DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance of the Dreyfus Premier Limited Term
Municipal Fund for its annual reporting period ended June 30, 1998, as shown in
the following table:
<TABLE>
Approximate
Total Return* Income Dividends** Distribution Rate***
___________ _____________________ _________________
<S> <C> <C> <C>
Class A 6.52% $0.520 4.08%
Class B 5.89% $0.457 3.70%
Class C 6.02% $0.464 3.74%
Class R 6.69% $0.550 4.45%
</TABLE>
THE ECONOMY
In recent testimony to Congress, Federal Reserve Board Chairman Alan Greenspan
proclaimed the economy to be " as impressive as any I have witnessed." Indeed,
the performance of the economy has been tremendous, with solid,
noninflationary economic growth and a robust rate of new job creation.
Accordingly, the unemployment rate hovers near its 28-year low. Not
surprisingly, consumers brim with confidence: new home sales were recently at
record levels, and retail sales have surged since January. The enthusiastic
spending of consumers has, so far, offset the adverse effects of the economic
problems in Asia. In fact, the financial crisis in the Far East has proved a
boon to consumers, since lower import prices have further subdued domestic
price pressures and helped keep interest rates low. Remarkably, despite the
strengthening economy since the beginning of this year, inflation has waned
further. With inflation under control and the economy just beginning to
experience a reduction in foreign demand, the Federal Reserve has been reluctant
to raise interest rates for fear of further roiling Asian financial markets. The
last increase in short-term rates came in March 1997 when the Federal Reserve
Board Open Market Committee (the policy-making arm of The Fed) hiked the target
rate for Federal Funds by one quarter of a percent to 5.5%.
Even with the booming job market, wage gains have had little inflationary
effect, since business spending in productivity-enhancing capital equipment has
been strong throughout the economic expansion. The one soft spot in the job
market has been in manufacturing: industrial production has slowed--a clear sign
that Asian economic woes are being felt here--and inventories of domestic
manufacturers have risen due to the reduction in foreign demand. It is widely
expected that the growing trade deficit will retard economic growth and possibly
serve as a drag over the foreseeable future. This reduction in foreign demand
could further moderate the rate of domestic production and consequently ease the
demand for labor, thus lessening inflationary pressure resulting from wage
increases. Cheaper imports have also weakened the pricing environment for U.S.
manufacturers and, in consequence, acted as an additional curb to inflation. All
this has been part of what Chairman Greenspan called our economy's "virtuous
cycle" where even so-called crises have proven economically beneficial. As a
further example, the economic upheavals in Asia and Russia have caused nervous
foreign investors to seek refuge in the U.S. bond market, causing a demand surge
that has helped maintain our low interest rate environment. Yet we, along with
Chairman Greenspan, are skeptical that our economy has somehow moved "beyond
history," and we share his vigilance regarding signs of inflationary imbalances
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
By the end of the reporting period, bond prices had continued to climb,
pushing yields to their lowest levels in recent memory. The turmoil surrounding
the financial crisis in the Asian markets and the benign inflationary pressures
in the domestic economy were the catalysts for the increased demand for
fixed-income securities. With the potential for an economic slowdown, the
likelihood that the Federal Reserve will tighten monetary policy seems remote.
Still, as recently as May, the Fed reiterated their bias towards tightening
monetary policy to ward off inflation.
Municipal bond prices continued to lag the advances in the taxable bond market
during the reporting period. The total return on the 10-year Treasury was
approximately 13.17% compared to just 8.48% for the Lehman Brothers 10-year
Municipal Bond Index. Heavy new issue volume has hampered the investment
performance of municipals and the overall supply of municipal securities was
over 50% greater than last year as of June 30, 1998. Total new issue volume was
$146 billion for the first two quarters of 1998 compared to $97 billion for the
first two quarters of 1997. The estimates for annual volume in 1998 have been
revised higher to nearly $290 billion compared to approximately $218 billion
during 1997. Consequently, the relative yield ratios between AAA-rated municipal
bonds and Treasury securities are near recent highs. This is most dramatic in
the 20- to 30-year maturity range where relative yield ratios ended the
reporting period near 90% .
The weighted average maturity of the Fund was opportunistically extended
throughout the reporting period as heavy new issue supply kept rates within a
narrow range. The weighted average maturity of the Fund began the reporting
period at 8.95 years and ended at 9.62 years.
Included in this report is a series of detailed statements about your Fund's
holdings and its financial condition. We hope they are informative. Please know
that we appreciate greatly your continued confidence in the Fund and in The
Dreyfus Corporation.
Very truly yours,
[John Flahive, signature logo]
Portfolio Manager
July 15, 1998
New York, N.Y.
*Total return includes reinvestment of dividends and any capital gains paid,
and does not take into consideration the maximum initial sales charge in the
case of Class A shares or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares.
**Income dividends per share were exempt from Federal personal income taxes.
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, divided by the maximum offering price per
share at the end of the reporting period 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,
adjusted for capital gain distributions.
