DREYFUS LAUREL TAX FREE MUNICIPAL FUNDS, 485APOS, 1998-08-28

DREYFUS LAUREL TAX FREE MUNICIPAL FUNDS
485APOS, 1998-08-28

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File No. 811-3700

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [ X ]

Pre-Effective Amendment No. [ ]

Post-Effective Amendment No. 49 [ X ]

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [ X ]

Amendment No. 48 [ X ]

(Check appropriate box or boxes.)

THE DREYFUS/LAUREL TAX FREE MUNICIPAL FUNDS
(formerly The Laurel Tax-Free Municipal Funds)
___________________________________________________
(Exact Name of Registrant as Specified in Charter)

c/o The Dreyfus Corporation
200 Park Avenue, New York, New York 10166
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (212) 922-6000

Mark N. Jacobs, Esq.
200 Park Avenue
New York, New York 10166
(Name and Address of Agent for Service)

It is proposed that this filing will become effective (check appropriate box)

immediately upon filing pursuant to paragraph (b)
----

on (date) pursuant to paragraph (b)
----

X 60 days after filing pursuant to paragraph (a)(i)
----

on (date) pursuant to paragraph (a)(i)
----
75 days after filing pursuant to paragraph (a)(ii)
----
on (date) pursuant to paragraph (a)(ii) of Rule 485
----

If appropriate, check the following box:

this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
----

Dreyfus BASIC California Municipal Money Market Fund
Dreyfus BASIC New York Municipal Money Market Fund
Dreyfus BASIC Massachusetts Municipal Money Market Fund
Dreyfus Premier Limited Term Municipal Fund
Dreyfus Premier Limited Term California Municipal Fund
Dreyfus Premier Limited Term Massachusetts Municipal Fund
Dreyfus Premier Limited Term New York Municipal Fund
Cross-Reference Sheet Pursuant to Rule 495(a)
________________________________________________________

Items in
Part A of Prospectus
Form N-1A Caption Caption
________ _______ __________

1 Cover Page Cover Page
Expense Summary

2 Synopsis Expense Summary

3 Condensed Financial Financial Highlights
Information

4 General Description of Investment Objective and
Registrant Policies; Further
Information About The Fund

5 Management of the Fund Further Information About
The Funds; Management

5(a) Management's Discussion Management's Discussion
of Fund's Performance of Fund's Performance

6 Capital Stock and Cover Page; Investor
Other Securities Line; Distribution; Taxes;

7 Purchase of Securities Expense Summary;
Being Offered Alternative Purchase Methods;
Special Shareholder Services;
How to invest in The
Dreyfus/Laurel Funds;
Distribution and Service Plans;
How to Exchange your Investment
From One Fund to Another;

8 Redemption or How to Redeem Shares
Repurchase

9 Pending Legal N.A.
Proceedings

Items in
Part B of Statement of Additional
Form N-1A Information Caption
- --------- -----------------------

10 Cover Page Cover

11 Table of Contents Table of Contents

12 General Information Management of the Trust
and History

13 Investment Objectives Investment Policies
and Policies
14 Management of the Fund Management of the Trust;
Trustees and Officers of the
Trust

15 Control Persons and Management of the Trust;
Principal Holders of
Securities

16 Investment Advisory Management of the Trust;
and Other Services Investment Manager;
Shareholder Services

17 Brokerage Allocation Investment Policies
and Other Practices Portfolio Transactions

18 Capital Stock and Description of the Trust;
Other Securities See Prospectus -- "Cover Page";
"How to Redeem Fund Shares";
"Further Information About The
Funds; The Dreyfus/Laurel Tax
Free Municipal Funds"

19 Purchase, Redemption Purchase of Shares;
and Pricing of Distribution and Service Plans;
Securities Being Offered Redemption of Shares;
Valuation of Shares

20 Tax Status Taxes

21 Underwriters Purchase of Shares;
Distribution and Service Plans;
Amounts Expended

Items in
Part C of
Form N-1A
_________

22 Calculation of Performance Data
Performance Data

23 Financial Statements Financial Statements

24 Financial Statements and Exhibits C-1

25 Persons Controlled by or Under C-4
Common Control with Registrant

26 Number of Holders of Securities C-4

27 Indemnification C-4

28 Business and Other Connections of C-4
Investment Adviser

29 Principal Underwriters C-12

30 Location of Accounts and Records C-15

31 Management Services C-15

32 Undertakings C-15

_______________________________________________________________________________

PROSPECTUS NOVEMBER 1, 1998

DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
_______________________________________________________________________________
THE DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
(FORMERLY, THE DREYFUS/LAUREL MASSACHUSETTS TAX-FREE MONEY FUND) (THE "FUND")
IS A SEPARATE, NON-DIVERSIFIED PORTFOLIO OF THE DREYFUS/LAUREL TAX-FREE
MUNICIPAL FUNDS (THE "TRUST"), AN OPEN-END MANAGEMENT INVESTMENT COMPANY
KNOWN AS A MUTUAL FUND. THE FUND SEEKS TO PROVIDE A HIGH LEVEL OF CURRENT
INCOME EXEMPT FROM FEDERAL AND MASSACHUSETTS 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.
SHARES OF THE FUND ARE SOLD WITHOUT A SALES LOAD.
YOU CAN PURCHASE OR REDEEM SHARES BY TELEPHONE USING THE DREYFUS
TELETRANSFER PRIVILEGE.
THE DREYFUS CORPORATION SERVES AS THE FUND'S INVESTMENT MANAGER. THE
DREYFUS CORPORATION IS REFERRED TO AS "DREYFUS."
AN INVESTMENT IN THE FUND IS NEITHER INSURED NOR GUARANTEED BY THE
U.S. GOVERNMENT. THERE CAN BE NO ASSURANCE THAT THE FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. SINCE THE FUND MAY
INVEST A SIGNIFICANT PORTION OF ITS ASSETS IN THE SECURITIES OF A SINGLE
ISSUER, AN INVESTMENT IN THE FUND MAY INVOLVE GREATER RISK THAN INVESTMENTS
IN CERTAIN OTHER TYPES OF MONEY MARKET FUNDS.
THIS PROSPECTUS SETS FORTH CONCISELY INFORMATION ABOUT THE FUND THAT
YOU SHOULD KNOW BEFORE INVESTING. IT SHOULD BE READ CAREFULLY BEFORE YOU
INVEST AND RETAINED FOR FUTURE REFERENCE.

THE STATEMENT OF ADDITIONAL INFORMATION DATED NOVEMBER 1, 1998 (THE
"SAI"), WHICH MAY BE REVISED FROM TIME TO TIME, PROVIDES A FURTHER DISCUSSION
OF CERTAIN AREAS IN THIS PROSPECTUS AND OTHER MATTERS WHICH MAY BE OF
INTEREST TO SOME INVESTORS. IT HAS BEEN FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION ("SEC") AND IS INCORPORATED HEREIN BY REFERENCE. THE SEC
MAINTAINS A WEB SITE (HTTP://WWW.SEC.GOV) THAT CONTAINS THE SAI, MATERIAL
INCORPORATED BY REFERENCE, AND OTHER INFORMATION REGARDING THE FUND. FOR A
FREE COPY OF THE SAI, WRITE TO THE FUND AT 144 GLENNCURTISS BOULEVARD,
UNIONDALE, NEW YORK 11556-0144, OR CALL 1-800-645-6561. WHEN TELEPHONING, ASK
FOR OPERATOR 144.

MUTUAL FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED
OR ENDORSED BY, ANY BANK, AND ARE NOT FEDERALLY INSURED BY THE FEDERAL
DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY.
ALL MUTUAL FUND SHARES INVOLVE CERTAIN INVESTMENT RISKS, INCLUDING THE
POSSIBLE LOSS OF PRINCIPAL.
THE FEES TO WHICH THE FUND IS SUBJECT ARE SUMMARIZED IN THE "EXPENSE
SUMMARY" SECTION OF THE FUND'S PROSPECTUS. THE FUND PAYS AN AFFILIATE OF
MELLON BANK, N.A. ("MELLON BANK") TO BE ITS INVESTMENT MANAGER. MELLON BANK
OR AN AFFILIATE MAY BE PAID FOR PERFORMING OTHER SERVICES FOR THE FUND, SUCH
AS CUSTODIAN, TRANSFER AGENT OR FUND ACCOUNTANT SERVICES.
_______________________________________________________________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
_______________________________________________________________________________

TABLE OF CONTENTS
EXPENSE SUMMARY................................. 4
FINANCIAL HIGHLIGHTS............................ 5
DESCRIPTION OF THE FUND......................... 6
MANAGEMENT OF THE FUND.......................... 9
HOW TO BUY FUND SHARES.......................... 11
SHAREHOLDER SERVICES............................ 13
HOW TO REDEEM FUND SHARES....................... 14
PERFORMANCE INFORMATION......................... 17
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES........ 17
GENERAL INFORMATION............................. 19

[Page 2]
[This Page Intentionally Left Blank]

[Page 3]
EXPENSE SUMMARY

SHAREHOLDER TRANSACTION EXPENSES:
Check Redemption Fee.................................. $2.00
Exchange Fee.......................................... $5.00
Account Closeout Fee.................................. $5.00
ESTIMATED ANNUAL FUND OPERATING EXPENSES:
(as a percentage of net assets)
Management Fee ....................................... .45%
Other Expenses*....................................... .00%
___
Total Fund Operating Expenses ........................ .45%
EXAMPLE:
You would pay the following expenses on a $1,000 investment,
assuming (1) a 5% annual return and (2) redemption at the end
of each time period:
1 Year $ 10
3 Years $ 19
5 Years $ 30
10 Years $ 62
*Does not include fees and expenses of the non-interested Trustees (including
counsel). The investment manager is contractually
required to reduce its Management Fee in an amount equal to the Fund's
allocable portion of such fees and expenses, which are estimated to be 0.01%
of the Fund's net assets. (See "Management of the Fund.")
_______________________________________________________________________________
THE AMOUNTS LISTED IN THE EXAMPLE SHOULD NOT BE CONSIDERED AS
REPRESENTATIVE OF PAST OR FUTURE EXPENSES AND ACTUAL EXPENSES MAY BE GREATER
OR LESS THAN THOSE INDICATED. MOREOVER, WHILE THE EXAMPLE ASSUMES A 5% ANNUAL
RETURN, THE FUND'S ACTUAL PERFORMANCE WILL VARY AND MAY RESULT IN AN ACTUAL
RETURN GREATER OR LESS THAN 5%.
_______________________________________________________________________________
The purpose of the foregoing table is to assist you in understanding
the various costs and expenses that investors will bear, directly or
indirectly, the payment of which will reduce investors' return on an annual
basis. The information in the foregoing table does not reflect any fee waiver
or expense reimbursement arrangements that may be in effect. In addition,
unlike certain other funds in The Dreyfus Family of Funds, the Fund will
charge your account $2.00 for each redemption check you write; you also will
be charged $5.00 for each exchange out of the Fund, wire redemption or
Dreyfus TELETRANSFER redemption you make and a $5.00 account closeout fee.
However, these charges will be waived if the closing balance in the
shareholder's account on the business day immediately preceding the effective
date of such transaction is $50,000 or more. These charges, when paid, are
paid to the Fund's transfer agent. See "Management of the Fund," "How to Buy
Fund Shares," "Shareholder Services" and "How to Redeem Fund Shares."

[Page 4]

FINANCIAL HIGHLIGHTS
The following table is based upon a single share outstanding
throughout each fiscal year or period and should be read in conjunction with
the financial statements, related notes and report of independent auditors
that appear in the Fund's Annual Report dated June 30, 1998, and that are
incorporated by reference in the SAI. The financial statements, as well as
the information in the table below insofar as it relates to the fiscal years
ended June 30, 1994, 1995, 1996, 1997 and 1998, have been audited by
independent auditors of the Fund. The information in the table below for the
five month period ended June 30, 1993, has been audited by other independent
auditors.

DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND
FOR A SHARE OUTSTANDING THROUGHOUT EACH YEAR OR PERIOD.

Year Year Year Year Year Year
Ended Ended Ended Ended Ended Ended
Per Share Data: 6/30/93(3) 6/30/94(3)(4) 6/30/95(2)(3) 6/30/96(1)(3) 6/30/97 6/30/98
________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period.. $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ______
___-____ ------- _______ ________ _______ ______
INVESTMENT OPERATIONS:
Net investment income...... 0.007(5) 0.019(5) 0.032 0.033 0.031 ______
DISTRIBUTIONS:
Dividends from net
investment income.......... (0.007) (0.019) (0.032) (0.033) (0.031) ______
___-____ ------- _______ ________ _______ ______
Net Asset Value, end of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00 ______
======== ======= ======= ======== ======= ======
TOTAL RETURN................... 0.73% 1.97% 3.25% 3.31% 3.12% ______
======== ======= ======= ======== ======= ======
RATIOS/SUPPLEMENTAL DATA:
Net Assets, end of period (in 000's)... $19,645 $19,830 $25,485 $52,317 $90,264 ______
Ratios of expenses to average
net assets...... 0.57%(6)(7) 0.56%(7) 0.35% 0.35% 0.37% ______
Ratios of net investment income to
average net assets......... 1.78%(6) 1.94% 3.19% 3.24% 3.09% ______
Decrease reflected in above expense ratios
due to undertakings by Dreyfus... _ _ _ 0.02% 0.09% ______

_______________________________________________________________________________________________________________________
(1) Effective May 8, 1996, the Fund's Investor class became shares of Dreyfus
Massachusetts Municipal Money Market Fund, the Fund's Class R designation was
eliminated, and the Fund became a single class Fund.
(2) Effective October 17, 1994, Dreyfus 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, a Trust share outstanding from April 4, 1994
to October 16, 1994, a Class R share outstanding from October 17, 1994 to May
7, 1996, and a Fund share outstanding after May 7, 1996.
(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 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.
</TABLE>

DEBT OUTSTANDING
PER SHARE DATA: YEAR ENDED JUNE 30, 1998(1)
___________________________
<S> <C> <C>
Amount of debt outstanding at end of year (in thousands)................. _
Average amount of debt outstanding throughout year (in thousands)(2)..... $ 46
Average number of shares outstanding throughout year (in thousands)(3)... 82.405
Average amount of debt per share throughout year......................... _
____________________
(1) From February 1, 1993 through June 30, 1996, the Fund had no
outstanding debt.
(2) Based upon daily outstanding borrowings.
(3) Based upon month-end balances.

</TABLE>

[Page 5]
DESCRIPTION OF THE FUND
INVESTMENT OBJECTIVE AND POLICIES
The Fund seeks 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.
The Fund seeks to achieve its objective by investing in debt obligations
issued by the Commonwealth of Massachusetts, its political subdivisions,
municipalities, and public authorities and in municipal obligations issued by
other governmental entities if, in the opinion of counsel to the respective
issuers, the interest from such obligations is excluded from gross income for
Federal and Massachusetts personal income tax purposes ("Massachusetts
Municipal Obligations").
Under normal market conditions, the Fund attempts to invest 100%, and
will invest a minimum of 80%, of its total assets in Massachusetts Municipal
Obligations. When, in the opinion of Dreyfus, adverse market conditions exist
for Massachusetts Municipal Obligations, and a "defensive" investment posture
is warranted, the Fund may temporarily invest more than 20% of its total
assets in money market instruments having maturity and quality
characteristics comparable to those (discussed below) for Massachusetts
Municipal Obligations, but which produce income exempt from Federal but not
Massachusetts personal income taxes for resident shareholders of
Massachusetts, or more than 20% of its total assets in taxable obligations
(including obligations the interest on which is included in the calculation
of alternative minimum tax for individuals). Periods when a defensive posture
is warranted include those periods when the Fund's monies available for
investment exceed the Massachusetts Municipal Obligations available for
purchase to meet the Fund's rating, maturity and other investment criteria.
The Fund does not anticipate that it will find it necessary to make any
investments in securities the interest from which is not exempt from Federal
and Massachusetts personal income taxes. The Fund's policy of investing a
minimum of 80% of its total assets in Massachusetts Municipal Obligations is
a fundamental policy of the Fund.
The Fund pursues its objective by investing in a varied portfolio of
high quality, short-term Massachusetts Municipal Obligations.
The Massachusetts Municipal Obligations purchased by the Fund may
include: (1) municipal bonds;
(2) municipal notes; (3) municipal commercial paper; and (4) municipal lease
obligations. The Fund will limit its portfolio investments to securities
that, at the time of acquisition, (i) are rated in the two highest short-term
rating categories by at least two nationally recognized statistical rating
organizations (or by one organization if only one organization has rated the
security), (ii) if not rated, are obligations of an issuer whose comparable
outstanding short-term debt obligations are so rated, or (iii) if not rated,
are of comparable quality, as determined by Dreyfus in accordance with
procedures established by the Board of Trustees. The Fund will limit its
investments to securities that present minimal credit risk, as determined by
Dreyfus under procedures established by the Board of Trustees.
Because many issuers of Massachusetts Municipal Obligations may
choose not to have their obligations rated, it is possible that a large
portion of the Fund's portfolio may consist of unrated obligations, and to
the extent the Fund invests in unrated obligations, the Fund will be more
reliant on Dreyfus' judgement, analysis and experience than would be the case
if the Fund invested in only rated obligations. The Fund invests only in
securities that have remaining maturities of thirteen months or less at the
date of purchase. Floating rate or variable rate obligations (described
below) which are payable on demand under conditions established by the SEC,
may have a stated maturity in excess of thirteen months; these securities
will be deemed to have remaining maturities of thirteen months or less. The
Fund maintains a dollar-weighted average portfolio maturity of 90 days or
less. The Fund seeks to maintain a constant net asset value of $1.00 per
share, although there is no assurance it can do so on a continuing basis,
using the amortized cost method of valuing its securities pursuant to Rule
2a-7 under the Investment Company Act of 1940, as amended (the "1940 Act"),
which Rule includes various maturity, quality and diversification
requirements.

