Semi-Annual Report
------------------
Dreyfus Premier
Limited Term
Massachusetts
Municipal Fund
------------------
December 31, 1997
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier Limited Term
Massachusetts Municipal Fund for its semi-annual reporting period ended December
31, 1997, as shown in the following table:
Approximate Annualized
Total Return* Income Dividends** Distribution Rate***
------------- ------------------ --------------------
Class A 4.51% $0.266 4.13%
Class B 4.16% $0.235 3.75%
Class C 4.49% $0.234 3.73%
Class R 4.56% $0.281 4.49%
ECONOMIC REVIEW
Inflation seems to be under control. Not since the oil price collapse in 1986
has it been so restrained. As the economy approached the end of its seventh
consecutive year of expansion, inflation seemed to become even more subdued.
During the last quarter of 1997, the 12-month pace of consumer price increases
fell below the 2% level. Producer prices actually fell at an annual rate of 1.2%
over the first 11 months of the year.
The ongoing fear in the financial markets has been that the Federal Reserve
Board's (the "Fed") unremitting fight against inflation could lead to further
increases in interest rates. Yet the Federal Open Market Committee (F.O.M.C.),
the policy-making arm of the Fed, has raised interest rates just once in over
two years, a period roughly coinciding with the latest surge of economic growth.
The last increase occurred on March 25, 1997 when the F.O.M.C. increased the
Federal Funds rate by a modest one quarter of a percentage point to 5.50%. (The
Federal Funds rate is the rate of interest that banks charge one another for
overnight loans.) Investor concern about additional monetary restraint centers
on the low unemployment rate. The unemployment rate as of December 31, 1997 was
4.6%, a 24-year low. In particular, there are fears that wages can rise at a
rate that could rekindle inflation. Over the last year, the gain in wages after
adjusting for inflation was 2%, the sharpest increase in 20 years.
Not surprisingly, an almost ideal economic climate -- plentiful jobs, low
interest rates and dwindling inflation -- has put consumers in an ebullient
mood. Though holiday retail sales were below expectations, spending in the third
quarter grew at the strongest pace in five years. Since consumer spending
accounts for two thirds of all economic activity, consumer attitudes are
important indicators of future economic conditions. The Conference Board (a
business-sponsored research group) reported in December that its Index of
Consumer Confidence rose to its highest level since 1969. So far, the serious
economic developments in Asia have not had an inhibiting effect on consumer
attitudes.
The Asian financial crisis, while bound to affect the import/export segment
of our economy, may also afford the Fed additional flexibility in implementing
monetary policy. While the Fed is concerned about the potential resurgence of
inflation, lower-priced Asian imports may counteract upward pressure on the rate
of U.S. inflation. Moreover, with our economic expansion mature by any
historical precedent (it's the second longest peacetime expansion in this
century), a slackening in overseas demand for U.S. products, combined with the
lower-priced imports, may help contain economic growth without additional
monetary tightening by the Fed. Regardless, we believe that it is unlikely that
the Fed would raise interest rates and further unsettle the international
financial markets while Asian countries struggle to stabilize their currencies
in relation to the U.S. dollar. Perhaps the biggest uncertainty ahead is the
extent to which the Asian turmoil will affect the U.S. economy. We are
particularly vigilant for developments abroad that might have either negative or
positive
<PAGE>
consequences for the portfolio. The trouble in Asia shows the close
and sensitive relationship between our economy and the economies around the
globe.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
Strong economic growth and sound financial management in Massachusetts
resulted in credit upgrades in October from A+ to AA- by Standard & Poor's.
Economic growth has been led by construction, business services and financial
companies. Wealth and income levels remain very strong, and unemployment is low.
Fiscal-year 1998 marks the seventh consecutive annual general fund surplus. The
Commonwealth has made progress on reducing its unfunded pension liability, which
it will now fund over 20 years instead of 30 years. Higher credit ratings may be
precluded by high debt levels, continuing uncertainty involving federal funding
for the $10.8 billion Central Artery/Tunnel Project, and a grassroots appeal to
end tolls on the western portions of the Massachusetts Turnpike. These fiscal
questions aside, we believe that the fundamentals remain strong and the outlook
is stable.