<TABLE>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND JUNE 30, 1998
- -----------------------------------------------------------------------------
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS PREMIER LIMITED
TERM MUNICIPAL FUND CLASS A SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL
BOND INDEX AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
Dollars
$22,079
Lehman Brothers 10-Year Municipal Bond Index*
$21,315
Lehman Brothers 7-Year Municipal Bond Index*
$19,932
Dreyfus Premier Limited Term Municipal Fund (Class A Shares)
*Source: Lehman Brothers
Average Annual Total Returns
- -----------------------------------------------------------------------------
Class A Shares Class B Shares
_______________________________________________________________ ______________________________________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
Period Ended 6/30/98 Sales Charge Sales Charge(3.0% Period Ended 6/30/98 Redemption Redemption*
_____________________ ______________ ________________________ ______________________ ____________ _______________
<S> <C> <C> <C> <C> <C>
1 Year 6.52% 3.36% 1 Year 5.89% 2.89%
5 Year 5.18 4.54 From Inception (12/28/94) 6.74 6.25
10 Year 7.47 7.14
Class C Shares Class R Shares
_____________________________________________________________ _______________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming Charge Upon
Period Ended 6/30/98 No Redemption Redemption** Period Ended 6/30/98
_____________________ ______________ ________________ ________________________________
1 Year 6.02% 5.27% 1 Year 6.69%
From Inception (12/28/94 6.84 6.84 5 Year 5.39
From Inception (2/1/93) 5.99
- ------------------------
Past performance is not predictive of future performance.
</TABLE>
The above graph compares a $10,000 investment made in the Fund's Class A shares
on 6/30/88 to a $10,000 investment made on that date in the Lehman Brothers
10-Year Municipal Bond Index (the "Lehman 10-Year Index"), as well as to an
investment in the Lehman Brothers 7-Year Municipal Bond Index (the "Lehman
7-Year Index" ) which are described below. The Lehman 7-Year Index began in
January of 1990. This investment assumes a beginning value of $11,672 which is
equal to the value of the $10,000 investment in the Fund at the starting point
of this Index, without taking into account the Fund's maximum initial sales
charge on Class A shares. All dividends and capital gain distributions are
reinvested. Performance for Class B, Class C and Class R shares will vary from
the performance of Class A shares shown above due to differences in charges and
expenses.
The Fund invests primarily in investment-grade municipal bonds with intermediate
maturities and expects to maintain an average maturity of less than 10 years.
The Fund' s performance shown in the line graph takes into account the maximum
initial sales charge on Class A shares and all other applicable fees and
expenses. Unlike the Fund, the Lehman 10-Year Index is an unmanaged total return
performance benchmark for the investment-grade, 10-year tax exempt bond market,
consisting of municipal bonds with maturities of 9-12 years. The Lehman 7-Year
Index consists of bonds with similar characteristics with maturities of 6-8
years. The Indices do not take into account charges, fees and other expenses
which can contribute to the Indices potentially outperforming the Fund. Further
information relating to Fund performance, including expense reimbursements, if
applicable, is contained in the Financial Highlights section of the Prospectus
and elsewhere in this report.
* The maximum contingent deferred sales charge for Class B shares is 3% and is
reduced to 0% after five years.
**The maximum contingent deferred sales charge for Class C shares is .75% for
shares redeemed within one year of the date of purchase.
<TABLE>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS JUNE 30, 1998
Principal
Long-Term Municipal Investments--96.2% Amount Value
- ------------------------------------------------------- ____________ ___________
Alaska--1.9%
Anchorage Port and Term Facilities, Revenue, Refunding
<S> <C> <C>
6%, 2/1/2003 (Insured; MBIA) $ 1,110,000 $1,192,751
Arizona--4.2%
Maricopa County Unified School District Number 69 (Paradise Valley)
6.35%, 7/1/2010 (Insured; MBIA) 550,000 640,508
Mesa, Refunding 5.90%, 7/1/2000 (Insured; AMBAC) 500,000 519,235
Phoenix, Refunding 6.25%, 7/1/2016 1,250,000 1,451,963
Arkansas--.9%
North Little Rock, Electric Revenue, Refunding 6%, 7/1/2001 (Insured; MBIA) 500,000 528,250
California--1.7%
Northern California, Transmission Revenue, Refunding (California - Oregon Transmission)
5.25%, 5/1/2008 (Insured; MBIA) 1,000,000 1,065,160
Connecticut--2.6%
Connecticut, Special Tax Obligation Revenue (Transportation Infrastructure)
5.25%, 10/1/1999 (Insured; FGIC) 1,000,000 1,019,360
Stamford 6.60%, 1/15/2007 500,000 580,505
