<PAGE>
Semi-Annual Report
--------------------------
Dreyfus Premier
--------------------------
Limited Term
--------------------------
New York
--------------------------
Municipal Fund
--------------------------
December 31, 1997
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier Limited Term
New York Municipal Fund for its semi-annual reporting period ended
December 31, 1997, as shown in the following table:
<TABLE>
<CAPTION>
Approximate Annualized
Total Return* Income Dividends** Distribution Rate***
------------- ------------------ --------------------
<S> <C> <C> <C>
Class A 4.42% $0.285 4.21%
Class B 4.24% $0.253 3.84%
Class C 4.15% $0.253 3.84%
Class R 4.63% $0.302 4.59%
</TABLE>
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 consequences for the portfolio. The trouble in Asia shows the close and
sensitive relationship between our economy and the economies around the globe.
<PAGE>
Market Environment/Portfolio Activity
New York State's debt rating was raised in September from A- to A by Standard
& Poor's, reflecting various financial positives, including a very strong
surplus of $1.9 billion on a Generally Accepted Accounting Principles ("GAAP")
basis. Income per capita remains high at 119% of the national average. Wall
Street will continue to be a major factor in State finances as it represents an
outsized portion of sector income relative to other states. Standard & Poor's
noted that the State may have difficulty improving its credit rating any further
in the near future due to a $6.1 billion approved tax reduction combined with
the 20% reduction in personal income tax and a major education program
enhancement. These initiatives will make balancing the budget more difficult,
particularly if the economy experiences a downturn. Furthermore, the debt level
remains high at $1,800 per capita and 6.1% of personal income.
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 are cited for the continued trend toward even narrower 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 cautiously shortened throughout
the reporting period as interest rates declined. The weighted average maturity
of the Fund began the period at 7.96 years and maintained a weighting of
approximately 7.25 years throughout.
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 State of New York
and New York City 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 at the end of the 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>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Statement of Investments December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments--100.0% Amount Value
- ------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
New York--92.9%
Albany County 7%, 10/1/2000 (Insured; FGIC, Prerefunded 10/1/1999) (a)......... $ 125,000 $ 135,044
Amherst, Public Improvement 6.20%, 4/1/2002 (Insured; FGIC).................... 150,000 162,343
Deer Park Union Free School District 5%, 6/15/2005 (Insured; MBIA)............. 200,000 208,988
Erie County Water Authority, Water Revenue, Refunding:
6.65%, 12/1/1999 (Insured; AMBAC)........................................... 250,000 262,592
7%, 12/1/2000 (Insured; AMBAC).............................................. 200,000 216,354
Greece Central School District 6%, 6/15/2010................................... 225,000 255,640
Town of Hempstead 6.30%, 1/1/2002 (Insured; AMBAC)............................. 150,000 161,889
Metropolitan Transportation Authority, Transporation Facilities Revenue
6.30%, 7/1/2007 (Insured; MBIA)............................................. 250,000 286,350
Monroe County, Public Improvement 7%, 6/1/2003 (Insured; FGIC)................. 200,000 227,254
Municipal Assistance Corporation for New York City:
7.10%, 7/1/2000............................................................. 100,000 106,442
6%, 7/1/2005 (Insured; AMBAC)............................................... 100,000 110,868
Nassau County:
7%, 7/1/2002 (Insured; AMBAC, Prerefunded 7/1/2000) (a)..................... 100,000 108,038
6.30%, 11/1/2003 (Insured; FGIC)............................................ 200,000 221,298
New York City:
5.75%, 8/1/2012............................................................. 100,000 104,948
Refunding 7%, 8/1/2006...................................................... 300,000 346,425
New York City Municipal Water Finance Authority,
Water and Sewer Systems Revenue 5.50%, 6/15/2027 (Insured; MBIA)............ 250,000 257,815
New York State, Refunding 6.25%, 8/15/2004..................................... 200,000 222,354
New York State Dormitory Authority, Revenue:
(Consolidated City University) 5.75%, 7/1/2018 (Insured; FSA) .............. 200,000 221,420
(FIT Student Housing) 5.75%, 7/1/2006 (Insured; AMBAC)...................... 130,000 142,431
Refunding:
(Mental Health Services Facilities) 6%, 8/15/2005........................ 260,000 284,476
(Vassar College) 6%, 7/1/2005............................................ 250,000 278,440
(Rochester Institute of Technology) 5.50%, 7/1/2006 (Insured; MBIA)......... 200,000 216,346
New York State Environmental Facilities Corporation, PCR, Refunding
(Water--Revolving Fund) 5.50%, 6/15/2006 (Insured; MBIA)..................... 200,000 216,284
New York State Local Government Assistance Corporation 6.375%, 4/1/2000........ 200,000 210,064
New York State Mortgage Agency, Homeowner Mortgage Revenue
7.50%, 10/1/1998............................................................ 45,000 45,773
New York State Power Authority, General Purpose Revenue
7%, 1/1/2018 (Prerefunded 1/1/2010) (a)..................................... 300,000 365,367
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------ --------- ------------
<S> <C> <C>
New York (continued)
New York State Thruway Authority (Emergency Highway Construction and Reconstruction)
6%, 3/1/2002 (Insured; FSA)................................................. $ 200,000 $ 214,248
New York State Urban Development Corporation, Refunding
(Corporation Purpose) 5.50%, 7/1/2005....................................... 200,000 215,380
Orange County:
5.10%, 11/15/2002........................................................... 130,000 135,799
Refunding 5.50%, 11/15/2007................................................. 250,000 272,233
Oyster Bay 7.125%, 4/15/2000 (Insured; FGIC)................................... 180,000 192,343
Port Washington Union Free School District 6%, 8/1/2001........................ 125,000 133,135
Suffolk County, Public Improvement
7%, 4/1/2002 (Insured; MBIA, Prerefunded 4/1/2001) (a)...................... 150,000 162,475
Tompkins County 5.25%, 9/15/2003............................................... 250,000 263,568
Triborough Bridge and Tunnel Authority, General Purpose Revenue:
7.40%, 1/1/2003 (Prerefunded 1/1/1999) (a).................................. 200,000 210,120
7%, 1/1/2011 (Prerefunded 1/1/1999) (a)..................................... 150,000 157,007
Refunding:
5.75%, 1/1/2005.......................................................... 250,000 272,342
5.90%, 1/1/2007.......................................................... 100,000 111,017
Westchester County 6.625%, 11/1/2004........................................... 250,000 286,663
Western Nassau County Water Authority,
Water Systems Revenue 5.50%, 5/1/2004 (Insured; AMBAC)...................... 250,000 267,793
U.S. Related--7.1%
Puerto Rico Commonwealth, Refunding 6.25%, 7/1/2011 (Insured; MBIA)............ 200,000 231,710
Puerto Rico Commonwealth Highway and Transporation Authority,
Highway Revenue 6.25%, 7/1/2009 (Insured; MBIA)............................. 150,000 173,731
University of Puerto Rico, University Revenues, Refunding
6.25%, 6/1/2006 ............................................................ 200,000 227,078
-----------
TOTAL INVESTMENTS (cost $8,469,282)............................................ $8,901,885
===========
</TABLE>
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Summary of Abbreviations
- -------------------------------------------------------------------------------
<TABLE>
<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 PCR Pollution ControlRevenue
</TABLE>
Summary of Combined Ratings (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fitch (b) or Moody's or Standard & Poor's Percentage of Value
- ------ ------- ---------------- -----------------
<S> <C> <C> <C> <C> <C>
AAA Aaa AAA 65.5%
AA Aa AA 18.2
A A A 13.1
BBB Baa BBB 3.2
-------
100.0%
=======
Notes to Statement of Investments:
- -------------------------------------------------------------------------------
<FN>
(a) Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay principal and interest on
the municipal issue and to retire the bonds in full at the earliest
refunding date.
(b) Fitch currently provides creditworthiness information for a limited number
of investments.
</FN>
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997 (Unaudited)
Cost Value
----------- -----------
<S> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $8,469,282 $8,901,885
Cash............................................. 39,169
Interest receivable.............................. 164,272
-----------
9,105,326
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 4,477
Due to Distributor............................... 153
-----------
4,630
-----------
NET ASSETS..................................................................... $9,100,696
==========
REPRESENTED BY: Paid-in capital.................................. $8,668,161
Accumulated net realized gain (loss) on investments (68)
Accumulated gross unrealized appreciation on investments 432,603
-----------
NET ASSETS..................................................................... $9,100,696
===========
</TABLE>
NET ASSET VALUE PER SHARE
-------------------------
<TABLE>
<CAPTION>
Class A Class B Class C Class R
----------- --------- --------- -----------
<S> <C> <C> <C> <C>
Net Assets..................................... $2,018,835 $271,075 $89,649 $6,721,137
Shares Outstanding............................. 154,929 20,780 6,863 515,861
NET ASSET VALUE PER SHARE...................... $13.03 $13.05 $13.06 $13.03
======= ======= ======= =======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1997 (Unaudited)
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $229,110
EXPENSES: Management fee--Note 2(a).................. $ 22,290
Distribution and service fees--Note 2(b)... 3,822
Loan commitment fees--Note 4............... 53
---------
Total Expenses........................... 26,165
--------
INVESTMENT INCOME--NET................................................... 202,945
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments.... $ 180
Net unrealized appreciation (depreciation)
on investments........................... 185,709
---------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS................... 185,889
--------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $388,834
========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1997 Year Ended
(Unaudited) June 30, 1997
----------------- -------------
OPERATIONS:
<S> <C> <C>
Investment income--net................................................. $ 202,945 $ 332,110
Net realized gain (loss) on investments................................ 180 9,828
Net unrealized appreciation (depreciation) on investments.............. 185,709 78,389
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from Operations..... 388,834 420,327
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares...................................................... (45,381) (95,673)
Class B shares...................................................... (4,571) (5,389)
Class C shares...................................................... (1,765) (2,540)
Class R shares...................................................... (151,228) (228,486)
Net realized gain on investments:
Class A shares...................................................... (2,220) (9,531)
Class B shares...................................................... (287) (585)
Class C shares...................................................... (103) (238)
Class R shares...................................................... (7,386) (20,591)
----------- -----------
Total Dividends.................................................. (212,941) (363,033)
----------- -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares...................................................... 69,706 90,003
Class B shares...................................................... 173,640 20,500
Class C shares...................................................... 7,000 29,735
Class R shares...................................................... 1,497,328 2,109,511
Dividends reinvested:
Class A shares...................................................... 35,988 78,384
Class B shares...................................................... 2,867 5,974
Class C shares...................................................... 1,850 2,770
Class R shares...................................................... 34,169 28,536
Cost of shares redeemed:
Class A shares...................................................... (171,979) (251,709)
Class B shares...................................................... (26,176) (30,000)
Class C shares...................................................... (5,120) (585)
Class R shares...................................................... (311,092) (861,594)
----------- -----------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 1,308,181 1,221,525
----------- -----------
Total Increase (Decrease) in Net Assets.......................... 1,484,074 1,278,819
NET ASSETS:
Beginning of Period.................................................... 7,616,622 6,337,803
----------- -----------
End of Period.......................................................... $9,100,696 $7,616,622
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term New York 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................................................................ 5,422 7,056
Shares issued for dividends reinvested..................................... 2,780 6,158
Shares redeemed............................................................ (13,337) (19,696)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... (5,135) (6,482)
========= =========
Class B
Shares sold................................................................ 13,392 1,608
Shares issued for dividends reinvested..................................... 221 469
Shares redeemed............................................................ (2,031) (2,366)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 11,582 (289)
========= =========
Class C
Shares sold................................................................ 542 2,322
Shares issued for dividends reinvested..................................... 143 217
Shares redeemed............................................................ (392) (46)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 293 2,493
========= =========
Class R
Shares sold................................................................ 116,450 165,819
Shares issued for dividends reinvested..................................... 2,640 2,244
Shares redeemed............................................................ (24,124) (68,185)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 94,966 99,878
========= =========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class A Shares
-------------------------------------------------------------------------------------
Six Months
Ended Period Ended Year Ended
December 31, 1997 Year Ended June 30, June 30, November 30,
------------------- ------------
PER SHARE DATA: (Unaudited) 1997 1996 1995(1,3) 1994(1,2,3) 1993(1) 1992
------------------- ------- ------- --------- ----------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $12.77 $12.65 $12.71 $12.59 $13.04 $12.70 $12.34
------ ------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net......... .29 .59 .59 .60 .35(4) .66(4) .68(4)
Net realized and unrealized gain
(loss) on investments...... .27 .18 (.06) .17 (.45) .46 .36
------ ------ ------ ------ ------ ------ ------
Total from Investment Operations .56 .77 .53 .77 (.10) 1.12 1.04
------ ------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment
income--net................. (.29) (.59) (.59) (.60) (.35) (.66) (.68)
Dividends from net realized gain
on investments............. (.01) (.06) -- (.04) -- (.12) --
Dividends in excess of net realized
gain on investments........ -- -- -- (.01) -- -- --
------ ------ ------ ------ ------ ------ ------
Total Distributions........... (.30) (.65) (.59) (.65) (.35) (.78) (.68)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $13.03 $12.77 $12.65 $12.71 $12.59 $13.04 $12.70
====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(5)....... 8.77%(6) 6.17% 4.23% 6.39% (.80%)(7) 9.00% 8.65%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets................. .75%(6) .75% .75% .75% .57%(6,8) .46%(8) .45%(8)
Ratio of net investment income
to average net assets...... 4.38%(6) 4.60% 4.62% 4.83% 4.66%(6) 5.11% 5.43%
Portfolio Turnover Rate....... 1.82%(7) 15.00% 43.43% 32.00% 13.00%(7) 32.00% --
Net Assets, end of period
(000's Omitted)............ $2,019 $2,043 $2,106 $2,340 $2,922 $2,100 $5,308
- ------------------
<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 Ashares. The Financial Highlights for the year ended June 30, 1995
are based upon a Class A (formerly Investor shares) outstanding. The
amounts shown for the period ended June 30, 1994 were calculated using
the performance of a Retail share outstanding from December 1, 1993
to April 3, 1994 and the performance of an Investor share outstanding
from April 4, 1994 to June 30, 1994. The Financial Highlights for the year
ended November 30, 1993 and prior years are based upon a Retail share
outstanding.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to April
4, 1994, The Boston Company Advisors, Inc. served as the Fund's investment
adviser.
(3) The Fund changed its fiscal year end to June 30. Prior to this, the Fund's
fiscal year end was November 30.
(4) Net investment income per share before waiver of fees and reimbursement
of expenses by the investment adviser and/or custodian and/or transfer
agent for the period ended June 30, 1994 and, for the years ended
November 30, 1993 and 1992 were $.28, $.42 and $.52, respectively.
(5) Exclusive of sales load.
(6) Annualized.
(7) Not annualized.
(8) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or custodian and/or
transfer agent for the period ended June 30, 1994 and, for the years
ended November 30, 1993 and 1992 were 1.51%, 2.32% and 1.70%, respectively.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class B Shares Class C Shares
--------------------------------------------------------------------------------------------
Period
Six Months Ended Year Ended June 30, Six Months Ended Year Ended June 30, Ended
December 31, 1997 ------------------- December 31, 1997, ------------------- June 30,
PER SHARE DATA: (Unaudited) 1997 1996(1) (Unaudited) 1997 1996 1995(1)
----------- ------- ------- ----------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $12.78 $12.66 $12.71 $12.80 $12.68 $12.71 $12.21
------ ------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net......... .25 .52 .54 .25 .52 .54 .28
Net realized and unrealized gain
(loss) on investments...... .28 .18 (.05) .27 .18 (.03) .49
------ ------ ------ ------ ------ ------ ------
Total from Investment Operations .53 .70 .49 .52 .70 .51 .77
------ ------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment
income--net................. (.25) (.52) (.54) (.25) (.52) (.54) (.27)
Dividends from net realized gain
on investments............. (.01) (.06) -- (.01) (.06) -- --
------ ------ ------ ------ ------ ------ ------
Total Distributions........... (.26) (.58) (.54) (.26) (.58) (.54) (.27)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $13.05 $12.78 $12.66 $13.06 $12.80 $12.68 $12.71
====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)....... 8.41%(3) 5.64% 3.85% 8.23%(3) 5.63% 4.02% 6.39%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets................. 1.25%(3) 1.25% 1.25% 1.25%(3) 1.25% 1.25% 1.25%(3)
Ratio of net investment income
to average net assets...... 3.84%(3) 4.09% 3.97% 3.89%(3) 4.08% 4.15% 4.34%(3)
Portfolio Turnover Rate....... 1.82%(4) 15.00% 43.43% 1.82%(4) 15.00% 43.43% 32.00%
Net Assets, end of period
(000's Omitted)............ $271 $118 $120 $90 $84 $52 $68
- --------------------
<FN>
(1) The Fund commenced selling Class B and Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class R Shares
----------------------------------------------------------------------------------------
Six Months Ended Period Ended Period Ended
December 31, 1997 Year Ended June 30, June 30, November 30,
-------------------------------
PER SHARE DATA: (Unaudited) 1997 1996 1995(1) 1994(1,2) 1993(3)
---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period..................... $12.76 $12.65 $12.71 $12.59 $13.04 $12.85
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net............ .30 .62 .63 .64 .37(4) .57(4)
Net realized and unrealized gain
(loss) on investments......... .28 .17 (.06) .17 (.45) .31
------ ------ ------ ------ ------ ------
Total from Investment Operations. .58 .79 .57 .81 (.08) .88
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment
income--net.................... (.30) (.62) (.63) (.64) (.37) (.57)
Dividends from net realized gain
on investments................ (.01) (.06) -- (.04) -- (.12)
Dividends in excess of net realized
gain on investments........... -- -- -- (.01) -- --
------ ------ ------ ------ ------ ------
Total Distributions.............. (.31) (.68) (.63) (.69) (.37) (.69)
------ ------ ------ ------ ------ ------
Net asset value, end of period... $13.03 $12.76 $12.65 $12.71 $12.59 $13.04
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(5).......... 9.18%(6) 6.34% 4.49% 6.65% (.67%)(7) 6.95%(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.................... .50%(6) .50% .50% .50% .29%(6,8) .25%(6,8)
Ratio of net investment income
to average net assets......... 4.64%(6) 4.85% 4.87% 5.08% 4.94%(7) 5.20%(6)
Portfolio Turnover Rate.......... 1.82%(7) 15.00% 43.43% 32.00% 13.00%(7) 32.00%
Net Assets, end of period
(000's Omitted)............... $6,721 $5,372 $4,060 $2,844 $2,388 $2,542
- --------------------
<FN>
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. From April 4, 1994 through October 16, 1994,
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
manager.
(2) The Fund changed its fiscal year end to June 30. Prior to this, the Fund's
fiscal year end was November 30.
(3) The Fund commenced selling Investment Class shares on February 1, 1993.
Effective April 4, 1994 the Investment Class was reclassified as the Trust
shares. Effective October 17, 1994 Trust shares were redesignated Class R
shares. The table above is based upon a Retail share outstanding from
February 1, 1993 to April 3, 1994 and a Trust share outstanding from April
4, 1994 to October 16, 1994.