Nationally last year, a lower interest rate environment provided many issuers
with the opportunity to refinance older, higher interest cost debt.
Consequently, new issue supply surged during the second half of 1997, bringing
the total new issue annual volume for municipal bonds to $221 billion, well
above 1996's $165 billion level. Moderate demand and heavy supply hampered the
relative performance of municipal bonds during the second half of 1997. The
total return of the Lehman Brothers Ten-Year Municipal Bond Index for the
semi-annual period ended December 31, 1997 was only 5.77% compared to 8.55% for
the Ten-Year Treasury Note, highlighting the significant underperformance in the
tax-exempt marketplace.
Lower-rated fixed income securities outperformed higher credit quality
securities again during the second half of 1997. Improving fiscal conditions,
strong demand from "yield hungry" investors and limited supply of lower credit
quality securities account for the continued trend toward narrowing yield
spreads between Baa and AAA rated securities. The positive yield spread for
30-year Baa rated municipal bonds was less than 40 basis points compared to
30-year AAA rated municipal bonds as of the end of the reporting period.
The weighted average maturity of the Fund was opportunistically extended
throughout the reporting period to take advantage of the declining interest rate
environment. The weighted average maturity of the Fund began the period at 7.17
years and fluctuated in a range of 7.75-8 years throughout.
<PAGE>
Included in this report is a series of detailed statements about your Fund's
holdings and its financial condition. We hope they are informative. Please know
that we appreciate greatly your continued confidence in the Fund and in The
Dreyfus Corporation.
Very truly yours,
/S/ KRISTIN LINDQUIST
Kristin Lindquist
Portfolio Manager
January 15, 1998
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains paid,
and does not take into consideration the maximum initial sales charge in the
case of Class A shares or the applicable contingent deferred sales charge
imposed on redemptions in the case of Class B and Class C shares.
** Income dividends per share were exempt from Federal and Commonwealth of
Massachusetts personal income taxes. Some income may be subject to the
Federal Alternative Minimum Tax (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, adjusted
for capital gain distributions.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Investments December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments--99.2% Amount Value
- ------------------------------------------------------------------------------- ----------- ------------
<S> <C> <C>
Massachusetts--89.8%
Amherst, GO 6%, 1/15/2003...................................................... $ 200,000 $ 216,286
Andover, GO 6%, 1/15/2005...................................................... 700,000 780,150
Belmont, GO 5.50%, 1/15/2005................................................... 585,000 628,337
Boston, Series A 5.25%, 10/1/2004 (Insured; MBIA).............................. 2,000,000 2,119,180
Boston, Water and Sewer Commission, Revenue 9.25%, 1/1/2011.................... 100,000 140,996
Burlington, GO:
5.25%, 2/1/2012............................................................. 200,000 210,176
5.25%, 2/1/2013............................................................. 250,000 261,967
Cambridge:
GO 6.60%, 6/15/2000......................................................... 675,000 717,545
Municipal Purpose Loan 5.60%, 11/1/2001..................................... 500,000 528,870
Cohasset, Municipal Purpose Loan:
6.70%, 11/1/1998 (Insured; MBIA)............................................ 160,000 163,962
6.90%, 11/1/2000 (Insured; MBIA)............................................ 150,000 161,991
Easton, Municipal Purpose Loan 6%, 9/15/2006................................... 105,000 114,036
Franklin, GO 6.25%, 11/15/2005 (Insured; MBIA)................................. 430,000 485,255
Haverhill, GO 6%, 6/15/2005 (Insured; FGIC).................................... 750,000 831,128
Mashpee, Municipal Purpose Loan 6.25%, 2/1/2006 (Insured; MBIA)................ 1,000,000 1,133,230
Massachusetts, Refunding 6.50%, 8/1/2008....................................... 600,000 698,478
Massachusetts Bay Transportation Authority, Massachusetts General Transportation:
5.25%, 3/1/2011 (Insured; AMBAC)............................................ 1,000,000 1,035,090
