contributing to the drop in rates was the
decision of the Open Market Committee of the Federal Reserve Board (the "Fed")
to leave short-term interest rates unchanged.
Inflation at the consumer level of the economy remains in the 3% range, which
has been accompanied by a comparably benign inflation picture at the production
level of the economy as well. The so-called "core" Producer Price Index (it
excludes the energy and food components because of their volatility) rose just
.1% in November and a mere .6% for the previous 12 months. Producers appeared to
have little ability to pass on price increases to their customers, a reason
cited by the Fed as evidence of the lack of rising price inflation.
Despite the sanguine price environment, consumers remained wary spenders and
modest borrowers, and retail sales growth has been moderate. Nevertheless, the
renewed decline in mortgage rates spurred the housing market: Existing home
sales in November increased for the first time in six months. New housing starts
also rose sharply, with the November increase the largest monthly rise since
July 1995. Job growth still appears to have underlying strength: Monthly
increases in workers added to payrolls could also move higher. The recent
unemployment rate rose slightly, but still remained near a seven-year low.
Lending optimism to the prospect for continued economic growth was the report
from The Conference Board--a private research group--that its Index of Leading
Economic Indicators rose for the tenth consecutive month in November. An
increase in this index generally correlates with economic expansion over the
next three to twelve months. Manufacturing remained firm all year: Both factory
orders and industrial production rose moderately. Despite this overall strength
in production, there were some signs of moderation at year-end. Inventories have
built up and orders for durable goods--those items intended to last three or
more years--declined.
Last year, high employment, low inflation and moderate economic growth stayed
the Fed's hand from raising interest rates. The economy is now in the sixth year
of this business cycle and we remain alert to signs of the potential rekindling
of inflationary pressures.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Demand for tax-exempt money market securities was heavy through most of the
reporting period. Continued low inflation resulted in a decrease in yields
throughout the period. One-year tax-exempt notes ended the year at 3.60%, a
reduction of 25 basis points from June 30, 1996. Because of solid demand and
falling yields, the relative yield ratio between tax-exempt and taxable one-year
money market securities ended the reporting period toward the lowest levels of
the year.
<PAGE>
Economic strength in California continues. Nonfarm employment is up by
400,000 jobs for the twelve months ended in October 1996. Employment has grown
faster in California than for the United States overall. Results were
particularly impressive in the manufacturing sector: 80,000 new jobs were added
while the nation lost 140,000. California's jobless rate fell to 6.9% by
October, the lowest rate since December 1990. Despite a weak home building
market in California, construction employment is also outpacing the rest of the
nation.
Revenue growth has been strong. As of November 1996, personal income tax
receipts are 3.5% above forecast levels, and bank and corporation taxes are
slightly above estimates. Overall, General Fund revenues are almost $500 million
higher than forecast through November 1996.
One caveat to the overall positive outlook was the passage of Proposition
218. This proposition requires approval by a simple majority of the voters on
any proposal to raise taxes and creates the possibility of overturning certain
taxes through initiative petition. Rating agencies, attorneys and analysts are
still evaluating the precise effect that Proposition 218 will have on the
various debt issuers. Moody's has already downgraded Los Angeles and San Diego
because of the proposition and feels it will diminish the financial flexibility
of cities. If this is so, there will be a direct effect on general obligations
and leases; the impact on revenue and tax assessment bonds is less clear. We
will continue to monitor the effect of Proposition 218.
The Fund's average portfolio maturity was lengthened to 53 days at the
beginning of the period to lock in the relatively high yields then prevailing.
As rates generally fell throughout the reporting period, the average maturity
was shortened to 48 days on December 31, 1996, in anticipation of a market
correction.
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,
Angela Deni
Portfolio Manager
January 15, 1997
New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ---------------------------------------------------------------------
Statement of Investments December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments--100.0% Amount Value
- --------------------------------------------------------------------- ------------- -------------
<S> <C> <C>
California--98.2%
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)
3.75% (LOC; Canadian Imperial Bank of Commerce) (a,b)..................... 1,000,000 1,000,000
Alameda County, MFMR, Refunding, VRDN
(Quail) 4.05%, Series A (LOC; Federal National Mortgage Association) (a,b) 200,000 200,000
Anaheim Housing Authority, MFHR, VRDN (Bel Age Project)
4.15%, Series A (LOC; Federal National Mortgage Association) (a,b)........ 1,800,000 1,800,000
Bay Area Government Association, LR, VRDN (Pooled Project)
4.10% (LOC; National Westminster Bank) (a,b).............................. 100,000 100,000
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)
4.10%, Series A (LOC; Banque Nationale de Paris) (a,b).................... 800,000 800,000
California Health Facilities Finance Authority, Revenue, VRDN:
(Catholic Health Care)
4%, Series B (Insured; MBIA and SBPA; Morgan Guaranty Trust Co.) (a).... 200,000 200,000
(Pooled Loan Program)
4%, 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, Multi-Family Revenue, Refunding:
4%, Series A, 8/1/97 (Insured; MBIA)...................................... 735,000 735,816
VRDN 4.05%, Series C (LOC; Federal National Mortgage Association) (a,b)... 1,000,000 1,000,000
California Pollution Control Financing Authority, VRDN:
IDR (Southdown Inc.) 3.50% (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.):
3.50% (LOC; Societe Generale) (a,b)................................... 400,000 400,000
3.50%, Series B (LOC; Societe Generale) (a,b)......................... 600,000 600,000
RRR, Refunding:
(Ultra Power Malaga) 4.25%, Series A (LOC; Bank of America) (a,b)....... 1,000,000 1,000,000
(Ultra Power Rocklin) 4.25%, Series A (LOC; Bank of America) (a,b)...... 200,000 200,000
California Statewide Communities Development Corporation, Revenue, VRDN:
(Johanson Project)
4.05%, Series E (LOC; California State Teacher Retirement System) (a,b). 300,000 300,000
(Karcher Property Project) 4%, Series C (LOC; Bayerische Vereinsbank) (a,b) 500,000 500,000
(Marko Products) 4.15% (LOC; Bank of Tokyo-Mitsubishi) (a,b).............. 610,000 610,000
(Tri-Valley) 4%, Series F (LOC; ABN-Amro Bank) (a,b)...................... 300,000 300,000
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ---------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996 (Unaudited)
Principal
Tax Exempt Investments (continued) Amount Value
- --------------------------------------------------------------------- ------------- -------------
California (continued)
Concord, MFMR, VRDN (Crossroads)
4.05%, Series B (LOC; Federal National Mortgage Association) (a,b)........ $ 1,000,000 $ 1,000,000
Contra Costa County, MFMR, Housing Authority, VRDN (Lakeshore)
4.05%, Series A (LOC; Federal National Mortgage Association) (a,b)........ 325,000 325,000
Contra Costa Water Authority, 4.30%, Series A, 10/1/97 (Insured; FGIC)....... 500,000 502,155
East Bay Municipal Utility District, Waste Water Treament Systems, CP
3.40%, 1/28/97 (Line of Credit; Westdeutsche Landesbank).................. 1,900,000 1,900,000
Fresno, Water Systems Revenue, (Water Remediation Project)
5.25%, Series A, 6/1/97 (Insured; FGIC)................................... 100,000 100,602
Glendale Revenue Reliance Development, VRDN (Public Parking)
3.50% (LOC; Barclays Bank) (a,b).......................................... 1,900,000 1,900,000
Huntington Park Redevelopment Agency, Revenue (Huntington Park Persons Storage II)
3.85%, 2/1/97 (LOC; Sanwa Bank) (b)....................................... 435,000 435,000
Long Beach, Harbor Revenue, CP
3.50%, Series A, 2/6/97 (Line of Credit; Canadian Imperial Bank of Commerce) 1,000,000 1,000,000
Los Angeles, MFHR, VRDN (Masselin Manor)
4.05% (LOC; Bank of America) (a,b)........................................ 500,000 500,000
Los Angeles County:
Refunding, VRDN:
Metropolitan Transportation Authority, Sales Tax Revenue
(Property C) 4%, Series A (Insured; MBIA and SBPA; Credit Local de France) 1,800,000 1,800,000
Pension Obligation
3.90%, Series C (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a).... 600,000 600,000
TRAN 4.50%, Series A, 6/30/97 (LOC: Bank of America, Credit Suisse,
Morgan Guaranty Trust Co., Union Bank of Switzerland
and West Deutsche Landesbank) (b)....................................... 1,000,000 1,003,090
Los Angeles County Community Development Commission, COP, VRDN (Willowbrook Project)
3.95% (LOC; Wells Fargo Bank) (a,b)....................................... 300,000 300,000
Los Angeles Regional Airports Improvement Corporation, LR, VRDN
(American Airlines):
4.15%, Series A (LOC; Wachovia Bank and Trust Co.) (a,b)................ 100,000 100,000
4.15%, Series E (LOC; Wachovia Bank and Trust Co.) (a,b)................ 1,000,000 1,000,000
Los Angeles Union School District, TRAN
4.50%, Series B, 9/30/97.................................................. 1,400,000 1,408,082
Metropolitan Water District, CP:
3.40%, Series B, 1/13/97 (Liquidity Facility; Westdeusche Landesbank)..... 1,500,000 1,500,000
3.45%, Series B, 2/5/97 (Liquidity Facility; Westdeusche Landesbank)...... 2,000,000 2,000,000
Modesto, MFHR, Refunding, VRDN (Shadowbrook)
4.20%, 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)..................................... 400,000 400,000
Northern Power Agency, Public Power Revenue, Refunding, VRDN (Geothermal Project # 3)
3.85%, Series A (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a)........ 1,000,000 1,000,000
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ---------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996 (Unaudited)
Principal
Tax Exempt Investments (continued) Amount Value
- --------------------------------------------------------------------- ------------- -------------
California (continued)
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)
4.05% (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 #6)
4% (LOC; Citibank) (a,b).................................................. 1,000,000 1,000,000
Paramount Unified School District, TRAN 4.50%, 6/30/97....................... 1,000,000 1,002,369
Rainbow Municipal Water District, Refunding 5.10%, 6/1/97 (Insured; AMBAC)... 225,000 226,263
Regional Airports Improvement Corporation, Terminal Facilities Completion, Revenue
VRDN (Los Angeles International Airport) 4.20% (LOC; Societe Generale) (a,b) 2,200,000 2,200,000
Riverside County, TRAN, VRDN
3.90%, Series B, 6/30/97 (LOC; Toronto-Dominion Bank) (a,b)............... 1,000,000 1,000,000
Sacramento County:
COP, VRDN (Administration Center and Court House Project)
3.75% (LOC; Union Bank of Switzerland) (a,b)............................ 800,000 800,000
TRAN 4.50%, 9/30/97....................................................... 1,000,000 1,004,563
Sacramento Municipal Utilities District, CP
3.30%, Series H, 1/30/97 (LOC: Bank of America and Morgan Guaranty Trust Co.) (b) 1,400,000 1,400,000
San Diego County:
CP 3.40%, Series 1, 2/4/97 (Liquidity Facility; Bayerische Landesbank).... 1,100,000 1,100,000
MFHR, VRDN (Lusk Mira Mesa Apartments)
4.05%, Series E (LOC; Swiss Bank Corp.) (a,b)........................... 300,000 300,000
San Francisco City and County, Prerefunded (City Hall Improvement Project)
7%, Series A, 6/15/97 (Insured; FGIC)..................................... 700,000 710,434
San Francisco City and County Housing Authority, MFHR, VRDN (737 Post Project)
4.05%, Series D (LOC; Banque Nationale DeParis) (a,b)..................... 200,000 200,000
San Jose, MFHR, VRDN (Foxchase)
4%, Series B (Insured; FGIC and Liquidity Facility; FGIC) (a)............. 100,000 100,000
Santa Ana, COP (Santa Ana Recycling Project)
3.90%, Series A, 5/1/97 (Insured; AMBAC).................................. 500,000 500,000
Santa Rosa, Waste Water Revenue 4.10%, Series A, 9/1/97 (Insured; FGIC)...... 500,000 501,270
Southern California Public Power Authority, VRDN, Refunding:
Power Revenue (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, RAN, VRDN 4%, Series C-1, 6/30/97 (SBPA: Bank of America,
Bank of Nova Scotia, Commerz Bank and National Westminster)............... 500,000 500,000
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ---------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996 (Unaudited)
Principal
Tax Exempt Investments (continued) Amount Value
- --------------------------------------------------------------------- ------------- -------------
California (continued)
Stockton, MFHR, VRDN (Mariners Pointe Association)
4%, Series A (LOC; Bank of America) (a,b)................................. $ 800,000 $ 800,000
Tulare County, COP, Public Facilities Corporation, Prerefunded
8.10%, 11/1/97 (Escrowed in; U.S. Government Securities and Insured; MBIA) 500,000 527,524
University of California Revenue, Board of Regents, CP
3.40%, Series a, 1/24/97 (Line of Credit: Bank of America, Bank of Montreal,
Canadian Imperial Bank of Commerce, Credit Agricole and Societe Generale). 1,000,000 1,000,000
Whittier Health Facility Revenue, Refunding, Prerefunded
(Presbyterian Intercommunity Hospital)
6.50%, 6/1/97 (Escrowed in U.S. Government Securities and Insured; MBIA).. 2,150,000 2,218,068
U.S. Related--1.8%
Commonwealth of Puerto Rico Government Development Bank, CP
3.65%, 1/14/97............................................................ 1,000,000 1,000,000
------------
TOTAL INVESTMENTS (cost $56,710,236)......................................... $56,710,236
============
</TABLE>
Summary of Abbreviations
- -----------------------------------------------------------------------------
<TABLE>
<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 RAN Revenue Anticipation Notes
IDR Industrial Development Revenue RRR Resources Recovery Revenue
LOC Letter of Credit SBPA Standby Bond Purchase Agreement
LR Lease Revenue TRAN Tax and Revenue Anticipation Notes
MBIA Municipal Bond Investors Assurance VRDN Variable Rate Demand Notes
Insurance Corporation
</TABLE>
Summary of Combined Ratings
- -----------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- ------ -------- ---------------- ------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 89.4%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 10.6
-------
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 letter of credit. At December 31, 1996, 57.1% of the Fund's net
assets are
backed by letters of credit issued by domestic banks, foreign banks,
government agencies and corporations.
(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.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ---------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
------------- -------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $ 56,710,236 $ 56,710,236
Interest receivable.............................. 331,767
-------------
57,042,003
-------------
LIABILITIES: Due to The Dreyfus Corporation................... 21,831
Cash overdraft due to Custodian.................. 572,741
Payable for investment securities purchased...... 1,015,416
-------------
1,609,988
-------------
NET ASSETS..................................................................... $ 55,432,015
=============
REPRESENTED BY: Paid-in capital.................................. $ 55,425,412
Accumulated net realized gain (loss) on investments 6,603
-------------
NET ASSETS..................................................................... $ 55,432,015
=============
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized)................. 55,425,421
NET ASSET VALUE, offering and redemption price per share....................... $1.00
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ---------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1996 (Unaudited)
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income.................................. $ 903,757
EXPENSES: Management fee--Note 2(a)......................... $115,987
Trustees' fees and expenses--Note 2(b)........... 2,636
----------
Total Expenses.............................. 118,623
Less-reduction in management fee due to
undertaking--Note 2(a).......................... (20,787)
----------
Net Expenses................................ 97,836
------------
INVESTMENT INCOME--NET.......................................................... 805,921
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b)............................. 6,603
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $ 812,524
============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ---------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
----------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................ $ 805,921 $ 827,721
Net realized gain (loss) on investments.............................. 6,603 4,282
----------------- -----------------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 812,524 832,003
----------------- -----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares.................................................... (805,921) (703,677)
Class R shares..................................................... -- (124,044)
Net reailzed gain on investments:
Investor shares.................................................... (3,500) (549)
----------------- -----------------
Total Dividends.................................................. (809,421) (828,270)
----------------- -----------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares.................................................... 93,487,238 102,593,225
Class R shares..................................................... -- 14,319,110
Dividends reinvested:
Investor shares.................................................... 557,425 443,530
Class R shares..................................................... -- 65,137
Cost of shares redeemed:
Investor shares.................................................... (75,343,432) (81,850,739)
Class R shares..................................................... -- (21,813,892)
----------------- -----------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 18,701,231 13,756,371
----------------- -----------------
Total Increase (Decrease) in Net Assets........................ 18,704,334 13,760,104
NET ASSETS:
Beginning of Period.................................................. 36,727,681 22,967,577
----------------- -----------------
End of Period........................................................ $ 55,432,015 $ 36,727,681
================= =================
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California 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.
<TABLE>
<CAPTION>
Investor shares
-------------------------------------------------------------------------
Six Months Year Ended Period Ended Year Ended
Ended June 30, June 30, November 30,
December 31, 1996 -------------- ---------- ------------------------------
PER SHARE DATA: (Unaudited) 1996 1995(4) 1994(1)(2) 1993(1)(3) 1992(1)(3) 1991(1)
----------- ------ ------- ---------- ---------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- ----- -----
Investment Operations:
Investment income--net................ .015 .031 .031 .012 .023 .031 0.46
----- ----- ----- ----- ----- ----- -----
Distributions:
Dividends from investment income--net. (.015) (.031) (.031) (.012) (.023) (.031) (0.46)
----- ----- ----- ----- ----- ----- -----
Net asset value, end of period....... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- ----- -----
TOTAL INVESTMENT RETURN................. 3.07%(5) 3.19% 3.10% 1.25% 2.41% 3.10% 4.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .37%(5) .44% .60% .47%(5) .32% .32% .32%
Ratio of net investment income
to average net assets............. 3.06%(5) 3.36% 3.07% 2.11%(5) 2.40% 3.03% 4.57%
Decrease reflected in above expense ratios
due to undertakings by the Manager .08%(5) .07% -- .38%(5) .76% .51% .46%
Net Assets, end of period (000's Omitted) $55,432 $36,728 $15,538 $17,170 $15,490 $26,987 $27,831
<FN>
- --------------------
(1) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and the Fund began offering the Institutional Class and 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.
(2) 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.
(3) The per share amounts have been calculated using the monthly
average shares method, which more appropriately presents per share data
for this period since use of the undistributed net investment income
method did not accord with results of operations.
(4) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(5) Annualized.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- -------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class R Shares(8)
---------------------------------------------------------
Year Ended Year Ended Period Ended Period Ended
June 30, June 30, June 30, November 30,
PER SHARE DATA: 1996 1995(1)(2) 1994(1)(3) 1993(1)(4)
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........... $1.00 $1.00 $1.00 $1.00
------ ----- ------ ------
Investment Operations:
Investment income (loss)--net................... .013 .033(5) .013(5) .020(5)
------ ----- ------ ------
Distributions:
Dividends from investment income--net........... (.013) (.033) (.013) (.020)
------ ----- ------ ------
Net asset value, end of period................. -- $1.00 $1.00 $1.00
====== ===== ====== ======
TOTAL INVESTMENT RETURN........................... -- 3.35% 1.31% 1.98%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........ .35%(6) .35% .29%(6)(7) .28%(6)(7)
Ratio of net investment income
to average net assets....................... 3.40%(6) 3.32% 2.29% 2.13%(6)
Net Assets, end of period (000's Omitted)...... -- $7,430 $9,747 $6,408
<FN>
- -----------------
(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 table 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.
(2) Effective October 17, 1994, The Dreyfus
Corporation began serving as the Fund's investment manager.
(3) 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.
(4) 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.
(5) Net invesment 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 $0.011 and $0.013, respectively.
(6) Annualized.
(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 periods ended
June 30, 1994 and November 30, 1993 were 0.67% and 1.03%, respectively.
(8) Effective November 21, 1995, the Fund converted to a single Class Fund,
with the existing R shares converted into Investor shares.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 Dreyfus BASIC California Municipal Money
Market Fund (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. ("Mellon
Bank"). Premier Mutual Fund Services, Inc. acts as the distributor of the Fund's
shares.
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. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments are valued at amortized cost in
accordance with 2a-7 of the Investment Company Act of 1940, 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 whin 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 December 31, 1996, 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).
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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. The
Manager has undertaken through November 19, 1996 to limit its unitary fee to .35
of 1% of the Fund's average daily net assets excluding certain fees outlined
below. 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). The reduction in management fee,
pursuant to the undertaking, amounted to $20,787 during the period ended
December 31, 1996.
(b) Trustees' fees: Each trustee who is not an interested person as defined in
the Act 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. These expenses are paid in total by the following funds:
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust. In addition the Chairman of the Board receives
an annual fee of $75,000 per year. These fees and expenses are charged and
allocated to each series based on net assets.
NOTE 3--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million 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.
For the period ended December 31, 1996, the Fund did not borrow under the line
of credit.
<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
Administrator
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 307SA9612
<PAGE>
Dreyfus
BASIC Massachusetts
Municipal
Money Market Fund
Semi-Annual
Report
December 31, 1996
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on Dreyfus BASIC Massachusetts
Municipal Money Market Fund. For its semi-annual reporting period ended December
31, 1996, your Fund produced an annualized yield of 3.08% per share. Reinvesting
dividends and calculating the effect of compounding resulted in an annualized
effective yield of 3.13%.* These dividends were exempt from Federal and
Commonwealth of Massachusetts personal income taxes, although some income may be
subject to the Federal Alternative Minimum Tax (AMT) for certain shareholders.