[Page 6]

OTHER INVESTMENT POLICIES AND RISK FACTORS
Custodial Receipts. The Fund may purchase securities, frequently
referred to as "custodial receipts," representing the right to receive future
principal and interest payments on municipal obligations underlying such
receipts. A number of different arrangements are possible. In a typical
custodial receipt arrangement, an issuer or a third party owner of a
municipal obligation deposits such obligation with a custodian in exchange
for two or more classes of receipts. The class of receipts that the Fund may
purchase has the characteristics of a typical tender option security backed
by a conditional "put," which provides the holder with the equivalent of a
short-term variable rate note. At specified intervals, the interest rate for
such securities is reset by the remarketing agent in order to cause the
securities to be sold at par through a remarketing mechanism. If the
remarketing mechanism does not result in a sale, the conditional put can be
exercised. In either event, the holder is entitled to full principal and
accrued interest to the date of the tender or exercise of the "put." The
"put" may be terminable in the event of a default in payment of principal or
interest on the underlying municipal obligation and for other reasons. Before
purchasing such security, the Fund is required to make certain determinations
with respect to the likelihood of, and the ability to monitor, the occurrence
of the conditions that would result in the put not being exercisable. The
interest rate for these receipts generally is expected to be below the coupon
rate of the underlying municipal obligations and generally is at a level
comparable to that of a municipal obligation of similar quality and having a
maturity equal to the period between interest rate readjustments. These
custodial receipts are sold in private placements. The Fund also may purchase
directly from issuers, and not in a private placement, municipal obligations
having the characteristics similar to the custodial receipts in which the
Fund may invest.

FLOATING RATE AND VARIABLE RATE OBLIGATIONS. The Fund may purchase
floating rate and variable rate obligations. These obligations bear interest
at rates that are not fixed, but vary with changes in specified market rates
or indices. Some of these obligations may carry a demand feature that permits
the Fund to receive the par value upon demand prior to maturity. The Fund may
invest in floating rate and variable rate obligations carrying stated
maturities in excess of thirteen months at the date of purchase if these
obligations carry demand features that comply with conditions established by
the SEC. The Fund will limit its purchases of floating rate and variable rate
Massachusetts Municipal Obligations to those meeting the quality standards
applicable to the Fund. Frequently, such obligations are secured by letters
of credit or other credit support arrangements provided by banks. The quality
of the underlying creditor or the bank, as determined by Dreyfus under the
supervision of the Trustees must also be equivalent to the quality standards
applicable to the Fund. In addition, Dreyfus monitors the earning power, cash
flow and other liquidity ratios of the issuers of such obligations, as well
as the creditworthiness of the institution responsible for paying the
principal amount of the obligations under the demand feature. Changes in the
credit quality of banks and other financial institutions that provide such
credit or liquidity enhancements to the Fund's portfolio securities could
cause losses to the Fund and affect its share price.
The Fund may invest in participation interests purchased from banks
in floating or variable rate Massachusetts Municipal Obligations owned by
banks. Participation interests carry a demand feature permitting the Fund to
tender them back to the bank. Each participation is backed by an irrevocable
letter of credit or guarantee of a bank which Dreyfus under the supervision
of the Trustees has determined meets the prescribed quality standards for the
Fund.
Other types of tax-exempt instruments that may become available in
the future may be purchased by the Fund as long as Dreyfus believes the
quality of these instruments meets the Fund's quality standards.
OTHER INVESTMENT COMPANIES. The Fund may invest in securities issued
by other investment companies to the extent that such investments are
consistent with its investment objective and policies and permissible under
the 1940 Act. As a shareholder of another investment company, the Fund would
bear, along with other shareholders, its pro rata portion of the other
investment company's expenses, including
[Page 7]
advisory fees. These expenses would be in addition to the advisory and other
expenses that the Fund bears directly in connection with its own operations.
TENDER OPTION BONDS. The Fund may invest up to 10% of the value of
its assets in tender option bonds. A tender option bond is a municipal
obligation (generally held pursuant to a custodial arrangement) having a
relatively long maturity and bearing interest at a fixed-rate substantially
higher than prevailing short-term tax-exempt rates, that has been coupled
with the agreement of a third party, such as a bank, broker-dealer or other
financial institution, pursuant to which such institution grants the security
holders the option, at periodic intervals, to tender their securities to the
institution and receive the face value thereof. As consideration for
providing the option, the financial institution receives periodic fees equal
to the difference between the municipal obligation's fixed coupon rate and
the rate, as determined by a remarketing or similar agent at or near the
commencement of such period, that would cause the securities, coupled with
the tender option, to trade at par on the date of such determination. Thus,
after payment of this fee, the security holder effectively holds a demand
obligation that bears interest at the prevailing short-term tax-exempt rate.
Dreyfus, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuer of the underlying municipal obligation, of any
custodian and the third-party provider of the tender option. In certain
instances and for certain tender option bonds, the option may be terminable
in the event of a default in payment of principal or interest on the
underlying municipal obligation and for other reasons. The Fund will not
invest more than 10% of the value of the Fund's net assets in illiquid
securities, which would include tender option bonds for which the required
notice to exercise the tender feature is more than seven days if there is no
secondary market available for these obligations.
WHEN-ISSUED SECURITIES. The Fund may purchase Massachusetts Municipal
Obligations on a "when-issued" basis (i.e., delivery of and payment for the
Massachusetts Municipal Obligations normally take place within 45 days after
the date of the purchase commitment). The payment obligation and the interest
rate on such securities are fixed at the time of the purchase commitment.
Although the Fund generally will purchase Massachusetts Municipal Obligations
on a when-issued basis with the intention of acquiring the securities, the
Fund may sell such securities before the settlement date. Massachusetts
Municipal Obligations purchased on a when-issued basis, like other
investments made by the Fund, may decline or appreciate in value prior to
their actual delivery to the Fund.

CERTAIN RISK CONSIDERATIONS REGARDING INVESTING IN THE COMMONWEALTH
OF MASSACHUSETTS MUNICIPAL OBLIGATIONS. Since the Fund is concentrated in
securities issued by Massachusetts or entities within Massachusetts, an
investment in the Fund may involve greater risk than investments in certain
other types of money market funds. You also should consider carefully the
special risks inherent in the Fund's investment in Massachusetts Municipal
Obligations. Massachusetts' economic difficulties and fiscal problems in the
late 1980s and early 1990s caused several rating agencies to lower their
ratings of Massachusetts Municipal Obligations. A return of persistent
serious financial difficulties could adversely affect the market values and
marketability of, or result in default in payment on, outstanding
Massachusetts Municipal Obligations. Massachusetts' operating losses in
fiscal 1989 and 1990, which totalled $672 million and $1.25 billion,
respectively, were covered primarily through deficit borrowings, and a fiscal
1991 operating loss of $21 million was covered by drawing on the adjusted
1990 fund balance of $258 million. Massachusetts ended fiscal years 1992
through 1997, however, with a positive fiscal balance in its general
operating funds. Appendix A of the SAI more fully sets forth these and other
risk factors.

LIMITING INVESTMENT RISKS AND CERTAIN RISK CONSIDERATIONS. The Fund
is subject to a number of investment limitations. Certain limitations are
matters of fundamental policy and may not be changed without the affirmative
vote of the holders of a majority of the Fund's outstanding shares. The SAI
describes all of the Fund's fundamental and non-fundamental investment
restrictions.

[Page 8]
The investment objective, policies, restrictions, practices and
procedures of the Fund, unless otherwise specified, may be changed without
shareholder approval. If the Fund's investment objective, policies,
restrictions, practices or procedures change, shareholders should
consider whether the Fund remains an appropriate investment in light of their
then current position and needs.
The Fund is classified as a "non-diversified" investment company, as
defined under the 1940 Act. However, the Fund intends to conduct its
operations so that it will qualify under the Internal Revenue Code of 1986,
as amended (the "Code") as a "regulated investment company." To continue to
qualify, among other requirements, the Fund will be required to limit its
investments so that, at the close of each quarter of the taxable year, with
respect to at least 50% of its total assets, not more than 5% of such assets
will be invested in the securities of a single issuer. In addition, not more
than 25% of the value of the Fund's total assets may be invested in the
securities of a single issuer at the close of each quarter of the taxable
year. The provisions of the Code place limits on the extent to which the
Fund's portfolio may be non-diversified. Furthermore, under rules established
by the SEC, the Fund may not purchase, with respect to 75% of its total
assets, a security if, as a result, more than 5% of its total assets would be
invested in the securities of any issuer. The Fund may invest more than 5% of
its total assets in the securities of one issuer only if those securities are
in the highest short-term rating category or are determined to be of
comparable quality by Dreyfus.

The ability of the Fund to meet its investment objective is subject
to the ability of municipal issuers (and in the case of instruments involving
put or tender options, the issuers of such options) to meet their payment
obligations. In addition, the Fund's portfolio will be affected by general
changes in interest rates which may result in increases or decreases in the
value of Fund holdings. Investors should recognize that, in periods of
declining interest rates, the Fund's yield will tend to be somewhat higher
than prevailing market rates, and in periods of rising interest rates, the
Fund's yield will tend to be somewhat lower. Also, when interest rates are
falling, the influx of new money to the Fund will likely be invested in
portfolio instruments producing lower yields than the balance of the Fund's
portfolio, thereby reducing the Fund's current yield. In periods of rising
interest rates, the opposite can be expected to occur.

The Fund may invest without limit in Massachusetts Municipal
Obligations which are repayable out of revenue streams generated from
economically related projects or facilities or whose issuers are located in
Massachusetts. Sizable investments in these obligations could increase risk
to the Fund should any of the related projects or facilities experience
financial difficulties. The Fund is authorized to borrow up to 10% of its
total assets for temporary or emergency purposes and to pledge its assets to
the same extent in connection with such borrowings.

Year 2000 Risks _ Like other mutual funds, financial and business
organizations and individuals around the world, the Fund could be adversely
affected if the computer systems used by The Dreyfus Corporation and the
Fund's other service providers do not properly process and calculate
date-related information and data from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Dreyfus Corporation is taking
steps to address the Year 2000 Problem with respect to the computer systems
that it uses and to obtain assurances that comparable steps are being taken
by the Fund's other major service providers. At this time, however, there can
be no assurance that these steps will be sufficient to avoid any adverse
impact on the Fund.

MANAGEMENT OF THE FUND

INVESTMENT MANAGER. Dreyfus, located at 200 Park Avenue, New York,
New York 10166, was formed in 1947. Dreyfus is a wholly-owned subsidiary of
Mellon Bank, which is a wholly-owned subsidiary of Mellon Bank Corporation
("Mellon"). As of July 31, 1998, Dreyfus managed or administered
approximately $110 billion in assets for more than 1.7 million investor
accounts nationwide.

[Page 9]
Dreyfus serves as the Fund's investment manager pursuant to an
Investment Management Agreement with the Fund dated May 8,
1996 (the "Investment Management Agreement"). Prior thereto, Dreyfus provided
investment advisory services to the Fund pursuant to a prior Investment
Management Agreement. Under the Investment Management Agreement, Dreyfus
supervises and assists in the overall management of the Fund's affairs
subject to the overall authority of the Board of Trustees of the Trust in
accordance with Massachusetts law. Pursuant to the Investment Management
Agreement, Dreyfus provides, or arranges for one or more third parties to
provide, investment advisory, administrative, custody, fund accounting and
transfer agency services to the Fund. As the Fund's investment manager,
Dreyfus manages the Fund by making investment decisions based on the Fund's
investment objective, policies and restrictions.

Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Bank Holding Company
Act of 1956, as amended. Mellon provides a comprehensive range of financial
products and services in domestic and selected international markets. Mellon
is among the twenty-five largest bank holding companies in the United States
based on total assets. Mellon's principal wholly-owned subsidiaries are
Mellon Bank, Mellon Bank (DE) National Association, Mellon Bank (MD), The
Boston Company, Inc., AFCO Credit Corporation and a number of companies known
as Mellon Financial Services Corporations. Through its subsidiaries,
including Dreyfus, Mellon managed approximately $350 billion in assets as of
June 30, 1998, including $125 billion in mutual fund assets. As of June 30,
1998, Mellon, through various subsidiaries, provided non-investment services,
such as custodial or administration services, for more than $1.991 trillion
in assets, including approximately $54 billion in mutual fund assets.

Under the Investment Management Agreement, the Fund pays a fee,
computed daily and paid monthly, at the annual rate of .45% of the Fund's
average daily net assets less certain expenses described below. In addition,
the Investment Management Agreement provides that certain redemption,
exchange and account closeout charges are payable directly by the Fund's
shareholders to the Fund's transfer agent and that the fee payable by the
Fund to Dreyfus is not reduced by the amount of these charges payable to the
transfer agent. Under the Investment Management Agreement, Dreyfus pays all
of the expenses of the Fund except brokerage fees, taxes, interest and
extraordinary expenses. Although Dreyfus is not obligated to pay the fees and
expenses of the non-interested Trustees (including counsel fees), Dreyfus is
contractually required to reduce its investment management fee in an amount
equal to the Fund's allocable share of such expenses. From time to time,
Dreyfus may voluntarily waive a portion of the investment management fees,
and/or assume certain expenses payable by the Fund, which would have the
effect of lowering the overall expense ratio of the Fund and increasing yield
to investors.

For the fiscal year ended June 30, 1998, the Fund paid Dreyfus at an
annual rate of .45% of its average daily net assets in investment management
fees, less fees and expenses of the non-interested Trustees (including
counsel fees).

For the fiscal year ended June 30, 1998, total operating expenses of
the Fund were .45% of the Fund's average daily net assets.

Dreyfus may pay the Fund's distributor for shareholder services from
Dreyfus' own assets, including past profits but not including the management
fee paid by the Fund. The Distributor may use part or all of such payments to
pay securities dealers or others in respect of these services.
In allocating brokerage transactions, Dreyfus seeks to obtain the
best execution of orders at the most favorable net price. Subject to this
determination, Dreyfus may consider, among other things, the receipt of
research services and/or the sale of shares of the Fund or other funds
managed, advised or administered by Dreyfus as factors in the selection of
broker-dealers to execute portfolio transactions for the Fund. See "Portfolio
Transactions" in the SAI.

[Page 10]
Dreyfus is authorized to allocate purchase and sale orders for
portfolio securities to certain financial institutions,
including, in the case of agency transactions, financial institutions that
are affiliated with Dreyfus or Mellon Bank or that have sold shares of the
Fund, if Dreyfus believes that the quality of the transaction and the
commission are comparable to what they would be with other qualified
brokerage firms. From time to time, to the extent consistent with its
investment objective, policies and restrictions, the Fund may invest in
securities of companies with which Mellon Bank has a lending relationship.
DISTRIBUTOR. The Fund's distributor is Premier Mutual Fund Services,
Inc. ("Distributor"), located at 60 State Street, Boston, Massachusetts
02109. The Distributor's ultimate parent is Boston Institutional Group, Inc.
CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT, AND
SUB-ADMINISTRATOR _ Mellon Bank, One Mellon Bank Center, Pittsburgh,
Pennsylvania 15258, is the Fund's custodian. Dreyfus Transfer, Inc., a
wholly-owned subsidiary of Dreyfus, P.O. Box 9671, Providence, Rhode Island
62940-9671, serves as the Fund's Transfer and Dividend Disbursing Agent (the
"Transfer Agent"). The Transfer Agent will receive the $5.00 exchange fee,
the $5.00 account closeout fee, the $5.00 wire and Dreyfus TELETRANSFER
redemption fees and the $2.00 checkwriting charge, described below. A
sufficient number of your shares will be redeemed automatically to pay these
amounts.
These payments will not reduce the management fee payable by the Fund to
Dreyfus. By purchasing Fund shares, you are deemed to have consented to this
procedure. Premier Mutual Fund Services, Inc. is the Fund's sub-administrator
and, pursuant to a Sub-Administration Agreement with Dreyfus, provides
various administrative and corporate secretarial services to the Fund.
HOW TO BUY FUND SHARES
GENERAL _ You can purchase Fund shares without a sales charge if you
purchase them directly from the Distributor; you may be charged a fee if you
effect transactions in Fund shares through a securities dealer or broker,
bank or other financial institution (collectively, "Agents"). Share
certificates are issued only upon your written request. No certificates are
issued for fractional shares. It is not recommended that the Fund be used as
a vehicle for Keogh, IRA or other qualified plans. The Fund reserves the right
to reject any purchase order.