(4) Net investment income per share before waiver of fees and reimbursement
of expenses by the investment adviser and/or custodian and/or transfer
agent for the periods ended June 30, 1994 and November 30, 1993 were $.30
and $.36, respectively.
(5) Exclusive of sales load.
(6) Annualized.
(7) Not annualized.
(8) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or custodian
and/or transfer agent for the periods ended June 30, 1994 and November 30,
1993 were 1.23% and 2.22%, respectively.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Premier Limited Term New York Municipal Fund is a series of The
Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is registered under
the Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering seven series including the Fund. The Fund's investment objective is to
maximize current income exempt from Federal, New York State and New York City
income taxes to the extent consistent with the preservation of capital. The
Dreyfus Corporation ("Manager") serves as the Fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A. ("Mellon Bank").
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 a service fee. Class R shares are sold primarily to bank trust
departments and other financial service providers (including Mellon Bank and its
affiliates) acting on behalf of customers having a qualified trust or investment
account or relationship at such institution, and bear no distribution or service
fees. Class R shares are offered without a front-end sales load or CDSC. Each
class of shares has identical rights and privileges, except with respect to
distribution and service fees and voting rights on matters affecting a single
class.
Investment income, net of expenses (other than class specific expenses),
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
Actual results may differ from estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(c) Concentration of risk: The Fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect the ability
of issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the Fund.
(d) Distributions to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, if any,
it is the policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
NOTE 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
(a) Investment management fee: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses,
service fees, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to reduce
its fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel) and extraordinary expenses.
Each trustees receives $27,000 per year, $1,000 for each Board meeting attended
and $750 for each Audit Committee meeting attended and is reimbursed for travel
and out-of-pocket expenses. The Chairman of the Board receives an additional
annual fee of $25,000 per year. These fees pertain to the following funds: The
Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The
Dreyfus/Laurel Funds Trust. These fees and expenses are allocated to each series
based on net assets. Amounts required to be paid by the Trust directly to the
non-interested Trustees, that would be applied to offset a portion of the
management fee payable to the Manager, are in fact paid directly by the Manager
to the non-interested Trustees.
(b) Distribution and service plan: The Fund has adopted a Distribution Plan
(the "Plan") pursuant to Rule 12b-1 under the 1940 Act relating to its Class A,
B and C shares. Under the Plan, the Fund may pay annually up to .25% of the
value of its average daily net assets attributable to its Class A shares to
compensate the Distributor and Dreyfus Service Corporation, an affiliate of the
Manager, for shareholder servicing activities and the Distributor for activities
and expenses primarily intended to result in the sale of Class A shares. Under
the Plan, the Fund may pay the Distributor for distributing the Fund's Class B
and Class C shares at an aggregate annual rate of .50% of the value of the
average daily net assets of Class B and Class C shares. Class B and Class C
shares are also subject to a service plan adopted pursuant to Rule 12b-1, under
which the Fund pays Dreyfus Service Corporation or the Distributor for providing
certain services to the holders of Class B and Class C shares a fee at the
annual rate of .25% of the value of the average daily net assets of Class B and
Class C shares. Class R shares bear no distribution or service fee. During the
<PAGE>
Dreyfus Premier Limited Term New York Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
period ended December 31, 1997, the Fund was charged $2,589, $595 and $227
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 $298 and $113 for Class B and Class C shares, respectively, purusant 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 purchase and sales of investment securities,
excluding short-term securities, during the period ended December 31, 1997,
amounted to $1,429,238 and $155,191, 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 based on prevailing
market rates 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
New York Municipal Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 348/648SA9712
<PAGE>
Semi-Annual Report
- -----------------------------------------------------------------------------
Dreyfus Premier
Limited Term
California Municipal
Fund
- -----------------------------------------------------------------------------
December 31, 1997
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- -----------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier Limited Term
California 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 4.37% $0.295 4.25%
Class B 4.10% $0.261 3.87%
Class C 4.10% $0.261 3.86%
Class R 4.50% $0.312 4.63%
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
<PAGE>
affect the U.S. economy. We are particularly vigilant for developments abroad
that might have either negative or positive 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
The California economy has continued to diversify and expand at a pace beyond
the national growth rate. For the period ending December 31, 1997, revenues
collected were slightly above-budget, creating a small operating surplus that
amounted to 4% of revenues. However, the State still has not addressed its
accumulated structural deficit of approximately $2.1 billion. Due to the sizable
expenditures for education and public safety and limited revenue generation
flexibility, we believe that it is unlikely the State will develop any sizable
budget surplus. Because of these limitations, we expect that the credit quality
of the State will remain in the "A" rated range despite the robust economy.
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 extended through the reporting
period to take advantage of the declining interest rate environment. The
weighted average maturity began the reporting period at 7.39 years and
fluctuated within 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/ Collette O'Brien
Collette O'Brien
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 State of
California 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 California Municipal Fund
- ------------------------------------------------------------------------------
Statement of Investments December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments--97.5% Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
California--81.6%
State of California:
6.80%, 10/1/2005............................................................ $ 700,000 $ 816,403
6.60%, 10/1/2005............................................................ 510,000 602,881
California Educational Facilities Authority, College and University Revenue,
Refunding (Los Angeles College Chiropractic) 5.75%, 11/1/2006............... 780,000 826,440
California Health Facilities Finance Authority, Lease Revenue, Refunding
(Presbyterian Hospital) 5.50%, 5/1/2007 (Insured; MBIA)..................... 500,000 541,575
California Housing Finance Agency, Home Mortgage Revenue
5.65%, 8/1/2006 (Insured;MBIA).............................................. 655,000 691,450
5.65%, 8/1/2017 (Insured;MBIA).............................................. 400,000 410,588
California Public Works Board, Lease Revenue:
(Corcoran State Prison) 7%, 9/1/1998 ....................................... 200,000 202,526
High Technology Facilities (Berkeley Campus) 7.20%, 3/1/2001 ............... 150,000 153,851
Refunding (California State University) 5.50%, 10/1/2007 ................... 500,000 540,800
California Rural Home Mortgage Finance Authority, Single Family Mortgage Revenue
5.75%, 8/1/2009 (Guaranteed; FNMA).......................................... 525,000 547,538
Elk Grove Unified School District, Special Tax Revenue, Refunding
(Community Facilities District No. 1) 6.50%, 12/1/2006 (Insured; AMBAC)..... 400,000 467,560
Franklin-McKinley School District, Refunding 5.20%, 7/1/2004 (Insured; MBIA) .. 375,000 397,556
Kern High School District, Refunding 6.40%, 2/1/2012 (Insured; MBIA)........... 750,000 875,505
Los Angeles, Wastewater System Revenue 7.10%, 11/1/1998........................ 150,000 153,390
Los Angeles County Metropolitan Transportation Authority, Sales Tax Revenue
8%, 7/1/2000 (Insured; AMBAC) .............................................. 500,000 548,010
Los Angeles County Transportation Commission, Sales Tax Revenue, Refunding
6.80%, 7/1/1999 ............................................................ 150,000 156,345
Metropolitan Water District of Southern California, Waterworks Revenue 6.375%,
7/1/2002.................................................................... 835,000 913,139
Modesto, Wastewater Treatment Facilities Revenue 6%, 11/1/2009 (Insured; MBIA). 500,000 570,910
Northern California, Transmission Revenue, Refunding (Project No. 1)
6.25%, 8/15/2000 (Insured; MBIA) ........................................... 360,000 373,270
Redding JT Powers Financing Authority, Electrical Systems Revenue
5.25%, 6/1/2015 (Insured; MBIA)............................................. 670,000 684,318
Rio Linda Unified School District, Refunding
6%, 8/1/2007 (Insured; FSA)................................................. 400,000 450,924
Riverside County Transportation Commission, Sales Tax Revenue :
6.50%, 6/1/2001 (Insured; AMBAC) ........................................... 520,000 562,541
Refunding, 6%, 6/1/2009 (Insured; FGIC)..................................... 500,000 569,005
Sacramento Municipal Utilities District, Electrical Revenue
6.30%, 9/1/2001 (Insured; MBIA) ............................................ 500,000 540,245
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
California (continued)
San Diego County Regional Transportation Commission, Sales Tax Revenue
6%, 4/1/2004 (Insured; FGIC) ............................................... $ 750,000 $ 826,725
San Francisco Bay Area Rapid Transit District, Sales Tax Revenue, Refunding
6.70%, 7/1/2000............................................................. 500,000 532,920
San Francisco City and County Airport Commission, International Airport Revenue
5.625%, 5/1/2006 (Insured; FGIC)............................................ 500,000 541,770
San Francisco City and County Public Utilities Commssion, Water Revenue, Refunding:
6%, 11/1/2003 .............................................................. 750,000 824,033
6.375%, 11/1/2006 .......................................................... 500,000 552,255
San Jose Redevelopment Agency, Tax Allocation
(Merged Area Redevelopment Project) 6%, 8/1/2009 (Insured; MBIA)............ 625,000 712,219
Santa Margarita-Dana Point Authority, Revenue, Refunding
7.25%, 8/1/2007 (Insured; MBIA)............................................. 500,000 613,280
San Mateo County Transit District, Sales Tax Revenue, Refunding
6.20%, 6/1/1999 (Insured; MBIA)............................................. 100,000 102,975
Santa Rosa, Wastewater Revenue
6.20%, 9/1/2003 (Prerefunded 9/1/2002) (Insured; FGIC) (a) ................. 350,000 385,595
Simi Valley Unified School District, Refunding 6.25%, 8/1/2004 (Insured; FGIC). 700,000 781,676
Southern California Public Power Authority, Power Project Revenue, Refunding
(Hydroelectric-Hoover Uprating Project) 6.30%, 10/1/2002 ................... 420,000 459,766
Tri-City Hospital District, Revenue, Refunding 6%, 2/15/2005 (Insured; MBIA)... 500,000 553,840
Westside Unified School District, Refunding 6%, 8/1/2014 (Insured; AMBAC)...... 385,000 437,876
U.S. Related--15.9%
Commonwealth of Puerto Rico, Refunding 6.25%, 7/1/2011 (Insured; MBIA)......... 750,000 868,913
Puerto Rico Electric Power Authority, Power Revenue, Refunding
6.50%, 7/1/2006 (Insured; MBIA)............................................. 625,000 721,313
Puerto Rico Highway and Transportation Authority, Highway Revenue
6.25%, 7/1/2004 (Insured; MBIA)............................................. 500,000 557,330
Puerto Rico Public Buildings Authority, Government Guaranteed Facilities
6.25%, 7/1/2010 (Insured; AMBAC) (Guaranteed; Commonwealth of Puerto Rico).. 750,000 870,150
University of Puerto Rico, University Revenue, Refunding
6.25%, 6/1/2008 (Insured; MBIA) ............................................ 750,000 864,705
-----------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $22,399,824).......................................................... $23,804,111
===========
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Short-Term Municipal Investments--2.5% Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
California:
LosAngeles Regional Airports Improvement Corp., Lease Revenue, VRDN (American
Airlines Inc.-Los Angeles International Airport):
5% (LOC; Wachovia Bank of Georgia) (b,c)................................. $ 300,000 $ 300,000
5% (LOC; Wachovia Bank of Georgia) (b,c)................................. 300,000 300,000
-----------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $600,000) ............................................................ $ 600,000
===========
TOTAL INVESTMENTS--100.0%
(cost $22,999,824).......................................................... $24,404,111
===========
</TABLE>
Summary of Abbreviations
- ------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FNMA Federal National Mortgage Association Insurance Corporation
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
</TABLE>
Summary of Combined Ratings
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- ------ ------- ---------------- -------------------
<S> <C> <C> <C>
AAA Aaa AAA 69.9%
AA Aa AA 14.1
A A A 10.1
BBB Baa BBB 3.4
F1 MIGI SP1 2.5
------
100.0%
======
<FN>
Notes to Statement of Investments:
- ------------------------------------------------------------------------------
(a) Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay principal and interest on the
municipal issue and to retire the bonds in full at the earliest refunding
date.
(b) 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.
(e) At December 31, 1997, 40.3% of the Fund's net assets are insured by MBIA.
</FN>
</TABLE>
Statement of Financial Futures December 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
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..................... 5 ($615,625) March '98 $1,719
======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997 (Unaudited)
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $22,999,824 $24,404,111
Cash............................................. 200,599
Interest receivable.............................. 446,050
-----------
25,050,760
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 14,325
Due to Distributor............................... 388
-----------
14,713
-----------
NET ASSETS..................................................................... $25,036,047
===========
REPRESENTED BY: Paid-in capital.................................. $23,631,284
Accumulated net realized gain (loss) on investments (1,243)
Accumulated gross unrealized appreciation on investments
(including $1,719 gross unrealized appreciation on
financial futures)............................. 1,406,006
-----------
NET ASSETS..................................................................... $25,036,047
===========
</TABLE>
NET ASSET VALUE PER SHARE
-------------------------
<TABLE>
<CAPTION>
Class A Class B Class C Class R
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Net Assets..................................... $8,099,165 $314,466 $183,149 $16,439,267
Shares Outstanding............................. 608,519 23,620 13,725 1,235,239
NET ASSET VALUE PER SHARE...................... $13.31 $13.31 $13.34 $13.31
====== ====== ====== ======
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- -----------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1997 (Unaudited)
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income............................. $ 642,959
EXPENSES: Management fee--Note 2(a)................... $ 62,101
Distribution and service fees--Note 2(b).... 11,542
Loan commitment fees--Note 4................ 68
--------
Total Expenses............................ 73,711
----------
INVESTMENT INCOME--NET.................................................... 569,248
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments..... $112,766
Net realized gain (loss) on financial futures (22,956)
--------
Net Realized Gain (Loss).................. 89,810
Net unrealized appreciation (depreciation)
on investments (including $1,719 gross unrealized
appreciation on financial futures)........ 413,094
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS.................... 502,904
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $1,072,152
==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1997 Year Ended
(Unaudited) June 30, 1997
----------------- ------------
OPERATIONS:
<S> <C> <C>
Investment income--net................................................. $ 569,248 $ 1,076,568
Net realized gain (loss) on investments................................ 89,810 127,545
Net unrealized appreciation (depreciation) on investments.............. 413,094 308,282
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 1,072,152 1,512,395
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares...................................................... (181,233) (357,294)
Class B shares...................................................... (5,612) (5,490)
Class C shares...................................................... (1,145) (1,019)
Class R shares...................................................... (381,258) (712,615)
Net realized gain on investments:
Class A shares...................................................... (43,807) (20,500)
Class B shares...................................................... (1,684) (342)
Class C shares...................................................... (439) (68)
Class R shares...................................................... (84,604) (40,475)
----------- -----------
Total Dividends.................................................. (699,782) (1,137,803)
----------- -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares...................................................... 357,548 593,180
Class B shares...................................................... 50,802 188,135
Class C shares...................................................... 155,000 --
Class R shares...................................................... 2,629,475 13,259,127
Dividends reinvested:
Class A shares...................................................... 151,203 252,279
Class B shares...................................................... 3,655 1,455
Class C shares...................................................... 934 --
Class R shares...................................................... 286,152 461,303
Cost of shares redeemed:
Class A shares...................................................... (545,146) (720,697)
Class B shares...................................................... -- (14,494)
Class R shares...................................................... (2,996,779) (10,055,228)
----------- -----------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 92,844 3,965,060
----------- -----------
Total Increase (Decrease) in Net Assets....................... 465,214 4,339,652
NET ASSETS:
Beginning of Period.................................................... 24,570,833 20,231,181
----------- -----------
End of Period.......................................................... $25,036,047 $24,570,833
=========== ===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Shares
---------------------------------
Six Months Ended
December 31, 1997 Year Ended
(Unaudited) June 30, 1997
----------------- -------------
CAPITAL SHARE TRANSACTIONS:
<S> <C> <C>
Class A
--------
Shares sold................................................................ 27,014 45,900
Shares issued for dividends reinvested..................................... 11,404 19,392
Shares redeemed............................................................ (41,201) (55,449)
-------- ---------
Net Increase (Decrease) in Shares Outstanding... (2,783) 9,843
======== =========
Class B
-------
Shares sold................................................................ 3,822 14,492
Shares issued for dividends reinvested..................................... 276 112
Shares redeemed............................................................ -- (1,116)
-------- ---------
Net Increase (Decrease) in Shares Outstanding... 4,098 13,488
======== =========
Class C
--------
Shares sold................................................................ 11,720 --
Shares issued for dividends reinvested..................................... 70 --
-------- ---------
Net Increase (Decrease) in Shares Outstanding... 11,790 --
======== =========
Class R
--------
Shares sold................................................................ 198,516 1,016,693
Shares issued for dividends reinvested..................................... 21,584 35,453
Shares redeemed............................................................ (226,949) (771,795)
-------- ---------
Net Increase (Decrease) in Shares Outstanding... (6,849) 280,351
======== =========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- -----------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------------------------
Six Months Ended Year Ended June 30, Period Ended Year Ended
December 31, 1997 -------------------------- June 30, November 30,
PER SHARE DATA: (Unaudited) 1997 1996 1995(1,2) 1994(1,2,3) 1993(1) 1992
------------------- ------- ------- --------- ------------ ------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $13.11 $12.88 $12.80 $12.61 $13.07 $12.81 $12.53
------ ------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net........ .30 .59 .60 .59 .34(4) .67(4) .70(4)
Net realized and unrealized gain
(loss) on investments...... .27 .26 .10 .21 (.46) .66 .44
------ ------ ------ ------ ------ ------ ------
Total from Investment Operations .57 .85 .70 .80 (.12) 1.33 1.14
------ ------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment
income--net................ (.30) (.59) (.60) (.60) (.34) (.67) (.70)
Dividends from net realized gain
on investments............. (.07) (.03) (.02) (.01) (.00)(5) (.40) (.16)
------ ------ ------ ------ ------ ------ ------
Total Distributions........... (.37) (.62) (.62) (.61) (.34) (1.07) (.86)
------ ------ ------ ------ ------ ------ ------
Net asset value, end of period $13.31 $13.11 $12.88 $12.80 $12.61 $13.07 $12.81
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------
TOTAL INVESTMENT RETURN(6)....... 8.67%(7) 6.79% 5.43% 6.48% (.95%) 10.58% 9.27%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets................. .75%(7) .75% .75% .75% .58%(7,8) .45%(8,9) .45%(8)
Ratio of net investment income
to average net assets...... 4.43%(7) 4.54% 4.59% 4.71% 4.51%(7) 5.09% 5.38%
Portfolio Turnover Rate....... 9.86%(10) 25.92% 39.09% 49.00% 5.00%(10) 38.00% 41.00%
Net Assets, end of period
(000's Omitted)............ $8,099 $8,012 $7,745 $8,506 $10,143 $10,971 $21,831
<FN>
- ------------------
(1) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and the Fund began offering the Institutional Class and Investment
Class of shares. Effective April 4, 1994 the Retail and Institutional
Classes were reclassified as a single class of shares known as the
Investor shares. Effective October 17, 1994, the Investor Class was
redesignated Class A. The Financial Highlights for the year ended June 30,
1995 are based upon a Class A share (formerly Investor shares)
outstanding. The amounts shown for the period ended June 30, 1994 were
calculated using the performance of a Retail share outstanding from
December 1, 1993 to April 3, 1994 and the performance of an Investor share
outstanding from April 4, 1994 to June 30, 1994. The Financial Highlights
for the year ended November 30, 1993 and prior years are based upon a
Retail share outstanding.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. From April 4, 1994 through October 16, 1994
Mellon Bank, N.A. served as the Fund's investment manager. Prior to April
4, 1994, The Boston Company Advisors, Inc. served as the Fund's investment
adviser.