Florida--4.5%
Dade County:
Sales Tax Revenue, Refunding 6%, 10/1/2002 (Insured; AMBAC) 1,000,000 1,076,820
Water and Sewer System Revenue 6.25%, 10/1/2008 (Insured; FGIC) 535,000 614,260
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 1,096,600
Georgia--1.6%
Georgia Municipal Electric Authority, Power Revenue, Refunding 6%, 1/1/2006 900,000 981,864
Idaho--2.7%
Idaho Health Facilities Authority, Health System Revenue
(Holy Cross Health System Corp.) 5%, 12/1/2018 (Insured; MBIA) . 1,725,000 1,689,275
Illinois--5.9%
Chicago Metropolitan Water Reclamation District (Chicago Capital Improvement)
7.25%, 12/1/2012 1,000,000 1,256,390
Illinois 5.60%, 6/1/2004 750,000 797,633
Illinois Development Finance Authority, PCR, Refunding
(Central Illinois Public Service Company) 5.70%, 8/15/2026 750,000 774,968
Regional Transportation Authority 7.75%, 6/1/2012 (Insured; FGIC) 390,000 507,211
Sangamon County School District Number 186 (Springfield)
7.70%, 6/1/2001 (Insured; MBIA) 300,000 329,685
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS JUNE 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- ____________ __________
Indiana--1.0%
Indiana Transportation Finance Authority, Highway Revenue
7.875%, 12/1/2011 (Insured; MBIA) (Prerefunded 12/1/1998) (a) $ 50,000 $ 51,875
Indianapolis Airport Authority, Special Facilities Revenue
(Federal Express Corp. Project) 7.10%, 1/15/2017 500,000 563,815
Iowa--1.7%
Iowa Student Loan Liquidity Corp., Student Loan Revenue, Refunding
5.65%, 12/1/2005 1,000,000 1,050,100
Kentucky--2.7%
Kenton County Airport Board, Special Facilities Airport Revenue
(Delta Airlines Project) 7.125%, 12/1/2021 500,000 545,595
Kentucky Turnpike Authority, Economic Development Road Revenue, Refunding
(Revitalization Projects) 6.50%, 7/1/2007 (Insured; AMBAC) 1,000,000 1,152,710
Maryland--2.4%
Maryland, State and Local Facilities Loan 5.25%, 6/15/2006 1,400,000 1,492,204
Massachusetts--4.8%
Massachusetts, Special Obligation Revenue 7%, 6/1/2002 1,000,000 1,102,260
Worcester, Refunding:
(Municipal Purpose Loan) 5.75%, 10/1/2014 (Insured; MBIA) 1,000,000 1,068,300
Refunding 6.25%, 7/1/2009 (Insured; MBIA) 720,000 829,418
Michigan--7.6%
Berkley City School District (Qualified School Board Loan Fund)
7%, 1/1/2009 (Insured; FGIC) 1,030,000 1,240,285
Comstock Park Public Schools 6%, 5/01/2016 (Prerefunded 5/1/1999) (a) 50,000 51,940
Flowerville Community School District
6.50%, 5/1/2006 (Insured; MBIA) 555,000 632,095
Lanse Creuse Public Schools, Refunding 5%, 5/1/2004 (Insured; AMBAC) 1,140,000 1,185,805
Redford Unified School District Number 1, Refunding
5%, 5/1/2013 (Insured; AMBAC) 1,000,000 1,023,120
Saint John's Public Schools (Qualified School Board Loan Fund)
6.50%, 5/1/2006 (Insured; FGIC) 525,000 597,555
Mississippi--1.0%
Mississippi Higher Education Assisstance Corporation, Student Loan Revenue
6.05%, 9/1/2007 565,000 594,431
Nebraska--1.7%
Omaha, Refunding 4.70%, 5/1/2003 1,000,000 1,026,690
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS JUNE 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- ____________ __________
New Jersey--4.2%
Cumberland County Improvement Authority, SWDR
6%, 1/1/2001 (Insured; FGIC) $ 500,000 $ 515,570
Ocean County Utilities Authority, Wastewater Revenue, Refunding
5%, 1/1/2004 1,000,000 1,037,700
New Jersey Transportation Corporation, Capital Grant Anticipation Notes
5.50%, 9/1/2003 (Insured; FSA) 1,000,000 1,054,760
New York--11.0%
New York City:
5%, 8/1/2006 (Insured; FGIC) 1,000,000 1,039,380
Refunding 6.20%, 8/1/2007 1,000,000 1,091,800
5.75%, 8/1/2012 445,000 473,462
New York State, Refunding 6.25%, 8/15/2004 1,000,000 1,103,680
New York State Dormitory Authority, Revenue:
Refunding (Mental Health Services Facilities) 6%, 8/15/2005 1,000,000 1,088,920
(State University Educational) 7.125%, 5/15/2009
(Insured; FGIC) (Prerefunded 5/15/1999) (a) 200,000 209,752
New York State Environmental Facilities Corporation, PCR
(State Water Revolving Fund) 7.50%, 6/15/2012 500,000 541,195
New York State Thruway Authority (Highway and Bridge Trust Fund)
5.50%, 4/1/2007 (Insured; FGIC) 1,000,000 1,075,740
Triborough Bridge and Tunnel Authority, General Purpose Revenue
7%, 1/1/2011 (Prerefunded 1/1/1999) (a) 100,000 103,190
North Carolina--2.4%
Charlotte, Refunding 5.50%, 7/1/2004 1,405,000 1,485,942
Ohio--1.2%
Clermont County, Hospital Facilities Revenue, Refunding
(Mercy Health System) 5.25%, 9/1/2003 (Insured; AMBAC) 685,000 717,257
Oregon--.4%
Tri County Metropolitan Transportation District (Light Rail Extension)
5.60%, 7/1/2003 250,000 265,793
Pennsylvania--5.3%
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 1,098,510
Philadelphia Authority For Industrial Development, Revenue
(Franklin Institute Project) 5.20%, 6/15/2018 1,100,000 1,081,200
Somerset County General Authority, Commonwealth LR
6.70%, 10/15/2003 (Insured; FGIC) (Prerefunded 10/15/2001) (a) 1,000,000 1,082,900