The minimum initial investment is $25,000. The Fund may waive its
minimum initial investment requirement for new Fund accounts opened through
an Agent whenever Dreyfus Institutional Services Division ("DISD") determines
for the initial account opened through such Agent which is below the Fund's
minimum initial investment requirement that the existing accounts in the Fund
opened through that Agent have an average account size, or the Agent has
adequate intent and access to funds to result in maintenance of accounts in
the Fund opened through that Agent with an average account size, in an amount
equal to or in excess of $25,000. DISD will periodically review the average
size of the accounts opened through each Agent and, if necessary, reevaluate
the Agent's intent and access to funds. DISD will discontinue the waiver as
to new accounts to be opened through an Agent if DISD determines that the
average size of accounts opened through that Agent is less than $25,000 and
the Agent does not have the requisite intent and access to funds. Subsequent
investments must be at least $1,000 (or at least $100 in the case of persons
who have held Fund shares since May 8, 1996). The initial investment must be
accompanied by the Fund's Account Application.

You may purchase Fund shares by check or wire, or through the Dreyfus
TELETRANSFER Privilege described below. Checks should be made payable to "The
Dreyfus Family of Funds." Payments to open new accounts which are mailed
should be sent to The Dreyfus Family of Funds, P.O. Box 9387, Providence,
Rhode Island 02940-9387, together with your Account Application. For
subsequent investments, your Fund account number should appear on the check
and an investment slip should be enclosed and sent to The Dreyfus Family of
Funds, P.O. Box 105, Newark, New Jersey 07101-0105.

[Page 11]
Neither initial nor subsequent investments should be made by third party
check. Purchase orders may be delivered in person only to a Dreyfus Financial
Center. THESE ORDERS WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY
UPON RECEIPT THEREBY. For the location of the nearest Dreyfus Financial
Center, please call the telephone number listed under "General Information."
Wire payments may be made if your bank account is in a commercial
bank that is a member of the Federal Reserve System or any other bank having
a correspondent bank in New York City. Immediately available funds may be
transmitted by wire to Boston Safe Deposit and Trust Company, DDA # 043508
Dreyfus BASIC Massachusetts Municipal Money Market Fund, for purchase of Fund
shares in your name. The wire must include your Fund account number (for new
accounts, your Taxpayer Identification Number ("TIN") should be included
instead), account registration and dealer number, if applicable. If your
initial purchase of Fund shares is by wire, you should call 1-800-645-6561
after completing your wire payment in order to obtain your Fund account
number. Please include your Fund account number on the Fund's Account
Application and promptly mail the Account Application to the Fund, as no
redemptions will be permitted until the Account Application is received. You
may obtain further information about remitting funds in this manner from your
bank. All payments should be made in U.S. dollars and, to avoid fees and
delays, should be drawn only on U.S. banks. A charge will be imposed if any
check used for investment in your account does not clear. The Fund makes
available to certain large institutions the ability to issue purchase
instructions through compatible computer facilities.
Subsequent investments also may be made by electronic transfer of
funds from an account maintained in a bank or other domestic financial
institution that is an Automated Clearing House ("ACH") member. You must
direct the institution to transmit immediately available funds through the
ACH System to Boston Safe Deposit and Trust Company with instructions to
credit your Fund account. The instructions must specify your Fund account
registration and Fund account number PRECEDED BY THE DIGITS "4750."
Federal regulations require that you provide a certified TIN upon
opening or reopening an account. See "Dividends, Other Distributions and
Taxes" and the Fund's Account Application for further information concerning
this requirement. Failure to furnish a certified TIN to the Fund could
subject you to a $50 penalty imposed by the Internal Revenue Service (the
"IRS").

Net Asset Value Per Share ("NAV") _ An investment portfolio's net
asset value ("NAV") refers to the worth of one share. The NAV for Fund
shares, which are offered on a continuous basis, is calculated on the basis
of amortized cost, which involves initially valuing a portfolio instrument at
its cost and thereafter assuming a constant amortization to maturity of any
discount or premium, regardless of the impact of fluctuating interest rates
on the market value of the instrument. The Fund intends to maintain a
constant NAV of $1.00, although there is no assurance that this can be done
on a continuing basis.

The offering price of Fund shares is their NAV. Investments and
requests to exchange or redeem shares received by the Transfer Agent or other
entity authorized to receive orders on behalf of the Fund before 4 p.m.,
Eastern time, on each day that the New York Stock Exchange is open (a
"business day") are effective on, and will receive the price next determined,
that business day. The NAV of the Fund is calculated two times each business
day, at 12 noon and 4 p.m., Eastern time. Investment, exchange or redemption
requests received after 4 p.m., Eastern time are effective on, and receive
the first share price determined, the next business day.
DREYFUS TELETRANSFER PRIVILEGE _ You may purchase Fund shares
(minimum $1,000 and maximum $150,000 per day) without charge by telephone if
you have checked the appropriate box and supplied the necessary information
on the Fund's Account Application or have filed a Shareholder Services Form
with the Transfer Agent. The proceeds will be transferred between the bank
account designated in one of these documents and your Fund account. Only a
bank account maintained in a domestic financial

[Page 12]
institution which is an ACH member may be so designated. The Fund may modify
or terminate this Privilege at any time or charge a service fee upon notice
to shareholders. No fee is contemplated for purchases of Fund shares pursuant
to this Privilege.

If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER purchase of Fund shares by calling
1-800-645-6561 or, if calling from overseas, call 516-794-5452.

SHAREHOLDER SERVICES

FUND EXCHANGES. You may purchase in exchange for shares of the Fund,
shares of certain other eligible funds managed or administered by Dreyfus to
the extent such shares are offered for sale in your state of residence. These
funds have different investment objectives which may be of interest to you.
If you desire to use this service, please call 1-800-645-6561 to determine if
it is available and whether any conditions are imposed on its use. You will
be charged a $5.00 fee for each exchange you make out of the Fund (unless you
have held Fund shares since May 8, 1996). This fee will be deducted from your
account and paid to the Transfer Agent. However, the Fund will waive this fee
if the closing balance in your account on the business day immediately
preceding the effective date of such transaction is $50,000 or more.

To request an exchange, you or your Agent acting on your behalf must
give exchange instructions to the Transfer Agent in writing or by telephone.
Before any exchange, you must obtain and should review a copy of the current
prospectus of the fund into which the exchange is being made. Prospectuses
may be obtained by calling 1-800-645-6561. The shares being exchanged must
have a current value of at least $1,000; furthermore, when establishing a new
account by exchange, the shares being exchanged must have a value of at least
the minimum initial investment required for the fund into which the exchange
is being made. The ability to issue exchange instructions by telephone is
given to all Fund shareholders automatically, unless you check the relevant
"No" box on the Account Application, indicating that you specifically refuse
this Privilege. The Telephone Exchange Privilege may be established for an
existing account, by written request signed by all shareholders on the
account, by a separate Shareholder Services Form, available by calling
1-800-645-6561, or by oral request from any of the authorized signatures on
the account by calling 1-800-645-6561. If you previously have established the
Telephone Exchange Privilege, you may telephone exchange instructions
(including over The Dreyfus TouchRegistration Mark automated telephone
system) by calling 1-800-645-6561. If you are calling from overseas, call
516-794-5452. See "How to Redeem Fund Shares_Procedures." Upon an exchange
into a new account, the following shareholder services and privileges, as
applicable and where available, will be automatically carried over to the
fund into which the exchange is made: Telephone Exchange Privilege, Check
Redemption Privilege, Wire Redemption Privilege, Telephone Redemption
Privilege, Dreyfus TELETRANSFER Privilege and the dividends and distributions
payment option (except for Dividend Sweep) selected by the investor.
Shareholders are limited to four exchanges per calendar year.

Shares will be exchanged at the next determined NAV; however, a sales
load may be charged with respect to exchanges into funds sold with a sales
load. If you are exchanging into a fund that charges a sales load, you may
qualify for share prices which do not include the sales load or which reflect
a reduced sales load, if the shares of the fund from which you are exchanging
were: (a) purchased with a sales load, (b) acquired by a previous exchange
from shares purchased with a sales load, or (c) acquired through reinvestment
of dividends or other distributions paid with respect to the foregoing
categories of shares. To qualify, at the time of the exchange you must notify
the Transfer Agent or your Agent must notify the Distributor. Any such
qualification is subject to confirmation of your holdings through a check of
appropriate records. See "Shareholder Services" in the SAI. The Fund reserves
the right to reject any exchange request in whole or in part. The
availability of fund exchanges may be modified or terminated at any time upon
notice to shareholders.

[Page 13]
The exchange of shares of one fund for shares of another is treated
for Federal income tax purposes as a sale of the shares given in exchange by
the shareholder and, therefore, an exchanging shareholder may realize a
taxable gain or loss.
DREYFUS DIVIDEND SWEEP
Dreyfus Dividend Sweep enables you to invest automatically dividends
or dividends and capital gain distributions, if any, paid by the Fund in
shares of certain other funds in the Dreyfus Family of Funds of which you are
an investor. Shares of the other fund will be purchased at the then-current
NAV; however, a sales load may be charged with respect to investments in
shares of a fund sold with a sales load. If you are investing in a fund that
charges a sales load, you may qualify for share prices which do not include
the sales load or which reflect a reduced sales load. If you are investing in
a fund that charges a contingent deferred sales charge the shares purchased
will be subject to the contingent deferred sales charge, if any, applicable
to the purchased shares. See "Shareholder Services" in the SAI. For more
information concerning this privilege, or to request a Dividend Options Form,
please call toll free 1-800-645-6561. You may cancel your participation in
this privilege by mailing written notification to The Dreyfus Family of
Funds, P.O. Box 9671, Providence, Rhode Island 02940-9671. To select a new
fund after cancellation, you must submit a new Dividend Options Form.
Enrollment in or cancellation of this Privilege is effective three business
days following receipt. This Privilege is available only for existing
accounts and may not be used to open new accounts. Minimum subsequent
investments do not apply. The Fund may modify or terminate this Privilege at
any time or charge a service fee. No such fee currently is contemplated.

HOW TO REDEEM FUND SHARES

GENERAL. You may request redemption of your shares at any time.
Redemption requests should be transmitted to the Transfer Agent as described
below. When a request is received in proper form by the Transfer Agent or
other entity authorized to receive orders on behalf of the Fund, the Fund
will redeem the shares at the next determined NAV as described below.

YOU WILL BE CHARGED $5.00 WHEN YOU REDEEM ALL SHARES IN YOUR ACCOUNT
OR YOUR ACCOUNT IS OTHERWISE CLOSED OUT (UNLESS YOU HAVE HELD FUND SHARES
SINCE MAY 8, 1996). The fee will be deducted from your redemption proceeds
and paid to the Transfer Agent. The account closeout fee does not apply to
exchanges out of the Fund or to wire or Dreyfus TELETRANSFER redemptions, for
each of which a $5.00 fee may apply. However, the Fund will waive this fee if
the closing balance in the shareholder's account on the business day
immediately preceding the effective date of such transaction is $50,000 or
more. Agents may charge a fee for effecting redemptions of Fund shares. Any
certificates representing Fund shares being redeemed must be submitted with
the redemption request. The value of the shares redeemed may be more or less
than their original cost, depending upon the Fund's then current NAV.
The Fund ordinarily will make payment for all shares redeemed within
seven days after receipt by the Transfer Agent of a redemption request in
proper form, except as provided by the rules of the SEC. HOWEVER, IF YOU HAVE
PURCHASED FUND SHARES BY CHECK OR BY THE DREYFUS TELETRANSFER PRIVILEGE AND
SUBSEQUENTLY SUBMIT A WRITTEN REDEMPTION REQUEST TO THE TRANSFER AGENT, THE
REDEMPTION PROCEEDS WILL BE TRANSMITTED TO YOU PROMPTLY UPON BANK CLEARANCE
OF YOUR PURCHASE CHECK OR DREYFUS TELETRANSFER PURCHASE ORDER, WHICH MAY TAKE
UP TO EIGHT BUSINESS DAYS OR MORE. IN ADDITION, THE FUND WILL NOT HONOR
REDEMPTION CHECKS UNDER THE CHECK REDEMPTION PRIVILEGE, AND WILL REJECT
REQUESTS TO REDEEM SHARES BY WIRE OR TELEPHONE OR PURSUANT TO THE DREYFUS
TELETRANSFER PRIVILEGE FOR A PERIOD OF EIGHT BUSINESS DAYS AFTER RECEIPT BY
THE TRANSFER AGENT OF THE PURCHASE CHECK OR THE DREYFUS TELETRANSFER PURCHASE
ORDER AGAINST WHICH SUCH REDEMPTION IS REQUESTED. THESE PROCEDURES WILL NOT
APPLY IF YOUR SHARES WERE PURCHASED BY WIRE PAYMENT, OR IF YOU OTHERWISE HAVE
A SUFFICIENT COLLECTED BALANCE IN YOUR ACCOUNT TO COVER THE REDEMPTION
[Page 14]
REQUEST. PRIOR TO THE TIME ANY REDEMPTION IS EFFECTIVE, DIVIDENDS ON SUCH
SHARES WILL ACCRUE AND BE PAYABLE, AND YOU WILL BE ENTITLED TO EXERCISE ALL
OTHER RIGHTS OF BENEFICIAL OWNERSHIP. Fund shares will not be redeemed until
the Transfer Agent has received your Account Application.
The Fund reserves the right to redeem your account at its option upon
not less than 45 days' written notice if the net asset value of your account
is $10,000 or less ($500 or less in the case of Fund shareholders as of May
8, 1996) and remains at or below such amount during the notice period. The
$5.00 account closeout fee would be charged in such case.
PROCEDURES. You may redeem shares by using the regular redemption
procedure through the Transfer Agent, or through the Telephone Redemption
Privilege or the Check Redemption Privilege, which are granted automatically
unless you specifically refuse them by checking the applicable "No" box on
the Account Application. The Telephone Redemption Privilege and the Check
Redemption Privilege may be established for an existing account by a separate
signed Shareholder Services Form or, with respect to the Telephone Redemption
Privilege, by oral request from any of the authorized signatories on the
account by calling 1-800-645-6561. You also may redeem shares through, the
Wire Redemption Privilege, or the Dreyfus TeleTransfer Privilege, if you have
checked the appropriate box and supplied the necessary information on the
Account Application or have filed a Shareholder Services Form with the
Transfer Agent. Other redemption procedures may be in effect for clients of
certain Agents and institutions. The Fund makes available to certain large
institutions the ability to issue redemption instructions through compatible
computer facilities. The Fund reserves the right to refuse any request made
by wire or telephone, including requests made shortly after a change of
address, and may limit the amount involved or the number of such requests.
The Fund may modify or terminate any redemption Privilege at any time or
charge a service fee upon notice to shareholders. No such fee currently is
contemplated. Shares for which certificates have been issued are not eligible
for the Check Redemption, Wire Redemption, Telephone Redemption or Dreyfus
TELETRANSFER Privilege.
The Telephone Redemption Privilege or Telephone Exchange Privilege
authorizes the Transfer Agent to act on telephone instructions (including
over The Dreyfus TouchRegistration Mark automated telephone system) from any
person representing himself or herself to be you, or a representative of your
Agent, and reasonably believed by the Transfer Agent to be genuine. The Fund
will require the Transfer Agent to employ reasonable procedures, such as
requiring a form of personal identification, to confirm that instructions are
genuine and, if it does not follow such procedures, the Fund or the Transfer
Agent may be liable for any losses due to unauthorized or fraudulent
instructions. Neither the Fund nor the Transfer Agent will be liable for
following telephone instructions reasonably believed to be genuine.
During times of drastic economic or market conditions, you may
experience difficulty in contacting the Transfer Agent by telephone to
request a redemption or an exchange of Fund shares. In such cases, you should
consider using the other redemption procedures described herein. Use of these
other redemption procedures may result in your redemption request being
processed at a later time than it would have been if telephone redemption had
been used.
REGULAR REDEMPTION. Under the regular redemption procedure, you may
redeem your shares by written request mailed to The Dreyfus Family of Funds,
P.O. Box 9671, Providence, Rhode Island 02940-9671. Redemption requests may
be delivered in person only to a Dreyfus Financial Center. THESE REQUESTS
WILL BE FORWARDED TO THE FUND AND WILL BE PROCESSED ONLY UPON RECEIPT
THEREBY. For the location of the nearest financial center, please call the
telephone number listed under "General Information." Redemption requests must
be signed by each shareholder, including each owner of a joint account, and
each signature must be guaranteed. The Transfer Agent has adopted standards
and procedures pursuant to which signature-guarantees in proper form
generally will be accepted from domestic banks, brokers, dealers, credit
unions, national securities exchanges, registered securities associations,
clearing agencies and savings associations, as well as from participants in
the New York Stock Exchange
[Page 15]
Medallion Signature Program, the Securities Transfer Agents Medallion Program
("STAMP"), and the Stock Exchanges Medallion Program. For more information
with respect to signature-guarantees, please call the telephone number listed
under "General Information."
Redemption proceeds of at least $5,000 will be wired to any member
bank of the Federal Reserve System in accordance with a written
signature-guaranteed request.