(3) The Fund changed its fiscal year end to June 30. Prior to this, the Fund's
fiscal year end was November 30.
(4) Net investment income per share before waiver of fees and reimbursement of
expenses by the investment adviser and/or custodian and/or transfer agent
for the period ended June 30, 1994 and for the years ended November 30,
1993 and 1992 were $.31, $.67 and $.64, respectively.
(5) Amount represents less than $.01 per share.
(6) Exclusive of sales load.
(7) Annualized.
(8) Annualized expense ratios before voluntary waiver of fees and reimbursement
of expenses by the investment adviser and/or custodian and/or transfer
agent for the period ended June 30, 1994 and for the years ended November
30, 1993 and 1992 were .95%, 1.10% and .93%, respectively.
(9) The operating expense ratio excludes interest expense. The operating expense
ratio including interest expense was .46% for the year ended November 30,
1993.
(10) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- ------------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class B Shares
------------------------------------------------------
Six Months Ended Year Ended June 30, Period Ended
December 31, 1997 ------------------- June 30,
PER SHARE DATA: (Unaudited) 1997 1996 1995(1)
----------------- ------ ------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................. $13.11 $12.88 $12.80 $12.28
------ ------ ------ ------
Investment Operations:
Investment income--net............................... .26 .52 .53 .27
Net realized and unrealized gain (loss) on investments .27 .26 .10 .53
------ ------ ------ ------
Total from Investment Operations..................... .53 .78 .63 .80
------ ------ ------ ------
Distributions:
Dividends from investment income--net................ (.26) (.52) (.53) (.28)
Dividends from net realized gain on investments...... (.07) (.03) (.02) --
------ ------ ------ ------
Total Distributions.................................. (.33) (.55) (.55) (.28)
------ ------ ------ ------
Net asset value, end of period....................... $13.31 $13.11 $12.88 $12.80
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2).............................. 8.13%(3) 6.25% 4.89% 6.51%(3)
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. 3.91%(3) 4.00% 4.08% 4.20%(3)
Portfolio Turnover Rate.............................. 9.86%(4) 25.92% 39.09% 49.00%
Net Assets, end of period (000's Omitted)............ $314 $256 $78 $9
<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 California Municipal Fund
- -----------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class C Shares
------------------------------------------------------
Six Months Ended Year Ended June 30, Period Ended
December 31, 1997 ------------------- June 30,
PER SHARE DATA: (Unaudited) 1997 1996 1995(1)
----------------- ------ ------ ------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................. $13.14 $12.91 $12.80 $12.28
------ ------ ------ ------
Investment Operations:
Investment income--net............................... .26 .53 .53 .28
Net realized and unrealized gain (loss) on investments .27 .26 .13 .52
------ ------ ------ ------
Total from Investment Operations..................... .53 .79 .66 .80
------ ------ ------ ------
Distributions:
Dividends from investment income--net................ (.26) (.53) (.53) (.28)
Dividends from net realized gain on investments...... (.07) (.03) (.02) --
------ ------ ------ ------
Total Distributions.................................. (.33) (.56) (.55) (.28)
------ ------ ------ ------
Net asset value, end of period....................... $13.34 $13.14 $12.91 $12.80
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2).............................. 8.13%(3) 6.25% 5.14% 6.51%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.............. 1.23%(3) 1.25% 1.25% 1.25%(3)
Ratio of net investment income to average net assets. 3.77%(3) 4.04% 4.06% 4.22%(3)
Portfolio Turnover Rate.............................. 9.86%(4) 25.92% 39.09% 49.00%
Net Assets, end of period (000's Omitted)............ $183 $25 $25 $25
<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 California Municipal Fund
- -----------------------------------------------------------------------------
Financial Highlights (continued)
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Class R Shares
---------------------------------------------------------------------------
Six Months Ended Year Ended June 30, Period Ended Period Ended
December 31, 1997 ------------------------ June 30, November 30,
PER SHARE DATA: (Unaudited) 1997 1996 1995(1) 1994(1,2) 1993(3)
----------- ------- ------- ------ --------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period..................... $13.11 $12.88 $12.80 $12.61 $13.07 $12.96
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net........... .31 .62 .63 .63 .35(4) .55(4)
Net realized and unrealized gain
(loss) on investments......... .27 .26 .10 .20 (.46) .52
------ ------ ------ ------ ------ ------
Total from Investment Operations. .58 .88 .73 .83 (.11) 1.07
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment
income--net................... (.31) (.62) (.63) (.63) (.35) (.56)
Dividends from net realized gain
on investments................ (.07) (.03) (.02) (.01) (.00)(5) (.40)
------ ------ ------ ------ ------ ------
Total Distributions.............. (.38) (.65) (.65) (.64) (.35) (.96)
------ ------ ------ ------ ------ ------
Net asset value, end of period... $13.31 $13.11 $12.88 $12.80 $12.61 $13.07
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(6).......... 8.93%(7) 7.04% 5.68% 6.75% (.87%)(8) 8.32%(8)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.................... .50%(7) .50% .50% .50% .42%(7,9) .40%(7,9,10)
Ratio of net investment income
to average net assets......... 4.68%(7) 4.79% 4.84% 4.96% 4.68%(7) 5.04%(7)
Portfolio Turnover Rate.......... 9.86%(8) 25.92% 39.09% 49.00% 5.00%(8) 38.00%
Net Assets, end of period
(000's Omitted)............... $16,439 $16,278 $12,384 $8,813 $12,235 $8,291
<FN>
- -------------------
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to April 4,
1994, The Boston Company Advisors, Inc. served as the Fund's investment
manager.
(2) The Fund changed its fiscal year end to June 30. Prior to this, the Fund's
fiscal year end was November 30.
(3) The Fund commenced selling Investment Class shares on February 1, 1993.
Effective April 4, 1994 the Investment Class was reclassified as the Trust
shares. Effective October 17, 1994 Trust shares were redesignated Class R
shares. The table above is based upon a Retail share outstanding from
February 1, 1993 to April 3, 1994 and a Trust share outstanding from April
4, 1994 to October 16, 1994.
(4) Net investment income per share before waiver of fees and reimbursement of
expenses by the investment adviser and/or custodian and/or transfer agent
for the periods ended June 30, 1994 and November 30, 1993 were $.32 and
$.49, respectively.
(5) Amount represents less than $.01 per share.
(6) Exclusive of sales load.
(7) Annualized.
(8) Not annualized.
(9) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or custodian and/or
transfer agent for the periods ended June 30, 1994 and November 30, 1993
were .79% and 1.06%, respectively.
(10) The operating expense ratio excludes interest expense. The operating
expense ratio including interest expense was .41% for the period ended
November 30, 1993.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- ----------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Limited Term California Municipal Fund (the "Fund") is a
series of The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is
registered under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company and operates as a series company
currently offering seven series including the Fund. The Fund's investment
objective is to maximize current income exempt from Federal income taxes and
state personal income taxes for resident shareholders of California consistent
with the prudent risk of capital by investing in municipal securities which are
of investment-grade quality and intermediate maturities. The Dreyfus Corporation
("Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. ("Mellon Bank").
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of
the Fund's shares. The Fund is authorized to issue an unlimited number of shares
of Beneficial Interest in the following classes of shares: Class A, Class B,
Class C and Class R. Class A, Class B and Class C shares are sold primarily to
retail investors through financial intermediaries and bear a distribution fee
and/or service fee. Class A shares are sold with a front-end sales charge, while
Class B and Class C shares are subject to a contingent deferred sales charge
("CDSC") and distribution and service fees. Class R shares are sold primarily to
bank trust departments and other financial service providers (including Mellon
Bank and its affiliates) acting on behalf of customers having a qualified trust
or investment account or relationship at such institution, and bear no
distribution or service fees. Class R shares are offered without a front-end
sales load or CDSC. Each class of shares has identical rights and privileges,
except with respect to distribution and service fees and voting rights on
matters affecting a single class.
Investment income, net of expenses (other than class specific expenses) 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
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and
<PAGE>
Dreyfus Premier Limited Term California 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 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,
service fees, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to reduce
its fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel). Each trustee receives
$27,000 per year, $1,000 for each Board meeting attended and $750 for each Audit
Committee meeting attended and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional annual fee of $25,000
per year. These fees pertain to the following funds: The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds
Trust. These fees and expenses are allocated to each series based on net assets.
Amounts required to be paid by the Trust
<PAGE>
Dreyfus Premier Limited Term California Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
directly to the non-interested Trustees, that would be applied to offset a
portion of the management fee payable to the Manager, are in fact paid directly
by the Manager to the non-interested Trustees.
(b) Distribution and service plan: 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 $10,237, $718 and $152, respectively for Class A, Class B and Class
C shares, pursuant to the distribution plan. During the period ended December
31, 1997, the Fund was charged $359 and $76 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 Trustees
who are not "interested persons" of the Investment Company and who have no
direct or indirect financial interest in the operation of the Plan or in any
agreement related to the Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities and financial futures, during the period ended
December 31, 1997, amounted to $2,953,586 and $2,359,612, 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 based on prevailing
market rates 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
California Municipal Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 343/643653/743SA9712
<PAGE>
Semi-Annual Report
- -----------------------------------------------------------------------------
Dreyfus Premier
Limited Term
Municipal Fund
- -----------------------------------------------------------------------------
December 31, 1997
[LOGO]
<PAGE>
Dreyfus Premier Limited Term Municipal Fund
- -----------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report the performance for Dreyfus Premier Limited Term
Municipal Fund for its semi-annual reporting period ended December 31, 1997, as
shown in the following table:
<TABLE>
<CAPTION>
Approximate Annualized
Total Return* Income Dividends** Distribution Rate***
------------- ------------------ --------------------
<S> <C> <C> <C>
Class A 4.43% $0.266 4.13%
Class B 4.07% $0.234 3.74%
Class C 4.19% $0.239 3.82%
Class R 4.56% $0.281 4.50%
</TABLE>
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 consequences for the portfolio. The trouble in Asia shows the close and
sensitive relationship between our economy and the economies around the globe.
<PAGE>
Market Environment/Portfolio Activity
A lower interest rate environment last year provided many issuers with the
opportunity to refinance older, higher interest cost debt. Consequently, 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 gradually extended throughout
the latter half of 1997 to take advantage of the falling interest rate
environment. The weighted average maturity of the Fund began the reporting
period at 7.63 years and fluctuated in a range of 7.75-8 years throughout.
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
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 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 at the end of the 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>
<CAPTION>
<PAGE>
Dreyfus Premier Limited Term Municipal Fund
- ------------------------------------------------------------------------------
Statement of Investments December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments--96.7% Amount Value
- ------------------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Alaska--2.3%
Anchorage Port and Term Facilities, Revenue, Refunding
6%, 2/1/2003 (Insured; MBIA)................................................ $1,110,000 $ 1,200,554
Arizona--5.1%
Maricopa County Unified School District Number 69 (Paradise Valley)
6.35%, 7/1/2010 (Insured; MBIA)............................................. 550,000 643,880
Mesa, Refunding 5.90%, 7/1/2000 (Insured; AMBAC)............................... 500,000 523,360
Phoenix, Refunding 6.25%, 7/1/2016............................................. 1,250,000 1,458,775
Arkansas--1.1%
North Little Rock, Electric Revenue, Refunding 6%, 7/1/2001 (Insured; MBIA).... 500,000 532,865
California--4.1%
Alameda County, COP, Refunding (Capital Projects) 5.25%, 6/1/2005 (Insured; AMBAC) 1,000,000 1,057,270
Northern California, Transmission Revenue, Refunding (California - Oregon Transmission)
5.25%, 5/1/2008 (Insured; MBIA)............................................. 1,000,000 1,074,030
Connecticut--3.1%
Connecticut, Special Tax Obligation Revenue (Transportation Infrastructure)
5.25%, 10/1/1999 (Insured; FGIC)............................................ 1,000,000 1,023,070
Stamford 6.60%, 1/15/2007...................................................... 500,000 584,140
Florida--5.4%
Dade County:
Sales Tax Revenue, Refunding 6%, 10/1/2002 (Insured; AMBAC)................. 1,000,000 1,082,070
Water and Sewer System Revenue 6.25%, 10/1/2008 (Insured; FGIC)............. 535,000 620,006
Miami Health Facilities Authority, Health Facilities Revenue (Mercy Hospital Project)
6.75%, 8/1/2020 (Insured; AMBAC) (Prerefunded 8/1/2001) (a)................. 1,000,000 1,105,260
Georgia--1.9%
Georgia Municipal Electric Authority, Power Revenue, Refunding 6%, 1/1/2006.... 900,000 987,642
Illinois--5.6%
Chicago Metropolitan Water Reclamation District (Chicago Capital Improvement)
7.25%, 12/1/2012............................................................ 1,000,000 1,262,490
Illinois Development Finance Authority, PCR, Refunding
(Central Illinois Public Service Company) 5.70%, 8/15/2026.................. 750,000 767,378
Regional Transportation Authority 7.75%, 6/1/2012 (Insured; FGIC).............. 390,000 510,140
Sangamon County School District Number 186 (Springfield)
7.70%, 6/1/2001 (Insured; MBIA)............................................. 300,000 334,791
Indiana--1.2%
Indiana Transportation Finance Authority, Highway Revenue
7.875%, 12/1/2011 (Insured; MBIA) (Prerefunded 12/1/1998) (a)............... 50,000 52,810
Indianapolis Airport Authority, Special Facilities Revenue
(Federal Express Corp. Project) 7.10%, 1/15/2017............................ 500,000 560,855
Iowa--2.0%
Iowa Student Loan Liquidity Corp., Student Loan Revenue, Refunding
5.65%, 12/1/2005............................................................ 1,000,000 1,053,690
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Premier Limited Term Municipal Fund
- -----------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Kentucky--2.2%
Kentucky Turnpike Authority, Economic Development Road Revenue, Refunding
(Revitalization Projects) 6.50%, 7/1/2007 (Insured; AMBAC).................. $1,000,000 $ 1,163,320
Maryland--2.9%
Maryland, State and Local Facilities Loan 5.25%, 6/15/2006..................... 1,400,000 1,495,984
Massachusetts--4.7%
Massachusetts, Special Obligation Revenue 7%, 6/1/2002......................... 1,000,000 1,115,300
Massachusetts Turnpike Authority, Metropolitian Highway System Revenue
5%, 1/1/2037 (Insured; MBIA)................................................ 500,000 484,990
Worcester, Refunding (Municipal Purpose)
6.25%, 7/1/2009 (Insured; MBIA)............................................. 720,000 832,507
Michigan--7.2%
Berkley City School District (Qualified School Board Loan Fund)
7%, 1/1/2009 (Insured; FGIC)................................................ 1,030,000 1,249,998
Comstock Park Public Schools 6%, 5/01/2016 (Prerefunded 5/1/1999) (a).......... 50,000 52,284
Flowerville Community School District
6.50%, 5/1/2006 (Insured; MBIA)............................................. 555,000 636,496
Lance Creuse Public Schools, Refunding 5%, 5/1/2004 (Insured; AMBAC)........... 1,140,000 1,189,738
Saint John's Public Schools (Qualified School Board Loan Fund)
6.50%, 5/1/2006 (Insured; FGIC)............................................. 525,000 603,272
Mississippi--1.2
Mississippi Higher Education Assistance Corporation, Student Loan Revenue
6.05%, 9/1/2007............................................................. 565,000 597,911
Nebraska--2.0%
Omaha, Refunding 4.70%, 5/1/2003............................................... 1,000,000 1,027,610
New Jersey--5.1%
Cumberland County Improvement Authority, SWDR
6%, 1/1/2001 (Insured; FGIC)................................................ 500,000 520,320
Ocean County Utilities Authority, Wastewater Revenue, Refunding
5%, 1/1/2004................................................................ 1,000,000 1,040,970
New Jersey Transportation Corporation, Capital Grant Anticipation Notes
5.50%, 9/1/2003 (Insured; FSA).............................................. 1,000,000 1,057,380
New York--9.0%
New York City:
Refunding 6.20%, 8/1/2007................................................... 1,000,000 1,087,970
5.75%, 8/1/2012............................................................. 445,000 467,019
New York State, Refunding 6.25%, 8/15/2004..................................... 1,000,000 1,111,770
New York State Dormitory Authority, Revenue:
Refunding (Mental Health Services Facilities) 6%, 8/15/2005................. 1,000,000 1,094,140
(State University Educational) 7.125%, 5/15/2009
(Insured; FGIC) (Prerefunded 5/15/1999) (a).............................. 200,000 212,124
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Premier Limited Term Municipal Fund
- -----------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
New York (continued)
New York State Environmental Facilities Corporation, PCR
(State Water Revolving Fund) 7.50%, 6/15/2012............................... $ 500,000 $ 548,245
Triborough Bridge and Tunnel Authority, General Purpose Revenue
7%, 1/1/2011 (Prerefunded 1/1/1999) (a)..................................... 100,000 104,671
North Carolina--2.9%
Charlotte, Refunding 5.50%, 7/1/2004........................................... 1,405,000 1,494,105
North Carolina Eastern Municipal Power Agency,
Power System Revenue, Refunding 8%, 1/1/2021 (Prerefunded 1/1/1998) (a).... 5,000 5,100
Ohio--1.4%
Clermont County, Hospital Facilities Revenue, Refunding
(Mercy Health System) 5.25%, 9/1/2003 (Insured; AMBAC)...................... 685,000 719,134
Oregon--.6%
Tri County Metropolitan Transportation District (Light Rail Extension)
5.60%, 7/1/2003............................................................. 250,000 266,608
Pennsylvania--4.3%
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 1,105,990
Somerset County General Authority, Commonwealth LR
6.70%, 10/15/2003 (Insured; FGIC) (Prerefunded 10/15/2001) (a).............. 1,000,000 1,090,850
South Carolina--1.0%
Anderson County, Hospital Facilities Revenue (Anderson Memorial Hospital)
7.50%, 2/1/2018 (Insured; MBIA) (Prerefunded 2/1/1998) (a).................. 500,000 511,515
Tennessee--1.0%
Louden County Industrial Development Board, SWDR
(Kimberly-Clark Corporation Project) 6.20%, 2/1/2023........................ 500,000 532,165
Texas--9.0%
Austin, Utility System Revenue
8%, 11/15/2016 (Prerefunded 5/15/2001) (a).................................. 200,000 224,520
Fort Bend Independent School District, Refunding (Permanent School Fund Guaranteed)
6.60%, 2/15/2004............................................................ 875,000 985,171
Lewisville Independent School District (Building Bonds)
(Permanent School Fund Guaranteed):
7.50%, 8/15/2006......................................................... 650,000 794,710
7.50%, 8/15/2007......................................................... 600,000 742,992
Mesquite, Independent School District, Refunding
5%, 8/15/2007............................................................... 1,000,000 1,045,810
Red River Authority, PCR (Hoechst Celanese Corp. Project)
6.875%, 4/1/2017............................................................ 750,000 818,888
Utah--1.1%
Intermountain Power Agency, Power Supply Revenue, Refunding
6.25%, 7/1/2009 (Insured; FSA).............................................. 500,000 577,645
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Premier Limited Term Municipal Fund
- ------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Vermont--2.7%
Vermont Educational and Health Buildings Financing Agency, Revenue
(Middlebury College Project) 6%, 11/1/2003.................................. $1,260,000 $ 1,377,545
Virginia--2.1%
Virginia Transportation Board, Transportation Contract Revenue, Refunding
(Route 28 Project) 6%, 4/1/2005............................................. 1,000,000 1,080,789
Washington--3.4%
Washington Public Power Supply System, Revenue, Refunding
(Nuclear Project No. 1):
6%, 7/1/2006 (Insured; MBIA)............................................. 500,000 552,865
7%, 7/1/2008............................................................. 1,000,000 1,182,969
Wisconsin--1.1%
Wisconsin, Health and Educational Facilities Revenue
(Aurora Medical Group Inc.) 5.75%, 11/15/2007 (Insured; FSA)................ 500,000 548,969
-----------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $47,290,366).......................................................... $49,787,435
===========
Short-Term Municipal Investments--3.3%
- -------------------------------------------------------------------------------
Alabama--.2%
Northern Alabama Environmental Improvement Authority, PCR, Refunding,
VRDN (Reynold Metals) 5% (LOC; Bank of Nova Scotia Trust Company
of New York) (b,c).......................................................... $ 100,000 $ 100,000
California--.8%
Los Angeles Regional Airports Improvement Corp., LR, VRDN
(American Airlines-Los Angeles International) 5%
(LOC; Wachovia Bank of Georgia) (b,c)....................................... 400,000 400,000
New York--.2%
New York City Municipal Water Finance Authority, Water and Sewer System
Revenue, VRDN 5% (Insured; FGIC) (b)........................................ 100,000 100,000
Oregon--.6%
Port Portland, PCR, VRDN (Reynolds Metals)
5% (LOC; Bank of Nova Scotia Trust Company of New York) (b,c)............... 300,000 300,000
South Carolina--.4%
South Carolina Jobs-Economic Development Authority, EDR, VRDN
(Saint Francis Hospital) 5% (LOC; The Chase Manhatten Bank) (b,c)........... 200,000 200,000
Tennessee--.2%
Sullivan County, Industrial Development Board, PCR, Refunding, VRDN
(Mead Corp. Project) 5% (LOC; Union Bank of Switzerland) (b,c).............. 100,000 100,000
Texas--.9%
Grand Prairie Housing Finance Corporation, MFHR, Refunding, VRDN
(Winridge Grand Prairie) 3.70% (b).......................................... 100,000 100,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Premier Limited Term Municipal Fund
- -----------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Short-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- ---------- -----------
<S> <C> <C>
Texas (continued)
Grapevine Industrial Development Corporation, Revenue, VRDN
(Multiple Mode-American Airlines):
5% (LOC; Morgan Guaranty Trust Co.) (b,c)................................ $ 100,000 $ 100,000
5% (LOC; Morgan Guaranty Trust Co.) (b,c)................................ 300,000 300,000
-----------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $1,700,000)........................................................... $ 1,700,000
===========
TOTAL INVESTMENTS--100.0%
(cost $48,990,366).......................................................... $51,487,435
===========
</TABLE>
Summary of Abbreviations
- ------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MBIA Municipal Bond Investors Assurance
COP Certificate of Participation Insurance Corporation
EDR Economic Development Revenue MFHR Multi-Family Housing Revenue
FGIC Financial Guaranty Insurance Company PCR Pollution Control Revenue
FSA Financial Security Assurance SWDR Solid Waste Disposal Revenue
LOC Letter of Credit VRDN Variable Rate Demand Notes
LR Lease Revenue
</TABLE>
Summary of Combined Ratings
- -----------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fitch (d) or Moody's or Standard & Poor's Percentage of Value
- --------- ------- ----------------- -------------------
<S> <C> <C> <C>
AAA Aaa AAA 62.9%
AA Aa AA 20.6
A A A 9.9
BBB Baa BBB 3.2
F1 MIG1/P1 SP1/A1 3.3
Not Rated (e) Not Rated (e) Not Rated (e) .1
------
100.0%
======
<FN>
Notes to Statement of Investments:
- -----------------------------------------------------------------------------
(a) Bonds which are prerefunded are collateralized by U.S. Government securities
which are held in escrow and are used to pay principal and interest on the
municipal issue and to retire the bonds in full at the earliest refunding
date.