Refunding 5.90%, 3/1/2004................................................... 550,000 597,591
Massachusetts, Consolidated Loan:
7%, 7/1/2006 (Insured; MBIA, Prerefunded 7/1/2000) (a)...................... 500,000 544,345
7.625%, 6/1/2008 (Prerefunded 6/1/2001) (a)................................. 400,000 451,816
7.375%, 12/1/2008 (Prerefunded 12/1/1998) (a)............................... 250,000 263,095
Massachusetts Education Loan Authority, Education Loan Revenue
6.20%, 7/1/2013 (Insured; AMBAC)............................................ 1,000,000 1,085,800
Massachusetts Health and Educational Facilities Authority, Revenue:
(Beth Israel Hospital) 7.80%, 7/01/2014 (Prerefunded 7/1/1998) (a).......... 500,000 519,845
(Brigham & Womens Hospital)
6.75%, 7/1/2024 (Insured; MBIA, Prerefunded 7/1/2001) (a)................ 2,000,000 2,206,920
(Harvard University):
6.20%, 12/1/2001......................................................... 1,000,000 1,079,220
Refunding 6.50%, 11/1/2004............................................... 700,000 793,485
(Malden Hospital Project) 9.50%, 8/1/2008 (Prerefunded 3/7/1998) (a)........ 35,000 35,363
(Partners Healthcare Systems) 5.25%, 7/1/2004 (Insured; FSA)................ 1,000,000 1,051,350
Refunding (Dana-Farber Cancer Institute) 5.55%, 12/01/2003 (Insured; FGIC).. 400,000 426,720
(Salem Hospital) 8.15%, 7/1/2014 (Prerefunded 7/1/1999) (a)................. 750,000 809,873
(South Shore Hospital):
7.50%, 7/1/2010 (Insured; MBIA, Prerefunded 7/1/2000) (a)................ 350,000 384,814
7.50%, 7/1/2020 (Insured; MBIA, Prerefunded 7/1/2000) (a)................ 500,000 549,735
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- ------------
<S> <C> <C>
Massachusetts (continued)
Massachusetts Health and Educational Facilities Authority, Revenue (continued):
(Wenworth Institute of Technology):
7.15%, 4/1/2000 (Insured; AMBAC)......................................... $ 225,000 $ 240,161
7.40%, 4/1/2010 (Insured; AMBAC, Prerefunded 4/1/2000) (a)............... 220,000 240,022
Massachusetts Housing Finance Agency, SFHR:
6%, 6/1/2014 (Insured; MBIA)................................................ 1,200,000 1,267,500
5.75%, 12/1/2029 (Insured; MBIA)............................................ 500,000 515,790
Massachusetts Industrial Finance Agency:
Electric Revenue (Nantucket Electric Co. Project) 6.75%, 7/1/2006 (Insured; AMBAC) 1,400,000 1,617,784
Museum Revenue, Refunding (Museum of Fine Arts of Boston)
5.375%, 1/1/2007 (Insured; MBIA)......................................... 1,000,000 1,071,050
Revenue:
(Babson College) 5.75%, 10/1/2007 (Insured; MBIA) ....................... 555,000 613,380
(Brooks School):
5.70%, 7/1/2006....................................................... 260,000 278,925
5.75%, 7/1/2007....................................................... 275,000 294,357
5.80%, 7/1/2008....................................................... 290,000 311,112
5.85%, 7/1/2009....................................................... 305,000 327,167
(Concord Academy) 5.50%, 9/1/2027........................................ 1,250,000 1,255,238
(Springfield College Project) 7.80%, 10/1/2009
(LOC; Fleet Bank of Massachusetts, Prerefunded 10/1/1999) (a,b)....... 1,100,000 1,202,333
Refunding:
(College of The Holy Cross) 5.50%, 3/1/2007 (Insured; MBIA)........... 1,145,000 1,238,203
(Worcester Polytechnic) 5.35%, 9/1/2006............................... 850,000 910,588
Massachusetts, Port Authority Revenue 7%, 7/1/2000 (Insured; FGIC)............. 1,000,000 1,070,460
Massachusetts, Special Obligation Revenue:
Highway Improvement Loan 5.80%, 6/1/2000.................................... 880,000 916,670
Refunding, Consolidated Loan 5.25%, 6/1/2010................................ 1,000,000 1,062,390
Massachusetts Turnpike Authority, Metropolitan Highway Systems Revenue
5%,1/1/2037 (Insured; MBIA)................................................. 500,000 484,990
Massachusetts, Water Pollution Abatement Trust:
Water Pollution Abatement Revenue:
(New Bedford Loan Program) 6%, 2/1/2004.................................. 1,000,000 1,091,670
(South Essex Sewer District Loan Program) 5.25%, 8/1/2005................ 1,050,000 1,115,888
Pooled Loan Program 6.125%, 2/1/2007 (Insured; FSA)......................... 1,000,000 1,130,370
Massachusetts Water Resource Authority:
7.125%, 4/1/2000............................................................ 500,000 533,225
General Revenue 5.30%, 11/1/2010 (Insured; FGIC)............................ 1,000,000 1,051,460
Refunding:
5.875%, 11/1/2004........................................................ 500,000 540,890
5.50%, 8/1/2008 (Insured; MBIA).......................................... 500,000 545,365
Mendon Upton, Regional School District 6%, 6/1/2007 (Insured; FGIC)............ 600,000 673,338
Nantucket, Refunding:
5%, 7/15/2003 (Insured; MBIA)............................................... 875,000 908,819
5%, 7/15/2017 (Insured; MBIA)............................................... 1,000,000 990,140
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ----------- -------------
<S> <C> <C>
Massachusetts (continued)
North Attleborough, GO 5.50%, 3/1/2006 (Insured; AMBAC)........................ $ 1,000,000 $ 1,083,060
Northampton, School Project Loan 6.40%, 5/15/2004 (Insured; MBIA).............. 750,000 839,280
Quabbin Regional School District, Refunding 6%, 6/15/2008 (Insured; AMBAC)..... 780,000 882,695
Rockport, GO 6.90%, 12/15/2007 (Insured; AMBAC,Prerefunded 12/15/1999) (a)..... 1,000,000 1,082,960
Somerville, GO 6%, 2/15/2007 (Insured; FSA).................................... 775,000 869,775
Southeastern University Building Authority, Project Revenue, Refunding
5.90%, 5/1/2010 (Insured; AMBAC)............................................ 500,000 548,020
Springfield, School Project Loan 6.10%, 9/1/2002 (Insured; AMBAC).............. 600,000 649,932
Uxbridge, Municipal Purpose Loan:
6.125%, 11/15/2005 (Insured; MBIA).......................................... 500,000 561,180
6.125%, 11/15/2007 (Insured; MBIA).......................................... 525,000 596,857
Whitman, GO:
7.75%, 6/1/2007 (Insured; AMBAC,Prerefunded 6/1/1998) (a)................... 180,000 187,484
7.75%, 6/1/2008 (Insured; AMBAC,Prerefunded 6/1/1998) (a)................... 250,000 260,395
Worchester, Municipal Purpose Loan, Refunding 6.25%, 7/1/2010 (Insured; MBIA).. 755,000 874,381
Yarmouth, GO 8.60%, 10/1/2000.................................................. 100,000 111,757
U.S. Related--9.4%
Commonwealth of Puerto Rico, GO, Refunding
6.25%, 7/1/2011 (Insured; MBIA)............................................. 1,050,000 1,216,477
Commonwealth of Puerto Rico Highway and Transportation Authority, Highway Revenue
6.25%, 7/1/2009 (Insured; MBIA)............................................. 1,000,000 1,158,210
Puerto Rico Electric Power Authority, Power Revenue
6.50%, 7/1/2006 (Insured; MBIA)............................................. 1,000,000 1,154,100
Puerto Rico Public Buildings Authority, Revenue 6.75%, 7/1/2005 (Insured; AMBAC) 1,000,000 1,158,080
University of Puerto Rico, University Revenue 6.25%, 6/1/2005.................. 750,000 843,825
------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS (cost $56,019,627)....................... $ 58,604,402
============
Short-Term Municipal Investments--.8%
- -------------------------------------------------------------------------------
Massachusetts:
Massachusetts Health and Educational Facilities Authority, Revenue, VRDN:
(Capital Asset Program) 3.95% (Insured; MBIA) (c)........................... $ 200,000 $ 200,000
(Harvard University) 3.80% (c).............................................. 100,000 100,000
Massachusetts Industrial Finance Agency, Revenue, Refunding, VRDN
(Showa Womans Institute) 4.25% (LOC; The Fugi Bank and Trust Company) (b,c). 200,000 200,000
------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS (cost $500,000)......................... $ 500,000
============
TOTAL INVESTMENTS--100.0% (cost $56,519,627).................................... $59,104,402
============
</TABLE>
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Summary of Abbreviations
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FSA Financial Security Assurance Insurance Corporation
GO General Obligation SFHR Single Family Housing Revenue
VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
<CAPTION>
Summary of Combined Ratings (Unaudited)
- ---------------------------------------------------------------------------------------------------------------------------
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- ------ ------- ---------------- -----------------
<S> <C> <C> <C>
AAA Aaa AAA 78.6%
AA Aa AA 12.6
A A A 5.9
BBB Baa BBB 2.1
F1, F-1+ MIG1, VMIG1 & P1 SP1, A1 .8
-------
100.0%
=======
Notes to Statement of Investments:
- --------------------------------------------------------------------------------
(a) Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay principal and interest on the
municipal issue and to retire the bonds in full at the earliest refunding date.