CHECK REDEMPTION PRIVILEGE. You may write Redemption Checks drawn on
your Fund account. Redemption Checks may be made payable to the order of any
person in the amount of $1,000 or more. Redemption Checks should not be used
to close your account. YOUR ACCOUNT WILL BE CHARGED $2.00 FOR EACH REDEMPTION
CHECK YOU WRITE (UNLESS YOU HAVE HELD FUND SHARES SINCE MAY 8, 1996).
However, the Fund will waive this fee if the closing balance in your account
on the business day immediately preceding the effective date of such
transaction is $50,000 or more. In addition, the Transfer Agent will impose a
fee for stopping payment of a Redemption Check upon your request or if the
Transfer Agent cannot honor the Redemption Check due to insufficient funds or
other valid reason. Such fees are not subject to waiver based on account
balance or other factors. The Fund may return an unpaid Redemption Check that
would draw your account balance below $5.00 and you may be subject to extra
charges. You should date your Redemption Checks with the current date when
you write them. Please do not postdate your Redemption Checks. If you do, the
Transfer Agent will honor, upon presentment, even if presented before the
date of the check, all postdated Redemption Checks which are dated within six
months of presentment for payment, if they are otherwise in good order. The
Check Redemption Privilege is granted automatically unless you refuse it.

WIRE REDEMPTION PRIVILEGE. You may request by wire, telephone or
letter that redemption proceeds (minimum $5,000) be wired to your account at
a bank which is a member of the Federal Reserve System, or a correspondent
bank if your bank is not a member. YOU WILL BE CHARGED A $5.00 WIRE
REDEMPTION FEE FOR EACH WIRE REDEMPTION (UNLESS YOU HAVE HELD FUND SHARES
SINCE MAY 8, 1996), WHICH WILL BE DEDUCTED FROM YOUR ACCOUNT AND PAID TO THE
TRANSFER AGENT. However, the Fund will waive this fee if the closing balance
in your account on the business day immediately preceding the effective date
of such transaction is $50,000 or more. Holders of jointly registered Fund or
bank accounts may have redemption proceeds of only up to $250,000 wired
within any 30-day period. You may telephone redemption requests by calling
1-800-645-6561 or, if calling from overseas, call 516-794-5452. The Fund's
SAI sets forth instructions for transmitting redemption requests by wire.

TELEPHONE REDEMPTION PRIVILEGE. You may request by telephone that
redemption proceeds (maximum $150,000 per day) be paid by check and mailed to
your address. You may telephone redemption instructions by calling
1-800-645-6561 or, if calling from overseas, call 516-794-5452. The Telephone
Redemption Privilege is granted automatically unless you specifically refuse
it.

DREYFUS TELETRANSFER PRIVILEGE. You may request by telephone that
redemption proceeds (minimum $1,000 per day) be transferred between your Fund
account and your bank account. Only a bank account maintained in a domestic
financial institution which is an ACH member may be so designated. Redemption
proceeds will be on deposit in your account at an ACH member bank ordinarily
two days after receipt of the redemption request. Holders of jointly
registered Fund or bank accounts may redeem through the Dreyfus TELETRANSFER
Privilege for transfer to their bank account only up to $250,000 within any
30-day period. YOUR ACCOUNT WILL BE CHARGED $5.00 FOR EACH REDEMPTION
EFFECTED PURSUANT TO THIS PRIVILEGE (UNLESS YOU HAVE HELD FUND SHARES SINCE
MAY 8, 1996). However, the Fund will waive this fee if the closing balance in
the shareholder's account on the business day immediately preceding the
effective date of such transaction is $50,000 or more.
If you have selected the Dreyfus TELETRANSFER Privilege, you may
request a Dreyfus TELETRANSFER redemption of Fund shares by calling
1-800-645-6561 or, if calling from overseas, 516-794-5452.

[Page 16]
PERFORMANCE INFORMATION
From time to time, the Fund may advertise its yield and
tax-equivalent yield. YIELD AND TAX-EQUIVALENT YIELD FIGURES ARE BASED ON
HISTORICAL EARNINGS AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. It
can be expected that these yield figures will fluctuate substantially.
The Fund's "yield" refers to the income generated by an investment in
the Fund over a seven-day period identified in the advertisement. This income
is then "annualized." That is, the amount of income generated by the
investment during that week is assumed to be generated each week over a
52-week period and is shown as a percentage of the investment. The "effective
yield" is calculated similarly, but, when annualized, the income earned by an
investment in the Fund is assumed to be reinvested. The "effective yield"
will be slightly higher than the "yield" because of the compounding effect of
this assumed reinvestment. The Fund's "yield" and "effective yield" may
reflect absorbed expenses pursuant to any undertaking that may be in effect.
See "Management of the Fund." Since yields fluctuate, yield data cannot
necessarily be used to compare an investment in the Fund with bank deposits,
savings accounts, and similar investment alternatives which often provide an
agreed-upon or guaranteed fixed yield for a stated period of time, or other
investment companies which may use a different method of computing yield. The
Fund's tax-equivalent yield shows the level of taxable yield needed to
produce an after-tax equivalent to the Fund's tax-free yield. This is done by
increasing the Fund's yield by the amount necessary to reflect the payment of
Federal income tax (and state income tax, if applicable) at a stated tax
rate.
Any fees charged by an Agent directly to its customers' account in
connection with investments in the Fund will not be included in calculations
of yield.
The Fund may compare its performance with various industry standards
of performance including Lipper Analytical Services, Inc. ratings.
Performance rankings as reported in CHANGING TIMES, BUSINESS WEEK,
INSTITUTIONAL INVESTOR, THE WALL STREET JOURNAL, IBC/DONOGHUE'S MONEY FUND
REPORT, MUTUAL FUND FORECASTER, NO LOAD INVESTOR, MONEY MAGAZINE, MORNINGSTAR
MUTUAL FUND VALUES, U.S. NEWS AND WORLD REPORT, FORBES, FORTUNE, BARRON'S and
similar publications may also be used in comparing the Fund's performance.
Furthermore, the Fund may quote its yields in advertisements or in
shareholder reports.
DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES
The Fund ordinarily declares dividends from its net investment income
on each day the New York Stock exchange is open for business. The Fund's
earnings for Saturdays, Sundays and holidays are declared as dividends on the
preceding business day. Dividends usually are paid on the last calendar day
of each month, and are automatically reinvested in additional Fund shares at
NAV or, at your option, paid in cash. If you redeem all shares in your
account at any time during the month, all dividends to which you are entitled
will be paid to you along with the proceeds of the redemption. If you are an
omnibus accountholder and indicate in a partial redemption request that a
portion of any accrued dividends to which such account is entitled belongs to
an underlying accountholder who has redeemed all shares in his or her
account, such portion of the accrued dividends will be paid to you along with
the proceeds of the redemption. Distributions from net realized securities
gains, if any, generally are declared and paid once a year, but the Fund may
make distributions on a more frequent basis to comply with the distribution
requirements of the Code, in all events in a manner consistent with the
provisions of the 1940 Act. The Fund will not make distributions from net
realized securities gains unless capital loss carryovers, if any, have been
utilized or have expired. You may choose whether to receive distributions in
cash or to reinvest in additional shares at NAV. All expenses are accrued
daily and deducted before declaration of dividends to investors.
Except as provided below, shares purchased on a day on which the Fund
calculates its NAV will not begin to accrue dividends until the following
business day and redemption orders effected on any particular day will
receive all dividends declared through the day of redemption. However, if
immediately

[Page 17]
available funds are received by the Transfer Agent after 12:00 noon, Eastern
time, you may receive the dividend declared on the day of purchase. You will
not receive the dividends declared on the day of redemption if a wire
redemption order is placed prior to 12:00 noon, Eastern time.
It is expected that the Fund will qualify for treatment as a
regulated investment company under the Code so that it will be relieved of
Federal income tax on that part of its investment company taxable income
(consisting generally of taxable net investment income and net short-term
capital gain) and net capital gain (the excess of net long-term capital gain
over net short-term capital loss) that is distributed to its shareholders. In
addition, the Fund intends to continue to qualify to pay "exempt-interest"
dividends, which requires, among other things, that at the close of each
quarter of its taxable year at least 50% of the value of its total assets
must consist of municipal securities.
Dividends from the Fund's investment company taxable income are
taxable to you as ordinary income, to the extent of the Fund's earnings and
profits. Distributions by the Fund that are designated by it as
"exempt-interest dividends" generally may be excluded by you from your gross
income. Distributions by the Fund of net capital gain, when designated as
such, are taxable to you as long-term capital gains, regardless of the length
of time you have owned your shares.
Interest on indebtedness incurred or continued to purchase or carry
shares of the Fund will not be deductible for Federal income tax purposes to
the extent that the Fund's distributions (other than capital gains
distributions) consist of exempt-interest dividends. The Fund may invest in
"private activity bonds," the interest on which is treated as a tax
preference item for shareholders in determining their liability for the
alternative minimum tax. Proposals may be introduced before Congress for the
purpose of restricting or eliminating the Federal income tax exemption for
interest on municipal securities. If such a proposal were enacted, the
availability of such securities for investment by the Fund and the value of
its portfolio would be affected. In such event, the Fund would reevaluate its
investment objective and policies.
Dividends and other distributions, to the extent taxable, are taxable
to you regardless of whether they are received in cash or reinvested in
additional Fund shares, even if the value of your shares is below your cost.
If you purchase shares shortly before a taxable distribution (i.e., any
distribution other than an exempt-interest dividend paid by the Fund), you
must pay income taxes on the distribution, even though the value of your
investment (plus cash received, if any) remains the same. In addition, the
share price at the time you purchase shares may include unrealized gains in
the securities held in the Fund. If these portfolio securities are
subsequently sold and the gains are realized, they will, to the extent not
offset by capital losses, be paid to you as a capital gain distribution and
will be taxable to you.
In January of each year, the Fund will send you a Form 1099-DIV
notifying you of the status for Federal income tax purposes of your
distributions for the preceding year. The Fund also will advise shareholders
of the percentage, if any, of the dividends paid by the Fund that are exempt
from Federal income tax and the portion, if any, of those dividends that is a
tax preference item for purposes of the Federal alternative minimum tax.
The Fund must withhold and remit to the U.S. Treasury ("backup
withholding") 31% of dividends, capital gain distributions and redemption
proceeds, regardless of the extent to which gain or loss may be realized,
paid to an individual or certain other non-corporate shareholders if such
shareholder fails to certify that the TIN furnished to the Fund is correct.
Backup withholding at that rate also is required from dividends and capital
gain distributions payable to such a shareholder if (1) that shareholder
fails to certify that he or she has not received notice from the IRS of being
subject to backup withholding as a result of a failure properly to report
taxable dividend or interest income on a Federal income tax return or (2) the
IRS notifies the Fund to institute backup withholding because the IRS
determines that the shareholder's TIN is incorrect or that the shareholder
has failed properly to report such income.
A TIN is either the Social Security number, IRS individual taxpayer
identification number, or employer identification number of the record owner
of the account. Any tax withheld as a result of backup withholding

[Page 18]
does not constitute an additional tax imposed on the record owner of
the account and may be claimed as a credit on the record owner's Federal
income tax return.
In addition, in order to avoid the application of a 4% nondeductible
excise tax on certain undistributed amounts of ordinary income and capital
gains, the Fund may make an additional distribution shortly before December
31 in each year of any undistributed ordinary (taxable) income or capital
gains and expects to pay any other dividends and distributions necessary to
avoid the application of this tax.
The foregoing is only a summary of some of the important tax
considerations generally affecting the Fund and its shareholders; see the SAI
for a further discussion. There may be other federal, state or local tax
considerations applicable to a particular investor; for example, the Fund's
dividends may be wholly or partly taxable under state and/or local laws. You
therefore are urged to consult your own tax adviser.
GENERAL INFORMATION
The Trust was organized as a Massachusetts business trust under the
laws of the Commonwealth of Massachusetts on March 28, 1983 under the name of
The Boston Company Tax-Free Municipal Funds, changed its name to the Laurel
Tax-Free Municipal Funds on March 31, 1994, and changed its name again to The
Dreyfus/Laurel Tax-Free Municipal Funds on October 17, 1994. The Trust is
authorized to issue an unlimited number of shares of beneficial interest,
each without par value. The Trust may also create an unlimited number of
separate investment portfolios (each a "fund") without shareholder approval.
Effective May 8, 1996, the Fund's name changed to "Dreyfus BASIC
Massachusetts Municipal Money Market Fund." The Trust is registered with the
SEC as an open-end management investment company, commonly known as a mutual
fund. The Trust may in the future seek to achieve the Fund's investment
objective by investing all of the Fund's assets in another investment company
having the same investment objective and substantially the same investment
policies and restrictions as those applicable to the Fund. Shareholders of
the Fund will be given at least 30 days' prior notice of any such investment.

Each share has one vote. All shares of all funds (and classes
thereof) vote together as a single class, except as to any matter for which a
separate vote of any fund or class is required by the 1940 Act, and except as
to any matter which affects the interests of one or more particular funds or
classes, in which case only the shareholders of the affected funds or classes
are entitled to vote, each as a separate class

Unless otherwise required by the 1940 Act, ordinarily it will not be
necessary for the Fund to hold annual meetings of shareholders. As a result,
Fund shareholders may not consider each year the election of Trustees or the
appointment of auditors. However, the holders of at least 10% of the shares
outstanding and entitled to vote may require the Fund to hold a special
meeting of shareholders for purposes of removing a Trustee from office and
for any other purpose. Trust shareholders may remove a Trustee by the
affirmative vote of two-thirds of the Trust's outstanding voting shares. In
addition, the Board of Trustees will call a meeting of shareholders for the
purpose of electing Trustees if, at any time, less than a majority of the
Trustees then holding office have been elected by shareholders.

The Transfer Agent maintains a record of your ownership and will send
you confirmations and statements of account.
Shareholder inquiries may be made by writing to the Fund at 144 Glenn
Curtiss Boulevard, Uniondale, New York 11556-0144, or by calling toll free
1-800-645-6561.
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE
FUND'S OFFICIAL SALES LITERATURE IN CONNECTION WITH THE OFFER OF THE FUND'S
SHARES, AND, IF GIVEN OR MADE, SUCH OTHER INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE FUND. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER IN ANY STATE IN WHICH, OR TO ANY PERSON TO WHOM,
SUCH OFFERING MAY NOT LAWFULLY BE MADE.
[Page 19]
Dreyfus
BASIC Massachusetts
Municipal Money Market Fund
Prospectus
Copy Rights 1998 Dreyfus Service Corporation
715p1098

_______________________________________________________________________________

DREYFUS BASIC MASSACHUSETTS MUNICIPAL MONEY MARKET FUND

PART B
(STATEMENT OF ADDITIONAL INFORMATION)

NOVEMBER 1, 1998

_______________________________________________________________________________

This Statement of Additional Information, which is not a prospectus,
supplements and should be read in conjunction with the current Prospectus of
the Dreyfus BASIC Massachusetts Municipal Money Market Fund (formerly, the
Dreyfus/Laurel Massachusetts Tax-Free Money Fund) (the "Fund"), dated
November 1, 1998, as it may be revised from time to time. The Fund is a
separate, non-diversified portfolio of The Dreyfus/Laurel Tax-Free Municipal
Funds (the "Trust"), an open-end management investment company, known as a
mutual fund. To obtain a copy of the Fund's Prospectus, please write to the
Fund at 144 Glenn Curtiss Boulevard, Uniondale, New York 11556-0144, or call
one of the following numbers:

Call Toll Free 1-800-645-6561
In New York City -- Call 1-718-895-1206
Outside the U.S. -- Call 516-794-5452

The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment
manager.

Premier Mutual Fund Services, Inc. (the "Distributor") is the
distributor of the Fund's shares.

TABLE OF CONTENTS

Page

Management of the Trust................................... B-2
Purchase of Fund Shares................................... B-9
Investment Policies....................................... B-10
Redemption of Fund Shares................................. B-21
Shareholder Services...................................... B-23
Determination of Net Asset Value.......................... B-25
Performance Information................................... B-26
Dividends, Other Distributions and Taxes.................. B-27
Information About the Fund................................ B-28
Principal Shareholders.................................... B-30
Custodian and Transfer Agent.............................. B-30
Counsel and Independent Auditors.......................... B-30
Financial Statements...................................... B-30
Appendix A - Risk Factors - Investing in
Massachusetts Municipal Obligations..................... B-31
Appendix B - Information about Securities Ratings......... B-34

MANAGEMENT OF THE TRUST

Trustees and Officers

The Trust has a Board composed of twelve Trustees which supervises the
Fund's investment activities and reviews contractual arrangements with
companies that provide the Fund with services. The following lists the
Trustees and officers and their positions with the Trust and their present
and principal occupations during the past five years. Each Trustee who is
an "interested person" of the Trust (as defined in the Investment Company
Act of 1940, as amended (the "Act"), is indicated by an asterisk. Each of
the Trustees also serves as a Director of The Dreyfus/Laurel Funds, Inc. and
as a Trustee of The Dreyfus/Laurel Funds Trust (collectively, with the
Trust, the "Dreyfus/Laurel Funds") and the Dreyfus High Yield Strategies
Fund.