(b) Securities payable on demand. The interest rate, which is subject to change,
is based upon bank prime rates or an index of market interest rates.
(c) Secured by 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.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Municipal Fund
- ------------------------------------------------------------------------------
Statement of Financial Futures December 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
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>
<TABLE>
<CAPTION>
Dreyfus Premier Limited Term Municipal Fund
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997 (Unaudited)
Cost Value
----------- -----------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $48,990,366 $51,487,435
Interest receivable.............................. 902,326
Receivable for shares of Beneficial Interest subscribed 7,000
-----------
52,396,761
-----------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 25,006
Due to Distributor............................... 1,242
Cash overdraft due to Custodian.................. 21,834
Payable for shares of Beneficial Interest redeemed 8,874
Payable for futures vartion margin--Note 1(c)..... 4,687
-----------
61,643
-----------
NET ASSETS..................................................................... $52,335,118
===========
REPRESENTED BY: Paid-in capital.................................. $49,912,907
Accumulated distributions in excess of investment income--net (23,994)
Accumulated net realized gain (loss) on investments (54,302)
Accumulated net unrealized appreciation (depreciation)
on investments (including $3,438 net unrealized
appreciation on financial futures)--Note 3...... 2,500,507
-----------
NET ASSETS..................................................................... $52,335,118
===========
</TABLE>
NET ASSET VALUE PER SHARE
-------------------------
<TABLE>
<CAPTION>
Class A Class B Class C Class R
----------- ---------- -------- -----------
<S> <C> <C> <C> <C>
Net Assets..................................... $18,095,806 $1,083,898 $152,645 $33,002,769
Shares Outstanding............................. 1,467,941 87,950 12,358 2,677,477
NET ASSET VALUE PER SHARE...................... $12.33 $12.32 $12.35 $12.33
====== ====== ====== ======
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus Premier Limited Term Municipal Fund
- ------------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1997 (Unaudited)
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $1,216,880
EXPENSES: Management fee--Note 2(a)................... $120,400
Distribution and service fees--Note 2(b).... 26,174
Loan commitment fees--Note 4................ 116
--------
Total Expenses........................... 146,690
----------
INVESTMENT INCOME--NET.................................................... 1,070,190
----------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 3:
Net realized gain (loss) on investments.... $ (7,725)
Net realized gain (loss) on financial futures (45,913)
---------
Net Realized Gain (Loss)................. (53,638)
Net unrealized appreciation (depreciation)
on investments (including $3,438 net unrealized
appreciation on financial futures)....... 1,093,296
----------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... 1,039,658
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $2,109,848
==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term 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.................................................. $ 1,070,190 $ 1,824,128
Net realized gain (loss) on investments................................ (53,638) 247,519
Net unrealized appreciation (depreciation) on investments.............. 1,093,296 586,517
----------- -----------
Net Increase (Decrease) in Net Assets Resulting from Operations.. 2,109,848 2,658,164
----------- -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net:
Class A shares...................................................... (381,415) (814,054)
Class B shares...................................................... (17,862) (20,860)
Class C shares...................................................... (2,210) (8,596)
Class R shares...................................................... (668,703) (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.................................................. (1,297,921) (1,927,792)
----------- -----------
BENEFICIAL INTEREST TRANSACTIONS:
Net proceeds from shares sold:
Class A shares...................................................... 1,101,999 975,607
Class B shares...................................................... 577,492 62,023
Class C shares...................................................... 99,100 584,907
Class R shares...................................................... 8,083,256 10,926,144
Dividends reinvested:
Class A shares...................................................... 353,105 673,205
Class B shares...................................................... 14,373 17,207
Class C shares...................................................... 2,814 7,047
Class R shares...................................................... 293,292 263,230
Cost of shares redeemed:
Class A shares...................................................... (982,355) (3,411,701)
Class B shares...................................................... (72,317) (37,406)
Class C shares...................................................... (25,109) (673,079)
Class R shares...................................................... (1,611,949) (3,698,970)
----------- -----------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 7,833,701 5,688,214
----------- -----------
Total Increase (Decrease) in Net Assets....................... 8,645,628 6,418,586
NET ASSETS:
Beginning of Period.................................................... 43,689,490 37,270,904
----------- -----------
End of Period.......................................................... $52,335,118 $43,689,490
=========== ===========
(Distributions in excess of investment income--net)........................ $ (23,994) $ (23,994)
----------- -----------
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term 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................................................................ 89,927 81,262
Shares issued for dividends reinvested..................................... 28,773 55,995
Shares redeemed............................................................ (80,273) (284,307)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 38,427 (147,050)
========= =========
Class B
-------
Shares sold................................................................ 47,146 5,189
Shares issued for dividends reinvested..................................... 1,173 1,431
Shares redeemed............................................................ (5,879) (3,122)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 42,440 3,498
========= =========
Class C
-------
Shares sold................................................................ 8,081 48,670
Shares issued for dividends reinvested..................................... 229 584
Shares redeemed............................................................ (2,048) (55,812)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 6,262 (6,558)
========= =========
Class R
-------
Shares sold................................................................ 660,876 908,731
Shares issued for dividends reinvested..................................... 23,909 21,887
Shares redeemed............................................................ (131,637) (308,882)
--------- ---------
Net Increase (Decrease) in Shares Outstanding... 553,148 621,736
========= =========
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class A Shares
------------------------------------------------------------------------
Six Months Ended Year Ended June 30,
December 31, 1997 ---------------------------------------------------
PER SHARE DATA: (Unaudited) 1997 1996 1995(1,2) 1994(1,2) 1993(2)
----------------- ------ ------ --------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period..... $12.12 $11.89 $11.82 $11.66 $12.61 $12.21
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net.................... .27 .54 .54 .53 .54(3) .60(3)
Net realized and unrealized gain (loss)
on investments........................ .27 .26 .08 .19 (.41) .68
------ ------ ------ ------ ------ ------
Total from Investment Operations......... .54 .80 .62 .72 .13 1.28
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net..... (.27) (.54) (.55) (.53) (.54) (.60)
Dividends from net realized gain on investments (.06) (.03) -- (.03) (.54) (.28)
------ ------ ------ ------ ------ ------
Total Distributions...................... (.33) (.57) (.55) (.56) (1.08) (.88)
------ ------ ------ ------ ------ ------
Net asset value, end of period........... $12.33 $12.12 $11.89 $11.82 $11.66 $12.61
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(4).................. 8.79%(5) 6.92% 5.25% 6.37% .96% 10.95%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets.. .75%(5) .75% .75% .75% .76%(6) 1.03%(6)
Ratio of net investment income to
average net assets.................... 4.31%(5) 4.52% 4.53% 4.59% 4.43% 4.91%
Portfolio Turnover Rate.................. 5.37%(7) 30.50% 55.07% 61.00% 57.00% 103.00%
Net Assets, end of period (000's Omitted) $18,096 $17,323 $18,751 $21,375 $23,715 $18,251
<FN>
- ----------------
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager. Prior to April 4,
1994, The Boston Company Advisors, Inc. served as the Fund's investment
adviser.
(2) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and the Fund began offering the Institutional Class and Investment
Class of shares. Effective April 4, 1994 the Retail and Institutional
Classes were reclassified as a single class of shares known as the Investor
shares. Effective October 17, 1994, the Investor shares were redesignated
Class A shares.The Financial Highlights for the year ended June 30, 1995 are
based upon a Class A (formerly Investor) share outstanding. The amounts
shown for the year ended June 30, 1994 were calculated using the performance
of a Retail shares outstanding from July 1, 1993 to April 3, 1994, and the
performance of an Investor share outstanding from April 4, 1994 to June 30,
1994. The Financial Highlights for the year ended June 30, 1993 and prior
years are based upon a Retail share outstanding.
(3) Net investment income before waiver of fees and/or reimbursement of expenses
by the investment adviser and/or custodian and/or transfer agent for the
years ended June 30, 1994 and 1993 were $.49 and $.59, respectively.
(4) Exclusive of sales load.
(5) Annualized.
(6) Annualized expense ratios before voluntary waiver of fees and/or
reimbursement of expenses by the investment adviser and/or custodian and/or
transfer agent for the years ended June 30, 1994 and 1993 were 1.09% and
1.11% respectively.
(7) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class B Shares
--------------------------------------------------------
Six Months Ended Year Ended June 30, Period Ended
December 31, 1997 ------------------- June 30,
PER SHARE DATA: (Unaudited) 1997 1996 1995(1)
----------------- ------ ------ ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................. $12.12 $11.89 $11.82 $11.32
------ ------ ------ ------
Investment Operations:
Investment income--net................................ .23 .48 .48 .24
Net realized and unrealized gain (loss) on investments .26 .26 .07 .50
------ ------ ------ ------
Total from Investment Operations..................... .49 .74 .55 .74
------ ------ ------ ------
Distributions:
Dividends from investment income--net................. (.23) (.48) (.48) (.24)
Dividends from net realized gain on investments...... (.06) (.03) -- --
------ ------ ------ ------
Total Distributions.................................. (.29) (.51) (.48) (.24)
------ ------ ------ ------
Net asset value, end of period....................... $12.32 $12.12 $11.89 $11.82
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)............................... 8.07%(3) 6.38% 4.71% 6.59%(4)
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.. 3.74%(3) 4.01% 3.98% 4.09%(3)
Portfolio Turnover Rate............................... 5.37%(4) 30.50% 55.07% 61.00%
Net Assets, end of period (000's Omitted)............. $1,084 $551 $500 $85
<FN>
- -------------------
(1) The Fund commenced selling Class B shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class C Shares
--------------------------------------------------------
Six Months Ended Year Ended June 30, Period Ended
December 31, 1997 ------------------- June 30,
PER SHARE DATA: (Unaudited) 1997 1996 1995(1)
----------------- ------ ------ ----------
<S> <C> <C> <C> <C>
Net asset value, beginning of period................. $12.14 $11.90 $11.82 $11.32
------ ------ ------ ------
Investment Operations:
Investment income--net................................ .24 .49 .48 .24
Net realized and unrealized gain (loss) on investments .27 .27 .08 .50
------ ------ ------ ------
Total from Investment Operations..................... .51 .76 .56 .74
------ ------ ------ ------
Distributions:
Dividends from investment income--net................. (.24) (.49) (.48) (.24)
Dividends from net realized gain on investments...... (.06) (.03) -- --
------ ------ ------ ------
Total Distributions.................................. (.30) (.52) (.48) (.24)
------ ------ ------ ------
Net asset value, end of period....................... $12.35 $12.14 $11.90 $11.82
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2)............................... 8.31%(3) 6.50% 4.81% 6.59%(4)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets............... 1.24%(3) 1.27% 1.24% 1.25%(3)
Ratio of net investment income to average net assets.. 3.81%(3) 4.17% 4.00% 4.09%(3)
Portfolio Turnover Rate............................... 5.37%(4) 30.50% 55.07% 61.00%
Net Assets, end of period (000's Omitted)............. $153 $74 $150 $84
<FN>
- ---------------------
(1) The Fund commenced selling Class C shares on December 28, 1994.
(2) Exclusive of sales load.
(3) Annualized.
(4) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
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.
<TABLE>
<CAPTION>
Class R Shares
----------------------------------------------------------------------------
Six Months Ended Year Ended June 30, Period Ended
December 31, 1997 ---------------------------------------- June 30,
PER SHARE DATA: (Unaudited) 1997 1996 1995(1,2) 1994(1,2) 1993(2)
----------------- ------ ------ --------- --------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period. $12.12 $11.89 $11.82 $11.66 $12.61 $12.21
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net................ .28 .57 .57 .56 .58(3) .25(3)
Net realized and unrealized gain (loss)
on investments.................... .27 .26 .08 .19 (.43) .40
------ ------ ------ ------ ------ ------
Total from Investment Operations..... .55 .83 .65 .75 .15 .65
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net. (.28) (.57) (.58) (.56) (.56) (.25)
Dividends from net realized gain
on investments.................... (.06) (.03) -- (.03) (.54) --
------ ------ ------ ------ ------ ------
Total Distributions.................. (.34) (.60) (.58) (.59) (1.10) (.25)
------ ------ ------ ------ ------ ------
Net asset value, end of period....... $12.33 $12.12 $11.89 $11.82 $11.66 $12.61
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(4).............. 9.05%(5) 7.17% 5.51% 6.64% 1.08% 5.36%(7)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .50%(5) .50% .50% .50% .50%(6) .68%(5,6)
Ratio of net investment income
to average net assets............. 4.56%(5) 4.77% 4.77% 4.84% 4.69% 4.82%(5)
Portfolio Turnover Rate.............. 5.37%(7) 30.50% 55.07% 61.00% 57.00%(7) 103.00%(7)
Net Assets, end of period (000's Omitted) $33,003 $25,741 $17,870 $16,727 $12,581 $8,974
<FN>
- --------------------
(1) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager. From April 4, 1994 through October 16, 1994,
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
adviser.
(2) The Fund commenced selling Investment Class shares on February 1, 1993.
Effective April 4, 1994 the Investment Class was redesignated as the Trust
shares. Effective October 17, 1994 Trust shares were redesignated Class R
shares. The table above is based upon an Investment share outstanding from
February 1, 1993 to April 3, 1994 and a Trust share outstanding from April
4, 1994 to October 16, 1994.
(3) Net investment income before waiver of fees and/or reimbursement of expenses
by the investment adviser and/or custodian and/or transfer agent for the
year ended June 30, 1994 and for the period ended June 30, 1993 were $.54
and $.24, respectively.
(4) Exclusive of sales load.
(5) Annualized.
(6) Annualized expense ratios before voluntary waiver of fees and
reimbursement of expenses by the investment adviser and/or custodian and/or
transfer agent for the year ended June 30, 1994 and for the period ended
June 30, 1993 were .83% and .93%, respectively.
(7) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Premier Limited Term Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Limited Term Municipal Fund (the "Fund") is a series of The
Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is registered under
the Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering seven series including the Fund. The Fund's investment objective is to
maximize current income exempt from Federal income taxes consistent with the
prudent risk of capital by investing in municipal securities which are of
investment-grade quality and intermediate maturities. The Dreyfus Corporation
("Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. ("Mellon Bank").
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.
<PAGE>
Dreyfus Premier Limited Term Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(c) Financial futures: The Fund may invest in financial futures contracts in
order to gain 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) 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
$25,0000 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 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.
(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
<PAGE>
Dreyfus Premier Limited Term Municipal Fund
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
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 $22,151, $2,392
and $290 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 $1,196 and $145 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 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
December 31, 1997, amounted to $10,077,210 and $2,468,450, respectively.