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS JUNE 30, 1998
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------- ____________ ___________
Tennessee--.9%
Louden County Industrial Development Board, SWDR
(Kimberly-Clark Corporation Project) 6.20%, 2/1/2023 $ 500,000 $ 533,540
Texas--12.7%
Austin, Utility System Revenue
8%, 11/15/2016 (Prerefunded 5/15/2001) (a) 200,000 221,510
Fort Bend Independant School District, Refunding (Permanent School Fund
Guaranteed)
6.60%, 2/15/2004 875,000 975,249
Lewisville Independant School District (Building Bonds):
(Permanent School Fund Guaranteed):
7.50%, 8/15/2006 650,000 784,134
7.50%, 8/15/2007 600,000 733,697
Mesquite, Independant School District, Refunding
5%, 8/15/2007 1,000,000 1,041,210
Red River Autority, PCR (Hoechst Celanese Corp. Project)
6.875%, 4/1/2017 750,000 818,325
Socorro Independent School District (Permanent School Fund Guaranteed) 6%, 8/15/2014 2,085,000 2,274,047
Texas Public Financing Authority, Refunding 5%, 10/1/2005 1,000,000 1,042,210
Utah--.9%
Intermountain Power Agency, Power Supply Revenue, Refunding
6.25%, 7/1/2009 (Insured; FSA) 500,000 572,705
Virginia--2.6%
Richmond Metropolitan Authority, Expressway Revenue, Refunding
5.25%, 7/15/2011 (Insuered; FGIC) 525,000 555,797
Virginia Transportation Board, Transportation Contract Revenue, Refunding
(Route 28 Project) 6%, 4/1/2005 1,000,000 1,078,569
Washington--2.8%
Washington Public Power Supply System, Revenue, Refunding
(Nuclear Project No. 1):
6%, 7/1/2006 (Insured; MBIA) 500,000 550,110
7%, 7/1/2008 1,000,000 1,178,810
Wisconsin--2.9%
Kenosha, Waterworks Revenue, Refunding 5%, 12/1/2012 (Insured; FGIC) 750,000 753,075
Wisconsin, Health and Educational Facilities Revenue
(Aurora Medical Group Inc.) 5.75%, 11/15/2007 (Insured; FSA) 500,000 544,750
Wisconsin Veteran Housing, Refunding 5.40%, 11/1/2023 500,000 504,220
____________
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $57,200,887) $59,559,345
============
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) JUNE 30, 1998
Principal
Short-Term Municipal Investments--2.5% Amount Value
- ------------------------------------------------------- ____________ __________
California--.3%
Los Angeles Regional Airports Improvement Corp., LR, VRDN
(American Airlines-Los Angeles International Airport) 4%
(LOC; Wachovia Bank of Georgia) (b,c) $ 200,000 $ 200,000
Florida--.2%
Alachua County Health Facilities Authority, Health Facilities Revenue, VRDN
(Shands Teaching Hospital) 3.50% (Insured; MBIA) (b) 100,000 100,000
Illinois--.6%
Illinois Development Finance Authority, Revenue, VRDN
(Council Jewish Elderly) 3.60% (LOC; Lasalle National Bank) (b,c) 100,000 100,000
Illinois Health Facilities Authority, Revenue, VRDN
(Ingalls Memorial Hospital) 3.60% (LOC; Lasalle National Bank) (b,c) 300,000 300,000
Louisiana--.4%
East Baton Rouge Parish, PCR, Refunding, VRDN (Rhone-Poulenc Inc. Project)
3.90% (LOC; Banque National de Paris) (b,c) 230,000 230,000
Michigan--.2%
Farmington Hills Hospital Finance Authority, Hospital Revenue, VRDN
(Botsford General Hospital) 3.80% (Insured; MBIA) (b) 100,000 100,000
Minnesota--.3%
Cohasset, Revenue, Refunding VRDN (Minnesota Power and Light Company Project)
4.05% (LOC; ABN Amro Bank N.V.) (b,c) 200,000 200,000
Texas--.3%
Grand Prairie Housing Finance Corporation, MFHR, Refunding, VRDN
(Winridge Grand Prairie) 3.45% (b) 100,000 100,000
Lonestar Airport Improvement Authority Inc., Revenue, VRDN
(American Airlines)
4% (LOC; The Royal Bank of Canada) (b,c) 100,000 100,000
Washington--.2%
Washington Health Care Facilities Authority, Revenue, VRDN
(Fred Hutchinson Cancer) 3.75% (LOC; Morgan Guaranty Trust Company) (b,c) 100,000 100,000
____________
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $1,530,000) $ 1,530,000
============
TOTAL INVESTMENTS
(cost $58,730,887) 98.7% $61,089,345
============
CASH AND RECEIVABLES (NET) 1.3% $ 800,410
============
NET ASSETS 100.0% $61,889,755
============
</TABLE>
<TABLE>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
Summary of Abbreviations
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
FGIC Financial Guaranty Insurance Company Insurance Corporation
FSA Financial Security Assurance MFHR Multi-Family Housing Revenue
LR Lease Revenue PCR Pollution Control Revenue
LOC Letter of Credit SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
- -----------------------------------------------------------------------------
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
______ _______ ___________________ ______________________
AAA Aaa AAA 64.8%
AA Aa AA 19.3
A A A 8.3
BBB Baa BBB 5.4
F1 MIG1/P1 SP1/A1 2.1
Not Rated (e) Not Rated (e) Not Rated (e) .1
_______
100.0%
=======
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay principal and interest on the
municipal issue and to retire the bonds in full at the earliest refunding
date.