(b) Secured by letters of credit.
(c) 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. (d) Fitch
currently provides creditworthiness information for a limited number of
investments.
</TABLE>
<TABLE>
<CAPTION>
Statement of Financial Futures December 31, 1997 (Unaudited)
Market Value Unrealized
Covered Appreciation
Financial Futures Short Contracts by Contracts Expiration at 12/31/97
- -------------------- -------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Municipal Bond Index Futures..................... 10 $(1,231,250) March '98 $3,438
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
------------ ------------
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $56,519,627 $59,104,402
Cash............................................. 12,883
Interest receivable.............................. 1,026,652
------------
60,143,937
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 26,880
Due to Distributor............................... 778
------------
27,658
------------
NET ASSETS..................................................................... $60,116,279
============
REPRESENTED BY: Paid-in capital.................................. $57,518,282
Accumulated net realized gain (loss) on investments 9,784
Accumulated gross appreciation on investments
(including $3,438 gross unrealized appreciation
on financial futures).......................... 2,588,213
------------
NET ASSETS..................................................................... $60,116,279
============
</TABLE>
<TABLE>
<CAPTION>
NET ASSET VALUE PER SHARE
- --------------------------------------------------------------------------------------------------------------------------
Class A Class B Class C Class R
------------ ---------- --------- ------------
<S> <C> <C> <C> <C>
Net Assets..................................... $16,411,457 $577,558 $55,602 $43,071,662
Shares Outstanding............................. 1,326,130 46,561 4,479 3,479,965
NET ASSET VALUE PER SHARE...................... $12.38 $12.40 $12.41 $12.38
====== ====== ====== ======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1997 (Unaudited)
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $1,355,483
EXPENSES: Management fee--Note 2(a).................. $134,051
Distribution and servicing fees--Note 2(b). 22,544
Loan commitment fees--Note 4............... 132
---------
Total Expenses........................... 156,727
-----------
INVESTMENT INCOME--NET................................................... 1,198,756
-----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments.... $ 56,179
Net realized gain (loss) on financial futures (45,912)
---------
Net Realized Gain (Loss)................. 10,267
Net unrealized appreciation (depreciation)
on investments (including $3,438 gross unrealized
appreciation on financial futures)....... 1,169,772
-----------
NET REALIZED AND UNREALIZED GAIN (LOSS)ON INVESTMENTS.................... 1,180,039
-----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $2,378,795
===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1997 Year Ended
(Unaudited) June 30, 1997
----------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 1,198,756 $ 2,091,005
Net realized gain (loss) on investments................................ 10,267 264,535
Net unrealized appreciation (depreciation) on investments.............. 1,169,772 509,245
------------ ------------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 2,378,795 2,864,785
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares...................................................... (352,229) (715,014)
Class B shares...................................................... (9,675) (18,156)
Class C shares...................................................... (860) (380)
Class R shares...................................................... (835,992) (1,357,455)
Net realized gain on investments:
Class A shares...................................................... (62,410) (32,638)
Class B shares...................................................... (2,164) (927)
Class C shares...................................................... (207) (19)
Class R shares...................................................... (148,583) (55,928)
------------ ------------
Total Dividends.................................................. (1,412,120) (2,180,517)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares...................................................... 795,309 2,771,894
Class B shares...................................................... 101,240 --
Class C shares...................................................... 47,575 6,937
Class R shares...................................................... 10,574,025 13,360,525
Dividends reinvested:
Class A shares...................................................... 308,905 560,539
Class B shares...................................................... 3,535 4,248
Class C shares...................................................... 758 364
Class R shares...................................................... 372,222 582,988
Cost of shares redeemed:
Class A shares...................................................... (1,080,007) (3,176,747)
Class C shares...................................................... -- (16,896)
Class R shares...................................................... (1,725,448) (7,164,398)
------------ ------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 9,398,114 6,929,454
------------ ------------
Total Increase (Decrease) in Net Assets....................... 10,364,789 7,613,722
NET ASSETS:
Beginning of Period.................................................... 49,751,490 42,137,768
------------ ------------
End of Period.......................................................... $60,116,279 $49,751,490
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Shares
----------------------------------
Six Months Ended
December 31, 1997 Year Ended
(Unaudited) June 30, 1997
---------------- -------------
<S> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Class A
Shares sold................................................................ 64,797 229,817
Shares issued for dividends reinvested..................................... 25,108 46,407
Shares redeemed............................................................ (87,895) (262,952)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 2,010 13,272
========= =========
Class B
Shares sold................................................................ 8,219 --
Shares issued for dividends reinvested..................................... 287 351
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 8,506 351
========= =========
Class C
Shares sold................................................................ 3,834 580
Shares issued for dividends reinvested..................................... 61 30
Shares redeemed............................................................ -- (1,404)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 3,895 (794)
========= =========
Class R
Shares sold................................................................ 860,300 1,105,028
Shares issued for dividends reinvested..................................... 30,253 48,271
Shares redeemed............................................................ (140,851) (594,128)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 749,702 559,171
========= =========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class A Shares
---------------------------------------------------------------------------
Six Months Ended
December 31, 1997 Year Ended June 30,
------------------------------------------------------
PER SHARE DATA: (Unaudited) 1997 1996 1995(1)(2) 1994(1)(2) 1993(1)
------------------ ------ ------ ----------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $12.15 $11.97 $11.91 $11.74 $12.38 $11.83
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net................... .27 .54 .54 .55 .54(3) .64(3)
Net realized and unrealized gain (loss)
on investments........................ .28 .20 .08 .20 (.36) .55
------ ------ ------ ------ ------ ------
Total from Investment Operations......... .55 .74 .62 .75 .18 1.19
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net.... (.27) (.54) (.54) (.54) (.54) (.64)
Dividends from net realized gain on investments (.05) (.02) (.02) (.04) (.28) --
------ ------ ------ ------ ------ ------
Total Distributions...................... (.32) (.56) (.56) (.58) (.82) (.64)
------ ------ ------ ------ ------ ------
Net asset value, end of period........... $12.38 $12.15 $11.97 $11.91 $11.74 $12.38
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(4).................. 8.95%(5) 6.36% 5.22% 6.60% 1.38% 10.27%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.. .75%(5) .75% .75% .75% .76%(7) .75%(7)
Ratio of net investment income to
average net assets.................... 4.31%(5) 4.47% 4.44% 4.65% 4.40% 5.30%
Portfolio Turnover Rate.................. 22.79%(6) 22.57% 39.16% 25.00% 19.00% 60.00%
Net Assets, end of period (000's Omitted) $16,411 $16,093 $15,689 $16,501 $21,276 $20,106
<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.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 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.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class B Shares
----------------------------------------
Six Months Ended
December 31, 1997 Year Ended June 30,
-------------------
PER SHARE DATA: (Unaudited) 1997 1996(1)
--------------- ---------- ----------
<S> <C> <C> <C>