At December 31, 1997, accumulated net unrealized appreciation on investments
was $2,500,507, consisting of $2,505,195 gross unrealized appreciation and
$4,688 gross unrealized depreciation.
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 based on prevailing
market rates 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
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. 347/647SA9712
<PAGE>
Dreyfus
BASIC New York
Municipal
Money Market Fund
Semi-Annual
Report
December 31, 1997
<PAGE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
LETTER TO SHAREHOLDERS
Dear Shareholder:
We are pleased to report the performance for Dreyfus BASIC New York
Municipal Money Market Fund for the six months ended December 31, 1997.
For the period, your Fund produced an annualized yield of 3.18%, and
after taking into account the effect of compounding, the annualized
effective yield was 3.22%.* Dividends earned were exempt from Federal,
State of New York and New York City personal income taxes, although some
income may be subject to the Federal Alternative Minimum Tax (AMT) for
certain shareholders.
ECONOMIC REVIEW
Inflation seems to have lost its terrors. 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 fourth quarter of 1997, the rate
of increase in consumer prices 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 of just 4.6%, a 24-year low as of the fourth
quarter of 1997. 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
optimistic 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 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 consequences for the Fund.
The trouble in Asia shows the close and sensitive relationship between
our economy and the economies around the globe.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
New York State's debt rating was raised in September from A- to A by
Standard & Poor's, reflecting various financial positives, including a
very strong surplus of $1.9 billion on a GAAP basis (General Accepted
Accounting Principles).
<PAGE>
This surplus reduced the accumulated budget deficit to 3% of
expenditures. Income per capita remains high at 119% of the national
average. Wall Street will continue to be a major factor in state
finances as it represents an outsized portion of sector income relative
to other states. Standard & Poor's, however, noted that the State will
have difficulty improving its credit rating any further in the near
future due to a $6.1 billion approved tax reduction (property taxes,
etc.) combined with the reduction in personal income tax and a major
education program enhancement. These conditions will make balancing the
budget a challenge, especially if the economy experiences a downturn.
Furthermore, the debt level remains high at $1,800 per capita and 6.1%
of personal income.
In general, short-term tax-exempt yields were higher in 1997 than in
the previous year. In 1996, the Fed was easing monetary policy and the
marketplace was anticipating additional easings. However in March 1997,
the Fed tightened monetary policy, which helped keep tax-exempt money
market yields high. The industry-average 7-day tax-exempt yield was at
3.38% as of December 31, 1997, as published by IBC Financial Data,
compared to 3.17% at the end of 1996.
Throughout 1997, there was strong investor demand for municipal money
market securities. High relative yields coupled with increased investor
wealth resulted in an increase in tax-exempt money fund assets by nearly
12% from $140 billion to almost $160 billion last year.
Increased supply also contributed to higher yields. New issue supply
of tax-exempt money market securities increased by more than 40% to $28
billion and the volume of new synthetic tax-exempt floating-rate
securities reached more than $20 billion. The relative yield ratio
between tax-exempt and taxable money market securities increased with
the One-year Bond Buyer Note Index versus the One-year Treasury Bill
above 69% as of the end of 1997. Within the one-year tax-exempt notes
sector, yields ranged between 3.50% and 3.95% for the six months ended
December 31, 1997, as published by IBC Financial Data. The Fund's
average maturity fluctuated within a range of 32-61 days throughout the
reporting period and averaged 50 days.
Included in this report is a series of detailed statements about your
Fund's holdings and its financial condition. We hope they are
informative. Please know that we appreciate greatly your continued
confidence in the Fund and in The Dreyfus Corporation.
Very truly yours,
/s/ Angela Deni
Angela Deni
Portfolio Manager
January 15, 1998
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
STATEMENT OF INVESTMENTS DECEMBER 31, 1997 (UNAUDITED)
PRINCIPAL
TAX EXEMPT INVESTMENTS--100.0% AMOUNT VALUE
- ------------------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
NEW YORK--99.9%
Albany Industrial Development Agency, IDR, VRDN
(Newkirk Products Inc., Project)
4.25%, Series A (LOC; Fleet Bank) (a,b)................................... $ 1,620,000 $ 1,620,000
Babylon Industrial Development Agency, RRR, VRDN
(Equity Babylon Project) 5% (LOC; Union Bank of Switzerland) (a,b).......... 8,500,000 8,500,000
Broome County Industrial Development Agency, IDR, Refunding, VRDN
(Bing Realty Co. Project) 3.90% (LOC; Meridian Bank Corp.) (a,b)............ 1,850,000 1,850,000
Chemung County Industrial Development Agency, Civic Facility Revenue, VRDN
(Arnot Ogden Medical Center) 4.05% (LOC; Chase Manhattan Bank) (a,b)........ 2,565,000 2,565,000
Connetquot Central School District, TAN 4.25%, 6/25/98........................ 5,500,000 5,508,927
Erie County, RAN 4.50%, Series A, 6/25/98
(LOC; Union Bank of Switzerland) (a)........................................ 3,000,000 3,009,116
Erie County Water Authority, Water Revenue, VRDN
3.55%, Series A (Insured; AMBAC and SBPA; National Bank of Australia) (b)... 2,000,000 2,000,000
Franklin County Industrial Development Agency, IDR, VRDN
(Kes Chateaugay LP Project)
4.25%, Series A (LOC; Bank of Tokyo-Mitsubishi) (a,b)..................... 500,000 500,000
Great Neck North Water Authority, Water System Revenue, Refunding, VRDN
3.70%, Series A (Insured; FGIC and SBPA; FGIC) (b).......................... 8,800,000 8,800,000
Jefferson County Industrial Development Agency, IDR, VRDN
(Watertown-Carthage IV) 3.70% (LOC; First National Bank of Chicago) (a,b)... 100,000 100,000
Montgomery Industrial Development Agency, IDR, VRDN (Service Merchandise Co.)
3.80% (LOC; Canadian Imperial Bank of Commerce) (a,b)....................... 200,000 200,000
Municipal Assistance Corporation:
CP 3.80%, Series F, 1/21/98 (Insured; AMBAC and SBPA:
Bank of Nova Scotia and National Westminster Bank)........................ 8,000,000 8,000,000
Refunding 4.20%, Series D, 7/1/98 (Insured; AMBAC).......................... 5,025,000 5,036,340
VRDN 3.55%, Series K-1 (LOC; Westdeutsche Landesbank) (a,b)................. 9,200,000 9,200,000
Nassau County:
General Improvement:
5.125%, Series V, 3/1/98 (Insured; AMBAC)................................. 3,000,000 3,007,050
4.80%, Series X, 11/1/98 (Insured; AMBAC)................................. 5,760,000 5,811,613
TAN:
4.25%, Series A, 3/31/98.................................................. 4,000,000 4,005,086
4.25%, Series B, 8/31/98.................................................. 4,000,000 4,012,148
New York City:
CP 3.75%, Series H-4, 2/18/98 (Insured; AMBAC and LOC; Krediet Bank) (a).... 2,000,000 2,000,000
VRDN:
3.70%, Series A-6 (LOC; Landesbank Hessen) (a,b).......................... 2,530,000 2,530,000
4%, Series A-10 (LOC; Morgan Guaranty Trust Co.)(a,b)..................... 3,500,000 3,500,000
New York City Health and Hospital Corporation, Revenue, VRDN (Health Systems)
3.50%, Series A (LOC; Morgan Guaranty Trust Co.) (a,b)...................... 12,000,000 12,000,000
3.50%, Series D (LOC; Bank of Nova Scotia) (a,b)............................ 5,200,000 5,200,000
3.55%, Series B (LOC; Canadian Imperial Bank of Commerce) (a,b)............. 5,000,000 5,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1997 (UNAUDITED)
PRINCIPAL
TAX EXEMPT INVESTMENTS--(CONTINUED) AMOUNT VALUE
- ------------------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
NEW YORK (CONTINUED)
New York City Housing Development Corporation, VRDN:
MFMR:
(Columbus)
4.05%, Series A (LOC; Citibank) (a,b)................................... $ 1,000,000 $ 1,000,000
(West 89th Street)
3.60%, Series A (LOC; Midland Bank) (a,b)............................... 12,500,000 12,500,000
Mortgage Revenue (Columbus Apartments)
3.55%, Series A (LOC; Federal National Mortgage Association) (a,b)........ 2,970,000 2,970,000
Multi-Family Rental Housing Revenue (Monterey)
3.55%, Series A (LOC; Federal National Mortgage Association) (a,b)........ 5,000,000 5,000,000
New York City Industrial Development Agency, VRDN:
Civic Facility Revenue (National Audobon Society)
4.75% (LOC; Swiss Bank Corp.) (a,b)....................................... 1,400,000 1,400,000
IDR (Brooklyn Navy Yard Cogen) 4.25%, Series A (LOC; Bank of America) (a,b). 2,400,000 2,400,000
New York City Municipal Water Finance Authority, Water and Sewer
Systems Revenue:
CP:
3.80% Series 1, 3/10/98 (LOC: Bayerische Landesbank, Landesbank Hessen
and Westdeutsche Landesbank) (a)...................................... 4,000,000 4,000,000
3.80% Series 5A, 3/10/98 (LOC: Bayerische Landesbank, Landesbank Hessen
and Westdeutsche Landesbank) (a)...................................... 6,000,000 6,000,000
VRDN:
4.15%, Series A (Insured; FGIC and SBPA; FGIC) (b)........................ 2,100,000 2,100,000
5%, Series G (Insured; FGIC) (b).......................................... 8,600,000 8,600,000
New York City Trust, Cultural Resource Revenue, Refunding, VRDN
(American Museum of National History)
3.55%, Series A (Insured; MBIA and SBPA; Credit Suisse) (b)................. 3,800,000 3,800,000
New York State, CP
3.60%, 2/12/98 (LOC; Westdeutsche Landesbank) (a)........................... 5,600,000 5,600,000
New York State Bridge Authority, Revenue, Refunding 5%, 1/1/98................ 2,260,000 2,260,000
New York State Dormitory Authority, Revenues:
CP (Memorial Sloan Kettering)
3.65%, 1/21/98 (LOC; Morgan Guaranty Trust Co.) (a)....................... 4,000,000 4,000,000
Refunding (New York University)
4%, Series A, 7/1/98 (Insured; MBIA)...................................... 4,000,000 4,004,181
VRDN:
(New York Public Library)
3.50%, Series B (LOC; Canadian Imperial Bank of Commerce) (a,b)......... 3,900,000 3,900,000
(Metropolitan Museum of Art):
3.50%, Series A (Guaranty; Metropolitan Museum of Art) (b).............. 3,200,000 3,200,000
3.50%, Series B (Guaranty; Metropolitan Museum of Art) (b).............. 2,050,000 2,050,000
New York State Energy, Research and Development Authority:
PCR:
(LILCO Project)
3.60%, Series A, 3/1/98 (LOC; Deutsche Bank) (a)........................ 3,000,000 3,000,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1997 (UNAUDITED)
PRINCIPAL
TAX EXEMPT INVESTMENTS--(CONTINUED) AMOUNT VALUE
- ------------------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
NEW YORK (CONTINUED)
PCR (continued):
(New York State Electric and Gas):
3.65%, Series A, 3/15/98 (LOC; Morgan Bank) (a)......................... $ 2,000,000 $ 2,000,000
3.80%, Series B, 10/15/98 (LOC; Union Bank of Switzerland) (a).......... 3,250,000 3,250,000
VRDN:
Electric Facilities Revenue (LILCO Project)
3.85%, Series A (LOC; Toronto-Dominion Bank) (a,b)...................... 500,000 500,000
Gas Facilities Revenue (Brooklyn Union Gas Project):
3.60%, Series A-2 (Insured; MBIA and SBPA;
United Bank of Switzerland) (b)....................................... 5,300,000 5,300,000
3.70%, Series A-1 (Insured; MBIA and SBPA;
United Bank of Switzerland) (b)....................................... 4,900,000 4,900,000
PCR:
(New York State Electric and Gas)
5% (LOC; Union Bank of Switzerland) (a,b)............................. 500,000 500,000
(Central Hudson Gas and Electric)
3.95%, Series B (LOC; Deutsche Bank) (a,b)............................ 5,700,000 5,700,000
New York State Environmental Facilities Corporation, SWDR, Refunding, CP
(General Electric Co. Project)
3.55%, Series A, 3/9/98 (LOC; General Electric Co.) (a)..................... 8,050,000 8,050,000
New York State Environment Quality, CP
3.75%, Series A, 2/12/98 (LOC: Bayerische Landesbank and
Landesbank Hessen) (a).................................................... 8,000,000 8,000,000
New York State Housing Finance Agency, VRDN:
HR (East 84th Streest) 3.60%, Series A (LOC; Fleet Bank) (a,b).............. 4,100,000 4,100,000
Revenue (250 West 50th Street) 3.60%, Series A (LOC; Fleet Bank) (a,b)...... 3,000,000 3,000,000
New York State Local Governmental Assistance Corporation, VRDN:
3.50%, Series B (LOC; Credit Suisse) (a,b).................................. 6,000,000 6,000,000
3.50%, Series F (LOC; Toronto-Dominion Bank) (a,b).......................... 4,100,000 4,100,000
4.05%, Series D (LOC; Societe Generale) (a,b)............................... 5,800,000 5,800,000
4.05%, Series E (LOC; Canadian Imperial Bank of Commerce) (a,b)............. 2,000,000 2,000,000
New York State Medical Care Facilities Finance Agency, Revenue:
Prerefunded (Hospital and Nursing Home)
8.30%, Series A, 2/15/98 (Escrowed in; U.S. Government Securities)........ 15,000,000 15,382,191
VRDN (Pooled Equipment Loan Program II)
3.65%, Series A (LOC; Chase Manhattan Bank) (a,b)......................... 3,700,000 3,700,000
New York State Power Authority, Refunding, Prerefunded
7.875%, Series V, 1/1/98 (Escrowed in; U.S. Government Securities and
Insured; MBIA)............................................................ 1,000,000 1,020,000
New York State Thruway Authority, Highway and Bridge Trust Fund
5%, Series A, 4/1/98 (Insured; AMBAC)....................................... 1,705,000 1,800,604
New York State Urban Development Corporation, Revenue, Prerefunded
(Correctional Facilities):
7.50%, Series C, 1/1/98 (Escrowed in; U.S. Government Securities and
Insured; AMBAC)......................................................... 2,200,000 2,244,000
7.75%, Series C, 1/1/98 (Escrowed in; U.S. Government Securities and
Insured; AMBAC)......................................................... 1,200,000 1,224,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
STATEMENT OF INVESTMENTS (CONTINUED) DECEMBER 31, 1997 (UNAUDITED)
PRINCIPAL
TAX EXEMPT INVESTMENTS--(CONTINUED) AMOUNT VALUE
- ------------------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
NEW YORK (CONTINUED)
Niagara Falls Bridge Commission, Toll Revenue, VRDN
3.55%, Series A (Insured; FGIC and SBPA; Credit Locale De France) (b)....... $ 6,000,000 $ 6,000,000
Onondaga County Industrial Development Agency, IDR, VRDN
(First Republic Corp. American)
3.65% (LOC; Chase Manhattan Bank) (a,b)..................................... 600,000 600,000
Town of Poughkeepsie, BAN 4%, Series A, 2/20/98............................... 3,100,000 3,101,237
Rensselaer County Industrial Development Agency, Civic Facility, Revenue,
VRDN (Polytech Institute Project) 4.10%, Series A
(LOC; Rennselaer Polytech Institute) (b).................................. 4,400,000 4,400,000
Saint Lawrence Industrial Development Agency, Environment Improvement Revenue,
VRDN 3.75% (LOC; Royal Bank of Canada) (a,b)................................ 1,100,000 1,100,000
Schenectady Industrial Development Agency, VRDN (Union College Project)
4.10%, Series A (b)......................................................... 5,980,000 5,980,000
Suffolk County Industrial Development Agency, Civic Facility Revenue, VRDN
(Suffolk Child Care Center Project) 3.60% (LOC; Barclays Bank) (a,b)........ 3,200,000 3,200,000
Triborough Bridge and Tunnel Authority, Revenue, Refunding, Prerefunded
7.50%, Series M, 1/1/98 (Insured; FGIC)..................................... 4,000,000 4,080,000
Westchester County 4.50%, 11/15/98............................................ 8,120,000 8,172,578
Yonkers Industrial Development Agency, Civil Facility Revenue, VRDN
(Consumers Union Facility)
3.50% (Insured; AMBAC and SBPA; Credit Locale De France) (b)................ 3,500,000 3,500,000
U.S. RELATED--.1%
Puerto Rico Industrial Medical and Environmental Pollution Control Facility
Finance Authority, Revenue, VRDN
(AGMEF Project) 4.15% (LOC; Bank of Tokyo-Mitsubishi) (a,b)................. 200,000 200,000
------------
TOTAL INVESTMENTS (cost $310,644,071)......................................... $310,644,071
============
</TABLE>
<PAGE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
<TABLE>
SUMMARY OF ABBREVIATIONS
- ------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MFMR Multi-Family Mortgage Revenue
BAN Bond Anticipation Notes PCR Pollution ControlRevenue
CP Commercial Paper RAN Revenue Anticipation Notes
FGIC Financial Guaranty Insurance Company RRR Resources Recovery Revenue
HR Hospital Revenue SBPA Standby Bond Purchase Agreement
IDR Industrial Development Revenue SWDR Solid Waste Disposal Revenue
LOC Letter of Credit TAN Tan Anticipation Notes
MBIA Municipal Bond Investors Assurance VRDN Variable Rate Demand Notes
Insurance Corporation
</TABLE>
<TABLE>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
- ------------------------------------------------------------------------
<CAPTION>
FITCH (C) OR MOODY'S OR STANDARD & POOR'S PERCENTAGE OF VALUE
- ------ ------- ----------------- -------------------
<S> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 81.4%
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 17.6
Not Rated (f) Not Rated (f) Not Rated (f) 1.0
------
100.0%
======
<FN>
NOTES TO STATEMENT OF INVESTMENTS:
- ------------------------------------------------------------------------
(a) Secured by letters of credit. At December 31, 1997, 54.9% of the
Fund's net assets are backed by letters of credit is issued by
domestic banks, foreign banks, corporations and government agencies.
(b) Securities payable on demand. The interest rate, which is subject to
change, is based upon bank prime rates or an index of market
interest rates.
(c) Fitch currently provides creditworthiness information for a limited
number of investments.
(d) P1 and A1 are the highest ratings assigned tax exempt commercial
paper by Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond
ratings of the issuers.