Trustees of the Trust

o+RUTH MARIE ADAMS. Trustee of the Trust; Professor of English and Vice
President Emeritus, Dartmouth College; Senator, United Chapters of Phi
Beta Kappa; Trustee, Woods Hole Oceanographic Institution. From
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 84 years old. Address: 1026 Kendal Lyme Road, Hanover, New
Hampshire 03755.

o+FRANCIS P. BRENNAN. Chairman of the Board of Trustees and Assistant
Treasurer of the Trust; Director and Chairman, Massachusetts Business
Development Corp. From November 1995 to January 1997, Director, Access
Capital Strategic Community Investment Fund, Inc. - Bank Portfolio.
Age: 81 years old. Address: Massachusetts Business Development Corp.,
50 Milk Street, Boston, Massachusetts 02109.

o+JOSEPH S. DiMARTINO. Trustee of the Trust. Since January 1995, Mr.
DiMartino has served as Chairman of the Board for various funds in the
Dreyfus Family of Funds. He is a Director of Noel Group, Inc., a
venture capital company (for which from February 1995 until November
1997, he was Chairman of the Board), The Muscular Dystrophy
Association, HealthPlan Services Corporation, a provider of marketing,
administrative and risk management services to health and other benefit
programs, Carlyle Industries, Inc. (formerly Belding Heminway Company,
Inc.), a button packager and distributor, Century Business Services,
Inc. a provider of various outservicing functions for small and medium
sized companies, and Career Blazers Inc. (formerly, Staffing Resources)
a temporary placement firm. Mr. DiMartino is also a Board member of
152 other funds in the Dreyfus Family of Funds. From November 1995 to
January 1997, Director, Access Capital Strategic Community Investment
Fund, Inc. - Institutional Investment Portfolio and Bank Portfolio.
For more than five years prior to January 1995, he was President, a
Director and, until August 24, 1994, Chief Operating Officer of Dreyfus
and Executive Vice President and a Director of Dreyfus Service
Corporation, a wholly-owned subsidiary of Dreyfus. From August 1994 to
December 31, 1994, he was a Director of Mellon Bank Corporation. Age:
55 years old. Address: 200 Park Avenue, New York, New York 10166.

o+JAMES M. FITZGIBBONS. Trustee of the Trust; Director, Lumber Mutual
Insurance Company; Director, Barrett Resources, Inc. From November
1995 to January 1997, Director, Access Capital Strategic Community
Investment Fund, Inc. - Bank Portfolio. Age: 64 years old. Address:
40 Norfolk Road, Brookline, Massachusetts 02167.

o*J. TOMLINSON FORT. Trustee of the Trust; Partner, Reed, Smith, Shaw &
McClay (law firm). From November 1995 to January 1997, Director,
Access Capital Strategic Community Investment Fund, Inc. - Bank
Portfolio. Age: 70 years old. Address: 204 Woodcock Drive,
Pittsburgh, Pennsylvania 15215.

o+ARTHUR L. GOESCHEL. Trustee of the Trust; Director, Calgon Carbon
Corporation; Director, Cerex Corporation; former Chairman of the Board
and Director, Rexene Corporation. From November 1995 to January 1997,
Director, Access Capital Strategic Community Investment Fund, Inc. -
Institutional Investment Portfolio. Age: 76 years old. Address: Way
Hollow Road and Woodland Road, Sewickley, Pennsylvania 15143.

o+KENNETH A. HIMMEL. Trustee of the Trust; former Director, The Boston
Company, Inc. ("TBC") and Boston Safe Deposit and Trust Company;
President and Chief Executive Officer, Himmel & Co., Inc.; Vice
Chairman, Sutton Place Gourmet, Inc.; Managing Partner, Franklin
Federal Partners. From November 1995 to January 1997, Director, Access
Capital Strategic Community Investment Fund, Inc. - Bank Portfolio.
Age: 52 years old. Address: 625 Madison Avenue, 9th Floor, New York,
New York 10022.

o*ARCH S. JEFFERY. Trustee of the Trust; Financial Consultant. From
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 81 years old. Address: 1817 Foxcroft Lane, Unit 306, Allison
Park, Pennsylvania 15101.

o+STEPHEN J. LOCKWOOD. Trustee of the Trust; President and CEO, LDG
Management Company Inc.; CEO, LDG Reinsurance Underwriters, SRRF
Management Inc. and Medical Reinsurance Underwriters Inc. From
November 1995 to January 1997, Director, Access Capital Strategic
Community Investment Fund, Inc. - Institutional Investment Portfolio.
Age: 51 years old. Address: 401 Edgewater Place, Wakefield,
Massachusetts 01880.

o+JOHN J. SCIULLO. Trustee of the Trust; Dean Emeritus and Professor of
Law, Duquesne University Law School; Director, Urban Redevelopment
Authority of Pittsburgh; Member of Advisory Committee, Decedents
Estates Laws of Pennsylvania. From November 1995 to January 1997,
Director, Access Capital Strategic Community Investment Fund, Inc. -
Institutional Investment Portfolio. Age: 67 years old. Address: 321
Gross Street, Pittsburgh, Pennsylvania 15224.

o+ROSLYN M. WATSON. Trustee of the Trust; Principal, Watson Ventures, Inc.;
Director, American Express Centurion Bank; Director, Harvard/Pilgrim
Health Care Plan, Inc. From November 1995 to January 1997, Director,
Access Capital Strategic Community Investment Fund, Inc. - Bank
Portfolio; Director, Massachusetts Electric Company; Director, The
Hyams Foundation, Inc. Age: 49 years old. Address: 25 Braddock Park,
Boston, Massachusetts 02116-5816.

o+BENAREE PRATT WILEY. Trustee of the Trust; President and CEO of The
Partnership, an organization dedicated to increasing the representation
of African Americans in positions of leadership, influence and decision-
making in Boston, MA; Trustee, Boston College; Trustee, WGBH
Educational Foundation; Trustee, Children's Hospital; Director, The
Greater Boston Chamber of Commerce; Director, The First Albany
Companies, Inc.; from April 1995 to March 1998, Director, TBC, an
affiliate of Dreyfus. Age: 52 years old. Address: 334 Boylston
Street, Suite 400, Boston, Massachusetts.

_____________________________
* "Interested person" of the Trust, as defined in the Act.
o Member of the Audit Committee.
+ Member of the Nominating Committee.

Officers of the Trust

#MARGARET W. CHAMBERS. Vice President and Secretary of the Trust. Senior
Vice President and General Counsel of Funds Distributor Inc. From
August 1996 to March 1998, she was Vice President and Assistant General
Counsel for Loomis, Sayles & Company, L.P. From January 1986 to July
1996, she was an associate with the law firm of Ropes & Gray. Age: 38
years old.

#MARIE E. CONNOLLY. President and Treasurer of the Trust. President, Chief
Executive Officer, Chief Compliance Officer and a Director of the
Distributor and Funds Distributor, Inc., the ultimate parent of which
is Boston Institutional Group, Inc. Age: 41 years old.

#DOUGLAS C. CONROY. Vice President and Assistant Secretary of the Trust.
Assistant Vice President of Funds Distributor, Inc. From April 1993 to
January 1995, he was a Senior Fund Accountant for Investors Bank &
Trust Company. Age: 29 years old.

#CHRISTOPHER J. KELLEY. Vice President and Assistant Secretary of the
Trust. Vice President and Senior Associate General Counsel of Funds
Distributor, Inc. and the Distributor. From April 1994 to July 1996,
Mr. Kelley was Assistant Counsel at Forum Financial Group. From
October 1992 to March 1994, Mr. Kelley was employed by Putnam
Investments in legal and compliance capacities. Age: 33 years old.

#KATHLEEN K. MORRISEY. Vice President and Assistant Secretary of the Trust.
Vice President and Assistant Secretary of Funds Distributor, Inc. From
July 1994 to November 1995, she was a Fund Accountant for Investors
Bank & Trust Company. Age: 26 years old.

#MARY A. NELSON. Vice President and Assistant Treasurer of the Trust. Vice
President of the Distributor and Funds Distributor, Inc. From
September 1989 to July 1994, she was an Assistant Vice President and
Client Manager for TBC. Age: 34 years old.

#MICHAEL S. PETRUCELLI. Vice President, Assistant Treasurer and Assistant
Secretary of the Trust. Senior Vice President and Director of
Strategic Client Initiatives of Funds Distributor, Inc. From December
1989 through November 1996 he was employed by GE Investment Services
where he held various financial, business development and compliance
positions. He also served as Treasurer of the GE Funds and as Director
of the GE Investment Services. Age 37 years old.

#STEPHANIE D. PIERCE. Vice President, Assistant Treasurer and Assistant
Secretary of the Trust. Vice President, Client Development Manager of
Funds Distributor, Inc. From April 1997 to March 1998, she was employed
as a Relationship Manager with Citibank, NA. Age: 30 years old.

#GEORGE A. RIO. Vice President and Assistant Treasurer of the Trust.
Executive Vice President and Client Service Director of Funds
Distributor, Inc. From June 1995 to March 1998, he was Senior Vice
President and Senior Key Account Manager for Putnam Mutual Funds. From
May 1994 to June 1995, he was Director of Business Development for
First Data Corporation. From September 1983 to May 1994, he was Senior
Vice President & Manager of Client Services and Director of Internal
Audit at TBC. Age: 43 years old.

#JOSEPH F. TOWER, III. Vice President and Assistant Treasurer of the Trust.
Senior Vice President, Treasurer, Chief Financial Officer and a
Director of the Distributor and Funds Distributor, Inc. From July 1988
to August 1994, he was employed by TBC where he held various management
positions in the Corporate Finance and Treasury areas. Age: 36 years
old.

#ELBA VASQUEZ. Vice President and Assistant Secretary of the Company.
Assistant Vice President of Funds Distributor, Inc. From March 1990 to
May 1996, she was employed by U. S. Trust Company of New York, where
she held various sales and marketing positions. Age: 37 years old.

__________________________________
# Officer also serves as an officer for other investment companies
advised by Dreyfus, including The Dreyfus/Laurel Funds Trust, The
Dreyfus/Laurel Funds, Inc. and Dreyfus High Yield Strategies Fund.

The address of each officer of the Trust is 200 Park Avenue, New York,
NY 10166.

No officer or employee of the Distributor (or of any parent, subsidiary
or affiliate thereof) receives any compensation from the Trust for serving
as an officer or Trustee of the Trust. In addition, no officer or employee
of Dreyfus (or of any parent, subsidiary or affiliate thereof) serves as an
officer or Trustee of the Trust. Effective July 1, 1998, the Dreyfus/Laurel
Funds pay each Director/Trustee who is not an "interested person" of the
Trust (as defined in the Act), $40,000 per annum plus $5,000 per joint
Dreyfus/Laurel Funds Board meeting attended, $2,000 for separate committee
meetings attended which are not held in conjunction with a regularly
scheduled board meeting and $500 for Board meetings and separate committee
meetings attended that are conducted by telephone. The Dreyfus/Laurel Funds
also reimburse each Director/Trustee who is not an "interested person" of
the Trust (as defined in the Act), for travel and out-of-pocket expenses.
The Chairman of the Board receives an additional 25% of such compensation
(with the exception of reimbursable amounts). In the event that there is a
joint committee meeting of the Dreyfus/Laurel Funds and the Dreyfus High
Yield Strategies Fund, the $2,000 fee will be allocated between the
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund.

Prior to July 1, 1998, the Dreyfus/Laurel Funds paid each
Director/Trustee who was not an "interested person" of the Trust (as defined
in the Act), $27,000 per annum (and an additional $25,000 for the Chairman
of the Board of Directors/Trustees of the Dreyfus/Laurel Funds) and $1,000
per joint Dreyfus/Laurel Funds Board meeting attended, plus $750 per joint
Dreyfus/Laurel Funds Audit Committee meeting attended, and reimbursed each
such Director/Trustee for travel and out-of-pocket expenses (the "Former
Compensation Structure").

For the fiscal year ended June 30, 1998, the aggregate amount of fees
and expenses received by each current Trustee from the Trust and all other
funds in the Dreyfus Family of Funds for which such person is a Board member
pursuant to the Former Compensation Structure were as follows:

Total Compensation
Aggregate from the Trust and
Name of Board Compensation Fund Complex Paid
Member from Trust# to Board Member+
- --------------- ------------- -------------------

Ruth Marie Adams
Francis P. Brennan*
Joseph S. DiMartino**
James M. Fitzgibbons
J. Tomlinson Fort**
Arthur L. Goeschel
Kenneth A. Himmel
Arch S. Jeffery**
Stephen J. Lockwood
John J. Sciullo
Roslyn M. Watson
Benaree Pratt Wiley++
_____________________________

# 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 Dreyfus, are in fact paid directly by Dreyfus to the non-
interested Trustees. Amount does not include reimbursed expenses for
attending Board meetings, which amounted to $4,295.88 for the Trust.

* Compensation of Francis P. Brennan reflects the $25,000 paid by the
Dreyfus/Laurel Funds to Mr. Brennan to be the Chairman of the Board
pursuant to the Former Compensation Structure.

**For the fiscal year ended June 30, 1998, Joseph S. DiMartino, J.
Tomlinson Fort and Arch S. Jeffery were paid directly by Dreyfus for
serving as Board members of the Trust and the funds in the Dreyfus/Laurel
Funds. For the fiscal year ended June 30, 1998, the aggregate amount of
fees and expenses received by Joseph S. DiMartino, J. Tomlinson Fort and
Arch S. Jeffery from Dreyfus for serving as a Board member of the Trust
were $________, $_________ and $________ respectively, and for serving as
a Board member of all funds in the Dreyfus/Laurel Funds (including the
Trust) were $_________, $________ and $________, respectively. In
addition, Dreyfus reimbursed Messrs. DiMartino, Fort and Jeffery a total
of $_________ for expenses attributable to the Trust's Board meetings
which is not included in the $_________ amount noted above.

*** Amount paid to Joseph S. DiMartino from the funds in the Fund Complex
for the year ended December 31, 1997.

+ The Dreyfus Family of Funds consists of 152 mutual funds.

++ Payments to Ms. Wiley were for the period from April 23, 1998 (the date
she was elected as a Board member) through June 30, 1998.

The officers and Trustees of the Trust as a group owned beneficially
less than 1% of the total shares of the Fund outstanding as of
___________________.

Management Arrangements

Dreyfus serves as the investment manager for the Fund pursuant to an
Investment Management Agreement (the "Investment Management Agreement") with
the Trust dated May 8, 1996, which was last approved by the Trust's Board of
Trustees on January 28, 1998 and approved by Fund shareholders on April 16,
1996. Dreyfus is a wholly-owned subsidiary of Mellon Bank, N.A. ("Mellon
Bank"). Pursuant to the Investment Management Agreement, Dreyfus provides,
or arranges for one or more third parties to provide, investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. As investment manager, Dreyfus manages the Fund by making investment
decisions based on the Fund's investment objective, policies and
restrictions.

Prior to May 8, 1996, Dreyfus served as investment manager to the Fund
pursuant to the Prior Investment Management Agreement (the "Prior Management
Agreement") with the Trust dated April 4, 1994 and transferred from Mellon
Bank to Dreyfus on October 17, 1994. The Prior Management Agreement was last
approved by the Trustees, including a majority of the Trustees who are not
"interested persons" of the Trust or Mellon Bank, on November 22, 1993,
(subject to shareholder approval) and last approved by the shareholders of
the Fund on March 29, 1994. The Prior Management Agreement became effective
on April 4, 1994.

The Investment Management Agreement with Dreyfus provides for a
"unitary fee." Under the unitary fee structure, Dreyfus pays all expenses
of the Fund except: (i) brokerage commissions, (ii) taxes, interest and
extraordinary expenses (which are expected to be minimal), and (iii) Rule
12b-1 fees, as applicable. Under the unitary fee, Dreyfus provides, or
arranges for one or more third parties to provide, investment advisory,
administrative, custody, fund accounting and transfer agency services to the
Fund. Although, under the Investment Management Agreement, Dreyfus is not
required to pay the fees and expenses of the non-interested Trustees
(including counsel fees), Dreyfus is required to reduce its management fee
by the amount of such fees and expenses. For the provision of such services
directly, or through one or more third parties, Dreyfus receives as full
compensation for all services and facilities provided by it, a fee computed
daily and paid monthly at the annual rate of .45 of 1% of the Fund's average
daily net assets, less the accrued fees and expenses (including counsel
fees) of the non-interested Trustees of the Trust. Dreyfus may waive all or
a portion of its fees payable by the Fund from time to time. The Investment
Management Agreement provides that certain redemption, exchange and account
close-out charges are payable directly by the Fund's shareholders to the
Fund's Transfer Agent (although the Fund will waive such fees if the closing
balance in the shareholder's account on the business day immediately
preceding the effective date of the transaction is $50,000 or more) and the
fee payable by the Fund to Dreyfus is not reduced by the amount of charges
payable to the Transfer Agent.

The Investment Management Agreement will remain in effect through April
4, 1999 and will continue thereafter from year to year provided that a
majority of the Trustees who are not interested persons of the Fund and
either a majority of all Trustees or a majority of the shareholders of the
Fund approve its continuance. The Fund may terminate the Investment
Management Agreement, without prior notice to Dreyfus, upon the vote of a
majority of the Board of Trustees or upon the vote of a majority of the
outstanding voting securities of the Fund on 60 days' written notice to
Dreyfus. Dreyfus may terminate the Investment Management Agreement upon 60
days' written notice to the Fund. The Investment Management Agreement will
terminate immediately and automatically upon its assignment.

The following persons are officers and/or directors of Dreyfus: W.
Keith Smith, Chairman of the Board; Christopher M. Condron, President, Chief
Executive Officer, Chief Operating Officer and a Director; Stephen E.
Canter, Vice Chairman, Chief Investment Officer and a Director; Lawrence S.
Kash, Vice Chairman, Distribution and a Director; J. David Officer, Vice
Chairman and a Director; Ronald P. O'Hanley III, Vice Chairman; William T.
Sandalls, Jr., Senior Vice President and Chief Financial Officer; Mark N.
Jacobs, Vice President, General Counsel and Secretary; Patrice M. Kozlowski,
Vice President-Corporate Communications; Mary Beth Leibig, Vice President-
Human Resources; Andrew S. Wasser, Vice President-Information System; James
Bitetto, Assistant Secretary; Steven F. Newman, Assistant Secretary; and
Mandell L. Berman, Burton C. Borgelt, Frank V. Cahouet and Richard F. Syron,
directors.