THE ECONOMY
Over the reporting period, the economy grew moderately, showing little
evidence of accelerating inflation despite the robust pace of new job creation
and the low unemployment rate. It was fear of accelerating inflation that
prompted a sharp rise in long-term interest rates earlier in the year. However,
by year-end, long-term rates had fallen by one half of one percent (50 basis
points) from last summer's peak. Contributing to the drop in rates was the
decision of the Open Market Committee of the Federal Reserve Board (the "Fed")
to leave short-term interest rates unchanged.
Inflation at the consumer level of the economy remains in the 3% range, which
has been accompanied by a comparably benign inflation picture at the production
level of the economy as well. The so-called "core" Producer Price Index (it
excludes the energy and food components because of their volatility) rose just
.1% in November and a mere .6% for the previous 12 months. Producers appeared to
have little ability to pass on price increases to their customers, a reason
cited by the Fed as evidence of the lack of rising price inflation.
Despite the sanguine price environment, consumers remained wary spenders and
modest borrowers, and retail sales growth has been moderate. Nevertheless, the
renewed decline in mortgage rates spurred the housing market: existing home
sales in November increased for the first time in six months. New housing starts
also rose sharply, with the November increase the largest monthly rise since
July 1995. Job growth still appears to have underlying strength: monthly
increases in workers added to payrolls could also move higher. The recent
unemployment rate rose slightly, but still remained near a seven-year low.
Lending optimism to the prospect for continued economic growth was the report
from The Conference Board--a private research group--that its Index of Leading
Economic Indicators rose for the tenth consecutive month in November. An
increase in this index generally correlates with economic expansion over the
next three to twelve months. Manufacturing remained firm all year: both factory
orders and industrial production rose moderately. Despite this overall strength
in production, there were some signs of moderation at year-end. Inventories have
built up and orders for durable goods--those items intended to last three or
more years--declined.
Last year, high employment, low inflation and moderate economic growth stayed
the Fed's hand from raising interest rates. The economy is now in the sixth year
of this business cycle and we remain alert to signs of the potential rekindling
of inflationary pressures.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Demand for tax-exempt money market securities was heavy through most of the
reporting period. Continued low inflation resulted in a decrease in yields
throughout the period. One-year tax-exempt notes ended the year at 3.60%, a
reduction of 25 basis points from June 30, 1996. Because of solid demand and
falling yields, the relative yield ratio between tax-exempt and taxable one-year
money market securities ended the reporting period toward the lowest levels of
the year.
<PAGE>
In Massachusetts, the economic recovery that began in 1992 following a severe
recession in the Northeast continued into 1996. Both income and employment grew
moderately throughout the period. While economic growth in the Commonwealth
slowed in the latter part of 1995, nonfarm payroll rose 1.4% for the twelve
months ended August 31, 1996, slightly below the national average rate of 1.9%.
The unemployment rate at the end of Fiscal Year 1996 was 5.5%, approximating the
national average. Employment growth sectors over the period were construction
(+7%), services (+4%), foreign trade (+2%) and manufacturing (+0.1%). The
increase in employment was the leading factor that caused personal income growth
to exceed the national growth rate in the first half of Fiscal Year 1996.
The Commonwealth's financial position has mirrored the improvement in the
regional economy. Massachusetts has reported three consecutive years of balanced
financial operations with conservative revenue estimates and expenditure
controls. The excess operating revenues over this period have increased the
level of reserves, including the Budget Stabilization Fund balance that reached
its statutory limit in 1996. It is expected that the state legislature will
raise the Stabilization Fund limit in Fiscal Year 1997 and provide a tax refund
with the Fiscal Year 1996 excess funds. Also contributing to the Commonwealth's
budget surplus were savings resulting from welfare reform provisions enacted in
1995.
Despite its strong finances, the Commonwealth maintains an above average debt
burden. Massachusetts will be confronted with the ramifications of the "Big Dig"
project during 1997. Several plans are under consideration that provide for the
majority of the funding to be absorbed by various state agencies, the
Massachusetts Port Authority and the Massachusetts Turnpike Authority. Expenses
for this project plus additional capital spending plans for highway, school and
correctional facilities will prevent the Commonwealth from reducing its debt
burden over the near term. The Commonwealth maintains A1 and A+ long-term debt
ratings from Moody's and Standard & Poors, respectively.
The towns and cities of Massachusetts are also benefiting from the region's
economic recovery, primarily through modest growth in real estate assessments,
lower unemployment and increased state aid. Nearly $500 million in increased
spending for education reform flowed to cities and towns in Fiscal Year 1996
with a similar allocation provided in Fiscal Year 1997.
The Fund's average portfolio maturity was lengthened to 60 days at the
beginning of the period to lock in the relatively high yields then prevailing.
As rates generally fell throughout the reporting period, the average maturity
was shortened to 34 days on December 31, 1996, in anticipation of a market
correction.
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,
Angela Deni
Portfolio Manager
January 15, 1997 New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- ----------------------------------------------------------------------
Statement of Investments December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments--100.0% Amount Value
- ---------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
Massachusetts--99.0%
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)............. 500,000 505,821
Boston Water and Sewer Commission, Revenue, VRDN
3.95%, Series A (LOC; State Street Bank and Trust Co.) (a,b).............. 4,580,000 4,580,000
Town of Falmouth, Revenue 6.80%, 6/1/97...................................... 150,000 151,806
Town of Gloucester, SAAN:
4.15%, 7/18/97............................................................ 676,087 676,764
4.25%, 7/18/97............................................................ 1,000,000 1,000,729
Holyoke, PCR, Refunding, VRDN (Holyoke Water Power Project)
3.95% (LOC; Union Bank of Switzerland) (a,b).............................. 660,000 660,000
Town of Lenox, Revenue 7.25%, 11/1/97........................................ 550,000 565,135
Town of Mansfield, BAN 4.15%, 8/21/97........................................ 1,675,000 1,677,481
Commonwealth of Massachusetts:
Notes 4.25%, Series A, 6/10/97............................................ 2,000,000 2,003,798
VRDN:
4%, Series B (LOC; National Westminster Bank) (a,b)..................... 2,905,000 2,905,000
4%, Series E (LOC; ABN-Amro Bank) (a,b)................................. 5,420,000 5,420,000
Massachusetts Bay Transportation Authority:
CP:
3.50%, Series C, 1/29/97 (LOC; West Deutsche Landesbank) (b)............ 3,100,000 3,100,000
3.90%, Series C, 1/3/97 (LOC; West Deutsche Landesbank) (b)............. 2,500,000 2,500,000
Notes:
3.60%, Series A, 3/1/97 (LOC; State Street Bank and Trust Co.) (b)...... 1,575,000 1,575,000
3.75%, Series A, 2/28/97 (Guaranteed by; Commonwealth of Massachusetts). 1,500,000 1,500,000
Massachusetts Health and Educational Facilities Authority, Revenue:
CP:
(Boston University) 3.70%, Series H, 2/13/97 (LOC; Landesbank Hessen) (b)
2,000,0002,000,000 (Harvard University) 3.40%, Series L, 2/11/97
(Guaranteed by; Harvard University) 1,840,0001,840,000
VRDN:
(Amherst College) 3.95%, Series F (Guaranteed by; Amherst College) (a).. 4,300,000 4,300,000
(Capital Asset Program):
4%, Series A (LOC; First National Bank of Chicago) (a,b).............. 900,000 900,000
3.95%, Series B (BPA; Credit Suisse and Insured; MBIA) (a)............ 600,000 600,000
3.95%, Series C (BPA; Credit Suisse and Insured; MBIA) (a)............ 2,100,000 2,100,000
4.15%, Series E (LOC; First Chicago Corp.) (a,b)...................... 2,000,000 2,000,000
(Falmouth Assistance For Living) 4.20%, Series A (LOC; Bank of Boston)
(a,b) 1,000,0001,000,000 (Harvard University):
3.80% (Guaranteed by; Harvard University) (a)......................... 535,000 535,000
3.80%, Series Q-1 (Guaranteed by; Harvard University) (a)............. 1,330,000 1,330,000
3.90%, Series I (Guaranteed by; Harvard University) (a)............... 5,115,000 5,115,000
(Massachusetts Institute of Technology)
3.85%, Series G (GO of; Massachusetts Institute of Technology) (a).... 2,165,000 2,165,000
(Wellesley College) 3.85%, Series B (Guaranteed by; Wellesley College) (a) 5,115,000 5,115,000
</TABLE>
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- ----------------------------------------------------------------------
Statement of Investments (Continued) December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments--100.0% Amount Value
- ---------------------------------------------------------------------------- ----------- -------------
<S> <C> <C>
Massachusetts (continued):
Massachusetts Health and Educational Facilities Authority, Revenue (continued):
VRDN (continued):
(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.) 3.95% (LOC; Wachovia Bank and Trust Co.) (a,b)... 500,000 500,000
Refunding:
(Cabot Newburyport Limited) 3.95% (LOC; Bank of Boston) (a,b)......... 1,250,000 1,250,000
(First Healthcare Corp.) 4.15%, Series B
(LOC; Wachovia Bank and Trust Co.) (a,b). 2,690,000 2,690,000
(Quamco Inc.):
3.95%, Series A (LOC; Bank of Nova Scotia) (a,b).................... 2,340,000 2,340,000
3.95%, Series B (LOC; Banca Commerciale Italia) (a,b)............... 940,000 940,000
Mortgage Revenue, Refunding, VRDN (Chestnut House Apartments)
3.90% (LOC; Sumitomo Bank) (a,b)........................................ 585,000 585,000
PCR, VRDN, Refunding (Holyoke Water Power Co.)
3.95%, Series A (LOC; Canadian Imperial Bank of Commerce) (a,b)......... 660,000 660,000
Revenue, VRDN:
(Berkshire Project) 3.85%, Series A (LOC; National Westminster Bank) (a,b) 1,600,000 1,600,000
(Goodard House) 4.10% (LOC; Fleet Bank) (a,b)........................... 8,360,000 8,360,000
(Groton School Project) 3.85% (LOC; State Street Bank and Trust Co.) (a,b) 2,000,000 2,000,000
(Hampshire College Project) 3.85% (LOC; National Westminster Bank) (a,b) 1,200,000 1,200,000
(Showa Womens Institute) 4.25% (LOC; Bank of America) (a,b)............. 400,000 400,000
RRR, Refunding, VRDN (Ogden Haverhill Project)
3.90%, Series A (LOC; Union Bank of Switzerland) (a,b).................. 3,880,000 3,880,000
Massachusetts Municipal Wholesale Electric Company, Power Supply Systems Revenue,
VRDN 4%, Series C (LOC; Canadian Imperial Bank of Commerce) (a,b)......... 1,735,000 1,735,000
Massachusetts Port Authority, Revenue, CP
3.60%, Series C, 2/26/97 (LOC; Canadian Imperial Bank of Commerce) (b).... 2,000,000 2,000,000
Massachusetts Water Resource Authority:
CP:
3.35%, 1/23/97 (LOC; Morgan Guaranty Trust Co.) (b)..................... 2,000,000 2,000,000
3.35%, 1/30/97 (LOC; Morgan Guaranty Trust Co.) (b)..................... 1,000,000 1,000,000
Revenue 6.90%, Series A, 4/1/97 (Escrowed In; U.S. Government Securities). 725,000 730,673
Middlesex County, HR 3.69%, 12/13/96......................................... 1,500,000 1,500,000
Mohawk Trail Regional School District, BAN 4.50%, 7/25/97.................... 1,100,000 1,101,896
Town of North Andover, Revenue 6.50%, 5/15/97 (Insured; MBIA)................ 200,000 201,934
Town of Pittsfield, Revenue 3.75%, 10/1/97 (Insured; FSA).................... 875,000 875,000
Town of Somerville, Municipal Purpose Loan Revenue 6.50%, Series 95, 5/15/97. 500,000 505,320
Town of Weymouth, Revenue 6.75%, 7/15/97 (Insured; AMBAC).................... 675,000 684,624
</TABLE>
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- ----------------------------------------------------------------------
Statement of Investments (Continued) December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments--100.0% Amount Value
- ---------------------------------------------------------------------------- ----------- -------------
<S> <C> <C>
U.S. Related--1.0%
Government Development Bank of the Commonwealth of Puerto Rico, CP
3.65%, 1/14/97 (LOC; Government Development Bank of Puerto Rico) (a)...... $1,000,000 $ 1,000,000
--------------
TOTAL INVESTMENTS (cost $101,655,981)........................................ $101,655,981
==============
</TABLE>
Summary of Abbreviations
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation HR Hospital Revenue
BAN Bond Anticipation Notes MBIA Municipal Bond Investors Assurance
BPA Bond Purchase Agreement Insurance Corporation
CP Commercial Paper PCR Pollution Control Revenue
GO General Obligation RRR Resources Recovery Revenue
FSA Financial Security Assurance SAAN State Aid Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
</TABLE>
Summary of Combined Ratings
- ---------------------------------------------------------------------------
<TABLE>
<CAPTION>
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) 85.7%
F2 VMIG2/MIG2, P2 SP2, A2 1.5
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 7.4
Not Rated (f) Not Rated (f) Not Rated (f) 5.4
-------
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 December 31, 1996, 51.4% 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 Fund's Board of Trustees to be of
comparable quality to those rated securities in which the Fund may invest.
See notes to financial statements.
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
------------- -------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $101,655,981 $101,655,981
Cash............................................. 16,013,267
Interest receivable.............................. 616,031
Other assets..................................... 3,399
-------------
118,288,678
-------------
LIABILITIES: Due to The Dreyfus Corporation................... 28,035
-------------
NET ASSETS..................................................................... $118,260,643
=============
REPRESENTED BY: Paid-in capital.................................. $118,315,746
Accumulated net realized gain (loss) on investments (55,103)
-------------
NET ASSETS..................................................................... $118,260,643
=============
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized)................. 118,313,694
NET ASSET VALUE, offering and redemption price per share....................... $1.00
======
</TABLE>
Statement of Operations Six Months Ended December 31, 1996 (Unaudited)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income.................................. $1,189,144
EXPENSES: Management fee--Note 2(a)......................... $151,377
Trustees' fees and expenses--Note 2(b)........... 3,440
----------
Total Expenses.............................. 154,817
Less--reduction in management fee due to
undertaking--Note 2(a).......................... (34,404)
----------
Net Expenses................................ 120,413
------------
INVESTMENT INCOME--NET.......................................................... 1,068,731
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b).............................. (40,461)
------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $1,028,270
============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1996 Year Ended
(Unaudited) June 30, 1996*
------------------ --------------
<S> <C> <C>
OPERATIONS:
Investment income--net............................................... $ 1,068,731 $ 3,129,672
Net realized gain (loss) on investments.............................. (40,461) (7,461)
------------- --------------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 1,028,270 3,122,211
-------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares.................................................... -- (1,993,334)
Class R shares..................................................... (1,068,731) (1,136,338)
-------------- --------------
Total Dividends.................................................. (1,068,731) (3,129,672)
-------------- ---------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares.................................................... -- 90,074,035
Class R shares..................................................... 119,519,781 129,504,181
Dividends reinvested:
Investor shares.................................................... -- 1,339,526
Class R shares..................................................... 402,216 365,421
Cost of shares redeemed:
Investor shares.................................................... -- (167,147,872)
Class R shares..................................................... (53,938,193) (103,041,570)
-------------- --------------
Increase (Decrease) in Net Assets from Beneficial
Interest Transactions 65,983,804 (48,906,279)
-------------- --------------
Total Increase (Decrease) in Net Assets........................ 65,943,343 (48,913,740)
NET ASSETS:
Beginning of Period.................................................. 52,317,300 101,231,040
------------- -------------
End of Period........................................................ $118,260,643 $ 52,317,300
============= =============
<FN>
- ---------------
* Effective May 8, 1996, the Fund converted to a single class Fund, with
existing Class R shares. Investor class shares became shares of Dreyfus
Massachusetts Municipal Money Market Fund.
</TABLE>
See notes to financial statements.
<PAGE>
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.(1)
<TABLE> <CAPTION>
Class R Shares
----------------------------------------------------------------------
Six Months Ended Year Ended June 30, Period Ended
December 31, 1996 ---------------------------------- June 30,
PER SHARE DATA: (Unaudited) 1996 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.................... .016 .033 .032 .019(5) .007(5)
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net..... (.016) (.033) (.032) (.019) (.007)
------ ------ ------ ------ ------
Net asset value, end of period........... $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN..................... 3.09%(6) 3.31% 3.25% 1.97% .73%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.. .35%(6) .35% .35% .56%(7) .57%(6)(7)
Ratio of net investment income
to average net assets................. 3.11%(6) 3.24% 3.19% 1.94% 1.78%(6)
Decrease reflected in above expense ratios
due to undertakings by the Manager.... .10%(6) .02% -- -- --
Net Assets, end of period (000's Omitted) $118,261 52,317 $25,485 $19,830 $19,645
<FN>
- -------------------
(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
$0.019 and $0.007, 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 0.64% and 0.62%, respectively.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- ---------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.(1)
<TABLE>
<CAPTION>
Investor Shares
------------------------------------------------------
Year Ended June 30,
------------------------------------------------------
PER SHARE DATA: 1996 1995(2)(3) 1994(2)(4) 1993(2) 1992(2)
----- --------- --------- ------- ------
<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.............................. .026 .029 .018(5) .019(5) .034
------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net............... (.026) (.029) (.018) (.019) (.034)
------ ------ ------ ------ ------
Net asset value, end of period..................... -- $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN............................... -- 2.99% 1.83% 1.94% 3.36%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............ .51% .60% .70%(6) .68%(6) .67%
Ratio of net investment income
to average net assets........................... 2.60% 2.94% 1.80% 1.98% 3.38%
Net Assets, end of period (000's Omitted).......... -- $75,746 $86,505 $68,952 $149,679
<FN>
- --------------------
(1) Effective May 8, 1996, the Fund converted to a single class Fund, with
existing Class R shares. Investor class shares became shares of Dreyfus
Massachusetts Municipal Money Market Fund.
(2) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the Insitutional 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
June 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) 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 years ended June 30, 1994 and 1993 were
$0.017 and $0.019, respectively.
(6) 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 0.78% and 0.69%, respectively.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 Dreyfus BASIC Massachusetts Municipal Money
Market Fund (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.
("Mellon Bank"). Premier Mutual Fund Services, Inc. acts as the distributor of
the Fund's shares.
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 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 are valued at amortized cost in
accordance with Rule 2a-7 of the Investment Company Act of 1940, 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.
(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, if any, 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 $15,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to June 30, 1996. If not
applied, $4,000 of the carryover expires in fiscal 1997, $7,000 expires in
fiscal 1998, $1,000 expires in fiscal 1999, $2,000 expires in fiscal 2000 and
$1,000 expires in fiscal 2002.
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
At December 31, 1996, 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 the New 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. The Manager has undertaken
through May 8, 1997 to limit its unitary fee to .35 of 1% of the Fund's average
daily net assets excluding certain fees outlined below. 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). The reduction in management
fee, pursuant to the undertaking, amounted to $34,404 during the period ended
December 31, 1996.
(B) TRUSTEES' FEES: Each trustee who is not an "interested person" as defined
in the Act 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. These expenses are paid in total by the following funds:
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust. In addition the Chairman of the Board receives
an annual fee of $75,000 per year. These fees and expenses are charged and
allocated to each series based on net assets.
NOTE 3--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million 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.
For the period ended December 31, 1996, the Fund did not borrow under the line
of credit.
NOTE 4--Subsequent Event:
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. The Fund is currently pursuing available
legal remedies to protect its interest.
<PAGE>
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. 715SA9612
<PAGE>
Dreyfus
BASIC New York
Municipal
Money Market Fund
Semi-Annual
Report
December 31, 1996
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on Dreyfus BASIC New York
Municipal Money Market Fund. For its semi-annual reporting period ended December
31, 1996, your Fund produced an annualized yield of 3.05% per share. Reinvesting
dividends and calculating the effect of compounding resulted in an annualized
effective yield of 3.09%.* 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
Over the reporting period, the economy grew moderately, showing little
evidence of accelerating inflation despite the robust pace of new job creation
and the low unemployment rate. It was fear of accelerating inflation that
prompted a sharp rise in long-term interest rates earlier in the year; by
year-end, however, long-term rates had fallen by one half of one percent (50
basis points) from last summer's peak. Contributing to the drop in rates was the
decision of the Open Market Committee of the Federal Reserve Board (the "Fed")
to leave short-term interest rates unchanged.
Inflation at the consumer level of the economy remains in the 3% range, which
has been accompanied by a comparably benign inflation picture at the production
level of the economy as well. The so-called "core" Producer Price Index (it
excludes the energy and food components because of their volatility) rose just
.1% in November and a mere .6% for the previous 12 months. Producers appeared to
have little ability to pass on price increases to their customers, a reason
cited by the Fed as evidence of the lack of rising price inflation.
Despite the sanguine price environment, consumers remained wary spenders and
modest borrowers, and retail sales growth has been moderate. Nevertheless, the
renewed decline in mortgage rates spurred the housing market: Existing home
sales in November increased for the first time in six months. New housing starts
also rose sharply, with the November increase the largest monthly rise since
July 1995. Job growth still appears to have underlying strength: Monthly
increases in workers added to payrolls could also move higher. The recent
unemployment rate rose slightly, but still remained near a seven-year low.