(f) Securities which, while not rated by Fitch, Moody's and Standard &
Poor's have been determined by the Manager to be of comparable
quality to those rated securities in which the Fund may invest.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
STATEMENT OF ASSETS AND LIABILITIES DECEMBER 31, 1997 (UNAUDITED)
COST VALUE
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments.. $310,664,071 $310,644,071
Cash..................................................... 6,937,628
Interest receivable...................................... 2,389,222
------------
319,970,921
------------
LIABILITIES: Due to The Dreyfus Corporation........................... 117,523
Interest payable--Note 3................................. 1,188
------------
118,711
------------
NET ASSETS....................................................................... $319,852,210
============
REPRESENTED BY: Paid-in capital.......................................... $319,852,220
Accumulated net realized gain (loss) on investments...... (10)
------------
NET ASSETS....................................................................... $319,852,210
============
SHARES OUTSTANDING
(unlimted number of shares of Beneficial Interest authorized).................... 319,852,220
NET ASSET VALUE, offering and redemption price per share......................... $1.00
=====
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
STATEMENT OF OPERATIONS SIX MONTHS ENDED DECEMBER 31, 1997 (UNAUDITED)
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income.......................................... $5,440,996
EXPENSES: Management fee--Note 2................................... $674,280
Interest expense--Note 3................................. 1,273
--------
Net Expenses........................................ 675,553
----------
INVESTMENT INCOME--NET, representing net increase in net assets
resulting from operations.................................................. $4,765,443
==========
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, 1997 YEAR ENDED
(UNAUDITED) JUNE 30, 1997
----------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income--net.................................................... $ 4,765,443 $ 7,309,990
Net realized gain (loss) on investments................................... -- 1,425
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS........ 4,765,443 7,311,415
------------ ------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net.................................................... (4,765,443) (7,309,990)
Net realized gain on investments.......................................... (1,034) --
------------ ------------
TOTAL DIVIDENDS........................................................ (4,766,477) (7,309,990)
------------ ------------
BENEFICIAL INTEREST TRANSACTIONS: ($1.00 per share):
Net proceeds from shares sold............................................. 184,853,034 404,312,797
Dividends reinvested...................................................... 4,377,796 6,613,748
Cost of shares redeemed................................................... (141,921,580) (294,875,277)
------------ ------------
INCREASE (DECREASE) IN NET ASSETS FROM BENEFICIAL INTEREST TRANSACTIONS 47,309,250 116,051,268
------------ ------------
TOTAL INCREASE (DECREASE) IN NET ASSETS............................. 47,308,216 116,052,693
NET ASSETS:
Beginning of Period....................................................... 272,543,994 156,491,301
------------ ------------
End of Period............................................................. $319,852,210 $272,543,994
============ ============
</TABLE>
See notes to financial statements.
<PAGE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share
of Beneficial Interest outstanding, total investment return, ratios to
average net assets and other supplemental data for each period
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
Six Months Ended Period Ended Year Ended
December 31, 1997 Year Ended June 30, June 30, November 30,
----------------------------- ------------------
PER SHARE DATA: (Unaudited) 1997 1996(1) 1995(2)(3) 1994(2)(4) 1993(2) 1992(2)
---------- ----- ------ ---------- --------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value,
beginning of period.......... $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
------ ------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net.......... .016 .031 .031 .029 .012 .021 .031
------ ------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment
income--net.................. (.016) (.031) (.031) (.029) (.012) (.021) (.031)
------ ------ ------ ------ ------ ------ ------
Net asset value,
end of period................ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
====== ====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN............ 3.19%(5) 3.11% 3.14% 2.95% 1.23% 2.15% 3.11%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets.................. .45%(5) .41% .43% .60% .44%(5) .31% .32%
Ratio of net investment income
to average net assets........ 3.18%(5) 3.08% 3.43% 2.97% 2.12%(5) 2.13% 3.08%
Decrease reflected in above
expense ratios due to
undertakings by the Manager.. -- .04% .09% -- .53%(5) .98% .71%
Net Assets, end of period
(000's Omitted)............. $319,852 $272,544 $156,491 $21,739 $8,011 $9,356 $11,183
<FN>
- ------------------------------------------------------------------------
(1) Effective December 8, 1995, the Fund's Investor shares became a
single class Fund without a class designation.
(2) On February 1, 1993 existing shares of the Fund were designated the
Retail Class and the Fund began offering the Institutional Class and
Investment Class of shares. Effective April 4, 1994 the Retail and
Institutional Classes were reclassified as a single class of shares
known as Investor shares. The Financial Highlights for the year
ended June 30, 1995 are based upon an Investor share outstanding.
The amounts shown for the period ended June 30, 1994 were calculated
using the performance of a Retail share outstanding from December 1,
1993 to April 3, 1994, and the performance of an Investor share
outstanding from April 4, 1994 to June 30, 1994. The Financial
Highlights for the year ended November 30, 1993 and prior periods
are based upon a Retail Share outstanding.
(3) Effective October 17, 1994, The Dreyfus Corporation began serving as
the Fund's investment manager.
(4) The Fund changed its fiscal year end to June 30. Prior to this, the
Fund's fiscal year end was November 30. Prior to April 4, 1994, The
Boston Company Advisors, Inc. served as the Fund's investment
adviser. From April 4, 1994 through October 16, 1994, Mellon Bank,
N.A. served as the Fund's investment manager.
(5) Annualized.
</FN>
</TABLE>
<PAGE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus BASIC New York Municipal Money Market Fund (the "Fund") is a
series of The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust")
which is registered under the Investment Company Act of 1940 ("Act") as
a non-diversified open-end management investment company and operates as
a series company currently offering seven series including the Fund. The
Fund's investment objective is to provide a high level of current income
exempt from Federal income taxes and New York State and New York City
personal income taxes to the extent consistent with the preservation of
capital and the maintenance of liquidity by investing in high quality,
short-term municipal securities. The Dreyfus Corporation ("Manager")
serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. is
the distributor of the Fund's shares.
The Fund's financial statements are prepared in accordance with
generally accepted accounting principles which may require the use of
management estimates and assumptions. Actual results could differ from
those estimates.
(A) PORTFOLIO VALUATION: Investments in securities are valued at
amortized cost in accordance with Rule 2a-7 of the Act, which has been
determined by the Fund's Board of Trustees to represent the fair value
of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per
share of $1.00 for the Fund; the Fund has adopted certain investment,
portfolio valuation and dividend and distribution policies to enable it
to do so. There is no assurance, however, that the Fund will be able to
maintain a stable net asset value per share of $1.00.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities
transactions are recorded on a trade date basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the
accrual basis. Realized gain and loss from securities transactions are
recorded on the identified cost basis.
Cost of investments represents amortized cost.
(c) Concentration of risk: The Fund follows an investment policy of
investing primarily in municipal obligations of one state. Economic
changes affecting the state and certain of its public bodies and
municipalities may affect the ability of issuers within the state to pay
interest on, or repay principal of, municipal obligations held by the
Fund.
(D) DISTRIBUTION TO SHAREHOLDERS: It is the policy of the Fund to
declare dividends daily from investment income-net; such dividends are
paid monthly. Dividends from net realized capital gain are normally declared
and paid annually, but the Fund may make distributions on a more frequent basis
to comply with the distribution requirements of the Internal Revenue
Code. To the extent that net realized capital gain can be offset by
capital loss carryovers, if any, it is the policy of the Fund not to
distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue to
qualify as a regulated investment company, which can distribute tax
exempt dividends, by complying with the applicable provisions of the
Internal Revenue Code, and to make distributions of income and net
realized capital gain sufficient to relieve it from substantially all
Federal income and excise taxes.
At December 31, 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).
<PAGE>
DREYFUS BASIC NEW YORK MUNICIPAL MONEY MARKET FUND
- ------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (UNAUDITED) (CONTINUED)
NOTE 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH
AFFILIATES:
INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management
agreement with the Manager, the Manager provides or arranges for one or
more third parties and/or affiliates to provide investment advisory,
administrative, custody, fund accounting and transfer agency services to
the Fund. The Manager also directs the investments of the Fund in
accordance with its investment objective, policies and limitations. For
these services, the Fund is contractually obligated to pay the Manager a
fee, calculated daily and paid monthly, at the annual rate of .45% of
the value of the Fund's average daily net assets. Out of its fee, the
Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, fees and expenses of non-interested Trustees (including
counsel fees) and extraordinary expenses. In addition, the Manager is
required to reduce its fee in an amount equal to the Fund's allocable
portion of fees and expenses of the non-interested Trustees (including
counsel). Each trustee receives $27,000 per year, $1,000 for each Board
meeting attended and $750 for each Audit Committee meeting attended and
is reimbursed for travel and out-of-pocket expenses. The Chairman of the
Board receives an additional annual fee of $25,000 per year. These fees
pertain to the following funds: The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds
Trust. These fees and expenses are allocated to each series based on net
assets. Amounts required to be paid directly 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.
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100
million line of credit primarily to be utilized for temporary or
emergency purposes, including the financing of redemptions. Interest is
charged to the Fund at rates which are related to the Federal Funds rate
in effect at the time of borrowings.
The average daily amount of borrowings outstanding during the period
ended December 31, 1997 was approximately $41,400, with a related
weighted average annualized interest rate of 6.09%.
<PAGE>
[LOGO]
DREYFUS BASIC NEW YORK
MUNICIPAL MONEY MARKET FUND
200 Park Avenue
New York, NY 10166
MANAGER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
CUSTODIAN
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 316SA9712
<PAGE>
Dreyfus
BASIC
California Municipal
Money Market Fund
Semi-Annual
Report
December 31, 1997
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report the performance for Dreyfus BASIC California
Municipal Money Market Fund for the six months ended December 31, 1997. For the
period, your Fund produced an annualized yield of 3.15%, and after taking into
account the effect of compounding, the annualized effective yield was 3.20%.*
Dividends earned were exempt from Federal and State of California personal
income taxes, although some income may be subject to the Federal Alternative
Minimum Tax (AMT) for certain shareholders.
ECONOMIC REVIEW
Inflation seems to have lost its terrors. 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 fourth quarter of 1997, the rate of increase in consumer prices 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 of just 4.6%, a 24-year low as of the fourth
quarter of 1997. 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 optimistic 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 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 consequences for
the Fund. The trouble in Asia shows the close and sensitive relationship between
our economy and the economies around the globe.
MARKET ENVIRONMENT/PORTFOLIO ACTIVITY
The California economy has continued to diversify and expand at a pace beyond
the national growth rate. For the six-month period ended December 31, 1997,
<PAGE>
revenues collected were slightly above-budget, creating a small operating *
surplus that amounted to 4% of revenues. However, the State still has not
addressed its accumulated structural deficit of approximately $2.1 billion. Due
to the sizable expenditures for education and public safety and limited revenue
generation flexibility, we believe it is unlikely the State will develop any
sizable budget surplus in the foreseeable future. Because of these limitations,
we expect that the credit quality rating of the State in the foreseeable future
will remain stable in the "A" rated range despite the robust economy.
In general, short-term tax-exempt yields were higher in 1997 than in the
previous year. In 1996, the Fed was easing monetary policy and the marketplace
was anticipating additional easings. However in March 1997, the Fed tightened
monetary policy, which helped keep tax-exempt money market yields high. The
industry-average 7-day tax-exempt yield was 3.38% as of December 31, 1997, as
published by IBC Financial Data, compared to 3.17% at the end of 1996.
Throughout 1997, there was strong investor demand for municipal money market
securities. High relative yields coupled with increased investor wealth resulted
in an increase in tax-exempt money fund assets by nearly 12% from $140 billion
in 1996 to almost $160 billion last year.
Increased supply also contributed to higher yields. New issue supply of
tax-exempt money market securities increased by more than 40% to $28 billion and
the volume of new synthetic tax-exempt floating-rate securities reached more
than $20 billion. The relative yield ratio between tax-exempt and taxable money
market securities increased with the One-year Bond Buyer Note Index versus the
One-year Treasury Bill above 69% as of the end of 1997. Within the one-year
tax-exempt notes sector, yields ranged between 3.50% and 3.95% for the six
months ended December 31, 1997, as published by IBC Financial Data. The Fund's
average maturity fluctuated within a range of 32-61 days throughout the
reporting period and averaged 45 days.
Included in this report is a series of detailed statements about your Fund's
holdings and its financial condition. We hope they are informative. Please know
that we appreciate greatly your continued confidence in the Fund and in The
Dreyfus Corporation.
Very truly yours,
/S/ Angela Deni
Angela Deni
Portfolio Manager
January 15,
1998 New York, N.Y.
*Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Investments December 31, 1997 (Unaudited)
<TABLE>
<CAPTION>
Principal
Tax Exempt Investments--100.0% Amount Value
- ------------------------------------------------------------------------------ ----------- -----------
<S> <C> <C>
Abag Finance Authority For Non-Profit Corporations, VRDN
(University of California Project) 4% (LOC; Union Bank of Switzerland) (a,b) $ 1,000,000 $ 1,000,000
Alameda-Contra Costa School Finance Authority, COP, VRDN
(Capital Improvements Financing Project):
3.85%, Series C (LOC; National Westminster Bank) (a,b)................... 1,400,000 1,400,000
3.90%, Series A (LOC; Canadian Imperial Bank of Commerce) (a,b).......... 1,000,000 1,000,000
Alameda County, VRDN:
Industrial Development Authority, Revenue:
(Dicon Fiberoptics Inc., Project) 4.25%, Series A (LOC; Wells Fargo Bank) (a,b) 1,500,000 1,500,000
(Ply Properties Project) 4.25%, Series A (LOC; Wells Fargo Bank) (a,b)... 1,450,000 1,450,000
(Tool Family Partnership) 4%, Series A (LOC; Wells Fargo Bank) (a,b)..... 2,250,000 2,250,000
MFMR, Refunding (Quail)
3.35%, Series A (LOC; Federal National Mortgage Association) (a,b)....... 200,000 200,000
Anaheim Housing Authority, MFHR, VRDN (Bel Age Project)
3.40%, Series A (LOC; Federal National Mortgage Association) (a,b).......... 1,800,000 1,800,000
California Economic Development Finance Authority, IDR, VRDN
(Volk Enterprises Inc., Project) 3.90% (LOC; Harris Trust and Savings Bank) (a,b) 500,000 500,000
California Educational Facilities Authority, Revenue, VRDN
(Foundation for Educational Achievement)
4.15%, Series A (LOC; Banque Nationale de Paris) (a,b)...................... 2,500,000 2,500,000
California Health Facilities Finance Authority, Revenue:
Refunding (Catholic Health Care West)
4.50%, Series B, 7/1/98 (Insured; MBIA).................................. 2,340,000 2,347,523
VRDN:
(Catholic Health Care)
3.90%, Series B (Insured; MBIA and SBPA; Morgan Guaranty Trust Co.) (a) 300,000 300,000
(Pooled Loan Program)
3.50%, Series B (Insured; FGIC) (a)................................... 200,000 200,000
California Housing Finance Agency, Multi-Family Revenue, Refunding, VRDN
3.35%, Series C (LOC; Federal National Mortgage Association) (a,b).......... 1,000,000 1,000,000
California Pollution Control Financing Authority:
PCR (Chevron USA Inc. Project) 4%, 5/15/98 (LOC; Chevron USA Inc.) (b)...... 700,000 700,373
VRDN:
PCR, Refunding (Pacific Gas and Electric):
3.55%, Series B (LOC; Rabobank Nederland) (a,b)....................... 1,500,000 1,500,000
4.75%, Series C (LOC; Krediet Bank) (a,b)............................. 1,000,000 1,000,000
RRR (Burney Forest Products Project) 4.95% (LOC; Fleet Bank) (a,b)....... 1,700,000 1,700,000
California Public Works Board High Technical Facilities, LR, Prerefunded
(University of California) 8.125%, 2/1/98 (Escrowed in; U.S. Government Securities) 1,500,000 1,535,297
California Statewide Communities Development Authority, Revenue, VRDN:
COP (John Muir/ Mt. Diablo Health)
4.85%, (Insured; AMBAC and Liquidity Facility; Rabobank Nederland) (b)... 300,000 300,000
MFHR (Sunrise of Moraga)
4.10%, Series G (LOC; Commerz Bank) (a,b)................................ 755,000 755,000
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------------------------------ ------------ ------------
<S> <C> <C>
California Statewide Communities Development Corporation, Revenue, VRDN:
(Johanson Project)
3.85%, Series E (LOC; California State Teacher Retirement System) (a,b).. $ 825,000 $ 825,000
(Karcher Property Project) 3.85%, Series C (LOC; Bayerische Vereinsbank) (a,b) 500,000 500,000
(Peets Coffee) 3.85% (LOC; California State Teacher Retirement System) (a,b) 700,000 700,000
(Tri-Valley Growers) 3.85%, Series F (LOC; ABN-Amro Bank) (a,b)............. 300,000 300,000
Clovis Unified School District, TRAN 4.25%, 6/30/98............................ 2,000,000 2,004,273
Concord, MFMR, VRDN (Crossroads)
3.35%, Series B (LOC; Federal National Mortgage Association) (a,b).......... 1,000,000 1,000,000
Conejo Valley Union School District, TRAN 4.25%, 7/2/98........................ 2,000,000 2,004,320
Contra Costa County:
CP 3.65%, 1/27/98 (Liquidity Facility; Westdeutsche Landesbank)............. 500,000 500,000
MFMR, Housing Authority, VRDN (Lakeshore)
3.35%, Series A (LOC; Federal National Mortgage Association) (a,b)....... 925,000 925,000
Eastern Municipal Water District, Water and Sewer Revenue, Refunding, COP, VRDN
3.85%, Series B (Insured; FGIC and SBPA; Rabobank) (a)...................... 100,000 100,000
Glendale Revenue Reliance Development, VRDN (Public Parking)
4.125% (LOC; Barclays Bank) (a,b)........................................... 1,900,000 1,900,000
Hermosa Beach Parking Authority, Refunding, COP, VRDN
3.40% (LOC; Dresdner Bank) (a,b)............................................ 200,000 200,000
Imperial County, COP, VRDN (Capital Projects)
3.80% (LOC; Canadian Imperial Bank of Commerce) (a,b)....................... 2,000,000 2,000,000
Kern County, COP, VRDN (Kern Public Facilities Project)
3.35%, Series C (LOC; Union Bank of Switzerland) (a,b)...................... 600,000 600,000