The following table shows the fees paid by the Fund to Dreyfus,
including any fee waivers or expense reimbursements, during the Fund's
fiscal years ending 1996, 1997 and 1998.

1998 1997 1996(2)
---- ---- ---
Fees Fees Fees Fees
Paid (1) Waived(1) Paid(1) Waived(1)
--- ------ ---- -----
Dreyfus BASIC $305,905 $72,296 $337,253 $7,062
Massachusetts Municipal
Money Market Fund

_______________________________

(1) Dreyfus voluntarily agreed to limit its management fee, or to reimburse
the Fund for its expenses, in order to ensure that the Fund's expenses
did not exceed .35% (annualized) of the value of the Fund's average
daily net assets from May 8, 1996 through May 7, 1997.
(2) Prior to May 8, 1996, Dreyfus served as investment manager to the Fund
under the Prior Management Agreement.

PURCHASE OF FUND SHARES

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."

The Distributor. The Distributor serves as the Fund's distributor
pursuant to an agreement which is renewable annually. The Distributor also
acts as distributor for the other funds in the Dreyfus Family of Funds and
for certain other investment companies.

Dreyfus TeleTransfer Privilege. Dreyfus TeleTransfer purchase orders
may be made at any time. Purchase orders received by 4:00 P.M., New York
time, on any business day that Dreyfus Transfer Inc., the Fund's transfer
and dividend disbursing agent (the "Transfer Agent"), and the New York Stock
Exchange ("NYSE") are open for business will be credited to the
shareholder's Fund account on the next bank business day following such
purchase order. Purchase orders made after 4:00 P.M., New York time, on any
business day the Transfer Agent and the NYSE are open for business, or
orders made on Saturday, Sunday or any Fund holiday (e.g. when the NYSE is
not open for business), will be credited to the shareholders' Fund account
on the second bank business day following such purchase order. To qualify
to use the Dreyfus TeleTransfer Privilege, the initial payment for purchase
of Fund shares must be drawn on, and redemption proceeds paid to, the same
bank and account as are designated on the Account Application or Shareholder
Services Form on file. If the proceeds of a particular redemption are to be
wired to an account at any other bank, the request must be in writing and
signature- guaranteed. See "Redemption of Fund Shares-- TeleTransfer
Privilege."

Reopening an Account. An investor may reopen an account with a minimum
investment of $100 without filing a new Account Application during the
calendar year the account is closed or during the following calendar year,
provided the information on the Account Application is still applicable.

In-Kind Purchases. If the following conditions are satisfied, the Fund
may, at its discretion, permit the purchase of shares through an "in-kind"
exchange of securities. Any securities exchanged must meet the investment
objective, policies and limitations of the Fund, must have a readily
ascertainable market value, must be liquid and must not be subject to
restrictions on resale. The market value of any securities exchanged, plus
any cash, must be at least equal to $25,000. Shares purchased in exchange
for securities generally cannot be redeemed for fifteen days following the
exchange in order to allow time for the transfer to settle.

The basis of the exchange will depend upon the relative net asset value
("NAV") of the shares purchased and securities exchanged. Securities
accepted by the Fund will be valued in the same manner as the Fund values
its assets. Any interest earned on the securities following their delivery
to the Fund and prior to the exchange will be considered in valuing the
securities. All interest, dividends, subscription or other rights attached
to the securities become the property of the Fund, along with the
securities. For further information about "in-kind" purchases, call 1-800-
645-6561.

Federal Law Affecting Mellon Bank

The Glass-Steagall Act of 1933 prohibits national banks from engaging
in the business of underwriting, selling or distributing securities and
prohibits a member bank of the Federal Reserve System from having certain
affiliations with an entity engaged principally in that business. The
activities of Mellon Bank in informing its customers of, and performing,
investment and redemption services in connection with the Fund, and in
providing services to the Fund as custodian, as well as investment advisory
activities of Dreyfus, may raise issues under these provisions. Mellon Bank
has been advised by counsel that the activities contemplated under these
arrangements are consistent with statutory and regulatory obligations.

Changes in either federal or state statutes and regulations relating to
the permissible activities of banks and their subsidiaries or affiliates, as
well as further judicial or administrative decisions or interpretations of
such future statutes and regulations, could prevent Mellon Bank or Dreyfus
from continuing to perform all or a part of the above services for its
customers and/or the Fund. If Mellon Bank or Dreyfus were prohibited from
serving the Fund in any of its present capacities, the Board of Trustees
would seek an alternative provider(s) of such services.

INVESTMENT POLICIES

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Investment Objective and
Policies."

The Prospectus discusses the investment objective of the Fund and the
policies it employs to achieve that objective. The following discussion
supplements the description of the Fund's investment policies in the
Prospectus.

Description of Municipal Obligations

For purposes of this Statement of Additional Information, the term
"Municipal Obligations" and "Massachusetts Municipal Obligations" shall mean
debt obligations issued by the Commonwealth of Massachusetts, its political
subdivisions, municipalities and public authorities and municipal
obligations issued by other government entities if, in the opinion of
counsel to the respective issuers, the interest from such obligations is
exempt from Federal and Massachusetts personal income taxes. "Municipal
Obligations" and "Massachusetts Municipal Obligations" include the
following:

Municipal Bonds

Municipal Bonds, which generally have a maturity of more than one year
when issued, have two principal classifications: General Obligation Bonds
and Revenue Bonds. A Private Activity Bond is a particular kind of Revenue
Bond. The classification of General Obligation Bonds, Revenue Bonds and
Private Activity Bonds are discussed below.

1. General Obligation Bonds. The proceeds of these obligations are
used to finance a wide range of public projects, including construction or
improvement of schools, highways and roads, and water and sewer systems.
General Obligation Bonds are secured by the issuer's pledge of its faith,
credit and taxing power for the payment of principal and interest.

2. Revenue Bonds. Revenue Bonds are issued to finance a wide variety
of capital projects including: electric, gas, water and sewer systems;
highways, bridges and tunnels; port and airport facilities; colleges and
universities; and hospitals. The principal security for a Revenue Bond is
generally the net revenues derived from a particular facility, group of
facilities or, in some cases, the proceeds of a special excise or other
specific revenue source. Although the principal security behind these bonds
may vary, many provide additional security in the form of a debt service
reserve fund whose money may be used to make principal and interest payments
on the issuer's obligations. Some authorities provide further security in
the form of a state's ability (without obligation) to make up deficiencies
in the debt service reserve fund.

3. Private Activity Bonds. Private Activity Bonds, which are
considered Municipal Bonds if the interest paid thereon is exempt from
Federal income tax, are issued by or on behalf of public authorities to
raise money to finance various privately operated facilities for business
and manufacturing, housing, sports and pollution control. These bonds are
also used to finance public facilities such as airports, mass transit
systems, ports and parking. The payment of the principal and interest on
such bonds is dependent solely on the ability of the facility's user to meet
its financial obligations and the pledge, if any, of real and personal
property so financed as security for such payment. As noted in the
Prospectus and discussed below under "Dividends, Other Distributions and
Taxes," interest income on these bonds may be an item of tax preference
subject to the Federal alternative minimum tax for individuals and
corporations.

Municipal Notes

Municipal Notes generally are used to provide for short-term capital
needs and generally have maturities of thirteen months or less. Municipal
Notes include:

1. Tax Anticipation Notes. Tax Anticipation Notes are issued to
finance working capital needs of municipalities. Generally, they are issued
in anticipation of various seasonal tax revenue, such as income, sales, use
and business taxes, and are payable from these specific future taxes.

2. Revenue Anticipation Notes. Revenue Anticipation Notes are issued
in expectation of receipt of other kinds of revenue, such as Federal
revenues available under the Federal Revenue Sharing Programs.

3. Bond Anticipation Notes. Bond Anticipation Notes are issued to
provide interim financing until long-term financing can be arranged. In
most cases, the long-term bonds then provide the money for the repayment of
the Notes.

Municipal Commercial Paper

Issues of Municipal Commercial Paper typically represent short-term,
unsecured, negotiable promissory notes. These obligations are issued by
agencies of state and local governments to finance seasonal working capital
needs of municipalities or to provide interim construction financing and are
paid from general revenues of municipalities or are refinanced with long-
term debt. In most cases, Municipal Commercial Paper is backed by letters of
credit, lending agreements, note repurchase agreements or other credit
facility agreements offered by banks or other institutions.

Municipal Lease Obligations

Municipal leases may take the form of a lease or a certificate of
participation in a purchase contract issued by state and local government
authorities to obtain funds to acquire a wide variety of equipment and
facilities such as fire and sanitation vehicles, computer equipment and
other capital assets. A lease obligation does not constitute a general
obligation of the municipality for which the municipality's taxing power is
pledged, although the lease obligation is ordinarily backed by the
municipality's covenant to budget for, appropriate and make payments due
under the lease obligation. Municipal leases have special risks not normally
associated with Municipal Bonds. These obligations frequently contain "non-
appropriation" clauses that provide that the governmental issuer of the
obligation has no obligation to make future payments under the lease or
contract unless money is appropriated for such purposes by the legislative
body on a yearly or other periodic basis. In addition to the non-
appropriation risk, municipal leases represent a type of financing that has
not yet developed the depth of marketability associated with Municipal
Bonds; moreover, although the obligations will be secured by the leased
equipment, the disposition of the equipment in the event of foreclosure
might prove difficult. For purposes of the 10% limitation on the purchase
of illiquid securities, the Fund will not consider the municipal lease
obligations or certificates of participation in municipal lease obligations
in which it invests as liquid, unless Dreyfus shall determine, based upon
such factors as the frequency of trades and quotes for the obligation, the
number of dealers willing to purchase or sell the security and the number of
other potential buyers, the willingness of dealers to undertake to make a
market in the security and the nature of marketplace trades, that a security
shall be treated as liquid for purposes of such limitation.

Obligations of issuers of Municipal Obligations are subject to the
provisions of bankruptcy, insolvency and other laws affecting the rights and
remedies of creditors. In addition, the obligations of such issuers may
become subject to laws enacted in the future by Congress, state legislators,
or referenda extending the time for payment of principal and/or interest, or
imposing other constraints upon enforcement of such obligations or upon
municipalities to levy taxes. There is also the possibility that, as a
result of litigation or other conditions, the power or ability of any issuer
to pay, when due, the principal of and interest on its Municipal Obligations
may be materially affected. The Fund will purchase an unrated municipal
lease only if the Board of Trustees determines that credit quality is
adequate, including an assessment that the lease will not be cancelled.

Tender Option Bonds

The Fund may invest up to 10% of the value of its assets in tender
option bonds. A tender option bond is a Municipal Obligation (generally
held pursuant to a custodial arrangement) having a relatively long maturity
and bearing interest at a fixed rate substantially higher than prevailing
short-term tax-exempt rates, that has been coupled with the agreement of a
third party, such as a bank, broker-dealer or other financial institution,
pursuant to which such institution grants the security holders the option,
at periodic intervals, to tender their securities to the institution and
receive the face value thereof. As consideration for providing the option,
the financial institution receives periodic fees equal to the difference
between the Municipal Obligation's fixed coupon rate and the rate, as
determined by a remarketing or similar agent at or near the commencement of
such period, that would cause the securities, coupled with the tender
option, to trade at par on the date of such determination. Thus, after
payment of this fee, the security holder effectively holds a demand
obligation that bears interest at the prevailing short-term tax-exempt rate.
Dreyfus, on behalf of the Fund, will consider on an ongoing basis the
creditworthiness of the issuer of the underlying Municipal Obligation, of
any custodian and the third-party provider of the tender option. In certain
instances and for certain tender option bonds, the option may be terminable
in the event of a default in payment of principal or interest on the
underlying Municipal Obligations and for other reasons. The Fund will not
invest more than 10% of the value of its net assets in illiquid securities,
which would include tender option bonds for which the required notice to
exercise the tender feature is more than seven days if there is no secondary
market available for these obligations.

Use of Ratings as Investment Criteria

The ratings of nationally recognized statistical rating organizations
("NRSROs") such as S&P and Moody's represent the opinions of these agencies
as to the quality of Municipal Obligations which they rate. It should be
emphasized, however, that such ratings are relative and subjective and are
not absolute standards of quality. These ratings will be used by the Fund
as initial criteria for the selection of portfolio securities, but the Fund
will also rely upon the independent advice of Dreyfus to evaluate potential
investments. Among the factors which will be considered are the short-term
and long-term ability of the issuer to pay principal and interest and
general economic trends. Further information concerning the ratings of the
NRSROs and their significance is contained in the Appendix B to this
Statement of Additional Information.

After being purchased by the Fund, the rating of a Municipal Obligation
may be reduced below the minimum rating required for purchase by the Fund or
the issuer of the Municipal Obligation may default on its obligations with
respect to the Municipal Obligation. In that event, the Fund will dispose of
the Municipal Obligation as soon as practicable, consistent with achieving
an orderly disposition of the Municipal Obligation, unless the Trust's Board
of Trustees determines that disposal of the Municipal Obligation would not
be in the best interest of the Fund. In addition, it is possible that a
Municipal Obligation may cease to be rated or an NRSRO might not timely
change its rating of a particular Municipal Obligation to reflect subsequent
events. Although neither event will require the sale of such Municipal
Obligation by the Fund, Dreyfus will consider such event in determining
whether the Fund should continue to hold the Municipal Obligation. In
addition, if an NRSRO changes its rating system, the Fund will attempt to
use comparable ratings as standards for its investments in accordance with
its investment objective and policies.

Floating Rate and Variable Rate Obligations

The Fund may purchase floating rate and variable rate obligations,
including participation interests therein. Floating rate or variable rate
obligations provide that the rate of interest is set as a specific
percentage of a designated base rate (such as the prime rate at a major
commercial bank) and that the Fund can demand payment of the obligation at
par plus accrued interest. Variable rate obligations provide for a
specified periodic adjustment in the interest rate, while floating rate
obligations have an interest rate which changes whenever there is a change
in the external interest rate. Frequently such obligations are secured by
letters of credit or other credit support arrangements provided by banks.
The quality of the underlying creditor or of the bank, as the case may be,
must, as determined by Dreyfus under the supervision of the Trustees, be
equivalent to the quality standard prescribed for the Fund. The Fund is
currently permitted to purchase floating rate and variable rate obligations
with demand features in accordance with requirements established by the SEC,
which, among other things, permit such instruments to be deemed to have
remaining maturities of thirteen months or less, notwithstanding that they
may otherwise have a stated maturity in excess of thirteen months.

The Fund may invest in participation interests purchased from banks in
floating rate or variable rate tax-exempt Municipal Obligations owned by
banks. A participation interest gives the purchaser an undivided interest
in the Municipal Obligation in the proportion that the Fund's participation
interest bears to the total principal amount of the Municipal Obligation,
and provides a demand feature. Each participation is backed by an
irrevocable letter of credit or guarantee of a bank (which may be the bank
issuing the participation interest, a bank issuing a confirming letter of
credit to that of the issuing bank, or a bank serving as agent of the
issuing bank with respect to the possible repurchase of the participation
interest) that Dreyfus, under the supervision of the Trustees, has
determined meets the prescribed quality standards for the Fund. The Fund
has the right to sell the instrument back to the issuing bank or draw on the
letter of credit on demand for all or any part of the Fund's participation
interest in the Municipal Obligation, plus accrued interest. The Fund is
currently permitted to invest in participation interests when the demand
provision complies with conditions established by the SEC. Banks will
retain a service and letter of credit fee and a fee for issuing repurchase
commitments in an amount equal to the excess of the interest paid on the
Municipal Obligations over the negotiated yield at which the instruments
were purchased by the Fund.

When-Issued Securities

The Fund may purchase Municipal Obligations on a when-issued basis
(i.e., for delivery beyond the normal settlement date at the stated price
and yield). The payment obligation and the interest rate that will be
received on the Municipal Obligations purchased on a when-issued basis are
each fixed at the time the buyer enters into the commitment. Although the
Fund will purchase Municipal Obligations on a when-issued basis only with
the intention of actually acquiring the securities, the Fund may sell these
securities before the settlement date if it is deemed advisable as a matter
of investment strategy.

Municipal Obligations purchased on a when-issued basis and the
securities held in the Fund's portfolio are subject to changes in market
value based upon the public's perception of the creditworthiness of the
issuer and changes, real or anticipated, in the level of interest rates
(which will generally result in similar changes in value, i.e., both
experiencing appreciation when interest rates decline and depreciation when
interest rates rise). Therefore, to the extent the Fund remains
substantially fully invested at the same time that it has purchased
securities on a when-issued basis, there will be a greater possibility of
fluctuation in the Fund's net asset value. Purchasing Municipal Obligations
on a when-issued basis can involve a risk that the yields available in the
market when the delivery takes place may actually be higher than those
obtained in the transaction.