(b) Securities payable on demand. The interest rate, which is subject to change,
is based upon bank prime rates or an index of market interest rates.
(c) Secured by letters of credit.
(d) Fitch currently provides creditworthiness information for a limited number
of investments.
(e) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1998
Cost Value
_____________ ____________
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $58,730,887 $61,089,345
Interest receivable 965,697
Other assets 32,534
____________
62,087,576
____________
LIABILITIES: Due to The Dreyfus Corporation and affiliates 27,931
Due to Distributor 1,830
Cash overdraft due to Custodian 121,363
Payable for shares of Beneficial Interest redeemed 3,940
Other liabilities 42,757
____________
197,821
____________
NET ASSETS $61,889,755
============
REPRESENTED BY: Paid-in capital $59,492,424
Accumulated net realized gain (loss) on investments 38,873
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 2,358,458
_____________
NET ASSETS $61,889,755
============
NET ASSET VALUE PER SHARE
--------------------
Class A Class B Class C Class R
____________ _____________ ____________ ____________
Net Assets $17,422,748 $ 1,240,330 $ 208,989 $43,017,688
Shares Outstanding 1,414,652 100,726 16,935 3,493,185
NET ASSET VALUE PER SHARE $12.32 $12.31 $12.34 $12.31
====== ====== ====== ======
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
STATEMENT OF OPERATIONS YEAR ENDED JUNE 30, 1998
INVESTMENT INCOME
<S> <C> <C>
INCOME: Interest Income $2,632,841
EXPENSES: Management fee--Note 2(a) $ 263,445
Distribution and service fees--Note 2(b) 53,195
Merger expense--Note 5 10,514
Loan commitment fees--Note 4 346
___________
Total Expenses 327,500
__________
INVESTMENT INCOME--NET 2,305,341
__________
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments $ 101,162
Net realized gain (loss) on financial futures (61,625)
___________
Net Realized Gain (Loss) 39,537
Net unrealized appreciation (depreciation)
on investments 951,247
__________
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 990,784
___________
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS $3,296,125
==========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
Year Ended Year Ended
June 30, 1998 June 30, 1997
______________ ______________
OPERATIONS:
<S> <C> <C>
Investment income--net $ 2,305,341 $ 1,824,128
Net realized gain (loss) on investments 39,537 247,519
Net unrealized appreciation (depreciation) on investments 951,247 586,517
_____________ ____________
Net Increase (Decrease) in Net Assets Resulting from Operations 3,296,125 2,658,164
_____________ ____________
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares (749,279) (814,054)
Class B shares (39,058) (20,860)
Class C shares (5,176) (8,596)
Class R shares (1,511,828) (980,618)
Net realized gain on investments:
Class A shares (80,051) (48,804)
Class B shares (4,823) (1,369)
Class C shares (650) (941)
Class R shares (142,207) (52,550)
_____________ ____________
Total Dividends (2,533,072) (1,927,792)
_____________ ____________
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares 1,928,337 975,607
Class B shares 866,854 62,023
Class C shares 169,572 584,907
Class R shares 20,684,158 10,926,144
Dividends reinvested:
Class A shares 627,594 673,205
Class B shares 30,430 17,207
Class C shares 5,778 7,047
Class R shares 559,128 263,230
Cost of shares redeemed:
Class A shares (2,732,478) (3,411,701)
Class B shares (219,487) (37,406)
Class C shares (42,680) (673,079)
Class R shares (4,439,994) (3,698,970)
_____________ ____________
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 17,437,212 5,688,214
_____________ ____________
Total Increase (Decrease) in Net Assets 18,200,265 6,418,586
NET ASSETS:
Beginning of Period 43,689,490 37,270,904
_____________ ____________
End of Period $61,889,755 $43,689,490
============= ============
DISTRIBUTIONS IN EXCESS OF INVESTMENT INCOME--NET -- $ (23,994)
_____________ ____________
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Shares
_______________________________
Year Ended Year Ended
June 30, 1998 June 30, 1997
_____________ ____________
CAPITAL SHARE TRANSACTIONS:
Class A
________
Shares sold 156,992 81,262
Shares issued for dividends reinvested 51,084 55,995
Shares redeemed (222,938) (284,307)
____________ ____________
Net Increase (Decrease) in Shares Outstanding (14,862) (147,050)
============ ============
Class B
________
Shares sold 70,552 5,189
Shares issued for dividends reinvested 2,478 1,431
Shares redeemed (17,814) (3,122)
____________ ____________
Net Increase (Decrease) in Shares Outstanding 55,216 3,498
============ ============
Class C
________
Shares sold 13,837 48,670
Shares issued for dividends reinvested 469 584
Shares redeemed (3,467) (55,812)
____________ ____________
Net Increase (Decrease) in Shares Outstanding 10,839 (6,558)