Net asset value, beginning of period............................ $12.18 $11.99 $11.91
------- ------- -------
Investment Operations:
Investment income--net.......................................... .24 .48 .48
Net realized and unrealized gain (loss) on investments.......... .27 .21 .10
------- ------- -------
Total from Investment Operations................................ .51 .69 .58
------- ------- -------
Distributions:
Dividends from investment income--net........................... (.24) (.48) (.48)
Dividends from net realized gain on investments................. (.05) (.02) (.02)
------- ------- -------
Total Distributions............................................. (.29) (.50) (.50)
------- ------- -------
Net asset value, end of period.................................. $12.40 $12.18 $11.99
======= ======= =======
TOTAL INVESTMENT RETURN(2)......................................... 8.25%(3) 5.90% 4.87%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets......................... 1.25%(3) 1.25% 1.25%
Ratio of net investment income to average net assets............ 3.78%(3) 3.96% 3.67%
Portfolio Turnover Rate......................................... 22.79%(4) 22.57% 39.16%
Net Assets, end of period (000's Omitted)....................... $578 $464 $452
<FN>
- -------------------------
(1) The Fund commenced selling Class B shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class C Shares
----------------------------------------------------------
Six Months Ended Period Ended
December 31, 1997 Year Ended June 30, June 30,
-------------------
PER SHARE DATA: (Unaudited) 1997 1996 1995(1)
----------------- ---------- -------- -------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................. $12.15 $11.97 $11.91 $11.45
------- ------- ------- -------
Investment Operations:
Investment income--net............................... .23 .49 .48 .26
Net realized and unrealized gain (loss) on investments .31 .20 .08 .45
------- ------- ------- -------
Total from Investment Operations..................... .54 .69 .56 .71
------- ------- ------- -------
Distributions:
Dividends from investment income--net................ (.23) (.49) (.48) (.25)
Dividends from net realized gain on investments...... (.05) (.02) (.02) --
------- ------- ------- -------
Total Distributions.................................. (.28) (.51) (.50) (.25)
------- ------- ------- -------
Net asset value, end of period....................... $12.41 $12.15 $11.97 $11.91
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2).............................. 8.91%(3) 5.87% 4.68% 6.24%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............. 1.25%(3) 1.25% 1.25% 1.25%(3)
Ratio of net investment income to average net assets. 3.75%(3) 4.05% 3.93% 4.15%(3)
Portfolio Turnover Rate.............................. 22.79%(4) 22.57% 39.16% 25.00%
Net Assets, end of period (000's Omitted)............ $56 $7 $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.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class R Shares
-----------------------------------------------------------------------------
Six Months Ended Period Ended
December 31, 1997 Year Ended June 30, June 30,
----------------------------------------- --------------
PER SHARE DATA: (Unaudited) 1997 1996 1995(1)(2) 1994(1)(2) 1993(1)
------------ ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period..................... $12.16 $11.97 $11.91 $11.74 $12.38 $12.08
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net........... .28 .57 .57 .57 .55(3) .25(3)
Net realized and unrealized gain
(loss) on investments......... .27 .21 .08 .21 (.35) .29
------ ------ ------ ------ ------ ------
Total from Investment Operations. .55 .78 .65 .78 .20 .54
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment
income--net................... (.28) (.57) (.57) (.57) (.56) (.24)
Dividends from net realized gain
on investments................ (.05) (.02) (.02) (.04) (.28) --
------ ------ ------ ------ ------ ------
Total Distributions.............. (.33) (.59) (.59) (.61) (.84) (.24)
------ ------ ------ ------ ------ ------
Net asset value, end of period... $12.38 $12.16 $11.97 $11.91 $11.74 $12.38
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(4).......... 9.05%(5) 6.70% 5.46% 6.87% 1.53% 4.53%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.................... .50%(5) .50% .50% .50% .62%(7) .65%(5)(7)
Ratio of net investment income
to average net assets......... 4.56%(5) 4.73% 4.68% 4.90% 4.54% 4.84%(5)
Portfolio Turnover Rate.......... 22.79%(6) 22.57% 39.16% 25.00% 19.00% 60.00%
Net Assets, end of period
(000's Omitted)............... $43,072 $33,188 $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,
MellonBank, 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 advisor.