A separate account of the Fund consisting of cash or liquid debt
securities equal to the amount of the when-issued commitments will be
established with the Fund's custodian. When the time comes to pay for when-
issued securities, the Fund will meet its obligations from then-available
cash flow, sale of securities held in the separate account, sale of other
securities or, although it would not normally expect to do so, from the sale
of the when-issued securities themselves (which may have a value greater or
lesser than the Fund's payment obligations). Sale of securities to meet
such obligations carries with it a greater potential for the realization of
capital gains, which are not exempt from Federal income tax.

Purchase of Securities with Stand-by Commitments

Pursuant to an exemptive order issued by the SEC under the Act, the
Fund may acquire stand-by commitments with respect to Municipal Obligations
held in its portfolio. Under a stand-by commitment, a broker-dealer, dealer
or bank would agree to purchase, at the Fund's option, a specified Municipal
Obligation at a specified price. Stand-by commitments acquired by the Fund
may also be referred to as "put options." The amount payable to the Fund
upon its exercise of a stand-by commitment normally would be (a) the
acquisition cost of the Municipal Obligation, less any amortized market
premium or plus any amortized market or original issue discount during the
period the Fund owned the security, plus (b) all interest accrued on the
security since the last interest payment date during the period. Absent
unusual circumstances, in determining net asset value the Fund would value
the underlying Municipal Obligation at amortized cost. Accordingly, the
amount payable by the broker-dealer, dealer or bank upon exercise of a stand-
by commitment will normally be substantially the same as the portfolio value
of the underlying Municipal Obligation.

The Fund's right to exercise a stand-by commitment is unconditional and
unqualified. Although the Fund could not transfer a stand-by commitment,
the Fund could sell the underlying Municipal Obligation to a third party at
any time. It is expected that stand-by commitments generally will be
available to the Fund without the payment of any direct or indirect
consideration. The Fund may, however, pay for stand-by commitments either
separately in cash or by paying a higher price for portfolio securities
which are acquired subject to the commitment (thus reducing the yield to
maturity otherwise available for the same securities). The total amount
paid in either manner for outstanding stand-by commitments held in the
Fund's portfolio will not exceed .5 of 1% of the value of the Fund's total
assets calculated immediately after such stand-by commitment was acquired.

The Fund intends to enter into stand-by commitments only with broker-
dealers, dealers or banks that Dreyfus believes present minimum credit
risks. The Fund's ability to exercise a stand-by commitment will depend on
the ability of the issuing institution to pay for the underlying securities
at the time the commitment is exercised. The credit of each institution
issuing a stand-by commitment to the Fund will be evaluated on an ongoing
basis by Dreyfus in accordance with procedures established by the Trustees.

The Fund intends to acquire stand-by commitments solely to facilitate
portfolio liquidity and does not intend to exercise its rights thereunder
for trading purposes. The acquisition of a stand-by commitment would not
affect the valuation or maturity of the underlying Municipal Obligation,
which will continue to be valued in accordance with the amortized cost
method. Each stand-by commitment will be valued at zero in determining net
asset value. Should the Fund pay directly or indirectly for a stand-by
commitment, its costs will be reflected as an unrealized loss for the period
during which the commitment is held by the Fund and will be reflected in
realized gain or loss when the commitment is exercised or expires. Stand-by
commitments will not affect the dollar-weighted average maturity of the
Fund's portfolio. The Fund understands that the Internal Revenue Service
has issued a revenue ruling to the effect that a registered investment
company will be treated for Federal income tax purposes as the owner of
Municipal Obligations acquired subject to stand-by commitments and the
interest on the Municipal Obligations will be tax-exempt to the Fund.

Taxable Investments

The Fund anticipates being as fully invested as practicable in
Municipal Obligations. Because the Fund's purpose is to provide income
exempt from Federal and state personal income tax, the Fund will invest in
taxable obligations only if and when the Trustees believe it would be in the
best interests of its shareholders to do so. Situations in which the Fund
may invest up to 20% of its total assets in taxable securities include: (a)
pending investment of proceeds of sales of shares of the Fund or of
portfolio securities, (b) pending settlement of purchases of portfolio
securities, and (c) when the Fund is attempting to maintain liquidity for
the purpose of meeting anticipated redemptions. The Fund may temporarily
invest more than 20% of its total assets in taxable securities to maintain a
"defensive" posture when, in the opinion of Dreyfus, it is advisable to do
so because of adverse market conditions affecting the market for Municipal
Obligations. The Fund may invest in only the following kinds of taxable
securities maturing in one year or less from the date of purchase: (1)
obligations of the United States Government, its agencies or
instrumentalities; (2) commercial paper rated at the time of purchase at
least Prime-1 by Moody's or A-1+ or A-1 by S&P; (3) certificates of deposit
of domestic banks with total assets of $1 billion or more; and (4)
repurchase agreements (instruments under which the seller of a security
agrees to repurchase the security at a specific time and price) with respect
to any securities that the Fund is permitted to hold.

Repurchase Agreements

The Fund may enter into repurchase agreements with member banks of the
Federal Reserve System or certain non-bank dealers. Under each repurchase
agreement the selling institution will be required to maintain the value of
the securities subject to the agreement at not less than their repurchase
price. If a particular bank or non-bank dealer defaults on its obligation
to repurchase the underlying debt instrument as required by the terms of a
repurchase agreement, the Fund will incur a loss to the extent that the
proceeds it realizes on the sale of the collateral are less than the
repurchase price of the instrument. In addition, should the defaulting bank
or non-bank dealer file for bankruptcy, the Fund could incur certain costs
in establishing that it is entitled to dispose of the collateral and its
realization on the collateral may be delayed or limited. Investments in
repurchase agreements are subject to the policy prohibiting investment of
more than 10% of the Fund's assets in restricted securities, securities
without readily available market quotations and repurchase agreements
maturing in more than seven days.

As noted in the Prospectus, the Fund may, on occasion, invest in
securities issued by other investment companies. These securities will be
of investment companies that determine their net asset value per share based
on the amortized cost or penny-rounding method. Such securities will be
acquired by the Fund within the limits prescribed by the Act, which include,
subject to certain exceptions, a prohibition against the Fund's investing
more than 10% of the value of its total assets in such securities.

Special Factors Affecting the Fund

Investing in Massachusetts Municipal Obligations. Investors should consider
carefully the special risks inherent in the Fund's investment in
Massachusetts Municipal Obligations, which are discussed in more detail in
Appendix A to this SAI.

Master Feeder Option

The Fund may in the future seek to achieve the Fund's investment
objective by investing all of the Fund's assets in another investment
company having the same investment objective and substantially the same
investment policies and restrictions as those applicable to the Fund.
Shareholders of the Fund will be given at lease 30 days prior notice of any
such investment. Such investment would be made only if the Trustees
determine it to be in the best interest of the Fund and its shareholders.
In making the determination, the Trustees will consider, among other things,
the benefits to shareholders and/or the opportunity to reduce costs and
achieve operational efficiencies. Although the Fund believes that the
Trustees will not approve an arrangement that is likely to result in higher
costs, no assurance is given that costs will be materially reduced if this
option is implemented.

Investment Restrictions

The following are fundamental investment restrictions of the Fund. The
Fund may not:

1. Purchase any securities which would cause more than 25% of the
value of the Fund's total assets at the time of such purchase to be
invested in the securities of one or more issuers conducting their principal
activities in the same industry. (For purposes of this limitation, U.S.
Government securities and state or municipal governments and their political
subdivisions are not considered members of any industry. In addition, this
limitation does not apply to investments of domestic banks, including U.S.
branches of foreign banks and foreign branches of U.S. banks.)

2. Borrow money or issue senior securities as defined in the Act,
except that (a) the Fund may borrow money in an amount not exceeding one-
third of the Fund's total assets at the time of such borrowing, and (b) the
Fund may issue multiple classes of shares. The purchase or sale of futures
contracts and related options shall not be considered to involve the
borrowing of money or issuance of senior securities.

3. Make loans or lend securities, if as a result thereof more than
one-third of the Fund's total assets would be subject to all such loans.
For purposes of this restriction, debt instruments and repurchase agreements
shall not be treated as loans.

4. Underwrite securities issued by any other person, except to the
extent that the purchase of securities and the later disposition of such
securities in accordance with the Fund's investment program may be deemed an
underwriting.

5. Purchase or sell real estate unless acquired as a result of
ownership of securities or other instruments (but this shall not prevent the
Fund from investing in securities or other instruments backed by real
estate, including mortgage loans, or securities of companies that engage in
the real estate business or invest or deal in real estate or interests
therein).

6. Purchase or sell commodities, except that the Fund may enter into
futures contracts and related options, forward currency contracts and other
similar instruments.

The Fund may, notwithstanding any other fundamental investment policy
or restriction, invest all of its investable assets in securities of a
single open-end management investment company with substantially the same
fundamental investment objectives, policies, and restrictions as the Fund.

The following are non-fundamental investment restrictions of the Fund:

1. The Fund will not purchase or retain the securities of any issuer
if the officers, directors or Trustees of the Trust, its advisers, or
managers owning beneficially more than one half of one percent of the
securities of each issuer together own beneficially more than five percent
of such securities.

2. The Fund will not purchase puts, calls, straddles, spreads and any
combination thereof if by reason thereof the value of its aggregate
investment in such classes of securities will exceed 5% of its total assets,
except that: (a) this restriction shall not apply to standby commitments,
and (b) this restriction shall not apply to the Fund's transactions in
futures contracts and related options.

3. The Fund will not purchase warrants if at the time of such
purchase: (a) more than 5% of the value of the Fund's net assets would be
invested in warrants, or (b) more than 2% of the value of the Fund's assets
would be invested in warrants that are not listed on the NYSE or American
Stock Exchange ("AMEX") (for purposes of this limitation, warrants acquired
by the Fund in units or attached to securities will be deemed to have no
value).

4. The Fund will not invest more than 10% of the value of its net
assets in illiquid securities, including repurchase agreements with
remaining maturities in excess of seven days, and other securities which are
not readily marketable. For purposes of this restriction, illiquid
securities shall not include commercial paper issued pursuant to Section
4(2) of the Securities Act of 1933 and securities which may be resold under
Rule 144A under the Securities Act of 1933, provided that the Board of
Trustees, or its delegate, determines that such securities are liquid based
upon the trading markets for the specific security.

5. The Fund may not invest in securities of other investment
companies, except as they may be acquired as part of a merger, consolidation
or acquisition of assets and except to the extent otherwise permitted by the
Act.

6. The Fund will not purchase oil, gas or mineral leases (the Fund
may, however, purchase and sell the securities of companies engaged in the
exploration, development, production, refining, transporting and marketing
of oil, gas or minerals).

7. The Fund shall not sell securities short, unless it owns or has
the right to obtain securities equivalent in kind and amounts to the
securities sold short, and provided that transactions in futures contracts
and options are not deemed to constitute selling securities short.

8. The Fund shall not purchase securities on margin, except that the
Fund may obtain such short-term credits as are necessary for the clearance
of transactions, and provided that margin payments in connection with
futures contracts and options on futures contracts shall not constitute
purchasing securities on margin.

9. The Fund shall not purchase any security while borrowings
representing more than 5% of the Fund's total assets are outstanding.

If a percentage restriction is adhered to at the time of an investment,
a later increase or decrease in such percentage resulting from a change in
the values of assets will not constitute a violation of such restriction.

Under the Act, a fundamental policy may not be changed without the vote
of a majority of the outstanding voting securities of the Fund, as defined
in the Act. "Majority" means the lesser of (1) 67% or more of the shares
present at the Fund's meeting, if the holders of more than 50% of the
outstanding shares of the Fund are present or represented by proxy, or (2)
more than 50% of the outstanding shares of the Fund. Non-fundamental
investment restrictions may be changed, without shareholder approval, by
vote of a majority of the Trust's Board of Trustees at any time.

In order to permit the sale of the Fund's shares in certain states, the
Trust may make commitments more restrictive than the investment restrictions
described above. Further, the Fund has given a representation that
investments will not be made in real estate limited partnerships. Should
the Trust determine that any such commitment is no longer in the best
interests of the Fund and its shareholders, it will revoke the commitment by
terminating sales of the Fund's shares in the state involved.

Portfolio Transactions

Decisions to buy and sell securities for the Fund and effectuation of
securities transactions are made by Dreyfus.

Purchases and sales of portfolio securities for the Fund will generally
be transacted with the issuer or a primary market maker on a net basis,
without the payment by the Fund of any brokerage commission for such
purchases or sales. Purchases from dealers serving as primary market makers
will reflect the spread between the bid and asked prices. In selecting
dealers and in executing portfolio transactions, Dreyfus seeks, on behalf of
the Fund, the best overall terms available. In doing so, Dreyfus considers
all matters it deems relevant, including the breadth of the market in the
security, the price of the security and the financial condition and
executing capability of the dealer.

Dealers may be selected who provide brokerage and/or research services
to the Trust and/or other accounts over which Dreyfus or its affiliates
exercise investment discretion. Such services may include advice concerning
the value of securities; the advisability of investing in, purchasing or
selling securities; the availability of securities or the purchasers or
sellers of securities; furnishing analyses and reports concerning issuers,
industries, securities, economic factors and trends, portfolio strategy and
performance of accounts; and effecting securities transactions and
performing functions incidental thereto (such as clearance and settlement).
The receipt of research from dealers may be useful to Dreyfus in rendering
investment management services to the Trust and/or its other clients; and,
conversely, such information provided by its brokers or dealers who have
executed transaction orders on behalf of other clients of Dreyfus may be
useful to Dreyfus in carrying out its obligation to the Trust.

The Fund will not purchase Municipal Obligations during the existence
of any underwriting or selling group relating thereto of which an affiliate
is a member, except to the extent permitted by the SEC. Under certain
circumstances, the Fund may be at a disadvantage because of this limitation
in comparison with other investment companies which have a similar
investment objective but are not subject to such limitations.

Dreyfus will make investment decisions for the Fund independently from
those made for its other clients, other funds and clients of other
affiliates of Dreyfus. On occasion, however, the same investment decisions
will be made for the Fund as for one or more of Dreyfus' clients at about
the same time. In a case in which the Fund and one of these other clients
are simultaneously engaged in the purchase or sale of the same security, the
transactions will, to the extent feasible and practicable, be averaged as to
price and allocated as to amount among the Fund and/or the other client or
clients pursuant to a formula considered equitable. In some cases, this
system could have a detrimental effect on the price or volume of the
security to be purchased or sold on behalf of the Fund. In other cases,
however, it is believed that coordination and the ability to participate in
volume transactions will be to the benefit of the Fund.

For the fiscal years ended June 30, 1996, 1997 and 1998, no brokerage
commissions were paid by the Fund.

REDEMPTION OF FUND SHARES

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Redeem Fund
Shares."

Check Redemption Privilege. The Fund provides Redemption Checks
("Checks") automatically upon opening an account, unless the investor
specifically refuses the Check Redemption Privilege by checking the
applicable "No" box on the Account Application. Checks will be sent only to
the registered owner(s) of the account and only to the address of record.
The Check Redemption Privilege may be established for an existing account by
a separate signed Shareholder Services Form. The Account Application or
Shareholder Services Form must be manually signed by the registered
owner(s). Checks are drawn on the investor's account and may be made
payable to the order of any person in an amount of $1,000 or more ($500 for
shareholders who have held Fund shares since May 8, 1996). When a Check is
presented to the Transfer Agent for payment, the Transfer Agent, as the
investor's agent, will cause the Fund to redeem a sufficient number of
shares in the investor's account to cover the amount of the Check and the
$2.00 charge. The fee will be waived if the closing balance in the
shareholder's account on the business day immediately preceding the
effective date of the transaction is $50,000 or more and for shareholders
who held fund shares since May 8, 1996. Dividends are earned until the
Check clears. After clearance, a copy of the Check will be returned to the
investor. Investors generally will be subject to the same rules and
regulations that apply to checking accounts, although election of this
Privilege creates only a shareholder-transfer agent relationship with the
Transfer Agent.

If the amount of the Check, plus any applicable charges, is greater
than the value of the shares in an investor's account, the Check will be
returned marked insufficient funds. Checks should not be used to close an
account.

Wire Redemption Privilege. By using this Privilege, the investor
authorizes the Transfer Agent to act on wire, telephone or letter redemption
instructions from any person representing himself or herself to be the
investor, or a representative of the investor's Agent, and reasonably
believed by the Transfer Agent to be genuine. An investor (other than one
who has held Fund shares since May 8, 1996) will be charged a $5.00 fee for
each wire redemption, which will be deducted from the investor's account and
paid to the Transfer Agent. The fee will be waived if the closing balance
in the shareholder's account on the business day immediately preceding the
effective date of the transaction is $50,000 or more. Ordinarily, the Fund
will initiate payment for shares redeemed pursuant to this Privilege on the
next business day after receipt if the Transfer Agent receives the
redemption request in proper form. Redemption proceeds ($5,000 minimum)
will be transferred by Federal Reserve wire only to the commercial bank
account specified by the investor on the Account Application or Shareholder
Services Form, or to a correspondent bank if the investor's bank is not a
member of the Federal Reserve System. Fees ordinarily are imposed by such
bank and are borne by the investor. Immediate notification by the
correspondent bank to the investor's bank is necessary to avoid a delay in
crediting the funds to the investor's bank account.