============ ============
Class R
________
Shares sold 1,685,584 908,731
Shares issued for dividends reinvested 45,521 21,887
Shares redeemed (362,249) (308,882)
___________ ___________
Net Increase (Decrease) in Shares Outstanding 1,368,856 621,736
=========== ===========
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
<TABLE>
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
Class A Shares
_______________________________________________________________
Year Ended June 30,
_______________________________________________________________
PER SHARE DATA: 1998 1997 1996 1995(1,2) 1994(1,2)
_______ _______ _______ _______ _______
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $12.12 $11.89 $11.82 $11.66 $12.61
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net .52 .54 .54 .53 .54(3)
Net realized and unrealized gain (loss) on investments .26 .26 .08 .19 (.41)
_______ _______ _______ _______ _______
Total from Investment Operations .78 .80 .62 .72 .13
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net (.52) (.54) (.55) (.53) (.54)
Dividends from net realized gain on investments (.06) (.03) --- (.03) (.54)
_______ _______ _______ _______ _______
Total Distributions (.58) (.57) (.55) (.56) (1.08)
_______ _______ _______ _______ _______
Net asset value, end of period $12.32 $12.12 $11.89 $11.82 $11.66
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(4) 6.52% 6.92% 5.25% 6.37% .96%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .77% .75% .75% .75% .76%(5)
Ratio of net investment income to average net assets 4.24% 4.52% 4.53% 4.59% 4.43%
Portfolio Turnover Rate 14.62% 30.50% 55.07% 61.00% 57.00%
Net Assets, end of period (000's Omitted) $17,423 $17,323 $18,751 $21,375 $23,715
- ---------
(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) 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) 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.
(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 was $.49.
(4) Exclusive of sales load.
(5) Annualized expense ratios before voluntary waiver of fees and/or
reimbursement of expenses by the investment adviser and/or custodian
and/or transfer agent for the year ended June 30, 1994 was 1.09%.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
Class B Shares
________________________________________________
Year Ended June 30, Period Ended
__________________________________ June 30,
PER SHARE DATA: 1998 1997 1996 1995(1)
______ _______ ______ __________
Net asset value, beginning of period $12.12 $11.89 $11.82 $11.32
______ ______ ______ ______
Investment Operations:
Investment income--net .46 .48 .48 .24
Net realized and unrealized gain (loss) on investments .25 .26 .07 .50
______ ______ ______ ______
Total from Investment Operations .71 .74 .55 .74
______ ______ ______ ______
Distributions:
Dividends from investment income--net (.46) (.48) (.48) (.24)
Dividends from net realized gain on investments (.06) (.03) --- ---
______ ______ ______ ______
Total Distributions (.52) (.51) (.48) (.24)
______ ______ ______ ______
Net asset value, end of period $12.31 $12.12 $11.89 $11.82
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2) 5.89% 6.38% 4.71% 6.59%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.27% 1.25% 1.25% 1.25%(4)
Ratio of net investment income to average net assets 3.68% 4.01% 3.98% 4.09%(4)
Portfolio Turnover Rate 14.62% 30.50% 55.07% 61.00%
Net Assets, end of period (000's Omitted) $1,240 $551 $500 $85
- ---------
(1) The Fund commenced selling Class B shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
Class C Shares
_________________________________________________
Year Ended June 30, Period Ended
__________________________________ June 30,
PER SHARE DATA: 1998 1997 1996 1995(1)
_______ _______ _______ ____________
Net asset value, beginning of period $12.14 $11.90 $11.82 $11.32
______ ______ ______ ______
Investment Operations:
Investment income--net .46 .49 .48 .24
Net realized and unrealized gain (loss) on investments .26 .27 .08 .50
______ ______ ______ ______
Total from Investment Operations .72 .76 .56 .74
______ ______ ______ ______
Distributions:
Dividends from investment income--net (.46) (.49) (.48) (.24)
Dividends from net realized gain on investments (.06) (.03) --- ---
______ ______ ______ ______
Total Distributions (.52) (.52) (.48) (.24)
______ ______ ______ ______
Net asset value, end of period $12.34 $12.14 $11.90 $11.82
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2) 6.02% 6.50% 4.81% 6.59%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets 1.27% 1.27% 1.24% 1.25%(4)
Ratio of net investment income to average net assets 3.71% 4.17% 4.00% 4.09%(4)
Portfolio Turnover Rate 14.62% 30.50% 55.07% 61.00%
Net Assets, end of period (000's Omitted) $209 $74 $150 $84
- ---------
(1) The Fund commenced selling Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Not annualized.