Lending optimism to the prospect for continued economic growth was the report
from The Conference Board -- a private research group -- that its Index of
Leading Economic Indicators rose for the tenth consecutive month in November. An
increase in this index generally correlates with economic expansion over the
next three to twelve months. Manufacturing remained firm all year: Both factory
orders and industrial production rose moderately. Despite this overall strength
in production, there were some signs of moderation at year-end. Inventories have
built up and orders for durable goods -- those items intended to last three or
more years -- declined.
Last year, high employment, low inflation and moderate economic growth stayed
the Fed's hand from raising interest rates. The economy is now in the sixth year
of this business cycle and we remain alert to signs of the potential rekindling
of inflationary pressures.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Demand for tax-exempt money market securities was heavy through most of the
reporting period. Continued low inflation resulted in a decrease in yields
throughout the period. One-year tax-exempt notes ended the year at 3.60%, a
reduction of 25 basis points from June 30, 1996. Because of solid demand and
falling yields, the relative yield ratio
<PAGE>
between tax-exempt and taxable one-year
money market securities ended the reporting period toward the lowest levels of
the year.
Here in New York State, audited financial statements from the June 1996
fiscal year show an improved ending cash balance of $445 million. Yet a still
large accumulated budget deficit remains. Despite the economic recovery which,
for the State, has lasted five years, New York has been unable to rebuild its
financial reserves to pre-recession levels. The State's economy has grown very
slowly during the nationwide recovery primarily because of the high cost of
doing business in the State. Recently implemented tax cuts, while impeding
revenue growth in the near term, should prove to be an incentive for resident
businesses to remain in the State.
The State's results in fiscal year 1996 were helped significantly by the
strong revenue flow from the financial services sector, particularly Wall
Street. This trend has continued into fiscal year 1997. In the just-released
1998 budget, Governor Pataki expressed his intention to close the 1998 budget
gap with a projected surplus from fiscal 1997. This surplus is projected to
arise primarily from higher personal tax revenues and from reduced Medicaid
expenses. Given the political ramifications regarding Medicaid, any reduction in
expenses is a questionable assumption. Overall, we remain neutral to slightly
positive on the State's credit trend.
The Fund's average maturity was held virtually constant throughout the period
at approximately 50 days. This maturity is very similar to the portfolio's peer
group average.
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,
Angela Deni
Portfolio Manager
January 15, 1997
New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- -------------------------------------------------------------------------
Statement of Investments December 31, 1996
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments--100.0% Amount Value
- -------------------------------------------------------------------------- ----------- -------------
<S> <C> <C>
New York--95.2%
Albany Industrial Development Agency, IDR, VRDN (Newkirk Products Inc., Project)
4.30%, Series A (LOC; Fleet Bank) (a,b)................................... $ 1,620,000 $ 1,620,000
Babylon Industrial Development Agency, VRDN:
IDR (Napco Security System Inc., Facility) 4.05% (LOC; Chase Manhattan
Bank) (a,b) 200,000 200,000
RRR (Equity Babylon Project) 4.15% (LOC; Union Bank of Switzerland) (a,b). 9,600,000 9,600,000
Broome County Industrial Development Agency, IDR, Refunding, VRDN
(Bing Realty Co. Project) 4% (LOC; Meridian BankCorp.) (a,b).............. 2,250,000 2,250,000
Buffalo, RAN 4.25%, Series A, 7/15/97 (LOC; Landesbank Hessen) (a)........... 2,800,000 2,809,544
Chemung County Industrial Development Agency, Civic Facility Revenue, VRDN
(Arnot Ogden Medical Center) 4.10% (LOC; Chase Manhattan Bank) (a,b)...... 2,600,000 2,600,000
Erie County Water Authority, Water Revenue, VRDN
3.80%, 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 PartnershipProject)
4.05%, Series A (LOC; Bank of Tokyo-Mitsubishi) (a,b)..................... 500,000 500,000
Great Neck North Water Authority, Water System Revenue, Refunding, VRDN
4%, Series A (Insured; FGIC and SBPA; FGIC) (b)........................... 9,000,000 9,000,000
Half Hallow Hills Central School District, TAN 4.25%, 6/27/97................ 2,000,000 2,003,732
Huntington Unified Free School District, TAN 4.375%, 6/24/97................. 4,000,000 4,010,567
Jefferson County Industrial Development Agency, IDR, VRDN (Watertown-Carthage TV)
3.55% (LOC; First National Bank of Chicago) (a,b)......................... 100,000 100,000
Liverpool Central School District, RAN 4.50%, 6/20/97........................ 5,000,000 5,013,427
Metropolitan Transportation Authority, Commuter Facilities Revenue, VRDN
4.05% (LOC; Bank of Tokyo-Mitsubishi, Industrial Bank of Japan, Morgan Bank,
National Westminster Bank and Sumitomo Bank) (a,b)........................ 200,000 200,000
Middletown City School District 5%, 11/1/97 (Insured; FGIC).................. 2,304,000 2,329,171
Monroe County Industrial Development Agency, Revenue, Refunding, VRDN (Office Building)
3.60% (LOC; Chase Manhattan Bank) (a,b)................................... 275,000 275,000
Montgomery Industrial Development Agency, IDR, VRDN (Service Merchandise Co.)
3.70% (LOC; Industrial Bank of Japan) (a,b)............................... 200,000 200,000
Nassau County General Improvement:
5%, Series S, 3/1/97 (Insured; AMBAC)..................................... 2,415,000 2,421,666
5%, Series Q, 8/1/97 (Insured; FGIC)...................................... 7,000,000 7,052,075
Nassau County Industrial Development Agency, Research Facility Revenue, VRDN
(Cold Spring Harbor Laboratory Project) 4.15% (LOC; Morgan Guaranty Trust
Co.) (a,b) 2,000,000 2,000,000
New York City, GO:
CP 3.35%, Series H-4, 1/23/97 (Insured; AMBAC and Liquidity Facility; Krediet
Bank) 2,000,000 2,000,000
VRDN:
4%, Series A-6 (LOC; Landesbank Hessen) (a,b)........................... 3,330,000 3,330,000
4.25%, Series B-3 (LOC; Bank of Nova Scotia) (a,b)...................... 2,100,000 2,100,000
4.25%, Series B-6 (Insured; MBIA and SBPA; Westdeutsche Landesbank) (b). 2,000,000 2,000,000
New York City Housing Development Corporation, Mortgage Revenue, VRDN:
(Columbus Apartments)
3.95%, Series A (LOC; Federal National Mortgage Association) (a,b)...... 2,720,000 2,720,000
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- -------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------------------------- ----------- -------------
New York (continued)
New York City Housing Development Corporation, Mortgage Revenue, VRDN (continued):
Multi-Family:
(Columbus) 3.95%, Series A (LOC; Citibank) (a,b)........................ $ 300,000 $ 300,000
(Tribeca Towers)
4.05%, Series A (LOC; Federal National Mortgage Association) (a,b).... 4,300,000 4,300,000
(West 89th Street) 4.25%, Series A (LOC; Midland Bank) (a,b)............ 5,000,000 5,000,000
Refunding (James Tower Development) 4.15%, Series A (LOC; Citibank) (a,b). 500,000 500,000
New York City Industrial Development Agency, VRDN:
Civic Facility Revenue (National Audobon Society) 4.05% (LOC; Swiss Bank
Corp.) (a,b) 1,400,000 1,400,000
IDR (Brooklyn Navy Yard Cogen) 4.15% (LOC; Bank of America) (a,b)......... 2,400,000 2,400,000
New York City Municipal Assistance Corporation, CP 3.40%, Series F, 2/12/97
(Insured; AMBAC and SBPA: Bank of Nova Scotia and National Westminster Bank) 3,000,000 3,000,000
New York City Municipal Water Finance Authority:
CP 3.50%, Series 3, 1/29/97 (LOC: Bank of Nova Scotia and Toronto-Dominion
Bank) (a) 3,000,000 3,000,000
Water and Sewer Systems Revenue:
CP 3.55%, Series 4, 1/28/97 (LOC; Credit Suisse) (a).................... 2,100,000 2,100,000
Prerefunded 7%, Series A, 6/15/97 (Escrowed in; U.S. Government Securities) 4,110,000 4,229,595
VRDN 4.20%, Series G (Insured; FGIC) (b)................................ 2,600,000 2,600,000
New York City Trust, Cultural Resource Revenue, VRDN:
Refunding (American Museum of Natural History)
3.80%, Series A (Insured; MBIA and SBPA; Credit Suisse) (b)............. 3,800,000 3,800,000
(Solomon R. Guggenheim) 4.05%, Series B (LOC; Swiss Bank Corp.) (a,b)..... 3,400,000 3,400,000
New York State, CP 3.55%, Series S, 2/6/97 (LOC; Westdeutsche Landesbank) (a) 5,600,000 5,600,000
New York State Dormitory Authority, Revenues:
CP (Memorial Sloan Kettering)
3.55%, Series A, 1/22/97 (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 1,092,653
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)............... 2,850,000 2,850,000
New York State Energy, Research and Development Authority:
PCR (New York State Electric and Gas):
3.30%, 3/15/97 (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 (LILCOProject)
4.05%, Series A (LOC; Toronto-Dominion Bank) (a,b).................... 500,000 500,000
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- -------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------------------------- ----------- -------------
New York (continued)
New York State Energy, Research and Development Authority (continued):
VRDN (continued):
PCR:
(Rochester Gas and Electric) 3.40% (LOC; The Bank of New York) (a,b).. $ 700,000 $ 700,000
Refunding (New York Electric and Gas)
3.95%, Series C (LOC; Morgan Guaranty Trust Co.) (a,b).............. 2,300,000 2,300,000
New York State Environmental Facilities Corporation, SWDR, Refunding,CP
(General Electric Co. Project)
3.30%, Series A, 1/23/97 (LOC; General Electric Co.) (a).................. 4,150,000 4,150,000
New York State Housing Finance Agency, VRDN:
HR:
(East 84th Street) 4.15%, Series A (LOC; Fleet Bank) (a,b).............. 1,600,000 1,600,000
(Liberty View Apartments) 4% (LOC; Chase Manhattan Bank) (a,b).......... 4,100,000 4,100,000
Revenue (Mount Sinai School of Medicine) 3.85%, Series A (LOC; Sanwa Bank)
(a,b) 1,700,0001,700,000 New York State Job Development Authority, VRDN:
3.60%, Series D-1 to D-9 (LOC; Sumitomo Bank) (a,b)....................... 175,000 175,000
3.65%, Series A-1 to A-9 (LOC; Sumitomo Bank) (a,b)....................... 515,000 515,000
3.65%, Series B-1 to B-6 (LOC; Sumitomo Bank) (a,b)....................... 115,000 115,000
3.65%, Series C-1 to C-34 (LOC; Sumitomo Bank) (a,b)...................... 365,000 365,000
4.30%, Series A-1 to A-42 (Guaranty; New York State and SBPA; Fuji Bank) (b) 2,975,000 2,975,000
4.30% Series B-1 to B-21 (Guaranty; New York State and SBPA; Fuji Bank) (b) 3,825,000 3,825,000
New York State Local Governmental Assistance Corporation, VRDN:
4%, Series B (LOC: Credit Suisse and Swiss Bank Corp.) (a,b).............. 6,000,000 6,000,000
4%, Series D (LOC; Societe Generale) (a,b)................................ 5,900,000 5,900,000
4%, Series E (LOC; Canadian Imperial Bank of Commerce) (a,b).............. 2,000,000 2,000,000
4%, Series F (LOC; Toronto-Dominion Bank) (a,b)........................... 4,100,000 4,100,000
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)..... 4,430,000 4,653,338
VRDN(Pooled Equipment Loan Program II) 3.90% (LOC; Chase Manhattan Bank) (a,b) 4,100,000 4,100,000
Niagara Falls Bridge Commission, TollRevenue, VRDN
3.80%, Series A (Insured; FGIC and LOC; Industrial Bank of Japan) (a,b)... 3,400,000 3,400,000
North Tonawanda City School District, BAN 4.25%, 6/12/97..................... 3,386,000 3,393,233
Onondaga County 4.40%, 2/15/97............................................... 2,050,000 2,052,023
Onondaga County Industrial Development Agency, IDR, VRDN:
(First Republic Corp. American) 4.05% (LOC; Chase Manhattan Bank) (a,b)... 1,100,000 1,100,000
(Pass and Seymour Project) 3.40% (LOC; Banque Nationale DeParis) (a,b).... 300,000 300,000
Town of Oyster Bay, Prerefunded 7.10%, 3/1/97 (Insured; FGIC)............... 400,000 402,402
Roslyn Unified Free School District, BAN 4.25%, 1/17/97...................... 4,000,000 4,001,109
Saint Lawrence Industrial Development Agency, EIR, VRDN (Reynolds Metals Co. Project)
4% (LOC; Royal Bank of Canada) (a,b)...................................... 1,100,000 1,100,000
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- -------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996
Principal
Tax Exempt Investments (continued) Amount Value
- -------------------------------------------------------------------------- ----------- -------------
New York (continued)
Suffolk County, Refunding (Southwest Sewer District) 4%, 2/1/97 (Insured:MBIA) $ 6,855,000 $ 6,857,375
Suffolk County Industrial Development Agency, VRDN:
Civil Facility Revenue (Suffolk Child Care Center Project)
4.15% (LOC; Barclays Bank) (a,b)........................................ 700,000 700,000
IDR, Refunding (Target Rock Corporation) 4% (LOC; Bank of Nova Scotia) (a,b) 2,500,000 2,500,000
Suffolk County Public Improvement 4.875%, Series D, 8/1/97 (Insured; FGIC)... 2,700,000 2,719,170
Suffolk County Water Authority, VRDN 3.90% (LOC; Bank of Nova Scotia) (a,b).. 6,000,000 6,000,000
Triborough Bridge and Tunnel Authority:
Prerefunded 8.25%, Series K, 1/1/97 (Escrowed in; U.S. Government Securities) 7,785,000 7,966,528
Special Obligation, VRDN 4% (Insured; FGIC and Liquidity Facility; FGIC) (b) 200,000 200,000
Westchester County 4.60%, 11/15/97........................................... 7,945,000 8,017,065
Western Nassau County Water Authority, Systems Revenue
3.70%, 5/1/97 (Insured; AMBAC)............................................ 460,000 460,025
Yonkers Industrial Development Agency, Civil Facility Revenue, VRDN
(Consumers Union Facility)
3.90% (Insured; AMBAC and SBPA; Credit Locale De France) (b).............. 3,500,000 3,500,000
U.S. Related--4.8%
Commonwealth of Puerto Rico Government Development Bank:
CP:
3.65%, 1/14/97 (Guaranty; Puerto Rico Development Bank)................. 2,000,000 2,000,000
3.45%, 2/7/97 (Guaranty; Puerto Rico Development Bank).................. 5,000,000 5,000,000
3.55%, 2/7/97 (Guaranty; Puerto Rico Development Bank).................. 2,000,000 2,000,000
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 1,041,154
Puerto Rico Industrial Medical and Environmental Pollution Control Facility Finance Authority,
Revenue, VRDN (AGMEF Project) 4.10% (LOC; Bank of Tokyo-Mitsubishi) (a,b). 200,000 200,000
--------------
TOTAL INVESTMENTS (cost $246,540,852)........................................ $ 246,540,852
==============
</TABLE>
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- --------------------------------------------------------------------------
Summary of Abbreviations
- --------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <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
EIR Environment Improvement Revenue RAN Revenue Anticipation Notes
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
HR Hospital Revenue SBPA Standby Bond Purchase Agreement
IDR Industrial Development Revenue TAN Tax Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
</TABLE>
Summary of Combined Ratings (Unaudited)
- ----------------------------------------------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- ------ -------- ---------------- ------------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 75.3%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 21.3
Not Rated (f) Not Rated (f) Not Rated (f) 3.4
-------
100.0%
=======
<FN>
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
(a) Secured by letters of credit. At December 31, 1996, 51% 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.
(f) Securities which, while not rated by Fitch, Moody's
and Standard & Poor's have been determined by the Fund's Board of Trustees
to be of comparable quality to those rated securities in which the Fund
may invest.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
------------- -------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $246,540,852 $246,540,852
Interest receivable.............................. 2,091,270
-------------
248,632,122
-------------
LIABILITIES: Due to The Dreyfus Corporation................... 84,817
Cash overdraft due to Custodian.................. 180,326
-------------
265,143
-------------
NET ASSETS..................................................................... $248,366,979
=============
REPRESENTED BY: Paid-in capital.................................. $248,367,380
Accumulated net realized gain (loss) on investments (401)
-------------
NET ASSETS..................................................................... $248,366,979
=============
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized)................. 248,367,380
NET ASSET VALUE, offering and redemption price per share....................... $1.00
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- --------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1996 (Unaudited)
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income.................................. $3,653,419
EXPENSES: Management fee--Note 2(a)......................... $468,651
Trustees' fees and expenses--Note 2(b)........... 10,651
----------
Total Expenses.............................. 479,302
Less--reduction in management fee due to
undertaking--Note 2(a).......................... (94,701)
----------
Net Expenses................................ 384,601
------------
INVESTMENT INCOME--NET, representing net increase in net assets
resulting from operations................................................ $3,268,818
------------
------------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- ------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
---------------- --------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................ $ 3,268,818 $ 2,250,574
Net realized gain (loss) on investments.............................. -- (391)
----------------- -----------------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 3,268,818 2,250,183
----------------- -----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Investor shares.................................................... (3,268,818) (2,138,509)
Class R shares..................................................... -- (112,065)
Net reailzed gain on investments:
Investor shares.................................................... -- (349)
----------------- -----------------
Total Dividends.................................................. (3,268,818) (2,250,923)
----------------- -----------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold:
Investor shares.................................................... 228,093,995 224,508,939
Class R shares..................................................... -- 4,827,833
Dividends reinvested:
Investor shares.................................................... 2,906,996 1,957,795
Class R shares..................................................... -- 23,917
Cost of shares redeemed:
Investor shares.................................................... (139,125,313) (91,714,099)
Class R shares..................................................... -- (12,901,810)
----------------- -----------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 91,875,678 126,702,575
----------------- -----------------
Total Increase (Decrease) in Net Assets........................ 91,875,678 126,701,835
NET ASSETS:
Beginning of Period.................................................. 156,491,301 29,789,466
----------------- -----------------
End of Period........................................................ $248,366,979 $156,491,301
================= =================
</TABLE>
See notes to financial statements.
<PAGE>
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.(1)
<TABLE>
<CAPTION>
Investor Shares
--------------------------------------------------------------------------------
Six Months Ended Year Ended June 30, Period Ended Year Ended November 30,
December 31, 1996 ------------------- June 30, --------------------------
PER SHARE DATA: (Unaudited) 1996 1995(2)(3) 1994(2)(4) 1993(2) 1992(2) 1991(2)
----------- -------- ---------- ---------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net............ .015 .031 .029 .012 .021 .031 .046
------ ------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment
income--net.................... (.015) (.031) (.029) (.012) (.021) (.031) (.046)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN............. 3.07%(5) 3.14% 2.95% 1.23% 2.15% 3.11% 4.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.................... .36%(5) .43% .60% .44%(5) .31% .32% .32%
Ratio of net investment income
to average net assets......... 3.07%(5) 3.43% 2.97% 2.12%(5) 2.13% 3.08% 4.58%
Decrease reflected in above expense
ratios due to undertakings by the
Manager....................... .09%(5) .09% -- .53%(5) .98% .71% .61%
Net Assets, end of period
(000's Omitted)............... $248,367 $156,491 $21,739 $8,011 $9,356 $11,183 $15,989
<FN>
- --------------------
(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.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- ------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.(1)
<TABLE>
<CAPTION>
Class R Shares
------------------------------------------------------
Year Ended June 30, Period Ended Period Ended
---------------------- June 30, November 30,
PER SHARE DATA: 1996 1995(2) 1994(3)(4) 1993(3)
------ ------ ---------- --------
<S> <C> <C> <C> <C>
Net asset value, beginning of period........... $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------
Investment Operations:
Investment income--net.......................... .015 .031 .013(5) .018(5)
------ ------ ------ ------
Distributions:
Dividends from investment income--net........... (.015) (.031) (.013) (.018)
------ ------ ------ ------
Net asset value, end of period................. -- $1.00 $1.00 $1.00
------ ------ ------ ------
------ ------ ------ ------
TOTAL INVESTMENT RETURN........................... -- 3.21% 1.32% 1.76%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets........ .35%(6) .35% .28%(6)(7) .26%(6)(7)
Ratio of net investment income
to average net assets....................... 3.32%(6) 3.22% 2.27%(6) 2.12%(6)
Net Assets, end of period (000's Omitted)...... -- $8,050 $5,459 $7,700
<FN>
- -----------------
(1) Effective December 8, 1995, the Fund coverted to a single Class Fund, with
the existing R shares coverted into Investor shares.
(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 the Investment Class share outstanding from
February 1, 1993 to April 3, 1994 and a Trust outstanding from April 4,
1994 to October 16, 1994.