(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.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Limited Term Massachusetts Municipal Fund (the "Fund") is a
series of the Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is
registered under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company and operates as a series company
currently offering seven series including the Fund. The Fund's investment
objective is to maximize current income exempt from Federal income taxes and
state personal income taxes for resident shareholders of Massachusetts
consistent with the prudent risk of capital by investing in municipal
obligations of the named state which are of investment-grade quality and
intermediate maturities. The Dreyfus Corporation ("Manager") serves as the
Fund's investment adviser. The Manager is a direct subsidiary of Mellon Bank,
N.A.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund's shares. The Fund is authorized to issue an unlimited number of shares
of Beneficial Interest in the following classes of shares: Class A, Class B,
Class C and Class R shares. Class A, Class B and Class C shares are sold
primarily to retail investors through financial intermediaries and bear a
distribution fee and/or service fee. Class A shares are sold with a front-end
sales charge, while Class B and Class C shares are subject to a contingent
deferred sales charge ("CDSC") and distribution and service fees. Class R shares
are sold primarily to bank trust departments and other financial service
providers (including Mellon Bank and its affiliates) acting on behalf of
customers having a qualified trust or investment account or relationship at such
institution, and bear no distribution fee or service fee. Class R shares are
offered without a front-end sales load or CDSC. Each class of shares has
identical rights and privileges, except with respect to distribution fees and
voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses) and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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.
(c) Financial futures: The Fund may invest in trading financial futures
contracts in order to gain exposure to or protect against changes in the market.
The Fund is exposed to market risk as a result of changes in the value of the
underlying financial instruments. Investments in financial futures require the
Fund to "mark to market" on a daily basis, which reflects the change in the
market value of the contract at the close of each day's trading. Typically,
variation margin payments are received or made to reflect daily unrealized gains
or losses. When the contracts are closed, the Fund recognizes a realized gain or
loss. These investments require initial margin deposits with a custodian, which
consist of cash or cash equivalents, up to approximately 10% of the contract
amount. The amount of these deposits is determined by the exchange or Board of
Trade on which the contract is traded and is subject to change. Contracts open
at December 31, 1997, and their related unrealized appreciation are set forth in
the Statement of Financial Futures.
(d) Concentration of risk: The Fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect the ability
of issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the Fund.
(e) Distributions to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(f) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
NOTE 2--Investment Management Fee and Other Transactions With Affiliates:
(a) Investment management fee: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses,
fees and expenses of non-interested Trustees (including counsel fees) and
extraordinary expenses. In addition, the Manager is required to reduce its fee
in an amount equal to the Fund's allocable portion of fees and expenses of the
non-interested Trustees (including counsel). Each trustee receives $27,000 per
year, $1,000 for each Board meeting attended and $750 for each Audit Committee
attended and is reimbursed for travel and out-of pocket expenses. The Chairman
of the Board receives an additional annual fee of $25,000 per year. These fees
pertain to the following funds: The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds Trust.
These fees and expenses are allocated to each series based on net assets.
Amounts required to be paid by the Trust directly to the non-interested
<PAGE>
Dreyfus Premier Limited Term Massachusetts Municipal Fund
- -------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
Trustees, that would be applied to offset a portion of the management fee
payable to the Manager, are in fact paid directly by the Manager to the
non-interested Trustees.
(b) Distribution and service plan: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, the Fund may pay annually up to
.25% of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the sale
of Class A shares. Under the Plan, the Fund may pay the Distributor for
distributing the Fund's Class B and Class C shares at an aggregate annual rate
of .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, 1997, the Fund
was charged $20,452, $1,280 and $115 for Class A, Class B and Class C shares,
respectively, pursuant to the distribution plan. During the period ended
December 31, 1997, the Fund was charged $640 and $57 for Class B and Class C
shares, respectively, pursuant to the service plan.
Under its terms, the Plan shall remain in effect from year to year, provided
such continuance is approved annually by a vote of majority of those Directors
who are not "interested persons" of the Company and who have no direct or
indirect financial interest in the operation of the Plan or in any agreement
related to the Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the period ended
December 31, 1997, amounted to $12,153,571 and $2,769,993, respectively.
At December 31, 1997, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 4--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates which are related to the
Federal Funds rate in effect at the time of borrowings. During the period ended
December 31, 1997, the Fund did not borrow under the Facility.
<PAGE>
Dreyfus Premier Limited Term
Massachusetts Municipal Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 346/646/SA9712