(4) Annualized.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
Class R Shares
______________________________________________________________
Year Ended June 30,
______________________________________________________________
PER SHARE DATA: 1998 1997 1996 1995(1,2) 1994(1,2)
_______ _______ _______ _______ _______
Net asset value, beginning of period $12.12 $11.89 $11.82 $11.66 $12.61
_______ _______ _______ _______ _______
Investment Operations:
Investment income--net .55 .57 .57 .56 .58(3)
Net realized and unrealized gain (loss) on investments .25 .26 .08 .19 (.43)
_______ _______ _______ _______ _______
Total from Investment Operations .80 .83 .65 .75 .15
_______ _______ _______ _______ _______
Distributions:
Dividends from investment income--net (.55) (.57) (.58) (.56) (.56)
Dividends from net realized gain on investments (.06) (.03) --- (.03) (.54)
_______ _______ _______ _______ _______
Total Distributions (.61) (.60) (.58) (.59) (1.10)
_______ _______ _______ _______ _______
Net asset value, end of period $12.31 $12.12 $11.89 $11.82 $11.66
======= ======= ======= ======= =======
TOTAL INVESTMENT RETURN(4) 6.69% 7.17% 5.51% 6.64% 1.08%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .52% .50% .50% .50% .50%(5)
Ratio of net investment income to average net assets 4.47% 4.77% 4.77% 4.84% 4.69%
Portfolio Turnover Rate 14.62% 30.50% 55.07% 61.00% 57.00%
Net Assets, end of period (000's Omitted) $43,018 $25,741 $17,870 $16,727 $12,581
</TABLE>
- ---------
(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) 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 was $.54.
(4) Exclusive of sales load.
(5) Annualized expense ratios before voluntary waiver of fees and reimbursement
of expenses by the investment adviser and/or custodian and/or transfer agent
for the year ended June 30, 1994 was .83%.
SEE NOTES TO FINANCIAL STATEMENTS.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Limited Term Municipal Fund (the "Fund" ) is a separate
non-diversified series of The Dreyfus/Laurel Tax-Free Municipal Funds (the
"Trust") which is registered under the Investment Company Act of 1940 ("Act") as
an open-end management investment company and operates as a series company
currently offering seven series including the Fund. The Fund's investment
objective is to maximize current income exempt from Federal income taxes
consistent with the prudent risk of capital by investing in municipal securities
which are of investment-grade quality and intermediate maturities. The Dreyfus
Corporation ("Manager") serves as the Fund's investment adviser. The Manager is
a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund's shares. The Fund is authorized to issue an unlimited number of shares
of Beneficial Interest in the following classes of shares: Class A, Class B,
Class C and Class R. Class A, Class B and Class C shares are sold primarily to
retail investors through financial intermediaries and bear a distribution fee
and/or service fee. Class A shares are sold with a front-end sales charge, while
Class B and Class C shares are subject to a contingent deferred sales charge
(" CDSC") and distribution and service 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) 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 may differ from estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
In accordance with Statement of Position (SOP 93-02) certain permanent book to
tax differences have been reclassified. This resulted primarily from
distributions necessary to avoid an excise tax. As a result, the Fund
reclassified $23,994 to accumulated undistributed investment income-net from
paid-in-capital.
(C) FINANCIAL FUTURES: The Fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The Fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the Fund to
"mark to market" on a daily basis, which reflects the change in the market value
of the contract at the close of each day's trading. Typically, variation margin
payments are received or made to reflect daily unrealized gains or losses. When
the contracts are closed, the Fund recognizes a realized gain or loss. These
investments require initial margin deposits with a custodian, which consist of
cash or cash equivalents, up to approximately 10% of the contract amount. The
amount of these deposits is determined by the exchange or Board of Trade on
which the contract is traded and is subject to change. At June 30, 1998, there
were no financial futures contracts outstanding.
(D) DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
NOTE 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(A) INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses,
service fees, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to reduce
its fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel) . Each trustee receives
$27,000 per year, $1,000 for each Board meeting attended and $750 for each Audit
Committee meeting attended and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional annual fee of $25,000
per year. These fees pertain to the following funds: The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust. (The $1,000 attendance fee and reimbursement of meeting expenses are also
borne pro rata by Dreyfus High Yield Strategies Fund.) These fees and expenses
are charged and allocated to each series based on net assets. Amounts required
to be paid by the Trust directly to the non-interested Trustees, that would be
applied to offset a portion of the management fee payable to the Manager, are in
fact paid directly by the Manager to the non-interested Trustees.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) DISTRIBUTION AND SERVICE PLAN: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, the Fund may pay annually up to
. 25% of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the sale
of Class A shares. Under the Plan, Class B and Class C may pay the Distributor
for distributing their 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 shares
and Class C shares are also subject to a service plan adopted pursuant to Rule
12b-1, under which the Class B shares and Class C shares pay Dreyfus Service
Corporation or the Distributor for providing certain services to the holders of
Class B and Class C shares a fee at the annual rate of .25% of the value of the
average daily net assets of Class B and Class C shares. Class R shares bear no
distribution or service fee. During the period ended June 30, 1998, Class A,
Class B and Class C shares were charged $44,199, $5,300 and $697, respectively,
pursuant to the Plan and Class B and Class C were charged $2,650 and $349,
respectively, pursuant to the service plan.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of majority of those Trustees
who are not "interested persons" of the Company and who have no direct or
indirect financial interest in the operation of the Plan or in any agreement
related to the Plan.