(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) Net invesment 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 periods ended June 30, 1994 and November 30, 1993
were $0.010 and $0.007, 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 periods ended June 30, 1994 and November 30,
1993 were 0.82% and 1.22%, respectively.
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 Dreyfus BASIC New York Municipal Money
Market Fund (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. ("Mellon Bank"). Premier Mutual Fund Services, Inc. acts as
the distributor of the Fund's shares.
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 are valued at amortized cost in
accordance with Rule 2a-7 of the Investment Company Act of 1940, 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, if any, 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 December 31, 1996, 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).
<PAGE>
Dreyfus BASIC New York Municipal Money Market Fund
- --------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 2--Investment Management Fee and Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to the New 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. The Manager has undertaken
through December 8, 1996 to limit its unitary fee to .35 of 1% of the value of
the Fund's average daily net assets excluding certain fees outlined below. 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). The reduction in
management fee, pursuant to the undertaking, amounted to $94,701 during the
period ended December 31, 1996.
(b) Trustees' fees: Each trustee who is not an "interested person" as defined
in the Act 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. These expenses are paid in total by the following funds:
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust. In addition the Chairman of the Board receives
an annual fee of $75,000 per year. These fees and expenses are charged and
allocated to each series based on net assets.
NOTE 3--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million 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.
For the period ended December 31, 1996, the Fund did not borrow under the line
of credit.
<PAGE>
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. 316SA9612
Semi-Annual Report
Premier Limited Term
California
Municipal Fund
December 31, 1996
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to provide you with this report on the Premier Limited
Term California Municipal Fund. For its semi-annual reporting period ended
December 31, 1996, your Fund produced total returns of 3.95%, 3.68%, 3.68%
and 4.08% for its Class A, Class B, Class C and Class R shares,
respectively.* During this six-month period, the Fund paid income dividends,
which were exempt from Federal and State of California personal income taxes,
in the amounts of approximately $.300 per share for Class A shares, $.266 per
share for Class B shares, $.267 per share for Class C shares and $.316 per
share for Class R shares.** This amounts to annualized tax-free distribution
rates per share of 4.41%, 4.03%, 4.04% and 4.79 % for Class A, Class B, Class
C and Class R shares, respectively.***
THE ECONOMY
Over the reporting period, the economy grew moderately, showing little
evidence of accelerating inflation despite the robust pace of new job
creation and the low unemployment rate. It was fear of accelerating inflation
that prompted a sharp rise in long-term interest rates earlier in the year.
By year-end, however, long-term rates had fallen by one half of one percent
(50 basis points) from last summer's peak. Contributing to the drop in rates
was the decision of the Open Market Committee of the Federal Reserve Board
(the "Fed") to leave short-term interest rates unchanged.
Inflation at the consumer level of the economy remains in the 3% range,
which has been accompanied by a comparably benign inflation picture at the
production level of the economy as well. The so-called "core" Producer Price
Index (it excludes the energy and food components because of their
volatility) rose just 0.1% in November and a mere 0.6% for the previous 12
months. Producers appeared to have little ability to pass on price increases
to their customers, a reason cited by the Fed as evidence of the lack of
rising price inflation.
Despite the sanguine price environment, consumers remained wary spenders
and modest borrowers, and retail sales growth has been moderate.
Nevertheless, the renewed decline in mortgage rates spurred the housing
market. Existing home sales in November increased for the first time in six
months. New housing starts also rose sharply, with the November increase the
largest monthly rise since July 1995. Job growth still appears to have
underlying strength and monthly increases in workers added to payrolls could
also move higher. The recent unemployment rate rose slightly, but still
remained near a seven-year low.
Lending optimism to the prospect for continued economic growth was the
report from The Conference Board _ a private research group _ that its Index
of Leading Economic Indicators rose for the tenth consecutive month in
November. An increase in this index generally correlates with economic
expansion over the next three to twelve months. Manufacturing remained firm
all year with both factory orders and industrial production rising
moderately. Despite this overall strength in production, there were some signs
of moderation at year-end. Inventories have built up and orders for durable
goods _ those items intended to last three or more years _ declined.
Last year, high employment, low inflation and moderate economic growth
stayed the Fed's hand from raising interest rates. The economy is now in the
sixth year of this business cycle and we remain alert to signs of the
potential rekindling of inflationary pressures.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Economic strength in California continues. Non-farm employment is up by
400,000 jobs for the twelve months ended October 1996. Employment has grown
faster in California than for the United States overall. Results were
particularly impressive in the manufacturing sector where 80,000 new jobs
were added while the nation lost 140,000. The jobless rate fell to 6.9% by
October, the lowest rate since December 1990. Despite a weak home building
market in California, construction employment is also outpacing the rest of
the nation.
Revenue growth has been strong. As of November 1996, personal income tax
receipts are 3.5% above forecasted levels, and bank and corporation taxes are
slightly above estimates. Overall, General Fund revenues are almost $500
million higher than forecasted through November 1996.
One caveat to the overall positive outlook was the passage of Proposition
218. This proposition requires a simple majority vote on any proposal to
raise taxes and creates the possibility of overturning certain taxes through
initiative petition. Rating agencies, attorneys and analysts are still
evaluating the precise effect that Proposition 218 will have on the various
debt issuers. Moody's has already downgraded Los Angeles and San Diego
because of the proposition and feels it will diminish the financial
flexibility of cities and counties. If this is so, there will be a direct
effect on general obligations and leases; the impact on revenue and tax
assessment bonds is less clear. We will continue to monitor the effect of
Proposition 218.
Buoyed by the strength in the taxable bond market and waning attention to
tax reform, municipal bond prices rose throughout the reporting period.
Demand was particularly strong in July due to heavier than normal maturity
and coupon payments on July 1st. However, the decline in interest rates also
increased new issue supply as issuers opportunistically refinanced older,
higher coupon debt. Consequently, the total new issue supply in the municipal
marketplace for 1996 was $182 billion, well above the expectations of most
analysts. As a result, longer maturity municipal bond prices rose in response
to this demand during the second half of 1996. Overall though, for the full
calendar year, these same securities declined in value and their yield
increased by 35 basis points. Prices on comparable Treasury securities
declined even further than municipals during the same period, increasing
their yields by more than 70 basis points. Thus, municipal bonds
significantly outperformed taxable fixed-income securities in 1996.
In keeping with its objective of maximizing income consistent with the
prudent risk of capital, the Fund emphasized premium coupon, high quality
securities throughout the reporting period. The weighted average maturity of
the portfolio was extended slightly during the second half of 1996 in
anticipation of a declining interest rate environment and to be more neutral
relative to its peer group of funds. The average maturity was increased from
7.15 years on June 30, 1996 to 7.44 years by December 31, 1996.
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
January 15, 1997
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid
without taking into account 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.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
*** Distribution rate per share is based upon dividends per share paid
from net investment income during the period (annualized), divided by the
maximum offering price in the case of Class A shares or the net asset value
per share in the case of Class B, Class C and Class R shares at the end of
the period, adjusted for capital gain distributions.
<TABLE>
<CAPTION>
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF INVESTMENTS DECEMBER 31, 1996 (UNAUDITED)
Principal
Long-Term Municipal Investments_94.8% Amount Value
----------- -----------
<S> <C> <C>
California_77.8%
California Housing Finance Agency:
Home Mortgage Revenue 5.65%, 8/1/2006 (Insured; MBIA)................... $ 655,000 $ 667,190
MFHR:
5.10%, 2/1/2003 (Insured; AMBAC)...................................... 460,000 462,990
5.25%, 2/1/2004 (Insured; AMBAC)...................................... 430,000 433,139
California Public Works Board, Lease Revenue:
(Corcoran State Prison) 7%, 9/1/1998.................................... 200,000 204,508
High Technology Facilities (Berkeley Campus) 7.20%, 3/1/2001............ 150,000 157,635
California Rural Home Mortgage Finance Authority, Single Family Mortgage
Revenue
5.75%, 8/1/2009 (Collateralized; GNMA).................................. 725,000 739,942
Elk Grove Unified School District, Special Tax Revenue, Refunding
(Community Facilities District No. 1) 6.50%, 12/1/2006 (Insured; AMBAC). 400,000 454,660
Franklin-McKinley School District, Refunding 5.20%, 7/1/2004 (Insured; MBIA) 375,000 388,774
Kern High School District, Refunding 6.40%, 2/1/2012 (Insured; MBIA)........ 750,000 847,028
Los Angeles, Wastewater System Revenue:
6.60%, 6/1/1998......................................................... 400,000 414,616
7.10%, 11/1/1998........................................................ 150,000 156,653
Los Angeles County Housing Authority, MFHR (Monrovia Project)
7.625%, 12/1/2028 (Prerefunded 12/1/1999) (Insured; CIC) (a)............ 100,000 101,094
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
8%, 7/1/2000 (Insured; AMBAC)........................................... 500,000 559,265
Los Angeles County Transportation Commission, Sales Tax Revenue 6.80%, 7/1/1999 150,000 159,201
Metropolitan Water District of Southern California, Waterworks Revenue 6.375%, 7/1/2002 835,000 912,872
Northern California, Transmission Revenue, Refunding (Project No. 1)
6.25%, 8/15/2000 (Insured; MBIA)........................................ 360,000 377,986
Port Oakland, Port Revenue 6%, 11/1/2002 (Insured; MBIA).................... 500,000 534,445
Redding JT Powers Financing Authority, Electrical Systems Revenue
5.25%, 6/1/2015 (Insured; MBIA)......................................... 670,000 652,614
Riverside County Transportation Commission, Sales Tax Revenue
6.50%, 6/1/2001 (Insured; AMBAC)........................................ 520,000 564,569
Sacramento Municipal Utilities District, Electrical Revenue:
5.85%, 7/1/2000 (Insured; FGIC)......................................... 100,000 105,269
6.30%, 9/1/2001 (Insured; MBIA)......................................... 500,000 539,755
San Bernardino Transportation Authority, Sales Tax Revenue 6%, 3/1/2002 (Insured; FGIC) 440,000 470,325
San Diego County Regional Transportation Commission, Sales Tax Revenue
6%, 4/1/2004 (Insured; FGIC)............................................ 750,000 813,330
San Diego Redevelopment Agency, Tax Allocation (Centre City Project)
5.50%, 9/1/2001 (Insured; AMBAC)........................................ 600,000 628,434
San Francisco Bay Area Rapid Transit District, Sales Tax Revenue, Refunding
6.70%, 7/1/2000......................................................... 500,000 539,265
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996 (UNAUDITED)
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 $ 525,710
San Francisco City and County Public Utilities Commission, Water Revenue,
Refunding:
6%, 11/1/2003........................................................... 750,000 814,942
6.375%, 11/1/2006....................................................... 500,000 547,065
San Mateo County Transit District, Sales Tax Revenue 6.20%, 6/1/1999 (Insured; MBIA) 100,000 105,687
Santa Margarita-Dana Point Authority, Revenue, Refunding
7.25%, 8/1/2007 (Insured; MBIA)......................................... 500,000 593,600
Santa Rosa, Waste Water Revenue
6.20%, 9/1/2003 (Prerefunded 9/1/2002) (Insured; FGIC) (a).............. 350,000 386,858
Simi Valley Unified School District, Refunding 6.25%, 8/1/2004 (Insured; FGIC) 700,000 770,147
Southern California Public Power Authority, Power Project Revenue, Refunding
(Hydroelectric-Hoover Uprating Project) 6.30%, 10/1/2002................ 420,000 457,871
State of California 6.60%, 2/1/2009......................................... 510,000 580,079
Tri-City California, Hospital District Revenue, Refunding
6%, 2/15/2005 (Insured; MBIA)........................................... 500,000 541,155
West and Central Basin Financing Authority, Revenue 6%, 8/1/2005 (Insured; AMBAC) 620,000 668,242
Westside Unified School District, Refunding 6%, 8/1/2014 (Insured; AMBAC)... 385,000 414,410
U.S. Related_17.0%
Commonwealth of Puerto Rico, Refunding 6.25%, 7/1/2011 (Insured; MBIA)...... 750,000 831,525
Puerto Rico Highway and Transportation Authority, Highway Revenue
6.25%, 7/1/2004 (Insured; MBIA)......................................... 500,000 553,335
Puerto Rico Public Buildings Authority, Government Guaranteed Facilities
6.25%, 7/1/2010 (Insured; AMBAC) (Guaranteed; Commonwealth of Puerto Rico) 750,000 831,488
Puerto Rico Electric Power Authority, Power Revenue 6.50%, 7/1/2006 (Insured; MBIA) 625,000 706,575
University of Puerto Rico, University Revenue, Refunding
6.25%, 6/1/2008 (Insured; MBIA)......................................... 750,000 835,957
-----------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $21,120,811)...................................................... $22,050,205
============
Short-Term Municipal Investments_5.2%
California:
California Health Facilities Finance Authority, Catholic Healthcare Revenue VRDN
3.10% (Insured; MBIA) (c)............................................... $ 100,000 $ 100,000
Los Angeles Regional Airports Improvement Corp., Lease Revenue, VRDN:
3.50% (LOC; Societe Generale) (b,c)..................................... 500,000 500,000
3.40% (LOC; Societe Generale) (b,c)..................................... 300,000 300,000
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1996 (UNAUDITED)
Principal
Short-Term Municipal Investments (continued) Amount Value
----------- -----------
California (continued):
Palm Springs Community Redevelopment Agency, Lease Revenue, COP VRDN
3.30% (LOC; Citibank) (b,c)............................................. $ 200,000 $ 200,000
San Diego County, Multifamily Housing Revenue, VRDN 3.25% (c)............... 100,000 100,000
-----------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $1,200,000)....................................................... $ 1,200,000
=============
TOTAL INVESTMENTS_100.0%
(cost $22,320,811)...................................................... $23,250,205
============
</TABLE>
<TABLE>
<CAPTION>
Summary of Abbreviations
<S> <C> <S> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
CIC Continental Insurance Company MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
GNMA Government National Mortgage Association VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- ------ ------- ---------------- -----------------
<S> <C> <S> <C>
AAA Aaa AAA 73.1
AA Aa AA 14.8
A A A 6.9
F1 MIG1 SP1 5.2
------
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) Secured by letter of credit.
(c) Security payable on demand. The interest rate, which is subject to
change, is based upon bank prime rate or an index of market interest
rates.
(d) Fitch currently provides creditworthiness information for a limited
number of investments.
(e) At December 31, 1996, 34.9% of the Funds net assets were insured by
MBIA.
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
<CAPTION>
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1996 (UNAUDITED)
Cost Value
------------ ------------
<S> <C> <C> <C> <C>
ASSETS: Investments in securities_See Statement of Investments $22,320,811 $23,250,205
Cash....................................... 46,119
Interest receivable........................ 443,550
------------
23,739,874
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates 20,537
Due to Distributor......................... 144
------------
20,681
------------
NET ASSETS.................................................................. $23,719,193
============
REPRESENTED BY: Paid-in capital............................ $22,777,187
Accumulated net realized gain (loss) on investments 12,612
Accumulated net unrealized appreciation (depreciation)
on investments_Note 3.................... 929,394
------------
NET ASSETS.................................................................. $23,719,193
============
NET ASSET VALUE PER SHARE
-----------------------------
Class A Class B Class C Class R
---------- ----------- ----------- ------------
Net Assets................................. $7,762,641 $143,862 $25,321 $15,787,369
Shares Outstanding......................... 594,690 11,021 1,935 1,209,512
NET ASSET VALUE PER SHARE.................. $13.05 $13.05 $13.08 $13.05
=========== ========== =========== ============
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF OPERATIONS SIX MONTHS ENDED DECEMBER 31, 1996 (UNAUDITED)
INVESTMENT INCOME
INCOME Interest Income............................ $579,621
EXPENSES: Management fee_Note 2(a)................... $ 54,020
Distribution and service fees_Note 2(b).... 10,331
Trustees' fees and expenses_Note 2(c)...... 443
-------------
Total Expenses....................... 64,794
-----------
INVESTMENT INCOME_NET....................................................... 514,827
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS_Note 3:
Net realized gain (loss) on investments.... $ 91,187
Net realized gain (loss) on financial futures 9,488
-------------
Net Realized Gain (Loss)............... 100,675
Net unrealized appreciation (depreciation) on investments 244,764
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS...................... 345,439
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................ $860,266
===========
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
December 31, 1996 Year Ended
(Unaudited)June 30, 1996
-------------------------- -------------
OPERATIONS:
Investment income_net................................................... $ 514,827 $ 928,763
Net realized gain (loss) on investments................................. 100,675 20,392
Net unrealized appreciation (depreciation) on investments............... 244,764 33,999
--------------- ----------------
Net Increase (Decrease) in Net Assets Resulting from Operations... 860,266 983,154
--------------- ----------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income_net:
Class A shares........................................................ (179,326) (391,455)
Class B shares........................................................ (2,333) (867)
Class C shares........................................................ (516) (890)
Class R shares........................................................ (332,652) (535,551)
Net realized gain on investments:
Class A shares........................................................ (20,500) (14,350)
Class B shares........................................................ (342) (39)
Class C shares........................................................ (67) (42)
Class R shares........................................................ (40,475) (18,429)
--------------- ----------------
Total Dividends................................................... (576,211) (961,623)
--------------- ----------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares........................................................ 139,496 645,645
Class B shares........................................................ 73,119 67,799
Class C shares........................................................ ____ 25,025
Class R shares........................................................ 5,360,649 8,085,552
Dividends reinvested:
Class A shares........................................................ 136,648 291,515
Class B shares........................................................ 681 679
Class C shares........................................................ ____ 815
Class R shares........................................................ 236,795 309,750
Cost of shares redeemed:
Class A shares........................................................ (364,270) (1,744,945)
Class B shares........................................................ (9,501) (16)
Class C shares........................................................ ____ (26,530)
Class R shares........................................................ (2,369,660) (4,798,508)
--------------- ----------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 3,203,957 2,856,781
--------------- ----------------
Total Increase (Decrease) in Net Assets......................... 3,488,012 2,878,312
NET ASSETS:
Beginning of Period..................................................... 20,231,181 17,352,869
--------------- ----------------
End of Period........................................................... $23,719,193 $20,231,181
=============== ================
Distribution in excess of investment income_net............................. ____ $ (150)
--------------- ----------------
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
-------------------------------
Six Months Ended
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
------------------- ----------------
CAPITAL SHARE TRANSACTIONS:
Class A
-------
Shares sold.............................................................. 10,730 49,480
Shares issued for dividends reinvested................................... 10,495 22,390
Shares redeemed.......................................................... (27,994) (134,672)
------------------- ----------------
Net Increase (Decrease) in Shares Outstanding (6,769) (62,802)
=================== ================
Class B
-------
Shares sold.............................................................. 5,668 5,287
Shares issued for dividends reinvested................................... 52 52
Shares redeemed.......................................................... (733) (1)
------------------- ----------------
Net Increase (Decrease) in Shares Outstanding 4,987 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.............................................................. 412,293 619,872
Shares issued for dividends reinvested................................... 18,177 23,809
Shares redeemed.......................................................... (182,695) (370,223)
------------------- ----------------
Net Increase (Decrease) in Shares Outstanding 247,775 273,458
=================== ================
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
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.
<TABLE>
<CAPTION>
Class A Shares
--------------------------------------------------------------------------------------------
Six Months Ended Period Ended
December 31, 1996 Year Ended June 30, June 30, Year Ended November 30,
-------------------- ------------------- ---------------------------
PER SHARE DATA: (Unaudited) 1996 1995(1)(2 1994(1)(2)(3) 1993(1) 1992 1991
------------- ------- ---------- ------------- -------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period. $12.88 $12.80 $12.61 $13.07 $12.81 $12.53 $12.29
------------- ------- ---------- ------------- -------- ------ ------
Investment Operations:
Investment income_net (4) .30 .60 .59 .34 .67 .70 .73
Net realized and unrealized gain
(loss) on investments .20 .10 .21 (.46) .66 .44 .24
------------- ------- ---------- ------------- -------- ------ ------
Total from
Investment Operations .50 .70 .80 (.12) 1.33 1.14 .97
------------- ------- ---------- ------------- -------- ------ ------
Distributions:
Dividends from
investment income_net (.30) (.60) (.60) (.34) (.67) (.70) (.73)
Dividends from net realized gain
on investments...... (.03) (.02) (.01) (.00)(5) (.40) (.16) --
------------- ------- ---------- ------------- -------- ------ ------
Total Distributions... (.33) (.62) (.61) (.34) (1.07) (.86) (.73)
------------- ------- ---------- ------------- -------- ------ ------
Net asset value, end of period $13.05 $12.88 $12.80 $12.61 $13.07 $12.81 $12.53
============= ======= ========== ============= ======== ====== ======
TOTAL INVESTMENT RETURN (6) 7.84%(7) 5.43% 6.48% (.95%) 10.58% 9.27% 8.07%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets (8) .75%(7) .75% .75% .58%(7) .45%(9) .45% .45%
Ratio of net investment income to
average net assets.. 4.57%(7) 4.59% 4.71% 4.51%(7) 5.09% 5.38% 5.84%
Portfolio Turnover Rate 14.69%(10) 39.09% 49.00% 5.00%(10) 38.00% 41.00% 27.00%
Net Assets, end of period
(000's Omitted)..... $7,763 $7,745 $8,506 $10,143 $10,971 $21,831 $16,203
(1) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the Institutional Class and
Investment Class of shares. Effective April 4, 1994 the Retail and
Institutional Classes were reclassified as a single class of shares known
as the Investor shares. Effective October 17, 1994, the Investor
Class was redesignated Class A. The Financial Highlights for the year ended
June 30, 1995 are based upon a Class A share (formerly Investor shares)
outstanding. The amounts shown for the period ended June 30, 1994 were
calculated using the performance of a Retail share outstanding from December
1, 1993 to April 3, 1994 and the performance of an Investor share outstanding
from April 4, 1994 to June 30, 1994. The Financial Highlights for the year
ended November 30, 1993 and prior years are based upon a Retail share
outstanding.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to April 4,
1994, The Boston Company Advisors, Inc. served as the Fund's investment
adviser.