3.35%, Series C (LOC; Union Bank of Switzerland) (a,b)...................... 300,000 300,000
Los Angeles, MFHR, VRDN (Masselin Manor)
3.90% (LOC; Bank of America) (a,b).......................................... 800,000 800,000
Los Angeles County, Pension Obligation, Refunding, VRDN
3.35%, Series C (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a).......... 600,000 600,000
Los Angeles County Community Development Commission, COP, VRDN (Willowbrook Project)
3.70% (LOC; Wells Fargo Bank) (a,b)......................................... 800,000 800,000
Los Angeles Metropolitan Transportation Authority, Revenue, CP
3.70%, 2/9/98 (LOC: Bayerische Landesbank, Canadian Imperial Bank of Commerce and
National Westminster Bank) (b).............................................. 1,000,000 1,000,000
Los Angeles Regional Airports Improvement Corporation, LR, VRDN
Los Angeles International:
(American Airlines):
5%, Series A (LOC; Wachovia Bank and Trust Co.) (a,b)................. 600,000 600,000
5%, Series C (LOC; Wachovia Bank and Trust Co.) (a,b)................. 600,000 600,000
5%, Series D (LOC; Wachovia Bank and Trust Co.) (a,b)................. 1,000,000 1,000,000
5%, Series E (LOC; Wachovia Bank and Trust Co.) (a,b)................. 400,000 400,000
5%, Series F (LOC; Wachovia Bank and Trust Co.) (a,b)................. 100,000 100,000
5%, Series G (LOC; Wachovia Bank and Trust Co.) (a,b)................. 1,000,000 1,000,000
(LAX-2) 5% (LOC; Societe Generale) (a,b)................................. 2,300,000 2,300,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------------------------------ ----------- ------------
<S> <C> <C>
Los Angeles Union School District, TRAN
4.50%, Series A, 7/1/98..................................................... $ 2,000,000 $ 2,006,685
Los Angeles Waste Water System, Revenue, CP
3.75%, 1/12/98 (LOC: Morgan Guaranty Trust Co. and United Bank of Switzerland) (b) 1,500,000 1,500,000
Metropolitan Water District, CP
3.75%, Series B, 1/12/98 (Liquidity Facility; Westdeutsche Landesbank)...... 2,000,000 2,000,000
Modesto, MFHR, Refunding, VRDN (Shadowbrook)
4%, Series A (LOC; Bank of America) (a,b)................................... 1,000,000 1,000,000
Moorpark, Multi-Family Revenue, VRDN (LeClub Apartments Project)
3.90%, Series A (LOC; Citibank) (a,b)....................................... 1,500,000 1,500,000
Northern Power Agency, Public Power Revenue, Refunding, VRDN (Geothermal Project # 3)
3.35%, Series A (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a).......... 1,000,000 1,000,000
Oakland, EDR, VRDN (Allen Temple Family Life)
3.85%, Series A (LOC; Wells Fargo Bank) (a,b)............................... 2,300,000 2,300,000
Orange County, VRDN:
Apartment Development Revenue:
(Costa Mesa Partners Development)
3.55%, Series 85BB (LOC; Chase Manhattan Bank) (a,b).................. 300,000 300,000
Refunding (Pointe Niguel Project)
4.20%, Series C (LOC; Wells Fargo Bank) (a,b)......................... 1,000,000 1,000,000
COP (Florence Crittendoc Services)
3.45% (LOC; Swiss Bank Corp.) (a,b)...................................... 700,000 700,000
Otay Water District, COP, VRDN (Capital Project)
3.45% (LOC; Landesbank Hessen) (a,b)........................................ 800,000 800,000
Palm Springs Community Redevelopment Agency, COP, VRDN (Headquarters Hotel):
3.85%, Series I (LOC; Citibank) (a,b)....................................... 200,000 200,000
3.85%, Series II (LOC; Citibank) (a,b)...................................... 300,000 300,000
3.85%, Series 5 (LOC; Citibank) (a,b)....................................... 300,000 300,000
Pasadena County, COP, VRDN (Rose Bowl Improvements Project)
3.40%, (LOC; Canadian Imperial Bank of Commerce) (a,b)...................... 100,000 100,000
Riverside County, VRDN:
COP (Riverside County Public Facility)
3.35%, Series B (LOC: Commerz Bank and National Westminster Bank) (a,b).. 1,600,000 1,600,000
MFHR (Sierra Pines Apartments Project)
3.85%, Series A (LOC; Swiss Bank Corp.) (a,b)............................ 2,300,000 2,300,000
Sacramento County, MFHR, VRDN (Smoketree)
3.35%, Series A (LOC; Federal National Mortgage Association) (a,b).......... 100,000 100,000
San Diego County:
MFHR, VRDN:
(Country Hills)
3.35%, Series A (LOC; Federal National Mortgage Association) (a,b).... 1,800,000 1,800,000
(Lusk Mira Mesa Apartments)
3.85%, Series E (LOC; Swiss Bank Corp.) (a,b)......................... 300,000 300,000
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Tax Exempt Investments (continued) Amount Value
- ----------------------------------------------------------------------------- ------------ ------------
<S> <C> <C>
San Diego County (continued):
MFHR, VRDN (continued):
(Nationwide)
3.35%, Series A (LOC; Federal National Mortgage Association) (a,b).... $ 100,000 $ 100,000
Regional Transmission Community, Sales Tax Revenue
5%, Series A, 4/1/98 (Insured; FGIC)..................................... 585,000 586,638
TRAN 4.50%, 9/30/98 (LOC: Bank of Nova Scotia, Canadian Imperial Bank of Commerce,
and Commerz Bank) (b).................................................... 1,500,000 1,507,705
San Francisco City and County Housing Authority, MFHR, VRDN (737 Post Project)
3.65%, Series D (LOC; Banque Nationale de Paris) (a,b)...................... 200,000 200,000
San Francisco City and County Redevelopment Financing Authority, Revenue, Refunding
VRDN (Yerba Buena Garden)
3.90% (LOC: Bank of Tokyo-Mitsubishi adnd National Westminster Bank) (a,b).. 215,000 215,000
San Francisco City and County Union School District, TRAN 4.50%, 10/30/98...... 2,500,000 2,514,302
San Jose, MFHR, VRDN (Foxchase)
3.85%, Series B (Insured; FGIC and Liquidity Facility; FGIC) (a)............ 200,000 200,000
San Mateo County Transportation Authority
4%, Series A, 6/1/98 (Insured; MBIA)........................................ 2,000,000 2,002,371
Santa Clara County Housing Authority, MFHR, VRDN (Foxchase Apartments)
3.85%, Series E (Insured; FGIC) (a)......................................... 700,000 700,000
Southern California Public Power Authority, Revenue, Refunding, VRDN:
(Palo Verde Project)
3.35%, Series C (Insured; AMBAC and SBPA; Morgan Guaranty Trust Co.) (a). 1,700,000 1,700,000
(Transmission Project)
3.35% (Insured; AMBAC and LOC; Barclays Bank) (a,b)...................... 200,000 200,000
State of California:
CP 3.70%, 2/10/98 (Liquidity Facility: Bayerische Landesbank, Credit Suisse,
Morgan Guaranty Trust Co. and Westdeutsche Landesbank)................... 2,000,000 2,000,000
RAN 4.50%, 6/30/98.......................................................... 3,000,000 3,009,459
Revenue 11%, 3/1/98......................................................... 1,500,000 1,516,658
------------
TOTAL INVESTMENTS (cost $85,555,604)........................................... $85,555,604
===========
</TABLE>
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SUMMARY OF ABBREVIATIONS
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation MFHR Multi-Family Housing Revenue
COP Certificate of Participation MFMR Multi-Family Mortgage Revenue
CP Commercial Paper PCR Pollution ControlRevenue
EDR Economic Development Revenue RRR Resources Recovery Revenue
FGIC Financial Guaranty Insurance Company SBPA Standby Bond Purchase Agreement
IDR Industrial Development Revenue TRAN Tax and Revenue Anticipation Notes
LOC Letter of Credit VRDN Variable Rate Demand Notes
LR Lease Revenue
MBIA Municipal Bond Investors Assurance
Insurance Corporation
</TABLE>
<TABLE>
<CAPTION>
SUMMARY OF COMBINED RATINGS (UNAUDITED)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Moody's or Standard & Poor's Percentage of Value
- ------- ----------------- -------------------
VMIG1/MIG1, P1 (c) SP1+/SP1, A1+/A1 (c) 92.6%
Aaa/Aa (d) AAA/AA (d) 7.4
-------
100.0%
=======
<FN>
NOTES TO STATEMENT OF INVESTMENTS:
- -------------------------------------------------------------------------------
(a) Securities payable on demand. The interest rate, which is subject to change,
is based upon bank prime rates or an index of market interest rates.
(b) Secured by letters of credit. At December 31, 1997, 65.2% of the Fund's net
assets are backed by letters of credit issued by domestic banks, foreign
banks, government agencies and corporations, of which Wells Fargo Bank
provided letters of credit to 10.7% of the Fund's net assets.
(c) P1 and A1 are the highest ratings assigned tax exempt commercial paper
by Moody's and Standard & Poor's, respectively.
(d) Notes which are not MIG or SP rated are represented by bond ratings of the
issuers.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
- -------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997 (Unaudited)
Cost Value
------------ ------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $85,555,604 $85,555,604
Cash............................................. 418,744
Interest receivable.............................. 673,596
-----------
86,647,944
-----------
LIABILITIES: Due to The Dreyfus Corporation................... 41,103
Interest payable--Note 3......................... 1,104
-----------
42,207
-----------
NET ASSETS at value, represented by paid-in capital............................ $86,605,737
===========
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized)................. 86,605,737
NET ASSET VALUE, offering and redemption price per share....................... $1.00
=====
</TABLE>
See notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Operations Six Months Ended December 31, 1997 (Unaudited)
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................ $1,636,397
EXPENSES: Management fee--Note 2..................... $203,819
Interest expense--Note 3................... 2,516
--------
Total Expenses........................... 206,335
----------
INVESTMENT INCOME--NET................................................... 1,430,062
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b)....................... 43,000
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS..................... $1,473,062
==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1997 Year Ended
(Unaudited) June 30, 1997
------------------ --------------
<S> <C> <C>
OPERATIONS
Investment income--net................................................. $ 1,430,062 $ 1,848,296
Net realized gain (loss) on investments................................ 43,000 (36,397)
------------ -------------
Net Increase (Decrease) in Net Assets Resulting from Operations..... 1,473,062 1,811,899
------------ -------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net................................................. (1,430,062) (1,848,296)
Net realized gain (loss) on investments................................ (6,603) (3,500)
------------ -------------
Total Dividends.................................................. (1,436,665) (1,851,796)
------------ -------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold.......................................... 81,999,761 189,667,243
Dividends reinvested................................................... 1,064,093 1,332,586
Cost of shares redeemed................................................ (77,074,998) (147,107,129)
------------ -------------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 5,988,856 43,892,700
------------ -------------
Total Increase (Decrease) in Net Assets.......................... 6,025,253 43,852,803
NET ASSETS:
Beginning of Period.................................................... 80,580,484 36,727,681
------------ -------------
End of Period.......................................................... $ 86,605,737 $ 80,580,484
============ =============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Year Ended
Ended Year Ended June 30, Period Ended November 30,
December 31, 1997 ------------------------ June 30, -----------------------
PER SHARE DATA: (Unaudited) 1997 1996(1) 1995(2) 1994(3)(4) 1993(3)(5) 1992(3)(5)
----------------- ------------------------ ------------ -----------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- ----- -----
Investment Operations:
Investment income--net........ .016 .031 .031 .031 .012 .023 .031
----- ----- ----- ----- ----- ----- -----
Distributions:
Dividends from investment
income-net................. (.016) (.031) (.031) (.031) (.012) (.023) (.031)
----- ----- ----- ----- ----- ----- -----
Net asset value, end of period $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== ===== ===== =====
TOTAL INVESTMENT RETURN.......... 3.19%(6) 3.11% 3.19% 3.10% 1.25% 2.41% 3.10%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average
net assets................. .46%(6) .42% .44% .60% .47%(6) .32% .32%
Ratio of net investment income
to average net assets...... 3.16%(6) 3.09% 3.36% 3.07% 2.11%(6) 2.40% 3.03%
Decrease reflected in above
expense ratios due to
undertakings by the Manager -- .03% .07% -- .38%(6) .76% .51%
Net Assets, end of period
(000's Omitted)............ $86,606 $80,580 $36,728 $15,538 $17,170 $15,490 $26,987
<FN>
- -------------
(1) Effective November 21, 1995, the Fund converted to a single Class Fund, with
the existing Class R shares converted into Investor shares.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(3) On February 1, 1993 existing shares of the Fund were designated the Retail
Class and the Fund began offering the Institutional Class and Investment
Class of shares. Effective April 4, 1994 the Retail and Institutional
Classes were reclassified as a single class of shares known as Investor
shares. The Financial Highlights for the year ended June 30, 1995 are based
upon an Investor share outstanding. The amounts shown for the period
ended June 30, 1994 were calculated using the performance of a Retail share
outstanding from December 1, 1993 to April 3, 1994, and the performance of
an Investor share outstanding from April 4, 1994 to June 30, 1994. The
Financial Highlights for the year ended November 30, 1993 and prior
periods are based upon a Retail share outstanding.
(4) The Fund changed its fiscal year end to June 30. Prior to this, the Fund's
fiscal year end was November 30. Prior to April 4, 1994, The Boston Company
Advisors, Inc. served as the Fund's investment adviser. From April 4,
1994 through October 16, 1994, Mellon Bank, N.A., served as the Fund's
investment adviser.
(5) The per share amounts have been calculated using the monthly average
shares method, which more appropriately presents per share data for this
period since use of the undistributed net investment income method did not
accord with results of operations.
(6) Annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENT (UNEDITED)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Dreyfus BASIC California Municipal Money Market Fund (the "Fund") is a series
of the Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is registered
under the Investment Company Act of 1940 ("Act") as a non-diversified open-end
management investment company and operates as a series company currently
offering seven series including the Fund. The Fund's investment objective is to
provide a high level of current income exempt from Federal and State of
California personal income taxes to the extent consistent with the preservation
of capital and the maintenance of liquidity by investing in high quality,
short-term municipal securities. The Dreyfus Corporation ("Manager") serves as
the Fund's investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A. Premier Mutual Fund Services, Inc. is the distributor of the Fund's
shares.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Trustees to represent the fair value of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Interest income, adjusted for amortization
of premiums and original issue discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis.
Cost of investments represents amortized cost.
(c) Concentration of risk: The Fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect the ability
of issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the Fund.
(d) Distributions to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, it is
the policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
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).
<PAGE>
Dreyfus BASIC California Municipal Money Market Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 2--INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES:
Investment management fee: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .45% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund except brokerage fees,
taxes, interest, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to reduce
its fee in an amount equal to the Fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel). Each trustee receives
$27,000 per year, $1,000 for each Board meeting attended and $750 for each Audit
Committee meeting attended and is reimbursed for travel and out-of-pocket
expenses. The Chairman of the Board receives an additional annual fee of $25,000
per year. These fees pertain to the following funds: The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust. These fees and expenses are allocated to each series based on net assets.
Amounts required to be paid by the Trust directly to the non-interested
Trustees, that would be applied to offset a portion of the management fee
payable to the Manager are in fact paid directly by the Manager to the
non-interested Trustees.
NOTE 3--BANK LINE OF CREDIT:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing or redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings.
The average daily amount of borrowings outstanding during the period ended
December 31, 1997 was approximately $61,100, with a related weighted average
annualized interest rate of 6.14%.
<PAGE>
Dreyfus
BASIC California
Municipal Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 307SA9712
<PAGE>
Dreyfus
BASIC Massachusetts
Municipal
Money Market Fund
Semi-Annual
Report
December 31, 1997
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to report the performance for Dreyfus BASIC Massachusetts
Municipal Money Market Fund for the six months ended December 31, 1997. For the
period, your Fund produced an annualized yield of 3.15%, and after taking into
account the effect of compounding, the annualized effective yield was 3.20%.*
Dividends earned were exempt from Federal and Commonwealth of Massachusetts
personal income taxes, although some income may be subject to the Federal
Alternative Minimum Tax (AMT) for certain shareholders. Economic Review
Inflation seems to have lost its terrors. 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 fourth quarter of 1997, the rate of increase in consumer prices 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 of just 4.6%, a 24-year low as of the fourth
quarter of 1997. 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 optimistic 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, 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 consequences for
the Fund. 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 resulted in
credit upgrades from A to A+ of the Commonwealth of Massachusetts General
Obligation credit rating by both Standard & Poor's and Fitch. Economic
<PAGE>
growth has been led by construction, business services and financial companies.
Wealth and income levels in the Commonwealth remained very strong, and
unemployment is low. Fiscal-year 1998 marks the 7th annual consecutive 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 are 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 the
fundamentals remain strong and the outlook is stable.
In general, short-term tax-exempt yields were higher in 1997 than in the
previous year. In 1996, the Fed was easing monetary policy and the marketplace
was anticipating additional easings. However, in March 1997, the Fed tightened
monetary policy, which helped keep tax-exempt money market yields high. The
industry-average 7-day tax-exempt yield was 3.38% as of December 31, 1997, as
published by IBC Financial Data, compared to 3.17% at the end of 1996.
Throughout 1997, there was strong investor demand for municipal money market
securities. High relative yields coupled with increased investor wealth resulted
in an increase in tax-exempt money fund assets by nearly 12% from $140 billion
to near $160 billion during 1997.
Increased supply also contributed to higher yields. New issue supply of
tax-exempt money market securities increased by more than 40% to $28 billion and
the volume of new synthetic tax-exempt floating-rate securities reached more
than $20 billion. The relative yield ratio between tax-exempt and taxable money
market securities increased with the One-year Bond Buyer Note Index versus the
One-year Treasury Bill above 69% as of the end of 1997. Within the one-year
tax-exempt notes sector, yields ranged between 3.50% and 3.95% for the six
months ended December 31, 1997, as published by IBC Financial Data. The Fund's
average maturity fluctuated within a range of 34 to 63 days throughout the
reporting period and averaged 53 days.
Included in this report is a series of detailed statements about your Fund's
holdings and its financial condition. We hope they are informative. Please know
that we appreciate greatly your continued confidence in the Fund and in The
Dreyfus Corporation.
Very truly yours,
/s/ Angela Deni
Angela Deni
Portfolio Manager
January 15, 1998
New York, N.Y.