NOTE 3--SECURITIES TRANSACTIONS:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the period ended
June 30, 1998, amounted to $24,909,042 and $7,368,746, respectively.
At June 30, 1998, accumulated net unrealized appreciation on investments was
$2,358,458, consisting of $2,379,823 gross unrealized appreciation and $21,365
gross unrealized depreciation.
At June 30, 1998, the cost of investments for Federal income tax purposes was
substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 4--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility (" Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended June
30, 1998, the Fund did not borrow under the Facility.
NOTE 5--SUBSEQUENT EVENT:
On September 15, 1998, shareholders of Dreyfus Premier Limited Term California
Municipal Fund and Dreyfus Premier Limited Term New York Municipal Fund will
vote on a proposed merger into Dreyfus Premier Limited Term Municipal Fund. If
approved, the merger will be effective shortly thereafter and the Trust will be
offering five series.
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
INDEPENDENT AUDITORS' REPORT
THE BOARD OF TRUSTEES AND SHAREHOLDERS
THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS:
We have audited the accompanying statement of assets and liabilities,
including the statement of investments, of Dreyfus Premier Limited Term
Municipal Fund of The Dreyfus/Laurel Tax-Free Municipal Funds as of June 30,
1998, and the related statement of operations for the year then ended, the
statements of changes in net assets for each of the years in the two-year period
then ended, and the financial highlights for each of the years or periods in the
five-year period then ended. These financial statements and financial highlights
are the responsibility of the Fund' s management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit also includes examining,
on a test basis, evidence supporting the amounts and disclosures in the
financial statements. Our procedures included confirmation of securities owned
as of June 30, 1998, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Dreyfus Premier Limited Term Municipal Fund of The Dreyfus/Laurel Tax-Free
Municipal Funds as of June 30, 1998, the results of its operations for the year
then ended, changes in its net assets for each of the years in the two-year
period then ended and its financial highlights for each of the years or periods
in the five-year period then ended, in conformity with generally accepted
accounting principles.
KPMG Peat Marwick LLP
New York, New York
August 13, 1998
DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND
- -----------------------------------------------------------------------------
IMPORTANT TAX IMFORMATION (UNAUDITED)
In accordance with Federal tax law, the Fund hereby makes the following
designations regarding its fiscal year ended June 30, 1998:
--all the dividends paid from investment income-net are "exempt-interest
dividends" (not generally subject to regular Federal income tax), and
--the Fund hereby designates $.0457 per share as a long-term capital gain
distribution (of which none is subject to the 20% maximum Federal tax rate) of
the $.0557 per share paid on December 4, 1997.
As required by Federal tax law rules, shareholders will receive notification
of their portion of the Fund's taxable ordinary dividends (if any) and capital
gains distributions (if any) paid for the 1998 calendar year on Form 1099-DIV
which will be mailed by January 31, 1999.
DREYFUS PREMIER LIMITED TERM
MUNICIPAL FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 347/647AR986
ANNUAL REPORT
- -------------------------------------------------------------------------------
DREYFUS PREMIER
LIMITED TERM
MUNICIPAL FUND
- -------------------------------------------------------------------------------
JUNE 30, 1998
[reg.tm, signature logo]
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS PREMIER LIMITED TERM MUNICIPAL FUND CLASS A
SHARES WITH THE LEHMAN BROTHERS 10-YEAR MUNICIPAL BOND
INDEX AND THE LEHMAN BROTHERS 7-YEAR MUNICIPAL BOND INDEX
EXHIBIT A:
DREYFUS
PREMIER
LIMITED LEHMAN LEHMAN
TERM BROTHERS BROTHERS
MUNICIPAL 10-YEAR 7-YEAR
FUND MUNICIPAL MUNICIPAL
PERIOD (CLASS A BOND BOND
SHARES) INDEX* INDEX*
6/30/88 9,701 10,000 -
6/30/89 10,990 10,962 -
12/31/89 - - 11,672
6/30/90 11,547 11,741 11,992
6/30/91 12,467 12,827 13,058
6/30/92 13,955 14,279 14,485
6/30/93 15,483 16,075 16,041
6/30/94 15,632 16,234 16,244
6/30/95 16,628 17,659 17,581
6/30/96 17,501 18,787 18,554
6/30/97 18,712 20,353 19,858
6/30/98 19,932 22,079 21,315
*Source: Lehman Brothers