(3) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30.(4) Net investment income per share
before waiver of fees and reimbursement of expenses by the investment
adviser and/or custodian and/or transfer agent for the period ended June 30,
1994, for the years ended November 30, 1993, 1992 and 1991 were$.31,$.67,
$.64 and$.66, respectively.
(5) Amount represents less than $.01 per share.
(6) Exclusive of sales load.
(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, for the years ended
November 30, 1993, 1992 and 1991 were .95%, 1.10%, .93% and 1.03%,
respectively.
(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.
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
-------------------------------------------- -------------------------------------------
Six Months Ended Year Ended Period Ended Six Months Ended Year Ended Period Ended
December 31, 1996 June 30, June 30, December 31, 1996 June 30, June 30,
PER SHARE DATA: (Unaudited) 1996 1995(1) (Unaudited) 1996 1995(1)
---------- ------ -------- ------------- ------- ----------
Net asset value,
beginning of period $12.88 $12.80 $12.28 $12.91 $12.80 $12.28
---------- ------ -------- ------------- ------- ----------
Investment Operations:
Investment income_net .27 .53 .27 .27 .53 .28
Net realized and
unrealized gain (loss)
on investments. .20 .10 .53 .20 .13 .52
Total from Investment
Operations..... .47 .63 .80 .47 .66 .80
---------- ------ -------- ------------- ------- ----------
Distributions:
Dividends from investment
income_net..... (.27) (.53) (.28) (.27) (.53) (.28)
Dividends from net
realized gain
on investments. (.03) (.02) -- (.03) (.02) ._
---------- ------ -------- ------------- ------- ----------
Total Distributions (.30) (.55) (.28) (.30) (.55) (.28)
---------- ------ -------- ------------- ------- ----------
Net asset value,
end of period.. $13.05 $12.88 $12.80 $13.08 $12.91 $12.80
========== ====== ======== ============= ======= ==========
TOTAL INVESTMENT RETURN (2) 7.30%(3) 4.89% 6.51% 7.30%(3) 5.14% 6.51%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to
average net assets 1.25%(3) 1.25% 1.25%(3) 1.25%(3) 1.25% 1.25%(3)
Ratio of net investment
income to average
net assets..... 4.04%(3) 4.08% 4.20%(3) 4.06%(3) 4.06% 4.22%(3)
Portfolio Turnover Rate 14.69%(4) 39.09% 49.00% 14.69%(4) 39.09% 49.00%
Net Assets, end of period
(000's Omitted) $144 $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.
(4) Not annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
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
--------------------------------------------------------------------------
Six Months Ended Period Ended Year Ended
December 31, 1996 Year Ended June 30 , June 30, November 30,
---------------------
PER SHARE DATA: (Unaudited) 1996 1995(1) 1994(1)(2) 1993(3)
----------- ------ --------- ---------- ----------
Net asset value, beginning of period $12.88 $12.80 $12.61 $13.07 $12.96
----------- ------ --------- ---------- ----------
Investment Operations:
Investment income_net............... .32 .63 .63 .35(4) .55(4)
Net realized and unrealized gain (loss)
on investments.................... .20 .10 .20 (.46) .52
----------- ------ --------- ---------- ----------
Total from Investment Operations.... .52 .73 .83 (.11) 1.07
----------- ------ --------- ---------- ----------
Distributions:
Dividends from investment income_net (.32) (.63) (.63) (.35) (.56)
Dividends from net realized gain
on investments.................... (.03) (.02) (.01) (.00)(5) (.40)
----------- ------ --------- ---------- ----------
Total Distributions................. (.35) (.65) (.64) (.35) (.96)
----------- ------ --------- ---------- ----------
Net asset value, end of period...... $13.05 $12.88 $12.80 $12.61 $13.07
=========== ====== ========= ========== ==========
TOTAL INVESTMENT RETURN (6)............. 8.09%(7) 5.68% 6.75% (.87%)(8) 8.32%(8)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .50%(7) .50% .50% .42%(7)(9) .40%(7)(9)(10)
Ratio of net investment income
to average net assets............. 4.82%(7) 4.84% 4.96% 4.68%(7) 5.04%(7)
Portfolio Turnover Rate............. 14.69%(8) 39.09% 49.00% 5.00%(8) 38.00%
Net Assets, end of period (000's Omitted) $15,787 $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 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) Annualized.
(8) Not 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 year
ended November 30, 1993.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1_Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 Premier Limited Term California
Municipal Fund (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").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an
unlimited number of shares of Beneficial Interest in the following classes of
shares: Class A, Class B, Class C and Class R. Class A, Class B and Class C
shares are sold primarily to retail investors through financial
intermediaries and bear a distribution fee and/or service fee. Class A shares
are sold with a front-end sales charge, while Class B and Class C shares are
subject to a contingent deferred sales charge ("CDSC") and a service fee.
Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting
on behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution 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: The Fund's investments (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.
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
(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 December 31, 1996, 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).
(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
PREMIER LIMITED TERM CALIFORNIA MUNICIPAL FUND
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
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 December 31, 1996, the distribution fee for
Class A, Class B and Class C shares was $9,803, $289 and $63, respectively.
During the period ended December 31, 1996, the service fee for Class B shares
and Class C shares was $144 and $32, 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.
(c) Trustees' fees: Each trustee who is not an "interested person" as
defined in the Act 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. These expenses are paid in total by
the following funds: The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel
Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust. In addition the
Chairman of the Board receives an annual fee of $75,000 per year. These fees
and expenses are charged and allocated to each series based on net assets.
NOTE 3_Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1996,
amounted to $5,490,465 and $3,036,617, respectively.
At December 31, 1996, accumulated net unrealized appreciation on
investments was $929,394, consisting of $930,159, gross unrealized
appreciation and $765 gross unrealized depreciation.
At December 31, 1996, 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 $100 million
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. For the period ended December 31, 1996, the Fund did not borrow
under the line of credit.
DREYFUS LION D LOGO)
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. LTCSA9612
(Dreyfus Logo)
<PAGE>
Semi-Annual Report
- --------------------------------------------------------------------------------
Premier Limited Term
Massachusetts
Municipal Fund
- --------------------------------------------------------------------------------
December 31, 1996
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Premier Limited Term
Massachusetts Municipal Fund. For its semi-annual reporting period ended
December 31, 1996, your Fund produced total returns of 3.78%, 3.59%, 3.55% and
3.91% for its Class A, Class B, Class C and Class R shares, respectively.*
During this six-month period, the Fund paid income dividends, which were exempt
from Federal and Commonwealth of Massachusetts personal income taxes, of
approximately $.274 per share for Class A shares, $.242 per share for Class B
shares, $.247 per share for Class C shares and $.289 per share for Class R
shares.** This amounts to annualized tax-free distribution rates per share of
4.34%, 3.95%, 4.03% and 4.72 % for Class A, Class B, Class C and Class R shares,
respectively.***
THE ECONOMY
Over the reporting period, the economy grew moderately, showing little
evidence of accelerating inflation despite the robust pace of new job creation
and the low unemployment rate. It was fear of accelerating inflation that
prompted a sharp rise in long-term interest rates earlier in the year. By
year-end, however, long-term rates had fallen by one half of one percent (50
basis points) from last summer's peak. Contributing to the drop in rates was the
decision of the Open Market Committee of the Federal Reserve Board (the "Fed")
to leave short-term interest rates unchanged.
Inflation at the consumer level of the economy remains in the 3% range, which
has been accompanied by a comparably benign inflation picture at the production
level of the economy as well. The so-called "core" Producer Price Index (it
excludes the energy and food components because of their volatility) rose just
0.1% in November and a mere 0.6% for the previous 12 months. Producers appeared
to have little ability to pass on price increases to their customers, a reason
cited by the Fed as evidence of the lack of rising price inflation.
Despite the sanguine price environment, consumers remained wary spenders and
modest borrowers, and retail sales growth has been moderate. Nevertheless, the
renewed decline in mortgage rates spurred the housing market. Existing home
sales in November increased for the first time in six months. New housing starts
also rose sharply, with the November increase the largest monthly rise since
July 1995. Job growth still appears to have underlying strength and monthly
increases in workers added to payrolls could also move higher. The recent
unemployment rate rose slightly, but still remained near a seven-year low.
Lending optimism to the prospect for continued economic growth was the report
from The Conference Board-- a private research group--that its Index of Leading
Economic Indicators rose for the tenth consecutive month in November. An
increase in this index generally correlates with economic expansion over the
next three to twelve months. Manufacturing remained firm all year with both
factory orders and industrial production rising moderately. Despite this overall
strength in production, there were some signs of moderation at year-end.
Inventories have built up and orders for durable goods--those items intended to
last three or more years--declined.
Last year, high employment, low inflation and moderate economic growth stayed
the Fed's hand from raising interest rates. The economy is now in the sixth year
of this business cycle and we remain alert to signs of the potential rekindling
of inflationary pressures.
<PAGE>
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
In Massachusetts, the economic recovery that began in 1992, following a
severe recession in the Northeast, continued into 1996. Both income and
employment grew moderately throughout the period. While economic growth in the
Commonwealth slowed in the latter part of 1995, nonfarm payroll rose 1.4% for
the twelve months ended August 31, 1996, slightly below the national average
rate of 1.9%. The unemployment rate at the end of Fiscal Year 1996 was 5.5%,
approximating the national average. Employment growth sectors over the period
were construction (+7%), services (+4%), foreign trade (+2%) and manufacturing
(+0.1%). The increase in employment was the leading factor that caused personal
income growth to exceed the national growth rate in the first half of Fiscal
Year 1996.
The Commonwealth's financial position has mirrored the improvement in the
regional economy. Massachusetts has reported three consecutive years of balanced
financial operations with conservative revenue estimates and expenditure
controls. The excess operating revenues over this period have increased the
level of reserves, including the Budget Stabilization Fund balance that reached
its statutory limit in 1996. It is expected that the state legislature will
raise the Stabilization Fund limit in Fiscal Year 1997 and provide a tax refund
with the Fiscal Year 1996 excess funds. Also contributing to the Commonwealth's
budget surplus were savings resulting from welfare reform provisions enacted in
1995.
Despite its strong finances, the Commonwealth maintains an above-average debt
burden. Massachusetts will be confronted with the ramifications of the "Big Dig"
project during 1997. Several plans are under consideration that provide for the
majority of the funding to be absorbed by various Commonwealth agencies, The
Massachusetts Port Authority and the Massachusetts Turnpike Authority. Expenses
for this project plus additional capital spending plans for highway, school and
correctional facilities will prevent the Commonwealth from reducing its debt
burden over the near term. The Commonwealth maintains A1 and A+ long-term debt
ratings from Moody's and Standard & Poors, respectively.
The towns and cities of Massachusetts are also benefiting from the region's
economic recovery, primarily through modest growth in real estate assessments,
lower unemployment and increased Commonwealth aid. Nearly $500 million in
increased spending for education reform flowed to cities and towns in Fiscal
Year 1996 with a similar allocation provided in Fiscal Year 1997.
Buoyed by the strength in the taxable bond market and waning attention to tax
reform, municipal bond prices rose throughout the reporting period. Demand was
particularly strong in July due to heavier than normal maturity and coupon
payments on July 1st. However, the decline in interest rates also increased new
issue supply as issuers opportunistically refinanced older, higher coupon debt.
Consequently, the total new issue supply in the municipal marketplace for 1996
was $182 billion, well above the expectations of most analysts. As a result,
longer maturity municipal bond prices rose in response to this demand during the
second half of 1996. Overall though, for the full calendar year, these same
securities declined in value and their yield increased by 35 basis points.
Prices on comparable Treasury securities declined even further than municipals
during the same period, increasing their yields by more than 70 basis points.
Thus, municipal bonds significantly outperformed taxable fixed-income securities
in 1996.
<PAGE>
In keeping with its objective of maximizing income consistent with the
prudent risk of capital, the Fund emphasized premium coupon, high quality
securities throughout the reporting period. The weighted average maturity of the
portfolio was shortened slightly during the second half of 1996 to be more
neutral relative to its peer group of funds. The average maturity declined from
7.36 years on June 30, 1996 to 7.06 years by the end of the reporting period.
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
Portfolio Manager
January 15, 1997
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid
without taking into account 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.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
***Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the maximum
offering price per share in the case of Class A shares or the net asset value
per share in the case of Class B, Class C and Class R shares at the end of
the period, adjusted for capital gain distributions
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- --------------------------------------------------------------------------------
Statement of Investments December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments--95.3% Amount Value
- ---------------------------------------------------------------------- ----------- ---------
<S> <C> <C>
Massachusetts--81.8%
Amherst, GO 6%, 1/15/2003.................................................... $ 200,000 $ 214,864
Andover, GO 6%, 1/15/2003.................................................... 700,000 765,898
Belmont 5.50%, 1/15/2005..................................................... 585,000 616,221
Boston Water and Sewer Commission, Revenue 9.25%, 1/1/2011................... 100,000 133,206
Cambridge:
GO 6.60%, 6/15/2000....................................................... 675,000 727,191
Municipal Purpose Loan 5.60%, 11/1/2001................................... 500,000 528,175
Cohasset, Municipal Purpose Loan:
6.70%, 11/1/1998 (Insured; MBIA).......................................... 160,000 168,117
6.90%, 11/1/2000 (Insured; MBIA).......................................... 150,000 164,229
Easton, Municipal Purpose Loan 6%, 9/15/2006................................. 105,000 112,354
Franklin, GO 6.25%, 11/15/2005 (Insured; MBIA)............................... 430,000 474,754
Massachusetts, Refunding:
5.40%, 11/1/2006.......................................................... 1,000,000 1,036,600
6.50%, 8/1/2008........................................................... 500,000 562,735
Massachusetts Bay Transportation Authority:
Massachusetts General Transportation 5.25%, 3/1/2011 (Insured; AMBAC)..... 1,000,000 988,610
Refunding 5.90%, 3/1/2004................................................. 550,000 588,516
Massachusetts Consolidated Loan:
7%, 7/1/2006 (Insured; MBIA, Prerefunded 7/1/2000) (a).................... 500,000 552,655
7.625%, 6/1/2008 (Prerefunded 6/1/2001) (a)............................... 400,000 457,936
7.375%, 12/1/2008 (Prerefunded 12/1/1998) (a)............................. 250,000 270,530
Massachusetts Education Loan Authority, Education Loan Revenue
6.20%, 7/1/2013 (Insured; AMBAC).......................................... 1,000,000 1,029,230
Massachusetts Health and Educational Facilities Authority, Revenue:
(Beth Israel Hospital) 7.80%, 7/1/2014.................................... 500,000 537,680
(Harvard University):
6.20%, 12/1/2001........................................................ 1,000,000 1,084,050
Refunding 6.50%, 11/1/2004.............................................. 700,000 786,842
(Lahey Clinic) 7.625%, 7/1/2018 (Prerefunded 7/1/1998) (a)................ 1,000,000 1,072,870
(Malden Hospital Project) 9.50%, 8/1/2008................................. 35,000 35,106
(Northeastern University) 6.80%, 10/1/1999 (Insured; AMBAC)............... 1,000,000 1,068,520
Refunding (Dana-Farber Cancer Institute) 5.55%, 12/1/2003 (Insured; FGIC). 400,000 420,128
(Salem University) 8.15%, 7/1/2014 (Prerefunded 7/1/1999) (a)............. 750,000 833,365
(South Shore Hospital):
7.50%, 7/1/2010 (Insured; MBIA, Prerefunded 7/1/2000) (a)............... 350,000 392,007
7.50%, 7/1/2020 (Insured; MBIA, Prerefunded 7/1/2000) (a)............... 500,000 560,010
(Wenworth Institute of Technology):
7.15%, 4/1/2000 (Insured; AMBAC)........................................ 225,000 244,593
7.40%, 4/1/2010 (Insured; AMBAC, Prerefunded 4/1/2000) (a).............. 220,000 244,647
Massachusetts Housing Finance Agency, SFHR:
6%, 6/1/2014 (Insured; MBIA).............................................. 1,200,000 1,226,808
5.75%, 12/1/2029 (Insured; MBIA).......................................... 500,000 505,395
</TABLE>
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ---------------------------------------------------------------------- ----------- ---------
<S> <C> <C>
Massachusetts (continued)
Massachusetts Industrial Finance Agency:
Museum Revenue, Refunding (Museum of Fine Arts of Boston)
5.375%, 1/1/2007 (Insured; MBIA)........................................ $1,000,000 $ 1,030,420
Revenue:
(Babson College) 5.75%, 10/1/2017 (Insured; MBIA) (b)................... 555,000 589,954
(Brooks School):
5.70%, 7/1/2006....................................................... 260,000 270,288
5.75%, 7/1/2007....................................................... 275,000 284,902
5.80%, 7/1/2008....................................................... 290,000 299,419
5.85%, 7/1/2009....................................................... 305,000 313,839
(Nantucket Electric Co. Project) 6.75%, 7/1/2006 (Insured; AMBAC)....... 1,400,000 1,567,748
(Refunding--College of The Holy Cross) 5.50%, 3/1/2007 (Insured; MBIA)... 1,145,000 1,191,498
(Springfield College Project) 7.80%, 10/1/2009
(LOC; Fleet Bank of Massachusetts, Prerefunded 10/1/1999) (a,d)....... 1,100,000 1,232,979
Massachusetts Municipal Wholesale Electric Co.,
Power Supply System Revenue, Refunding 6.30%, 7/1/2000 (Insured; AMBAC)... 500,000 527,190
Massachusetts, Port Authority Revenue 7%, 7/1/2000 (Insured; FGIC)........... 1,000,000 1,084,340
Massachusetts, Special Obligation Revenue 5.80%, 6/1/2000.................... 880,000 921,070
Massachusetts, Water Pollution Abatement Trust, Revenue (Pooled Loan Program):
4.70%, 2/1/1999 (Insured; FSA)............................................ 1,000,000 1,013,730
6.125%, 2/1/2007 (Insured; FSA)........................................... 1,000,000 1,091,100
Massachusetts Water Resource Authority:
General Revenue 5.30%, 11/1/2010 (Insured; FGIC).......................... 1,000,000 998,470
Refunding 5.875%, 11/1/2004............................................... 500,000 534,345
Northampton, School Project Loan 6.40%, 5/15/2004 (Insured; MBIA)............ 750,000 828,862
Rockport, GO 6.90%, 12/15/2007............................................... 1,000,000 1,094,490
Southeastern University Building Authority, Revenue, Refunding
5.90%, 5/1/2010 (Insured; AMBAC).......................................... 500,000 521,855
Springfield, School Project Loan 6.10%, 9/1/2002 (Insured; AMBAC)............ 600,000 646,914
Uxbridge, Municipal Purpose Loan 6.125%, 11/15/2007 (Insured; MBIA).......... 525,000 575,657
Whitman, GO:
7.75%, 6/1/2007 (Prerefunded 6/1/1998) (a)................................ 180,000 194,125
7.75%, 6/1/2008 (Prerefunded 6/1/1998) (a)................................ 250,000 269,618
Worchester, Municipal Purpose, Refunding 6.25%, 7/1/2010 (Insured; MBIA)..... 755,000 833,150
Yarmouth, GO 8.60%, 10/1/2000................................................ 100,000 114,433
U.S. Related--13.5%
Commonwealth of Puerto Rico:
GO, Refunding:
6.50%, 7/1/2003 (Insured; MBIA) (c)..................................... 550,000 613,860
6.25%, 7/1/2011 (Insured; MBIA)......................................... 1,050,000 1,164,135
Commonwealth of Puerto Rico Highway and Transportation Authority, Revenue
6.25%, 7/1/2009 (Insured; MBIA)........................................... 1,000,000 1,112,690
</TABLE>
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ---------------------------------------------------------------------- ----------- ---------
<S> <C> <C>
U.S. Related (continued):
Puerto Rico Electric Power Authority, Power Revenue
6.50%, 7/1/2006 (Insured; MBIA)........................................... $1,000,000 $ 1,130,520
Puerto Rico Public Buildings Authority, Revenue 6.75%, 7/1/2005 (Insured; AMBAC) 1,000,000 1,148,720
University of Puerto Rico, University Revenue 6.25%, 6/1/2005................ 750,000 835,245
-----------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $41,107,473)..................... $42,439,408
===========
Short-Term Municipal Investments--4.7%
- --------------------------------------------------------------------------
Massachusetts:
Boston, Water and Sewer Commission, General Revenue, VRDN
3.95% (LOC; State Street Bank and Trust) (d,e)............................ $ 100,000 $ 100,000
Massachusetts, VRDN 4% (LOC; National Westminster Bank) (d,e)................ 1,700,000 1,700,000
Massachusetts Health and Educational Authority, Revenue, VRDN
(Capital Asset Program) 4.15% (LOC; First Chicago International) (d,e).... 300,000 300,000
-----------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $2,100,000)..................... $ 2,100,000
-----------
-----------
TOTAL MUNICIPAL INVESTMENTS--100.0% (cost $43,207,473)........................ $44,539,408
-----------
-----------
</TABLE>
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- ---------------------------------------------------------------------------
<TABLE>
Summary of Abbreviations
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation GO General Obligation
CGIC Capital Guaranty Insurance Company LOC Letter of Credit
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FHA Federal Housing Association Insurance Corporation
FSA Financial Security Assurance SFHR Single Family Housing Revenue
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
- ----------------------------------------------------------------------------------------
Fitch (f) or Moody's or Standard & Poor's Percentage of Value
- ------ -------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
AAA Aaa AAA 77.2%
AA Aa AA 8.3
A A A 9.8
F1, F-1+ MIG1, VMIG1 & P1 SP1, A1 4.7
-------
100.0%
=======
<FN>
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
delayed-delivery securities.