* Annualized effective yield is based upon dividends declared daily and
reinvested monthly.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Investments December 31, 1997 (Unaudited)
Principal
Tax Exempt Investments--100.0% Amount Value
- ------------------------------------------------------------------------------- --------------- -------------
<S> <C> <C>
Massachusetts--98.4%
City of Boston, Revenue:
4%, Series A, 9/1/98 (Insured; FSA)......................................... $ 500,000 $ 500,632
5%, Series A, 11/1/98 (Insured; FGIC)....................................... 1,000,000 1,010,094
Boston Water and Sewer Commission, Revenue, VRDN
3.90%, Series A (LOC; State Street Bank and Trust Co.) (a,b)................ 1,000,000 1,000,000
Town of Brockton, Municipal Purpose Loan Revenue 5%, 9/15/98 (Insured; FSA).... 520,000 523,902
Town of Brookline, Revenue 6%, 6/15/98......................................... 700,000 706,670
Town of Concord, GO Notes 5.25%, Series 97, 5/15/98............................ 240,000 241,111
Town of Easton, Revenue 6%, 6/1/98 (Insured; MBIA)............................. 400,000 403,165
Town of Holbrook, Revenue 6.25%, 5/15/98 (Insured; FSA)........................ 365,000 367,925
Town of Holyoke, Refunding:
PCR, VRDN (Holyoke Water Power Project) 3.90% (LOC; Union Bank of Switzerland) (a,b) 660,000 660,000
Revenue 5%, 8/1/98 (Insured; FSA)........................................... 515,000 518,639
Town of Mashpee, Municipal Purpose Loan Revenue 3.60% 2/1/98 (Insured; MBIA)... 1,000,000 1,000,743
Commonwealth of Massachusetts:
Revenue, Refunding:
(Consolated Loan):
4.10%, Series A, 2/1/98 (Insured; FGIC)................................ 500,000 501,358
4.10%, Series A, 2/1/98................................................ 800,000 800,264
VRDN 4.05%, Series B (a)................................................. 5,000,000 5,000,000
Massachusetts Bay Transportation Authority:
CP:
3.75%, Series C, 2/11/98 (LOC; West Deutsche Landesbank) (b)............. 1,000,000 1,000,000
3.75%, Series C, 3/6/98 (LOC; West Deutsche Landesbank) (b).............. 4,000,000 4,000,000
Notes 4.25%, Series A, 2/27/98.............................................. 1,000,000 1,000,965
Revenue (General Transportation System)
3.75%, Series 84A, 3/1/98 (LOC; State Street Bank and Trust Co.) (b)..... 1,575,000 1,575,000
Massachusetts Health and Educational Facilities Authority, Revenue:
(Saint Elizabeth's Hospital of Boston) 6%, Series C, 2/15/98) (Insured; FSA) 640,000 641,748
Refunding (Lowell General Hospital) 4%, Series B, 6/1/98 (Insured; FSA)..... 650,000 650,382
CP:
(Boston University) 3.80%, Series H, 1/21/98 (LOC; Landesbank Hessen) (b) 2,000,000 2,000,000
(Harvard University) 3.70%, Series L, 3/9/98 (Guaranteed by; Harvard University) 1,690,000 1,690,000
Prerefunded (Lahey Medical Clinic)
7.625%, Series A, 7/1/98 (Escrowed in; U.S. Government Securities and Insured; MBIA) 1,000,000 1,038,150
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------------------------------- --------------- -------------
<S> <C> <C>
Massachusetts (continued)
Massachusetts Health and Educational Facilities Authority, Revenue (continued):
VRDN:
(Capital Asset Program):
3.45%, Series G-1 (Insured; MBIA and SBPA; Credit Suisse) (a).......... $2,000,000 $ 2,000,000
3.85%, Series A (LOC; First National Bank of Chicago) (a,b)............ 900,000 900,000
4.80%, Series B (Insured; MBIA and SBPA; Credit Suisse) (a)............ 1,600,000 1,600,000
5%, Series D (Insured; MBIA and SBPA; Credit Suisse) (a)............... 9,400,000 9,400,000
5%, Series E (LOC; First Chicago Corp.) (a,b).......................... 8,500,000 8,500,000
(Falmouth Assistance For Living) 3.95%, Series A (LOC; Bank of Boston) (a,b) 900,000 900,000
(Harvard University) 3.80%, Series I (Guaranteed by; Harvard University) (a) 5,415,000 5,415,000
(Massachusetts Institute of Technology)
3.45%, Series G (Guaranteed by; Massachusetts Institute of Technology) (a) 7,100,000 7,100,000
(Newton-Wellesley Hospital)
3.50%, Series F (Insured; MBIA and SBPA; Credit Suisse) (a)............ 3,000,000 3,000,000
(Partners Healthcare Systems) 3.50%, Series P-2
(BPA: Bayerische Landesbank and Morgan Guaranty Trust Co. and Insured; FSA) (a) 6,700,000 6,700,000
(Wellesley College) 3.50%, Series B (Guaranteed by; Wellesley College) (a) 3,115,000 3,115,000
(Williams College) 3.60%, Series E (Guaranteed by; Williams College) (a). 3,095,000 3,095,000
Massachusetts Industrial Finance Agency:
Industrial Revenue, VRDN:
(General Signal Corp.) 3.95% (LOC; Wachovia Bank and Trust Co.) (a,b).... 500,000 500,000
Refunding:
(Cabot Newburyport Limited) 3.95% (LOC; Bank of Boston) (a,b).......... 1,315,000 1,315,000
(First Healthcare Corp.) 4.20%, Series B (LOC; Wachovia Bank and Trust Co.) 2,690,000 2,690,000
(Quamco Inc.):
3.45%, Series A (LOC; Bank of Nova Scotia) (a,b)..................... 2,700,000 2,700,000
3.45%, Series B (LOC; Bank of Nova Scotia) (a,b)..................... 880,000 880,000
PCR, VRDN, Refunding (Holyoke Water Power Co.)
3.90%, Series A (LOC; Canadian Imperial Bank of Commerce) (a,b).......... 660,000 660,000
Prerefunded (Framingham Union Hospital)
8.625%, Series A, 7/1/98 (Escrowed in; U.S. Government Securities)....... 1,000,000 1,040,196
Revenue (New England College) 3.85%, 10/1/98 (LOC; State Street Bank and Trust) (a,b) 2,500,000 2,500,000
VRDN:
(Eastern Nazarene College) 3.55% (LOC; State Street Bank and Trust Co.) (a,b) 1,000,000 1,000,000
(Goddard House) 3.95% (LOC; Fleet Bank) (a,b).......................... 6,060,000 6,060,000
(Gordon College) 3.75% (LOC; State Street Bank and Trust Co.) (a,b).... 4,000,000 4,000,000
(Groton School Project) 3.55% (LOC; State Street Bank and Trust Co.) (a,b) 2,000,000 2,000,000
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Investments (continued) December 31, 1997 (Unaudited)
Principal
Tax Exempt Investments (continued) Amount Value
- ------------------------------------------------------------------------------- --------------- -------------
<S> <C> <C>
Massachusetts (continued)
Massachusetts Industrial Finance Agency (continued):
VRDN:
(Heritage At Dartmouth) 4.05% (LOC; Bank of Boston) (a,b).............. $1,500,000 $ 1,500,000
(Milton Academy) 3.90% (Liquidity; Fleet Bank and Insured; MBIA) (a)... 2,000,000 2,000,000
Refunding (Showa Womens Institute) 4.95% (LOC; Bank of America) (a,b).. 9,900,000 9,900,000
(Society for the Prevention of Cruelty) 4.05% (LOC; Fleet Bank) (a,b).. 1,000,000 1,000,000
RRR, Refunding, VRDN (Ogden Haverhill Project):
3.50%, Series A (LOC; Union Bank of Switzerland) (a,b)................... 1,695,000 1,695,000
3.55%, Series B (LOC; Union Bank of Switzerland) (a,b)................... 5,000,000 5,000,000
Massachusetts Municipal Wholesale Electric Company, Power Supply Systems Revenue,
3.50%, Series C (BPA; Credit Suisse and Insured; MBIA)...................... 2,000,000 2,000,000
Massachusetts Port Authority, Revenue:
CP 3.75%, Series B, 2/2/98 (LOC; Canadian Imperial Bank of Commerce) (b).... 5,000,000 5,000,000
VRDN, Refunding 4.75%, Series A (LOC; Landesbank Hessen) (a,b).............. 2,350,000 2,350,000
Massachusetts Water Resource Authority:
CP:
3.75%, 1/21/98 (LOC; Morgan Guaranty Trust Co.) (b)...................... 3,500,000 3,500,000
3.60%, 2/2/98 (LOC; Morgan Guaranty Trust Co.) (b)....................... 3,000,000 3,000,000
VRDN 3.45%, Series A (Insured; AMBAC and SBPA; Bank of Nova Scotia) (a)..... 8,600,000 8,600,000
Mendon Upton Regional School District, Revenue 7%, 6/1/98 (Insured; FGIC)...... 691,000 699,604
Town of Natick:
BAN 3.75%, 2/27/98.......................................................... 1,000,000 1,000,330
Revenue 6.25%, 5/15/98...................................................... 905,000 912,648
Town of Newton:
BAN 4%, 3/25/98............................................................. 1,000,000 1,000,429
Municipal Purpose Loan Revenue 6.25%, 3/1/98................................ 610,000 612,547
Town of Northampton, Revenue 4.50%, 5/15/98.................................... 385,000 385,824
Town of Quincy, Revenue 5.80%, 5/1/98 (Insured; FSA)........................... 500,000 502,998
Town of Reading, BAN 4.25%, 7/10/98............................................ 1,217,000 1,219,137
Town of Somerville, Revenue 7%, 2/15/98 (Insured; FSA)......................... 623,000 625,519
Town of Westborough, Revenue 6.125%, 5/15/98................................... 545,000 549,126
Town of Westfield, BAN 3.95%, 3/26/98.......................................... 400,000 400,132
Town of Weston, BAN 3.75%, 3/4/98.............................................. 900,000 900,000
Town of Westwood, Revenue 5.40%, 10/1/98....................................... 440,000 445,110
Town of Worchester, Municipal Purpose Loan Revenue 5%, 8/1/98.................. 2,430,000 2,445,031
U.S. Related--1.6%
Commonwealth of Puerto Rico Aqueduct and Sewer Authority, Revenue, Prerefunded
7.875%, Series A, 7/1/98 (Escrowed in; U.S. Government Securities).......... 2,450,000 2,546,547
------------
TOTAL INVESTMENTS (cost $163,690,926).......................................... $163,690,926
============
</TABLE>
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
<TABLE>
Summary of Abbreviations
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation LOC Letter of Credit
BAN Bond Anticipation Notes MBIA Municipal Bond Investors Assurance
BPA Bond Purchase Agreement Insurance Corporation
CP Commercial Paper PCR Pollution Control Revenue
GO General Obligation RRR Resources Recovery Revenue
FGIC Financial Guaranty Insurance Company SBPA Standby Bond Purchase Agreement
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
</TABLE>
<TABLE>
Summary of Combined Ratings (Unaudited)
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Fitch (c) or Moody's or Standard & Poor's Percentage of Value
- ------ ------- ---------------- -----------------
F1+/F1 VMIG1/MIG1, P1 (d) SP1+/SP1, A1+/A1 (d) 83.8%
F2 VMIG2/MIG2, P2 SP2, A2 .6
AAA/AA (e) Aaa/Aa (e) AAA/AA (e) 13.2
Not Rated (f) Not Rated (f) Not Rated (f) 2.4
------
100.0%
======
<FN>
Notes to Statement of Investments:
- --------------------------------------------------------------------------------
(a) Securities payable on demand. The interest rate, which is subject to change,
is based upon bank prime rates or an index of market interest rates.
(b) Secured by letters of credit. At December 31, 1997, 46.9% of the Fund's
net assets are backed by letters of credit issued by domestic banks and
foreign banks.
(c) Fitch currently provides creditworthiness information for a limited number
of investments.
(d) P1 and A1 are the highest ratings assigned tax exempt commercial paper by
Moody's and Standard & Poor's, respectively.
(e) Notes which are not F, MIG or SP rated are represented by bond ratings of
the issuers.
(f) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
</FN>
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Assets and Liabilities December 31, 1997 (Unaudited)
Cost Value
-------------- --------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments $163,690,926 $163,690,926
Cash............................................. 1,352,441
Interest receivable.............................. 1,042,906
------------
166,086,273
------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.... 65,089
Interest payable--Note 3......................... 617
------------
65,706
------------
NET ASSETS..................................................................... $166,020,567
============
REPRESENTED BY: Paid-in capital.................................. $166,075,670
Accumulated net realized gain (loss) on investments (55,103)
------------
NET ASSETS..................................................................... $166,020,567
============
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized)................. 166,029,742
NET ASSET VALUE, offering and redemption price per share....................... $1.00
=====
</TABLE>
Statement of Operations Six Months Ended December 31, 1997 (Unaudited)
<TABLE>
<S> <C> <C> <C>
INVESTMENT INCOME
INCOME Interest Income............................. $2,164,788
EXPENSES: Management fee--Note 2...................... $258,428
Legal fees--Note 4.......................... 24,307
Interest expense--Note 3.................... 784
--------
Total Expenses............................ 283,519
----------
INVESTMENT INCOME--NET.................................................... 1,881,269
NET REALIZED GAIN (LOSS) ON INVESTMENTS--Note 1(b)........................ 43,876
----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS...................... $1,925,145
==========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
December 31, 1997 Year Ended
(Unaudited) June 30, 1997
----------------- -------------
<S> <C> <C>
OPERATIONS:
Investment income--net................................................. $ 1,881,269 $ 2,597,779
Net realized gain (loss) on investments................................ 43,876 3,415
------------ -----------
Net Increase (Decrease) in Net Assets Resulting from Operations..... 1,925,145 2,601,194
------------ -----------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net................................................. (1,881,269) (2,597,779)
------------ -----------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold.......................................... 179,642,937 227,213,640
Dividends reinvested................................................... 685,114 965,646
Cost of shares redeemed................................................ (104,615,765) (190,235,596)
------------ -----------
Increase (Decrease) in Net Assets from Beneficial Interest Transactions 75,712,286 37,943,690
------------ -----------
Total Increase (Decrease) in Net Assets.......................... 75,756,162 37,947,105
NET ASSETS:
Beginning of Period.................................................... 90,264,405 52,317,300
------------ -----------
End of Period.......................................................... $166,020,567 $90,264,405
============ ===========
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
Financial Highlights
Contained below is per share operating performance data for a share of
Beneficial Interest outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This information
has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
Six Months Ended Year Ended June 30, Period Ended
December 31, 1997 ---------------------------------------- June 30,
PER SHARE DATA: (Unaudited) 1997 1996(1) 1995(2) 1994(3,4) 1993(3)
----------------- ------- ------- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
Investment Operations:
Investment income--net................ .016 .031 .033 .032 .019(5) .007(5)
----- ----- ----- ----- ----- -----
Distributions:
Dividends from investment income--net. (.016) (.031) (.033) (.032) (.019) (.007)
----- ----- ----- ----- ----- -----
Net asset value, end of period........ $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL INVESTMENT RETURN.................. 3.25%(6) 3.12% 3.31% 3.25% 1.97% .73%
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets .49%(6) .37% .35% .35% .56%(7) .57%(6,7)
Ratio of net investment income
to average net assets.............. 3.28%(6) 3.09% 3.24% 3.19% 1.94% 1.78%(6)
Decrease reflected in above expense ratios
due to undertakings by the Manager -- .09% .02% -- -- --
Net Assets, end of period (000's Omitted) $166,021 $90,264 $52,317 $25,485 $19,830 $19,645
<FN>
- -------------------
(1) Effective May 8, 1996, the Fund's Investor class became shares of Dreyfus
Massachusetts Municipal Money Market Fund and Class R designates were
eliminated and the Fund became a single class Fund.
(2) Effective October 17, 1994, The Dreyfus Corporation began serving as the
Fund's investment manager.
(3) The Fund commenced selling Investment Class shares on February 1, 1993.
Effective April 4, 1994 the Investment Class was reclassified as the Trust
shares. Effective October 17, 1994 Trust shares were redesignated as Class
R shares. The above is based upon an Investment Class share outstanding
from February 1, 1993 to April 3, 1994 and a Trust share outstanding from
April 4, 1994 to October 16, 1994.
(4) Prior to April 4, 1994, The Boston Company Advisors, Inc. served as the
Fund's investment adviser. From April 4, 1994 through October 16, 1994,
Mellon Bank, N.A. served as the Fund's investment manager.
(5) Net investment income per share before waiver of fees and/or reimbursement
of expenses by the investment adviser and/or custodian and/or transfer
agent for the year ended June 30, 1994 and period ended June 30, 1993 were
$.019 and $.007, respectively.
(6) Annualized.
(7) Annualized expense ratios before voluntary waiver of fees and/or
reimbursement of expenses by the investment adviser and/or custodian
and/or transfer agent for the year ended June 30, 1994 and period ended
June 30, 1993 were .64% and .62% respectively.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC Massachusetts Municipal Money Market Fund (the "Fund") is a
series of The Dreyfus/Laurel Tax-Free Municipal Funds (the "Trust") which is
registered under the Investment Company Act of 1940 ("Act") as a non-diversified
open-end management investment company and operates as a series company
currently offering seven series including the Fund. The Fund's investment
objective is to provide a high level of current income exempt from Federal
income taxes and Massachusetts personal income taxes to the extent consistent
with the preservation of capital and the maintenance of liquidity by investing
in high quality, short-term municipal securities. The Dreyfus Corporation
("Manager") serves as the Fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc. is the
distributor of the Fund's shares.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at amortized
cost in accordance with Rule 2a-7 of the Act, which has been determined by the
Fund's Board of Trustees to represent the fair value of the Fund's investments.
It is the Fund's policy to maintain a continuous net asset value per share of
$1.00 for the Fund; the Fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the Fund will be able to maintain a stable net asset
value per share of $1.00.
(b) Securities transactions and investment income: Securities transactions
are recorded on a trade date basis. Interest income, adjusted for amortization
of premiums and original issue discounts on investments, is earned from
settlement date and recognized on the accrual basis. Realized gain and loss from
securities transactions are recorded on the identified cost basis.
Cost of investments represents amortized cost.
(c) Concentration of risk: The Fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
commonwealth and certain of its public bodies and municipalities may affect the
ability of issuers within the state to pay interest on, or repay principal of,
municipal obligations held by the Fund.
(d) Distributions to shareholders: It is the policy of the Fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the Fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code. To the extent
that net realized capital gain can be offset by capital loss carryovers, it is
the policy of the Fund not to distribute such gain.
(e) Federal income taxes: It is the policy of the Fund to continue to qualify
as a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Internal Revenue Code, and to
make distributions of income and net realized capital gain sufficient to relieve
it from substantially all Federal income and excise taxes.
The Fund has an unused capital loss carryover of approximately $11,000
available for Federal income tax purposes to be applied against future net
securities profits, if any, realized subsequent to June 30, 1997. If not
applied, $7,000 of the carryover expires in fiscal 1998, $1,000 expires in
fiscal 1999, $2,000 expires in fiscal 2000 and $1,000 expires in fiscal 2002.
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).
<PAGE>
Dreyfus BASIC Massachusetts Municipal Money Market Fund
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 2--Investment Management Fee And Other Transactions With Affiliates:
Investment management fee: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the Fund. The Manager also directs
the investments of the Fund in accordance with its investment objective,
policies and limitations. For these services, the Fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .45% of the value of the Fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the Fund, except brokerage
fees, taxes, interest, fees and expenses of non-interested Trustees (including
counsel fees) and extraordinary expenses. In addition, the Manager is required
to reduce its fee in an amount equal to the Fund's allocable portion of fees and
expenses of the non-interested Trustees (including counsel). Each trustee
receives $27,000 per year, $1,000 for each Board meeting attended and $750 for
each Audit Committee meeting attended and is reimbursed for travel and
out-of-pocket expenses. The Chairman of the Board receives an additional annual
fee of $25,000 per year. These fees pertain to the following funds: The
Dreyfus/Laurel Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds and the
Dreyfus/Laurel Funds Trust. These fees and expenses are allocated to each series
based on net assets. Amounts required to be paid by the Trust directly to the
non-interested Trustees, that would be applied to offset a portion of the
management fee payable to the Manager, are in fact paid directly by the Manager
to the non-interested Trustees.
NOTE 3--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
Fund at rates which are related to the Federal Funds rate in effect at the time
of borrowings.
The average daily amount of borrowings outstanding during the period ended
December 31, 1997 was approximately $25,300 with a related weighted average
annualized interest rate of 6.15%.
NOTE 4--Defaulted Security:
On December 13, 1996, Middlesex County, Massachusetts defaulted on payment of
principal and interest on $1,500,000 (principal amount) County Hospital Revenue
Anticipation Notes held by the Fund. On June 17, 1997, the Fund received
$575,269 from Middlesex County, consisting of a $520,159 principal payment and a
$55,110 payment for interest accrued as of December 13, 1996. On July 18, 1997,
the Fund received the remaining $1,086,698 from Middlesex County, consisting of
a $979,842 principal payment and a $106,586 payment for interest charges for
late payment. In connection with the above, legal fees of $24,307 were incurred.
<PAGE>
Dreyfus BASIC Massachusetts
Municipal Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 715SA9712