(d) Secured by letter of credit.
(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.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
----------- -----------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of
Investments................................... $43,207,473 $44,539,408
Interest receivable.............................. 807,562
------------
45,346,970
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 22,320
Due to Distributor............................... 250
Cash overdraft due to Custodian.................. 4,686
Payable for investment securities purchased...... 585,678
------------
612,934
------------
NET ASSETS..................................................................... $44,734,036
============
REPRESENTED BY: Paid-in capital.................................. $43,243,205
Accumulated net realized gain (loss) on investments 158,896
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3.......................... 1,331,935
------------
NET ASSETS..................................................................... $44,734,036
============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
- ----------------------------------------------------------------------------------------------------------------------
Class A Class B Class C Class R
---------- --------- -------- ----------
<S> <C> <C> <C> <C>
Net Assets..................................... $16,329,639 $460,274 $9,738 $27,934,385
Shares Outstanding............................. 1,347,299 37,882 803.289 2,304,499
NET ASSET VALUE PER SHARE...................... $12.12 $12.15 $12.12 $12.12
======= ======= ======= =======
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1996 (Unaudited)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income.................................. $1,155,663
EXPENSES: Management fee--Note 2(a)........................ $109,076
Distribution and service fees--Note 2(b)......... 21,871
Trustees' fees and expenses--Note 2(c)........... 931
---------
Total Expenses................................. 131,878
-----------
INVESTMENT INCOME--NET.......................................................... 1,023,785
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments......... $198,249
Net realized gain on financial futures........... 12,300
---------
Net Realized Gain (Loss)....................... 210,549
Net unrealized appreciation (depreciation) on investments 422,739
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ 633,288
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $1,657,073
===========
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
----------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income--net...................................................... $ 1,023,785 $ 1,834,858
Net realized gain (loss) on investments..................................... 210,549 67,052
Net unrealized appreciation (depreciation) on investments................... 422,739 57,430
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations......... 1,657,073 1,959,340
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares............................................................ (361,885) (730,953)
Class B shares............................................................ (9,155) (1,544)
Class C shares............................................................ (252) (709)
Class R shares............................................................ (652,493) (1,101,652)
Net realized gain on investments:
Class A shares............................................................ (32,637) (23,631)
Class B shares............................................................ (927) (14)
Class C shares............................................................ (19) (26)
Class R shares............................................................ (55,928) (32,290)
------------ ------------
Total Dividends......................................................... (1,113,296) (1,890,819)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares............................................................ 1,191,686 1,601,368
Class B shares............................................................ -- 450,001
Class R shares............................................................ 4,265,204 9,355,436
Dividends reinvested:
Class A shares............................................................ 302,574 574,790
Class B shares............................................................ 2,227 1,133
Class C shares............................................................ 272 651
Class R shares............................................................ 298,671 498,611
Cost of shares redeemed:
Class A shares............................................................ (1,054,628) (3,075,439)
Class B shares............................................................ -- (16)
Class C shares............................................................ (7,206) (2,522)
Class R shares............................................................ (2,946,309) (3,553,482)
------------ ------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions. 2,052,491 5,850,531
------------ ------------
Total Increase (Decrease) in Net Assets............................... 2,596,268 5,919,052
NET ASSETS:
Beginning of Period......................................................... 42,137,768 36,218,716
------------ ------------
End of Period............................................................... $44,734,036 $42,137,768
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Shares
---------------------------------
Six Months Ended
December 31, 1996 Year Ended
CAPITAL SHARE TRANSACTIONS: (Unaudited) June 30, 1996
----------------- -------------
<S> <C> <C>
Class A
-------
Shares sold................................................................. 98,832 132,502
Shares issued for dividends reinvested...................................... 25,034 47,482
Shares redeemed............................................................. (87,415) (254,257)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 36,451 (74,273)
========= =========
Class B
-------
Shares sold................................................................. -- 37,610
Shares issued for dividends reinvested...................................... 178 94
Shares redeemed............................................................. -- (1)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 178 37,703
========= =========
Class C
-------
Shares issued for dividends reinvested...................................... 22 54
Shares redeemed............................................................. (597) (209)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... (575) (155)
========= =========
Class R
-------
Shares sold................................................................. 352,801 770,353
Shares issued for dividends reinvested...................................... 24,717 41,214
Shares redeemed............................................................. (244,111) (294,159)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 133,407 517,408
========= =========
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class A Shares
--------------------------------------------------------------------------
Six Months Ended Year Ended June 30,
December 31, 1996 -------------------------------------------------------
PER SHARE DATA: (Unaudited) 1996 1995(1)(2) 1994(1)(2) 1993(1) 1992
----------------- ------ ---------- ---------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $11.97 $11.91 $11.74 $12.38 $11.83 $11.23
------- ------- ------- ------- ------- -------
Investment Operations:
Investment income--net..................... .27 .54 .55 .54(3) .64(3) .73
Net realized and unrealized gain (loss)
on investments.......................... .17 .08 .20 (.36) .55 .60
------- ------- ------- ------- ------- -------
Total from Investment Operations........... .44 .62 .75 .18 1.19 1.33
------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment income--net...... (.27) (.54) (.54) (.54) (.64) (.73)
Dividends from net realized gain on
investments............................. (.02) (.02) (.04) (.28) -- --
------- ------- ------- ------- ------- -------
Total Distributions........................ (.29) (.56) (.58) (.82) (.64) (.73)
------- ------- ------- ------- ------- -------
Net asset value, end of period............. $12.12 $11.97 $11.91 $11.74 $12.38 $11.83
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(4).................... 7.50%(5) 5.22% 6.60% 1.38% 10.27% 12.21%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.... .75%(5) .75% .75% .76%(7) .75%(7) .76%
Ratio of net investment income
to average net assets................... 4.50%(5) 4.44% 4.65% 4.40% 5.30% 6.34%
Portfolio Turnover Rate.................... 14.70%(6) 39.16% 25.00% 19.00% 60.00% 23.00%
Net Assets, end of period (000's Omitted).. $16,330 $15,689 $16,501 $21,276 $20,106 $20,513
<FN>
- --------------------
(1) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and the Fund began offering the Institutional Class and 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.
(6) Not annualized.
(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 years ended June 30, 1994 and 1993 were .89% and .92% respectively.
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class B Shares
---------------------------------
Six Months Ended
December 31, 1996 Year Ended
PER SHARE DATA: (Unaudited) June 30, 1996(1)
----------------- ----------------
<S> <C> <C>
Net asset value, beginning of period.................................... $11.99 $11.91
------- -------
Investment Operations:
Investment income--net.................................................. .24 .48
Net realized and unrealized gain (loss)
on investments....................................................... .18 .10
------- -------
Total from Investment Operations........................................ .42 .58
------- -------
Distributions:
Dividends from investment income--net................................... (.24) (.48)
Dividends from net realized gain on investments......................... (.02) (.02)
------- -------
Total Distributions..................................................... (.26) (.50)
------- -------
Net asset value, end of period.......................................... $12.15 $11.99
======= =======
TOTAL INVESTMENT RETURN(2)................................................. 7.12%(3) 4.87%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets................................. 1.25%(3) 1.25%
Ratio of net investment income
to average net assets................................................ 3.98%(3) 3.67%
Portfolio Turnover Rate................................................. 14.70%(4) 39.16%
Net Assets, end of period (000's Omitted)............................... $460 $452
<FN>
- ---------------
(1) The Fund commenced selling Class B shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class C Shares
-----------------------------------------------------
Six Months Ended
December 31, 1996 Year Ended Period Ended
(Unaudited) June 30, 1996 June 30, 1995(1)
------------------ ------------- ----------------
<S> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period..................... $11.97 $11.91 $11.45
------- ------- -------
Investment Operations:
Investment income--net................................... .25 .48 .26
Net realized and unrealized gain (loss)
on investments........................................ .17 .08 .45
------- ------- -------
Total from Investment Operations......................... .42 .56 .71
------- ------- -------
Distributions:
Dividends from investment income--net.................... (.25) (.48) (.25)
Dividends from net realized gain on investments.......... (.02) (.02) --
------- ------- -------
Total Distributions...................................... (.27) (.50) (.25)
------- ------- -------
Net asset value, end of period........................... $12.12 $11.97 $11.91
======= ======= =======
TOTAL INVESTMENT RETURN(2).................................. 7.04%(3) 4.68% 6.24%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................. 1.25%(3) 1.25% 1.25%(3)
Ratio of net investment income
to average net assets................................. 4.09%(3) 3.93% 4.15%(3)
Portfolio Turnover Rate.................................. 14.70%(4) 39.16% 25.00%
Net Assets, end of period (000's Omitted)................ $10 $16 $18
<FN>
- -----------------
(1) The Fund commenced selling Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class R Shares
-----------------------------------------------------------------
Six Months Ended Period
December 31, Year Ended June 30, Ended
1996 __________________________________ June 30,
PER SHARE DATA: (Unaudited) 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................... .29 .57 .57 .55(3) .25(3)
Net realized and unrealized gain (loss)
on investments........................ .17 .08 .21 (.35) .29
------- ------- ------- ------- -------
Total from Investment Operations......... .46 .65 .78 .20 .54
------- ------- ------- ------- -------
Distributions:
Dividends from investment income--net.... (.29) (.57) (.57) (.56) (.24)
Dividends from net realized gain on
investments.......................... (.02) (.02) (.04) (.28) --
------- ------- ------- ------- -------
Total Distributions...................... (.31) (.59) (.61) (.84) (.24)
------- ------- ------- ------- -------
Net asset value, end of period........... $12.12 $11.97 $11.91 $11.74 $12.38
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(4).................. 7.76%(5) 5.46% 6.87% 1.53% 4.53%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.. .50%(5) .50% .50% .62%(7) .65%(5)(7)
Ratio of net investment income
to average net assets................. 4.75%(5) 4.68% 4.90% 4.54% 4.84%(5)
Portfolio Turnover Rate.................. 14.70%6) 39.16% 25.00% 19.00% 60.00%
Net Assets, end of period (000's Omitted) $27,934 $25,981 $19,700 $15,681 $9,411
<FN>
- ------------------
(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) Not annualized.
(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 year ended June 30, 1994 and for the period ended June 30, 1993 were
.75% and .87%, respectively.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 Premier Limited Term Massachusetts Municipal
Fund (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 the named state consistent with what is believed to be 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. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as 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 a service fee. Class R shares are
sold primarily to bank trust departments and other financial service providers
(including Mellon Bank and its affiliates) acting on behalf of customers having
a qualified trust or investment account or relationship at such institution, and
bear no distribution fee or service 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 require the use of management estimates.
Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: The Fund's investments (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.
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
(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. Accordingly,
variation margin payments are received or made to reflect daily unrealized gains
or losses. When the contracts are closed, the Fund recognizes a ralized gain or
loss. These investments require initial margin deposits 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 December 31, 1996, 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, if any, 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
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
Directors (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 Directors (including
counsel).
(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,
pursuant to 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
<PAGE>
Premier Limited Term Massachusetts Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)(continued)
of the average daily net assets of
Class B and Class C shares. Class R shares bear no service or distribution fee.
During the period December 31, 1996, the distribution fee for Class A, Class B
and Class C was $20,098, $1,151 and $31, respectively. During the period ended
December 31, 1996, the service fee for Class B shares and Class C shares was
$576 and $15, 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.
(C) TRUSTEES' FEES: Each trustee who is not an interested person as defined
in the Act 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, which is paid in total by the following funds: the
Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and the
Dreyfus/Laurel Funds Trust. In addition the Chairman of the Board receives an
annual fee of $75,000 per year. These fees and expenses are charged and
allocated to each series based on net assets.
NOTE 3--Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1996,
amounted to $6,593,048 and $6,184,788, respectively.
At December 31, 1996, accumulated net unrealized appreciation on
investments was $1,331,935, consisting of $1,372,895 gross unrealized
appreciation and $40,960 gross unrealized depreciation.
At December 31, 1996, 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 $100 million 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.
For the period ended December 31, 1996, the Fund did not borrow under the line
of credit.
<PAGE>
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. LTMASA9612
<PAGE>
Semi-Annual Report
- --------------------
Premier Limited Term
Municipal Fund
- --------------------
December 31, 1996
<PAGE>
Premier Limited Term Municipal Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Premier Limited Term
Municipal Fund. For its semi-annual reporting period ended December 31, 1996,
your Fund produced total returns of 4.12%, 3.86%, 3.87% and 4.25% for its Class
A, Class B, Class C and Class R shares, respectively.* During this six-month
period, the Fund paid income dividends, which were exempt from Federal personal
income taxes, in the amounts of approximately $.273 per share for Class A
shares, $.243 per share for Class B shares, $.245 per share for Class C shares
and $.288 per share for Class R shares.** This amounts to annualized tax-free
distribution rates per share of 4.35%, 3.98%, 4.01% and 4.73% for Class A, Class
B, Class C and Class R shares, respectively.***
THE ECONOMY
Over the reporting period, the economy grew moderately, showing little
evidence of accelerating inflation despite the robust pace of new job creation
and the low unemployment rate. It was fear of accelerating inflation that
prompted a sharp rise in long-term interest rates earlier in the year. By
year-end, However, long-term rates had fallen by one half of one percent (50
basis points) from last summer's peak. Contributing to the drop in rates was the
decision of the Open Market Committee of the Federal Reserve Board (the "Fed")
to leave short-term interest rates unchanged.
Inflation at the consumer level of the economy remains in the 3% range, which
has been accompanied by a comparably benign inflation picture at the production
level of the economy as well. The so-called "core" Producer Price Index ( it
excludes the energy and food components because of their volatility) rose just
0.1% in November and a mere 0.6% for the previous 12 months. Producers appeared
to have little ability to pass on price increases to their customers, a reason
cited by the Fed as evidence of the lack of rising price inflation.
Despite the sanguine price environment, consumers remained wary spenders and
modest borrowers, and retail sales growth has been moderate. Nevertheless, the
renewed decline in mortgage rates spurred the housing market. Existing home
sales in November increased for the first time in six months. New housing starts
also rose sharply, with the November increase the largest monthly rise since
July 1995. Job growth still appears to have underlying strength and monthly
increases in workers added to payrolls could also move higher. The recent
unemployment rate rose slightly, but still remained near a seven-year low.
Lending optimism to the prospect for continued economic growth was the report
from The Conference Board--a private research group--that its Index of Leading
Economic Indicators rose for the tenth consecutive month in November. An
increase in this index generally correlates with economic expansion over the
next three to twelve months. Manufacturing remained firm all year with both
factory orders and industrial production rising moderately. Despite this overall
strength in production, there were some signs of moderation at year-end.
Inventories have built up and orders for durable goods--those items intended to
last three or more years--declined.
Last year, high employment, low inflation and moderate economic growth stayed
the Fed's hand from raising interest rates. The economy is now in the sixth year
of this business cycle and we remain alert to signs of the potential rekindling
of inflationary pressures.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Buoyed by the strength in the taxable bond market and waning attention to tax
reform, municipal bond prices rose throughout the reporting period. Demand was
particularly strong in July due to heavier than normal maturity and coupon
payments on July 1st. However, the decline in interest rates also increased new
issue supply as issuers
<PAGE>
opportunistically refinanced older, higher coupon debt.
Consequently, the total new issue supply in the municipal marketplace for 1996
was $182 billion, well above the expectations of most analysts. As a result,
longer maturity municipal bond prices rose in response to this demand during the
second half of 1996. Overall though, for the full calendar year, these same
securities declined in value and their yield increased by 35 basis points.
Prices on comparable Treasury securities declined even further than municipals
during the same period, increasing their yields by more than 70 basis points.
Thus, municipal bonds significantly outperformed taxable fixed-income securities
in 1996.
In keeping with its objective of maximizing income consistent with the
prudent risk of capital, the Fund emphasized premium coupon, high quality
securities throughout the reporting period. The weighted average maturity of the
portfolio was extended in the beginning of the reporting period, then cautiously
shortened by the end of the year in order to remain neutral. By September 30,
1996, the average maturity had been increased to 8.04 years (from 7.56 years on
June 30, 1996), and reduced to 7.52 years by December 31, 1996.
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
Portfolio Manager
January 15, 1997
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid
without taking into account 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.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
***Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the
maximum offering price per share in the case of Class A shares or the net
asset value per share in the case of Class B, Class C and Class R shares
at the end of the period, adjusted for capital gain distributions.
<PAGE>
Premier Limited Term Municipal Fund
- --------------------------------------------------------------------------------
Statement of Investments December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments--94.3% Amount Value
- ----------------------------------------------------------------------------- ------------- ------------
<S> <C> <C>
Alaska--3.1%
Anchorage, Port and Term Facilities Revenue, Refunding
6%, 2/1/2003 (Insured; MBIA).............................................. $1,110,000 $ 1,192,939
Arizona--5.1%
Maricopa County Unified School District Number 69 (Paradise Valley)
6.35%, 7/1/2010 (Insured; MBIA)........................................... 550,000 613,360
Phoenix, Refunding 6.25%, 7/1/2016........................................... 1,250,000 1,385,975
Arkansas--1.4%
North Little Rock, Electric Revenue, Refunding 6%, 7/1/2001 (Insured; MBIA).. 500,000 532,655
Connecticut--1.5%
Stamford 6.60%, 1/15/2007.................................................... 500,000 569,950
Florida--4.6%
Dade County:
Public Improvement 7.125%, 10/1/2016...................................... 100,000 102,236
Water and Sewer System Revenue 6.25%, 10/1/2008 (Insured; FGIC)........... 535,000 596,102
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 1,110,930
Georgia--3.9%
Fulton De Kalb Hospital Authority, HR
7.25%, 1/1/2020 (Insured; AMBAC) (Prerefunded 1/1/2000) (a)............... 500,000 550,870
Georgia Municipal Electric Authority, Power Revenue, Refunding 6%, 1/1/2006.. 900,000 953,883
Illinois--5.2%
Chicago Metropolitan Water Reclamation District (Chicago Capital Improvement)
7.25%, 12/1/2012.......................................................... 1,000,000 1,203,620
Regional Transportation Authority 7.75%, 6/1/2012 (Insured; FGIC)............ 390,000 483,974
Sangamon County School District Number 186 (Springfield)
7.70%, 6/1/2001 (Insured; MBIA)........................................... 300,000 338,112
Indiana--1.5%
Indiana Transportation Finance Authority, Highway Revenue
7.875%, 12/1/2011 (Prerefunded 12/1/1998) (a)............................. 50,000 54,393
Indianapolis Airport Authority, Special Facilities Revenue
(Federal Express Corp. Project) 7.10%, 1/15/2017.......................... 500,000 539,985
Iowa--2.6%
Iowa Student Loan Liquidity Corp., Student Loan Revenue, Refunding
5.65%, 12/1/2005.......................................................... 1,000,000 1,011,070
Kentucky--2.9%
Kentucky Turnpike Authority, Economic Development Road Revenue, Refunding
(Revitalization Projects) 6.50%, 7/1/2007 (Insured; AMBAC)................ 1,000,000 1,130,560
Massachusetts--7.6%
Massachusetts:
(Consolidated Loan) 5.90%, 6/1/2000....................................... 1,000,000 1,049,810
Special Obligation Revenue 7%, 6/1/2002................................... 1,000,000 1,115,690
<PAGE>
Premier Limited Term Municipal Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996 (Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ----------------------------------------------------------------------------- ------------- ------------
<S> <C> <C>
Massachusetts (continued)
Worcester, Refunding (Municipal Purpose)
6.25%, 7/1/2009 (Insured; MBIA)........................................... $ 720,000 $ 797,602
Michigan--6.3%
Berkley City School District (Qualified School Board Loan Fund)
7%, 1/1/2009 (Insured; FGIC).............................................. 1,030,000 1,203,534
Comstock Park Public Schools 6%, 5/01/2016 (Prerefunded 5/1/1999) (a)........ 50,000 52,879
Flowerville Community School District
6.50%, 5/1/2006 (Insured; MBIA)........................................... 555,000 618,409
Saint John's Public Schools (Qualified School Board Loan Fund)
6.50%, 5/1/2006 (Insured; FGIC)........................................... 525,000 589,575
Mississippi--1.6%
Mississippi Higher Education Assisstance Corporation, Student Loan Revenue
6.05%, 9/1/2007........................................................... 620,000 635,395
New Jersey--1.3%
Cumberland County Improvement Authority, SWDR
6%, 1/1/2001 (Insured; FGIC).............................................. 500,000 525,060
New York--5.1%
New York State, Refunding 6.25%, 8/15/2004................................... 1,000,000 1,097,940
New York State Dormitory Authority, Revenues (State University Educational)
7.125%, 5/15/2009 (Insured; FGIC)......................................... 200,000 215,108
New York State Environmental Facilities Corporation, PCR
(State Water Revolving Fund) 7.50%, 6/15/2012............................. 500,000 551,410
Triborough Bridge and Tunnel Authority, General Purpose Revenue
7%, 11/1/2011 (Prerefunded 1/1/1999) (a).................................. 100,000 107,205
North Carolina--3.8%
Charlotte, Refunding 5.50%, 7/1/2004......................................... 1,405,000 1,483,427
North Carolina Eastern Municipal Power Agency,
Power System Revenue, Refunding 8%, 1/1/2021 (Prerefunded 1/1/1998) (a).. 5,000 5,305
Ohio--2.5%
Clermont County, Hospital Facilities Revenue, Refunding
(Mercy Health System) 5.25%, 9/1/2003 (Insured; AMBAC).................... 685,000 706,543
Cuyahoga County, HR, Refunding (Mount Sinai Medical Center)
8.125%, 11/15/2014 (Prerefunded 11/15/1997) (a)........................... 250,000 264,533
Oregon--.7%
Tri County Metropolitan Transportation District (Light Rail Extension)
5.60%, 7/1/2003........................................................... 250,000 265,413
Pennsylvania--5.7%
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 1,110,450
<PAGE>
Premier Limited Term Municipal Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996 (Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ----------------------------------------------------------------------------- ------------- ------------
<S> <C> <C>
Pennsylvania (continued)
Somerset County General Authority, Commonwealth LR
6.70%, 10/15/2003 (Insured; FGIC) (Prerefunded 10/15/2001) (a)............ $1,000,000 $ 1,097,220
South Carolina--1.4%
Anderson County, Hospital Facilities Revenue (Anderson Memorial Hospital)
7.50%, 2/1/2018 (Insured; MBIA) (Prerefunded 2/1/1998) (a)................ 500,000 529,345
Tennessee--1.3%
Louden County Industrial Development Board, SWDR
(Kimberly-Clark Corporation Project) 6.20%, 2/1/2023...................... 500,000 509,825
Texas--9.0%
Austin, Utility System Revenue
8%, 11/15/2016 (Prerefunded 5/15/2001) (a)................................ 200,000 228,040
Fort Bend Independant School District, Refunding (Permanent School Fund Guaranteed)
6.60%, 2/15/2004.......................................................... 875,000 974,978
Lewisville Independant School District (Building Bonds)
(Permanent School Fund Guaranteed):
7.50%, 8/15/2006........................................................ 650,000 777,550
7.50%, 8/15/2007........................................................ 600,000 720,480
Red River Autority, PCR (Hoechst Celanese Corp. Project)
6.875%, 4/1/2017.......................................................... 750,000 805,538
Utah--1.4%
Intermountain Power Agency, Power Supply Revenue, Refunding
6.25%, 7/1/2009 (Insured; FSA)............................................ 500,000 553,890
Vermont--3.5%
Vermont Educational and Health Buildings Financing Agency, Revenue
(Middlebury College Project) 6%, 11/1/2003................................ 1,260,000 1,362,955
Virginia--2.8%
Virginia Transportation Board, Transportation Contract Revenue, Refunding
(Route 28 Project) 6%, 4/1/2005........................................... 1,000,000 1,070,850
Washington--7.1%
Spokane Regional Solid Waste Management System, Revenue
7.625%, 1/1/2011 (Insured; AMBAC) (Prerefunded 1/1/1999) (a).............. 1,000,000 1,087,370
Washington Public Power Supply System, Revenue, Refunding
(Nuclear Project No. 1):
6%, 7/1/2006 (Insured; MBIA)............................................ 500,000 532,389
7%, 7/1/2008............................................................ 1,000,000 1,145,930
Wisconsin--1.4%
Wisconsin, Health and Educational Facilities Revenue
(Aurora Medical Group Inc.) 5.75%, 11/15/2007 (Insured; FSA).............. 500,000 527,259
-----------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $35,397,842)........................................................ $36,689,521
=================
<PAGE>
Premier Limited Term Municipal Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996 (Unaudited)
</TABLE>
<TABLE>
<CAPTION>
Principal
Short-Term Municipal Investments--5.7% Amount Value
- ----------------------------------------------------------------------------- ------------- ------------
<S> <C> <C>
California--1.2%
Los Angeles Regional Airports Improvement Corp., LR, VRDN:
(American Airlines-Los Angeles International):
4.95% (LOC; Wachovia Bank) (b,c)........................................ $ 100,000 $ 100,000
4.95% (LOC; Wachovia Bank) (b,c)........................................ 100,000 100,000
(Los Angeles International Airport) 4.95% (LOC; Societe Generale) (b,c)... 300,000 300,000
Louisiana--.6%
East Baton Rouge Parish, PCR, Refunding, VRDN (Rhone-Poulenc Inc. Project)
5.50% (LOC; Banque National de Paris) (b,c)............................... 230,000 230,000
Massachusetts--1.0%
Massachusetts, VRDN 4.80% (LOC; National Westminster Bank PLC) (b,c)......... 400,000 400,000
New York--.3%
New York City Municipal Water Finance Authority, Water and Sewer System
Revenue, VRDN 5% (Insured; FGIC) (c)...................................... 100,000 100,000
South Carolina--.8%
South Carolina Jobs Economic Development Authority, EDR, VRDN (Saint Francis Hospital)
4.95% (LOC; Chase Manhatten Bank) (b,c)................................... 300,000 300,000
Tennessee--.5%
Metropolitan Nashville Airport Authority, Special Facilities Revenue, Refunding,
VRDN (American Airlines Project) 4.95% (LOC; Bayerische Landesbank) (b,c). 200,000 200,000
Texas--.8%
Grand Prairie Housing Finance Corp., MFHR, Refunding, VRDN
(Winridge Grand Prairie) 4.20% (c)........................................ 100,000 100,000
Grapevine Industrial Development Corporation, Revenue, VRDN
(Multiple Mode-American Airlines):
4.95% (LOC; Morgan Guaranty Trust Company) (b,c)........................ 100,000 100,000
4.95% (LOC; Morgan Guaranty Trust Company) (b,c)........................ 100,000 100,000
Wyoming--.5%
Green River, PCR, Refunding, VRDN (Rhone-Poulenc Inc. Project)
5.50% (LOC; ABN-AMRO Bank) (b,c).......................................... 200,000 200,000
-----------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $2,230,000)......................................................... $ 2,230,000
=================
TOTAL INVESTMENTS--100.0%
(cost $37,627,842)........................................................ $38,919,521
=================
</TABLE>
<PAGE>
Premier Limited Term Municipal Fund
- ----------------------------------------------------------------------------
Summary of Abbreviations
- ----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
EDR Economic Development Revenue Insurance Corporation
FGIC Financial Guaranty Insurance Company MFHR Multi-Family Housing Revenue
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit VRDN Variable Rate Demand Notes
LR Lease Revenue
</TABLE>
Summary of Combined Ratings (Unaudited)
- --------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <C> <C>
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- ------ -------- ---------------- ------------------
AAA Aaa AAA 58.4%
AA Aa AA 22.9
A A A 12.8
BBB Baa BBB 1.4
F1 MIG1/P1 SP1/A1 4.4
Not Rated (e) Not Rated (e) Not Rated (e) .1
------
100.0%
------
------
<FN>
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) 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.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Municipal Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $37,627,842 $38,919,521
Interest receivable.............................. 704,625
------------
39,624,146
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 19,524
Due to Distributor............................... 1,561
Cash overdraft due to Custodian.................. 28,824
------------
49,909
------------
NET ASSETS..................................................................... $39,574,237
============
REPRESENTED BY: Paid-in capital.................................. $38,152,184
Accumulated distributions in excess of investment
income--net..................................... (23,994)
Accumulated net realized gain (loss) on investments 154,368
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3.......................... 1,291,679
------------
NET ASSETS..................................................................... $39,574,237
============
</TABLE>
NET ASSET VALUE PER SHARE
-------------------------
<TABLE>
<CAPTION>
Class A Class B Class C Class R
----------- --------- --------- -----------
<S> <C> <C> <C> <C>
Net Assets..................................... $18,363,104 $524,108 $356,069 $20,330,956
Shares Outstanding............................. 1,521,750 43,440 29,464 1,684,976
NET ASSET VALUE PER SHARE...................... $12.07 $12.07 $12.08 $12.07
======= ======= ======= =======
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Municipal Fund
- -----------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1996 (Unaudited)
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income.................................. $1,000,881
EXPENSES: Management fee--Note 2(a)........................ $ 94,152
Distribution and service fees--Note 2(b)......... 26,086
Trustees' fees and expenses--Note 2(c)........... 802
---------
Total Expenses................................. 121,040
-----------
INVESTMENT INCOME--NET.......................................................... 879,841
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments......... $134,627
Net realized gain (loss) on financial futures... 40,194
---------
Net Realized Gain (Loss)......................... 174,821
Net unrealized appreciation (depreciation) on investments 470,985
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ 645,806
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $1,525,647
===========
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Municipal Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
Decemer 31, 1996 Year Ended
(Unaudited) June 30, 1996
---------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income--net....................................................... $ 879,841 $ 1,793,304
Net realized gain (loss) on investments..................................... 174,821 249,223
Net unrealized appreciation (depreciation) on investments................... 470,985 (638)
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations......... 1,525,647 2,041,889
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares............................................................ (419,568) (879,802)
Class B shares............................................................ (10,287) (13,817)
Class C shares............................................................ (5,324) (4,466)
Class R shares............................................................ (444,662) (895,219)
Net realized gain on investments:
Class A shares............................................................ (48,805) --
Class B shares............................................................ (1,369) --
Class C shares............................................................ (941) --
Class R shares............................................................ (52,550) --
------------ ------------
Total Dividends......................................................... (983,506) (1,793,304)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares............................................................ 240,854 1,917,807
Class B shares............................................................ 45,217 488,218
Class C shares............................................................ 580,907 65,040
Class R shares............................................................ 4,416,018 6,442,697
Dividends reinvested:
Class A shares............................................................ 370,152 712,884
Class B shares............................................................ 9,170 10,430
Class C shares............................................................ 4,821 1,403
Class R shares............................................................ 111,689 185,865
Cost of shares redeemed:
Class A shares............................................................ (1,267,191) (5,397,222)
Class B shares............................................................ (37,308) (81,163)
Class C shares............................................................ (383,644) (239)
Class R shares............................................................ (2,329,493) (5,593,570)
------------ ------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions. 1,761,192 (1,247,850)
------------ ------------
Total Increase (Decrease) in Net Assets............................... 2,303,333 (999,265)
NET ASSETS:
Beginning of Period......................................................... 37,270,904 38,270,169
------------ ------------
End of Period............................................................... $39,574,237 $ 37,270,904
============ ============
Distributions in excess of investment income--net.............................. $ (23,994) $ (23,994)
------------ ------------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Municipal Fund
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Shares
---------------------------------
Six Months Ended
Decemer 31, 1996 Year Ended
(Unaudited) June 30, 1996
---------------- -------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Class A
-------
Shares sold................................................................. 20,047 159,936
Shares issued for dividends reinvested...................................... 30,783 59,279
Shares redeemed............................................................. (105,644) (451,257)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... (54,814) (232,042)
========= =========
Class B
-------
Shares sold................................................................. 3,779 40,828
Shares issued for dividends reinvested...................................... 763 867
Shares redeemed............................................................. (3,114) (6,840)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 1,428 34,855
--------- ---------
Class C
-------
Shares sold................................................................. 48,337 5,436
Shares issued for dividends reinvested...................................... 400 117
Shares redeemed............................................................. (31,927) (20)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 16,810 5,533
========= =========
Class R
-------
Shares sold................................................................. 367,849 537,652
Shares issued for dividends reinvested...................................... 9,278 15,459
Shares redeemed............................................................. (194,744) (465,937)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 182,383 87,174
========= =========
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class A Shares
--------------------------------------------------------------
Six Months Ended
December 31, 1996 Year Ended June 30,
---------------------------------------------
PER SHARE DATA: (Unaudited) 1996 1995(1)(2) 1994(1)(2) 1993(2) 1992
--------------- ------ ---------- --------- ------- ----
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period....... $11.89 $11.82 $11.66 $12.61 $12.21 $11.58
------- ------- ------- ------- ------- -------
Investment Operations:
Investment income--net...................... .54 .54 .53 .54(3) .60(3) .70(3)
Net realized and unrealized gain (loss)
on investments.......................... .21 .08 .1 (.41) .68 .65
------- ------- ------- ------- ------- -------
Total from Investment Operations........... .75 .62 .72 .13 1.28 1.35
------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment income--net....... (.54) (.55) (.53) (.54) (.60) (.70)
Dividends from net realized gain on investments (.03) -- (.03) (.54) (.28) (.02)
------- ------- ------- ------- ------- -------
Total Distributions........................ (.57) (.55) (.56) (1.08) (.88) (.72)
------- ------- ------- ------- ------- -------
Net asset value, end of period............. $12.07 $11.89 $11.82 $11.66 $12.61 $12.21
======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(4).................... 8.17%(5) 5.25% 6.37% .96% 10.95% 11.94%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.... .75%(5) .75% .75% .76%(6) 1.03%(6) .97%(6)
Ratio of net investment income
to average net assets................... 4.52%(5) 4.53% 4.59% 4.43% 4.91% 5.82%
Portfolio Turnover Rate.................... 23.03%(7) 55.07% 61.00% 57.00% 103.00% 30.00%
Net Assets, end of period (000's Omitted).. $18,363 $18,751 $21,375 $23,715 $18,251 $26,192
<FN>
- -------------------------
(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
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.
(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, 1993 and 1992 were
$.49, $.59 and $.68, respectively.
(4) Exclusive of sales load.
(5) Annualized.
(6) 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, 1993 and 1992 were 1.09%, 1.11% and
1.12%, respectively.
(7) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class B Shares
---------------------------------------------------
Six Months Ended Period Ended
December 31, 1996 Year Ended June 30,
(Unaudited) June 30, 1996 1995(1)
------------------ ------------ ------------
<S> <C> <C> <C>
PER SHARE DATA:
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........................................ .21 .07 .50
------- ------- -------
Total from Investment Operations......................... .69 .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........................... $12.07 $11.89 $11.82
======= ======= =======
TOTAL INVESTMENT RETURN(2).................................. 7.76%(3) 4.71% 6.59%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................. 1.25%(3) 1.25% 1.25%(3)
Ratio of net investment income
to average net assets................................. 4.02%(3) 3.98% 4.09%(3)
Portfolio Turnover Rate.................................. 23.03%(4) 55.07% 61.00%
Net Assets, end of period (000's Omitted)................ $524 $500 $85
<FN>
- --------------------------------
(1) The Fund commenced selling Class B shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class C Shares
---------------------------------------------------
Six Months Ended Period Ended
December 31, 1996 Year Ended June 30,
(Unaudited) June 30, 1996 1995(1)
------------------ ------------ ------------
<S> <C> <C> <C>
PER SHARE DATA:
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........................................ .21 .08 .50
------- ------- -------
Total from Investment Operations......................... .70 .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........................... $12.08 $11.90 $11.82
======= ======= =======
TOTAL INVESTMENT RETURN(2).................................. 7.68%(3) 4.81% 6.59%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.................. 1.26%(3) 1.24% 1.25%(3)
Ratio of net investment income
to average net assets................................. 4.14%(3) 4.00% 4.09%(3)
Portfolio Turnover Rate.................................. 23.03%(4) 55.07% 61.00%
Net Assets, end of period (000's Omitted)................ $356 $150 $84
<FN>
- --------------
(1) The Fund commenced selling Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class R Shares
-------------------------------------------------------------
Six Months
Ended Period
December 31, Year Ended June 30, Ended
1996 ___________________________________ June 30,
PER SHARE DATA: (Unaudited) 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........................ .21 .08 .19 (.43) .40
------- ------- ------- ------- -------
Total from Investment Operations......... .78 .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........... $12.07 $11.89 $11.82 $11.66 $12.61
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(4).................. 8.43%(5) 5.51% 6.64% 1.08% 5.36%(6)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.. .50%(5) .50% .50% .50%(7) .68%(5)(7)
Ratio of net investment income
to average net assets................. 4.77%(5) 4.77% 4.84% 4.69% 4.82%(5)
Portfolio Turnover Rate.................. 23.03%(6) 55.07% 61.00% 57.00% 103.00%(6)
Net Assets, end of period (000's Omitted) $20,331 $17,870 $16,727 $12,581 $8,974
<FN>
- -----------------------------
(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) Annualized.
(6) Not annualized.
(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 year ended June 30, 1994 and for the period ended June 30,
1993 were .83% and .93%, respectively.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term Municipal Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 Premier Limited Term Municipal Fund (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").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an unlimited
number of shares of Beneficial Interest in the following classes of shares:
Class A, Class B, Class C and Class R. Class A, Class B and Class C shares are
sold primarily to retail investors through financial intermediaries and bear a
distribution fee and/or service fee. Class A shares are sold with a front-end
sales charge, while Class B and Class C shares are subject to a contingent
deferred sales charge ("CDSC") and a service fee. Class R shares are sold
primarily to bank trust departments and other financial service providers
(including Mellon Bank and its affiliates) acting on behalf of customers having
a qualified trust or investment account or relationship at such institution, and
bear no distribution 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: The Fund's investments (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.
<PAGE>
Premier Limited Term Municipal Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (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 December 31, 1996,
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, 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).
(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 December 31, 1996, the distribution fee for Class A, Class B and
Class C shares was $23,201,
<PAGE>
Premier Limited Term Municipal Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
$1,280 and $643, respectively. During the period
ended December 31, 1996, the service fee for Class B and Class C shares was $640
and $322, 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.
(c) Trustees' fees: Each trustee who is not an "interested person" as defined
in the Act 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. These expenses are paid in total by the following funds:
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust. In addition the Chairman of the Board receives
an annual fee of $75,000 per year. These fees and expenses are charged and
allocated to each series based on net assets.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1996,
amounted to $9,156,976 and $8,336,666, respectively.
At December 31, 1996, accumulated net unrealized appreciation on
investments was $1,291,679, consisting of $1,325,796 gross
unrealized appreciation and $34,117 gross unrealized depreciation.
At December 31, 1996, 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 $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. For the period ended December 31, 1996, the Fund did not borrow
under the line of credit.
<PAGE>
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. PLTSA9612
<PAGE>
Semi-Annual Report
- -------------------------------------------------------------------------------
Premier Limited Term
New York
Municipal Fund
- -------------------------------------------------------------------------------
December 31, 1996
<PAGE>
Premier Limited Term New York Municipal Fund
- -------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Premier Limited Term
New York Municipal Fund. For its semi-annual reporting period ended December 31,
1996, your Fund produced total returns of 3.68%, 3.49%, 3.41% and 3.81% for its
Class A, Class B, Class C and Class R shares, respectively.* During this
six-month period, the Fund paid income dividends, which were exempt from
Federal, State of New York and New York City personal income taxes, in the
amounts of approximately $.293 per share for Class A shares, $.261 per share for
Class B shares, $.261 per share for Class C shares and $.309 per share for Class
R shares.** This amounts to annualized tax-free distribution rates per share of
4.40%, 4.03%, 4.02% and 4.78% for Class A, Class B, Class C and Class R shares,
respectively.***
THE ECONOMY
Over the reporting period, the economy grew moderately, showing little
evidence of accelerating inflation despite the robust pace of new job creation
and the low unemployment rate. It was fear of accelerating inflation that
prompted a sharp rise in long-term interest rates earlier in the year. By
year-end, however, long-term rates had fallen by one half of one percent (50
basis points) from last summer's peak. Contributing to the drop in rates was the
decision of the Open Market Committee of the Federal Reserve Board (the "Fed")
to leave short-term interest rates unchanged.
Inflation at the consumer level of the economy remains in the 3% range, which
has been accompanied by a comparably benign inflation picture at the production
level of the economy as well. The so-called "core" Producer Price Index (it
excludes the energy and food components because of their volatility) rose just
0.1% in November and a mere 0.6% for the previous 12 months. Producers appeared
to have little ability to pass on price increases to their customers, a reason
cited by the Fed as evidence of the lack of rising price inflation.
Despite the sanguine price environment, consumers remained wary spenders and
modest borrowers, and retail sales growth has been moderate. Nevertheless, the
renewed decline in mortgage rates spurred the housing market. Existing home
sales in November increased for the first time in six months. New housing starts
also rose sharply, with the November increase the largest monthly rise since
July 1995. Job growth still appears to have underlying strength and monthly
increases in workers added to payrolls could also move higher. The recent
unemployment rate rose slightly, but still remained near a seven-year low.
Lending optimism to the prospect for continued economic growth was the report
from The Conference Board -- a private research group -- that its Index of
Leading Economic Indicators rose for the tenth consecutive month in November. An
increase in this index generally correlates with economic expansion over the
next three to twelve months. Manufacturing remained firm all year with both
factory orders and industrial production rising moderately. Despite this overall
strength in production, there were some signs of moderation at year-end.
Inventories have built up and orders for durable goods -- those items intended
to last three or more years -- declined.
Last year, high employment, low inflation and moderate economic growth stayed
the Fed's hand from raising interest rates. The economy is now in the sixth year
of this business cycle and we remain alert to signs of the potential rekindling
of inflationary pressures.
<PAGE>
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Here in New York State, audited financial statements from the June 1996
fiscal year show an improved ending cash balance of $445 million. Yet a still
large accumulated fund deficit remains. Despite the economic recovery which, for
the State, has lasted five years, New York has been unable to rebuild its
financial reserves to prerecession levels. The State's economy has grown very
slowly during the nationwide recovery, primarily because of the high cost of
doing business in the State. Recently implemented tax cuts, while impeding
revenue growth in the near term, should prove to be an incentive for resident
businesses to remain in the State.
The State's results in 1996 were helped significantly by the strong revenue
flow from the financial services sector, particularly Wall Street. This trend
has continued into Fiscal Year 1997. In the just-released 1998 budget, Governor
Pataki expressed his intention to close the 1998 budget gap with a projected
surplus from Fiscal 1997. This surplus is projected to arise primarily from
higher personal tax revenues and from reduced Medicaid expenses. Given the
political ramifications regarding Medicaid, any reduction in expenses is a
questionable assumption. Overall, we remain neutral to slightly positive on the
State's credit trend.
Two trends that bear watching in 1997 relate to hospitals and electric
utilities. Health care deregulation is just beginning in New York. As a result,
hospital credits may come under pressure because of the new competitive
environment. Regarding electric utilities, the two political parties are united
in their belief that the key to attracting new businesses to the State is to
reduce the high cost of electric power. It is agreed that competition is the
answer, yet the nature of the proposals vary widely. The form of utility
competition in New York will be a much discussed topic, and the role of the New
York Power Authority is uncertain. For this reason, we do not favor New York
Power Authority credits at this time.
Buoyed by the strength in the taxable bond market and waning attention to tax
reform, municipal bond prices rose throughout the reporting period. Demand was
particularly strong in July due to heavier than normal maturity and coupon
payments on July 1st. However, the decline in interest rates also increased new
issue supply as issuers opportunistically refinanced older, higher coupon debt.
Consequently, the total new issue supply in the municipal marketplace for 1996
was $182 billion, well above the expectations of most analysts. As a result,
longer maturity municipal bond prices rose in response to this demand during the
second half of 1996. Overall though, for the full calendar year, these same
securities declined in value and their yield increased by 35 basis points.
Prices on comparable Treasury securities declined even further than municipals
during the same period, increasing their yields by more than 70 basis points.
Thus, municipal bonds significantly outperformed taxable fixed-income securities
in 1996.
In keeping with its objective of maximizing income consistent with the
prudent risk of capital, the Fund emphasized premium coupon, high quality
securities throughout the reporting period. The weighted average maturity of the
portfolio was extended slightly during the second half of 1996 in anticipation
of a declining interest rate environment and to be more neutral relative to its
peer group of funds. By September 30, 1996, the average maturity had been
increased to 7.2 years (from 6.73 years on June 30, 1996), and further extended
to 7.28 years by the end of the reporting period.
<PAGE>
Included in this report is a series of detailed statements about your Fund's
holdings and its financial condition. We hope they are informative. Please know
that we greatly appreciate your continued confidence in the Fund and in The
Dreyfus Corporation.
Very truly yours,
Kristin Lindquist
Kristin Lindquist
Portfolio Manager
January 15, 1997
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid
without taking into account 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.
**Some income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
***Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the
maximum offering price for Class A shares and the net asset value per share
for Class B, Class C and Class R shares at the end of the period, adjusted
for capital gain distributions.
<PAGE>
Premier Limited Term New York Municipal Fund
- -------------------------------------------------------------------------
Statement of Investments December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments--100.0% Amount Value
- ----------------------------------------------------------------------------- ------------ -----------
New York--90.8%
<S> <C> <C>
Albany County 7%, 10/1/2000 (Insured; FGIC, Prerefunded 10/1/1999) (a)....... $ 125,000 $ 137,697
Amherst, Public Improvement 6.20%, 4/1/2002 (Insured; FGIC).................. 150,000 162,303
Battery Park City Authority, Revenue 5.50%, 11/1/2016 (Insured; AMBAC)....... 200,000 198,672
Erie County Water Authority, Water Revenue, Refunding
6.65%, 12/1/1999 (Insured; AMBAC)......................................... 250,000 267,240
7%, 12/1/2000 (Insured; AMBAC)............................................ 200,000 219,680
Greece Central School District 6%, 6/15/2010................................. 225,000 243,508
Town of Hempstead 6.30%, 1/1/2002 (Insured; AMBAC)........................... 150,000 161,649
Metropolitan Transportation Authority, Transporation Facilities Revenue:
6.30%, 7/1/2007 (Insured; MBIA)........................................... 250,000 277,055
(Service Contract) 7%, 7/1/1998 (Insured; AMBAC).......................... 100,000 104,467
Monroe County, Public Improvement 7%, 6/1/2003 (Insured; FGIC)............... 200,000 227,076
Municipal Assistance Corporation for New York City:
7.10%, 7/1/2000........................................................... 100,000 108,319
Refunding 5.25%, 7/1/2002 (Insured; AMBAC)................................ 125,000 129,492
Nassau County 7%, 7/1/2002 (Insured; AMBAC, Prerefunded 7/1/2000) (a)........ 100,000 109,737
New York State, Refunding 6.25%, 8/15/2004................................... 200,000 219,588
New York State Dormitory Authority, Revenue:
(FIT Student Housing) 5.75%, 7/1/2006 (Insured; AMBAC).................... 130,000 138,161
Refunding (Vassar College) 6%, 7/1/2005................................... 250,000 274,488
New York State Housing Finance Agency, Refunding:
(Housing Project Mortgage Revenue) 5.50%, 11/1/2006 (Insured; FSA)........ 200,000 204,558
(State University Construction) 7.15%, 11/1/1997.......................... 155,000 159,619
New York State Local Government Assistance Corporation 6.375%, 4/1/2000...... 200,000 211,948
New York State Mortgage Agency, Homeowner Mortgage Revenue
7.50%, 10/1/1998.......................................................... 45,000 46,427
New York State Power Authority, General Purpose Revenue
7%, 1/1/2018 (Prerefunded 1/1/2010) (a)................................... 300,000 351,345
New York State Thruway Authority (Emergency Highway Construction and
Reconstruction) 6%, 3/1/2002 (Insured; FSA)............................... 200,000 213,688
New York State Urban Development Corporation, Refunding
(Corporation Purpose) 5.50%, 7/1/2005..................................... 200,000 210,034
Orange County 5.10%, 11/15/2002.............................................. 130,000 134,780
Oyster Bay 7.125%, 4/15/2000 (Insured; FGIC)................................. 180,000 195,804
Port Washington Union Free School District 6%, 8/1/2001...................... 125,000 132,975
Suffolk County, Public Improvement
7%, 4/1/2002 (Insured; MBIA, Prerefunded 4/1/2001) (a).................... 150,000 165,099
Triborough Bridge and Tunnel Authority, General Purpose Revenue:
7.40%, 1/1/2003 (Prerefunded 1/1/1999) (a)................................ 200,000 215,934
7%, 1/1/2011 (Prerefunded 1/1/1999) (a)................................... 150,000 160,808
Refunding 5.90%, 1/1/2007................................................. 100,000 107,235
Westchester County 6.625%, 11/1/2004......................................... 250,000 285,168
</TABLE>
<PAGE>
Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ----------------------------------------------------------------------------- ------------ -----------
<S> <C> <C>
Western Nassau County Water Authority,
Water Systems Revenue 5.50%, 5/1/2004 (Insured; AMBAC).................... $ 250,000 $ 263,775
U. S. Related--9.2%
Puerto Rico Commonwealth, Refunding 6.25%, 7/1/2011 (Insured; MBIA).......... 200,000 221,740
Puerto Rico Commonwealth Highway and Transporation Authority,
Highway Revenue 6.25%, 7/1/2009 (Insured; MBIA)........................... 150,000 166,904
University of Puerto Rico, University Revenues, Refunding
6.25%, 6/1/2006........................................................... 200,000 222,154
-------------
TOTAL INVESTMENTS (cost $6,389,380).......................................... $6,649,127
=============
</TABLE>
Summary of Abbreviations
- -----------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation FSA Financial Security Assurance
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
Insurance Corporation
</TABLE>
Summary of Combined Ratings
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fitch (b) or Moody's or Standard & Poor's Percentage of Value
- ------ -------- ---------------- ------------------
<S> <C> <C> <C> <C> <C>
AAA Aaa AAA 77.2%
AA Aa AA 12.1
A A A 6.5
BBB Baa BBB 4.2
-------
100.0%
=======
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
<FN>
(a) Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay prinicpal and interest
on the municipal issue and to retire the bonds in full at the earliest
refunding date.
(b) Fitch currently provides creditworthiness information for a limited number
of investments.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term New York Municipal Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1996 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
----------- -----------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments... $6,389,380 $6,649,127
Cash...................................................... 3,566
Interest receivable....................................... 121,409
-----------
6,774,102
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates............ 3,043
Due to Distributor....................................... 135
Trustees' fee payable.................................... 452
-----------
3,630
-----------
NET ASSETS............................................................................. $6,770,472
===========
REPRESENTED BY: Paid-in capital......................................... $6,511,078
Accumulated net realized gain (loss) on investments (353)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3................................ 259,747
-----------
NET ASSETS..................................................................... $6,770,472
===========
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
---------------------------
Class A Class B Class C Class R
---------- --------- -------- ----------
<S> <C> <C> <C> <C>
Net Assets..................................... $2,080,779 $143,875 $52,889 $4,492,929
Shares Outstanding............................. 163,053 11,262 4,134 352,128
NET ASSET VALUE PER SHARE...................... $12.76 $12.78 $12.79 $12.76
========= ======= ======= ==========
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term New York Municipal Fund
- -------------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1996 (Unaudited)
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income........................................... $178,813
EXPENSES: Management fee--Note 2(a).................................. $16,675
Distribution and service fees--Note 2(b)................... 3,355
Trustees' fees and expenses--Note 2(c)..................... 141
--------
Total Expenses........................................... 20,171
---------
INVESTMENT INCOME--NET.............................................................. 158,642
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments..................... $ (273)
Net unrealized appreciation (depreciation) on investments... 91,242
--------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS........................ 90,969
---------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.......................... $249,611
=========
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term New York Municipal Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
---------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income--net...................................................... $ 158,642 $ 264,764
Net realized gain (loss) on investments..................................... (273) 36,858
Net unrealized appreciation (depreciation) on investments................... 91,242 (63,766)
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from Operations......... 249,611 237,856
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares............................................................ (48,957) (106,844)
Class B shares............................................................ (2,562) (1,519)
Class C shares............................................................ (1,078) (2,084)
Class R shares............................................................ (106,023) (154,347)
Net realized gain on investments:
Class A shares............................................................ (9,531) --
Class B shares............................................................ (584) --
Class C shares............................................................ (239) --
Class R shares............................................................ (20,591) --
----------- -----------
Total Dividends......................................................... (189,565) (264,794)
----------- -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares............................................................ 65,992 304,803
Class B shares............................................................ 19,500 119,997
Class C shares............................................................ -- 127,309
Class R shares............................................................ 760,401 1,483,810
Dividends reinvested:
Class A shares............................................................ 43,951 76,624
Class B shares............................................................ 3,147 1,520
Class C shares............................................................ 1,299 1,925
Class R shares............................................................ 11,075 12,580
Cost of shares redeemed:
Class A shares............................................................ (155,294) (606,642)
Class B shares............................................................ -- (16)
Class C shares............................................................ (563) (147,090)
Class R shares............................................................ (376,885) (262,285)
----------- -----------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions. 372,623 1,112,535
----------- -----------
Total Increase (Decrease) in Net Assets............................... 432,669 1,085,597
NET ASSETS:
Beginning of Period......................................................... 6,337,803 5,252,206
----------- -----------
End of Period............................................................... $6,770,472 $6,337,803
=========== ===========
Distributions in excess of investment income--net.............................. -- $ (22)
----------- -----------
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term New York Municipal Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Shares
--------------------------------------
Six Months Ended
December 31, 1996 Year Ended
(Unaudited) June 30, 1996
---------------- -------------
CAPITAL SHARE TRANSACTIONS:
Class A
-------
<S> <C> <C>
Shares sold................................................................. 5,168 23,900
Shares issued for dividends reinvested...................................... 3,443 5,966
Shares redeemed............................................................. (12,104) (47,503)
-------- ---------
Net Increase (Decrease) in Shares Outstanding... (3,493) (17,637)
========= =========
Class B
-------
Shares sold................................................................. 1,529 9,368
Shares issued for dividends reinvested...................................... 246 119
Shares redeemed............................................................. -- (1)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 1,775 9,486
========= =========
Class C
-------
Shares sold................................................................. -- 9,989
Shares issued for dividends reinvested...................................... 101 150
Shares redeemed............................................................. (44) (11,396)
-------- ---------
Net Increase (Decrease) in Shares Outstanding... 57 (1,257)
======== =========
Class R
-------
Shares sold................................................................. 59,808 116,482
Shares issued for dividends reinvested...................................... 867 980
Shares redeemed............................................................. (29,564) (20,278)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 31,111 97,184
========= =========
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class A Shares
-----------------------------------------------------------------------------------
Year Ended
Six Months Ended June 30, Period Ended Year Ended April 30,
December 31, 1996 ___________________ June 30, __________________________
PER SHARE DATA: (Unaudited) 1996 1995(1)(2) 1994(1)(2)(3) 1993(1) 1992 1991
---------------- ------ ---------- ------------ ------- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.65 $12.71 $12.59 $13.04 $12.70 $12.34 $12.02
------ ------- ------- ------ ------- ------ -------
Investment Operations:
Investment income--net(4)......... .29 .59 .60 .35 .66 .68 .70
Net realized and unrealized gain
(loss) on investments......... .17 (.06) .17 (.45) .46 .36 .32
------- ------- ------- ------- ------- ------- -------
Total from Investment Operations. .46 .53 .77 (.10) 1.12 1.04 1.02
------- ------- ------- ------- ------- ------- -------
Distributions:
Dividends from investment
income--net.................... (.29) (.59) (.60) (.35) (.66) (.68) (.70)
Dividends from net realized gain
on investments................ (.06) -- (.04) -- (.12) -- --
Dividends in excess of net realized
gain on investments........... -- -- (.01) -- -- -- --
------- ------- ------- ------- ------- ------- -------
Total Distributions.............. (.35) (.59) (.65) (.35) (.78) (.68) (.70)
------- ------- ------- ------- ------- ------- -------
Net asset value, end of period... $12.76 $12.65 $12.71 $12.59 $13.04 $12.70 $12.34
======= ======= ======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(5).......... 7.30%(6) 4.23% 6.39% (.80%)(7) 9.00% 8.65% 8.71%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets(8)................. .75%(6) .75% .75% .57%(6) .46% .45% .45%
Ratio of net investment income
to average net assets......... 4.56%(6) 4.62% 4.83% 4.66%(6) 5.11% 5.43% 5.74%
Portfolio Turnover Rate.......... 5.85%(7) 43.43% 32.00% 13.00%(7) 32.00% -- --
Net Assets, end of period
(000's Omitted)............... $2,080 $2,106 $2,340 $2,922 $2,100 $5,308 $5,202
<FN>
- -----------
(1) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and the Fund began offering the Institutional Class and 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, for the years ended November
30, 1993, 1992 and 1991 were $.28, $.42, $.52 and $.52, respectively.
(5) Exclusive of sales load.
(6) Annualized.
(7) Not 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, for the years
ended November 30, 1993, 1992 and 1991 were 1.51%, 2.32%, 1.70% and 1.88%,
respectively.
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class B Shares Class C Shares
---------------------- ----------------------------------
Six Months Six Months
Ended Ended Period
December 31, Year Ended December 31, Year Ended Ended
1996 June 30, 1996 June 30, November 30,
PER SHARE DATA: (Unaudited) 1996(1) (Unaudited) 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.................... .26 .54 .26 .54 .28
Net realized and unrealized gain (loss)
on investments......................... .18 (.05) .17 (.03) .49
------- ------- ------- ------- -------
Total from Investment Operations......... .44 .49 .43 .51 .77
------- ------- ------- ------- -------
Distributions:
Dividends from investment income--net..... (.26) (.54) (.26) (.54) (.27)
Dividends from net realized gain on investments (.06) -- (.06) --
------- ------- ------- ------- -------
Total Distributions...................... (.32) (.54) (.32) (.54) (.27)
------- ------- ------- ------- -------
Net asset value, end of period........... $12.78 $12.66 $12.79 $12.68 $12.71
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(2).................. 6.92%(3) 3.85% 6.76%(3) 4.02% 6.39%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.. 1.25%(3) 1.25% 1.25%(3) 1.25% 1.25%(3)
Ratio of net investment income
to average net assets................. 4.04%(3) 3.97% 4.11%(3) 4.15% 4.34%(3)
Portfolio Turnover Rate.................. 5.85%(4) 43.43% 5.85%(4) 43.43% 32.00%
Net Assets, end of period (000's Omitted) $144 $120 $53 $52 $68
<FN>
- --------------------------------------------------------------------------------
(1) The Fund commenced selling Class B and Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class R Shares
--------------------------------------------------------------
Six Months
Ended Period Period
December 31, Year Ended June 30, Ended Ended
1996 _____________________ June 30, June 30,
PER SHARE DATA: (Unaudited) 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.................... .31 .63 .64 .37(4) .57(4)
Net realized and unrealized gain (loss)
on investments........................ .17 (.06) .17 (.45) .31
------- ------- ------- ------- -------
Total from Investment Operations......... .48 .57 .81 (.08) .88
------- ------- ------- ------- -------
Distributions:
Dividends from investment income--net..... (.31) (.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...................... (.37) (.63) (.69) (.37) (.69)
------- ------- ------- ------- -------
Net asset value, end of period........... $12.76 $12.65 $12.71 $12.59 $13.04
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(5).................. 7.56%(6) 4.49% 6.65% (.67%)(7) 6.95%(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.. .50%(6) .50% .50% .29%(6)(8) .25%(6)(8)
Ratio of net investment income
to average net assets................. 4.82%(6) 4.87% 5.08% 4.94%(6) 5.20%(6)
Portfolio Turnover Rate.................. 5.85%(7) 43.43% 32.00% 13.00%(7) 32.00%
Net Assets, end of period (000's Omitted) $4,493 $4, 060 $2,844 $2,388 $2,542
<FN>
- --------------------------------------------------------------------------------
(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) Annualized.
(7) Not 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.
</TABLE>
See notes to financial statements.
<PAGE>
Premier Limited Term New York Municipal Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") 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 Premier Limited Term New York Municipal Fund
(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").
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund is authorized to issue an unlimited
number of shares of Beneficial Interest in the following classes of shares:
Class A, Class B, Class C and Class R. Class A, Class B and Class C shares are
sold primarily to retail investors through financial intermediaries and bear a
distribution fee and/or service fee. Class A shares are sold with a front-end
sales charge, while Class B and Class C shares are subject to a contingent
deferred sales charge ("CDSC") and a service fee. Class R shares are sold
primarily to bank trust departments and other financial service providers
(including Mellon Bank and its affiliates) acting on behalf of customers having
a qualified trust or investment account or relationship at such institution, and
bear no distribution 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: The Fund's investments (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.
<PAGE>
(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, Rule 12b-1 distribution fees and expenses, fees and expenses of
non-interested Directors (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 Directors
(including counsel).
(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 December 31, 1996, the distribution fee for Class A, Class B and
Class C shares was $2,683, $317 and $131, respectively. During the period ended
December 31, 1996, the service fee for Class B and Class C shares was $158 and
$66, 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.
<PAGE>
(c) Trustees' fees: Each trustee who is not an "interested person" as defined
in the Act 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. These expenses are paid in total by the following funds:
The Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and
The Dreyfus/Laurel Funds Trust. In addition the Chairman of the Board receives
an annual fee of $75,000 per year.
These fees and expenses are charged and allocated to each series based on net
assets.
NOTE 3--Securities Transactions:
The aggregate amount of purchase and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1996,
amounted to $1,042,892 and $373,255, respectively.
At December 31, 1996, accumulated net unrealized appreciation on investments
was $259,747, consisting of $260,914 gross unrealized appreciation and $1,167
gross unrealized depreciation.
At December 31, 1996, 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 $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. For the period ended December 31, 1996, the Fund did not borrow
under the line of credit.
<PAGE>
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. LTNYSA9612