Investors with access to telegraphic equipment may wire redemption
requests to the Transfer Agent by employing the following transmittal code
which may be used for domestic or overseas transmissions:

Transfer Agent's
Transmittal Code Answer Back Sign
---------------- ----------------

144295 144295 TSSG PREP

Investors who do not have direct access to telegraphic equipment may
have the wire transmitted by contacting a TRT Cables operator at 1-800-654-
7171, toll free. Investors should advise the operator that the above
transmittal code must be used and should also inform the operator of the
Transfer Agent's answer back sign.

Share Certificates; Signatures. Any certificates representing Fund
shares to be redeemed must be submitted with the redemption request.
Written redemption requests must be signed by each shareholder, including
each holder of a joint account, and each signature must be guaranteed.
Signatures on endorsed certificates submitted for redemption also must be
guaranteed. The Transfer Agent has adopted standards and procedures
pursuant to which signature-guarantees in proper form generally will be
accepted from domestic banks, brokers, dealers, credit unions, national
securities exchanges, registered securities associations, clearing agencies
and savings associations as well as from participants in the NYSE Medallion
Signature Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. Guarantees must be
signed by an authorized signatory of the guarantor and "Signature-
Guaranteed" must appear with the signature. The Transfer Agent may request
additional documentation from corporations, executors, administrators,
trustees or guardians, and may accept other suitable verification
arrangements from foreign investors, such as consular verification. For
more information with respect to signature-guarantees, please call one of
the telephone numbers listed on the cover.

Dreyfus TeleTransfer Privilege. Investors should be aware that if they
have also selected the Dreyfus TeleTransfer Privilege, any request for a
wire redemption will be effected as a Dreyfus TeleTransfer transaction
through the ACH system unless more prompt transmittal specifically is
requested. Redemption proceeds will be on deposit in the investor's account
at an ACH member bank ordinarily two business days after receipt of the
redemption request. An investor (other than one who has held Fund shares
since May 8, 1996) will be charged a $5.00 fee for each redemption effected
pursuant to this Privilege, which will be deducted from the investor's
account and paid to the Transfer Agent. The fee will be waived if the
closing balance in the shareholder's account on the business day immediately
preceding the effective date of the transaction is $50,000 or more. See
"Purchase of Fund Shares--Dreyfus TeleTransfer Privilege."

Redemption Commitment. The Fund has committed itself to pay in cash
all redemption requests by any shareholder of record of the Fund, limited in
amount during any 90-day period to the lesser of $250,000 or 1% of the value
of the Fund's net assets at the beginning of such period. Such commitment
is irrevocable without the prior approval of the SEC. In the case of
requests for redemption in excess of such amount, the Trustees and executive
officers of the Trust reserve the right to make payments in whole or in part
in securities or other assets in case of an emergency or any time a cash
distribution would impair the liquidity of the Fund to the detriment of the
existing shareholders. In this event, the securities would be valued in the
same manner as the Fund's portfolio is valued. If the recipient sold such
securities, brokerage charges would be incurred.

Suspension of Redemptions. The right to redeem Fund shares may be
suspended or the date of payment postponed (a) for any period during which
the NYSE is closed (other than for customary weekend or holiday closings);
(b) when trading in the markets the Trust normally uses is restricted or
when an emergency exists as determined by the SEC so that disposal of the
Fund's investments or determination of its net asset value is not reasonably
practicable, or (c) for such other periods as the SEC, by order, may permit
for protection of the Fund's shareholders.

SHAREHOLDER SERVICES

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Shareholder Services."

Fund Exchanges. Fund shares may be exchanged for shares of certain
other funds advised or administered by Dreyfus. Shares of other funds
purchased by exchange will be purchased on the basis of relative net asset
value per share as follows:

A. Exchanges for shares of funds that are offered without a
sales load will be made without a sales load.

B. Shares of funds purchased without a sales load may be
exchanged for shares of other funds sold with a sales load, and
the applicable sales load will be deducted.

C. Shares of funds purchased with a sales load may be exchanged
without a sales load for shares of other funds sold without a
sales load.

D. Shares of funds purchased with a sales load, shares of funds
acquired by a previous exchange from shares purchased with a
sales load and additional shares acquired through reinvestment of
dividends or other distributions of any such funds (collectively
referred to herein as "Purchased Shares") may be exchanged for
shares of other funds sold with a sales load (referred to herein
as "Offered Shares"), provided that, if the sales load applicable
to the Offered Shares exceeds the maximum sales load that could
have been imposed in connection with the Purchased Shares (at the
time the Purchased Shares were acquired), without giving effect
to any reduced loads, the difference will be deducted.

To accomplish an exchange under item D above, shareholders must notify
the Transfer Agent of their prior ownership of fund shares and their account
number.

To request an exchange, an investor, or the investor's Agent acting on
the investor's behalf, must give exchange instructions to the Transfer Agent
in writing or by telephone. The ability to issue exchange instructions by
telephone is given to all Fund shareholders automatically, unless the
investor checks the applicable "No" box on the Account Application,
indicating that the investor specifically refuses this Privilege. By using
the Telephone Exchange Privilege, the investor authorizes the Transfer Agent
to act on telephonic instructions (including over The Dreyfus Touchr
automated telephone system) from any person representing himself or herself
to be the investor or a representative of the investor's Agent, and
reasonably believed by the Transfer Agent to be genuine. Telephone
exchanges may be subject to limitations as to the amount involved or the
number of telephone exchanges permitted. Shares issued in certificate form
are not eligible for telephone exchange. Investors (other than those who
have held Fund shares since May 8, 1996) will be charged a $5.00 fee for
each exchange made out of the Fund, which will be deducted from the
investor's account and paid to the Transfer Agent. The fee will be waived
if the closing balance in the shareholder's account on the business day
immediately preceding the effective date of the transaction is $50,000 or
more. Exchanges out of the Fund pursuant to Fund Exchanges are limited to
four per calendar year.

This Privilege is available to shareholders resident in any state in
which shares of the fund being acquired may legally be sold. Shares may be
exchanged only between accounts having identical names and other identifying
designations.

Shareholder Services Forms and prospectuses of the other funds may be
obtained by calling 1-800-645-6561. The Fund reserves the right to reject
any exchange request in whole or in part. The Fund Exchange service may be
modified or terminated at any time upon notice to shareholders.

Dreyfus Dividend Sweep. Dreyfus Dividend Sweep allows investors to
invest on the payment date their dividends or dividends and capital gain
distributions, if any, from the Fund in shares of certain other funds in the
Dreyfus Family of Funds of which the investor is a shareholder. Shares of
the other funds purchased pursuant to this Privilege will be purchased on
the basis of relative NAV per share as follows:

A. Dividends and other distributions paid by a fund may be
invested without imposition of a sales load in shares of other
funds that are offered without a sales load.

B. Dividends and other distributions paid by a fund which does
not charge a sales load may be invested in shares of other funds
sold with a sales load, and the applicable sales load will be
deducted.

C. Dividends and other distributions paid by a fund which
charges a sales load may be invested in shares of other funds
sold with a sales load (referred to herein as "Offered Shares"),
provided that, if the sales load applicable to the Offered Shares
exceeds the maximum sales load charged by the fund from which
dividends or other distributions are being swept, without giving
effect to any reduced loads, the difference will be deducted.

D. Dividends and other distributions paid by a fund may be
invested in shares of other funds that impose a contingent
deferred sales charge ("CDSC") and the applicable CDSC, if any,
will be imposed upon redemption of such shares.

DETERMINATION OF NET ASSET VALUE

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "How to Buy Fund Shares."

The Prospectus describes the time at which the net asset value of the
Fund is determined for purposes of sales and redemptions. In addition,
portfolio securities held by the Fund may be actively traded in securities
markets which are open for trading on days when the Fund will not be
determining its net asset value. Accordingly, there may be occasions when
the Fund is not open for business but when the value of the Fund's portfolio
securities will be affected by such trading activity. The holidays (as
observed) on which the NYSE is closed currently are: New Years Day, Martin
Luther King, Jr. Day, Presidents' Day, Good Friday, Memorial Day,
Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

It is the Trust's policy to use its best efforts to maintain the Fund's
net asset value per share ("NAV") at a constant value of $1.00. The Fund's
portfolio instruments are valued on the basis of amortized cost. This
involves valuing an instrument at its cost initially and, thereafter,
assuming a constant amortization to maturity of any discount or premium,
regardless of the impact of fluctuating interest rates on the market value
of the instrument. While this method provides certainty in valuation, it
may result in periods during which the value, as determined by amortized
cost, is higher or lower than the price the Fund would receive if it sold
the instrument.

The valuation of the Fund's portfolio instruments based upon their
amortized cost and simultaneous maintenance of the Fund's NAV at $1.00 are
permitted by a rule adopted by the SEC. Under this rule, the Fund must
maintain a dollar-weighted average portfolio maturity of 90 days or less,
purchase only instruments having remaining maturities of thirteen months or
less, and invest only in securities determined by the Trustees to be
eligible securities with minimal credit risks at the time of their
acquisition by the Fund. In accordance with the rule, the Trustees have
established procedures designed to stabilize, to the extent reasonably
practicable, the Fund's NAV as computed for the purpose of sales and
redemptions at $1.00. Such procedures include review of the Fund's
portfolio holdings by the Trustees, at such intervals as they may deem
appropriate, to determine whether the NAV of the Fund calculated by using
available market quotations or market equivalents deviates from $1.00 per
share based on amortized cost. The rule also provides that the extent of any
deviation between the Fund's NAV based upon available market quotations or
market equivalents and $1.00 NAV based on amortized cost must be examined by
the Trustees. In the event the Trustees determine that a deviation exists
which may result in material dilution or other unfair results to investors
or existing shareholders, pursuant to the rule they must cause the Fund to
take such corrective action as the Trustees regard as necessary and
appropriate, including: selling portfolio instruments prior to maturity to
realize capital gains or losses or to shorten average portfolio maturity;
withholding dividends or paying distributions from capital or capital gains;
redeeming shares in kind; or establishing a NAV by using available market
quotations.

PERFORMANCE INFORMATION

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "Performance
Information."

From time to time, the Fund may quote its yield in advertisements,
shareholder reports or other communications to shareholders. The Fund may
compare its performance to that of other mutual funds, relevant indices or
rankings prepared by independent services or other financial or industry
publications that monitor mutual fund performance.

Performance rankings as reported in Changing Times, Business Week,
Institutional Investor, The Wall Street Journal, Mutual Fund Forecaster, No
Load Investor, Money Magazine, Morningstar Mutual Fund Values, U.S. News and
World Report, Forbes, Fortune, Barron's, Financial Planning, Financial
Planning on Wall Street, Certified Financial Planner Today, Investment
Advisor, Kiplinger's, Smart Money and similar publications may also be used
in comparing the Fund's performance.

Yields

The Fund's yield is computed by: (a) determining the net change in the
value of a hypothetical pre-existing account in a Fund having a balance of
one share at the beginning of a seven-calendar-day period for which yield is
to be quoted, (b) dividing the net change by the value of the account at the
beginning of the period to obtain the base period return, and (c)
annualizing the results (i.e., multiplying the base period return by 365/7).
The net change in the value of the account reflects the value of additional
shares purchased with dividends declared on the original share and any such
additional shares, but does not include realized gains and losses or
unrealized appreciation and depreciation. In addition, the Fund may
calculate a compound effective annualized yield by adding 1 to the base
period return (calculated as described above), raising the sum to a power
equal to 365/7 and subtracting 1. The Fund's equivalent taxable yield is
computed by dividing that portion of the Fund's yield which is tax-exempt by
one minus a stated income tax rate and adding the product to that portion,
if any, of the Fund's yield that is not tax-exempt.

Effective May 8, 1996, the Fund's separate "Investor" and "Class R"
designations were eliminated and the Fund became a single class Fund. For
the seven-day period ended June 30, 1998, the Fund's yield was 3.09%,
effective yield was 3.14% and equivalent taxable yield* was 5.81%.

From time to time, advertising material for the Fund may include
biographical information relating to its portfolio manager and may refer to,
or include commentary by the portfolio manager relating to investment
strategy, asset growth, current or past business, political, economic or
financial conditions and other matters of general interest to investors.

DIVIDENDS, OTHER DISTRIBUTIONS AND TAXES

The following information supplements and should be read in conjunction
with the Section in the Fund's Prospectus entitled "Dividends, Other
Distributions and Taxes."

The Fund intends to satisfy the requirements for qualifying as a
"regulated investment company" under Subchapter M of the Code. Provided the
Fund distributes at least 90% of its taxable net investment income,
including market discount and net realized short-term capital gains, and 90%
of the tax-exempt interest income (reduced by certain expenses), the Fund,
if it qualifies as a regulated investment company, will not be liable for
Federal income taxes to the extent its taxable net investment income and
capital gain net income are distributed to its shareholders.

Because the Fund will distribute exempt-interest dividends, interest on
indebtedness incurred by a shareholder to purchase or carry Fund shares is
not deductible for Federal income tax purposes. If a shareholder receives
an exempt-interest dividend with respect to shares of the Fund and if such
shares are held by the shareholder for six months or less, then any loss on
the redemption or exchange of such shares will, to the extent of such exempt-
interest dividends, be disallowed. In addition, the Code may require a
shareholder, if he or she receives exempt-interest dividends, to treat as
taxable income a portion of certain otherwise non-taxable social security
and railroad retirement benefit payments. Furthermore, that portion of an
exempt-interest dividend paid by the Fund which represents income from
private activity bonds may not retain its tax-exempt status in the hands of
a shareholder who is a "substantial user" of a facility financed by such
bonds, or a "related person" thereof. Moreover, as noted in the Fund's
Prospectus, some or all of the Fund's dividends may be a specific preference
item, or a component of an adjustment item, for purposes of the Federal
individual and corporate alternative minimum taxes. In addition, the
receipt of Fund dividends and distributions may affect a foreign corporate
shareholder's Federal "branch profits" tax liability and a Subchapter S
corporation shareholder's Federal "excess net passive income" tax liability.
Shareholders should consult their own tax advisers as to whether they are
(1) substantial users with respect to a facility or related to such users
within the meaning of the Code or (2) subject to a Federal alternative
minimum tax, any applicable state alternative minimum tax, the Federal
branch profits tax, or the Federal excess net passive income tax.
_______________________________
* Example assumes a Federal marginal tax rate of 39.6% and a
Massachusetts marginal tax rate of 12% (combined effective rate of
46.85%).

Dividends derived by the Fund from tax-exempt interest are designated
as tax-exempt in the same percentage of the day's dividend as the actual tax-
exempt income earned that day. Thus, the percentage of the dividend
designated as tax-exempt may vary from day to day. Similarly, dividends
derived by the Fund from interest on Massachusetts Municipal Obligations
will be designated as exempt from Commonwealth of Massachusetts taxation in
the same percentage of the day's dividend as the actual interest on
Massachusetts Municipal Obligations earned on that day.

The Fund is required to withhold and remit to the U.S. Treasury 31% of
the taxable dividends paid by the Fund and the distributions paid by the
Fund (in excess of $10 on an annualized basis) with respect to any non-
corporate shareholder who fails to furnish or certify his or her correct
taxpayer identification number, who has been notified that he or she is
subject to back up withholding due to underreporting of dividend or interest
income or who fails to certify that he or she has provided a correct
taxpayer identification number, and that he or she is not subject to such
withholding. An individual's tax identification number is his or her social
security number. The backup withholding tax is not an additional tax and
may be credited against a shareholder's regular Federal income tax
liability.

The foregoing is only a summary of certain tax considerations generally
affecting the Fund and its shareholders, and is not intended as a substitute
for careful tax planning. Individuals may be exempt from Massachusetts state
and local personal income taxes on exempt-interest income derived from
obligations of issuers located in Massachusetts, but are usually subject to
such taxes on such dividends that are derived from obligations of issuers
located in other jurisdictions. Investors are urged to consult their tax
advisers with specific reference to their own tax situations.

INFORMATION ABOUT THE FUND

The following information supplements and should be read in conjunction
with the section in the Fund's Prospectus entitled "General Information."

The Trust is an open-end management investment company organized as an
unincorporated business trust under the laws of the Commonwealth of
Massachusetts by an Agreement and Declaration of Trust dated March 28, 1983,
amended and restated December 9, 1992, and subsequently further amended. On
March 31, 1994, the Trust changed its name from "The Boston Company Tax-Free
Municipal Funds" to "The Laurel Tax-Free Municipal Funds." The Trust's name
was then changed to "The Dreyfus/Laurel Tax-Free Municipal Funds" effective
October 17, 1994. On May 8, 1996, the Fund's name was changed from
"Dreyfus/Laurel Massachusetts Tax-Free Money Fund" to "Dreyfus BASIC
Massachusetts Municipal Money Market Fund."

The Trustees have authority to create an unlimited number of shares of
beneficial interest, without par value, in separate series. Currently,
seven series have been authorized (each a "fund"). The Trustees have
authority to create additional series at any time in the future without
shareholder approval.

Each share (regardless of class) has one vote. On each matter
submitted to a vote of the shareholders, all shares of each fund or class
shall vote together as a single class, except as to any matter for which a
separate vote of any fund or class is required by the Act and except as to
any matter which affects the interest of a particular fund or class, in
which case only the holders of shares of the one or more affected funds or
classes shall be entitled to vote, each as a separate class.

The assets received by the Trust for the issue or sale of shares of
each fund and all income, earnings, profits and proceeds thereof, subject
only to the rights of creditors, are specifically allocated to such fund,
and constitute the underlying assets of such fund. The underlying assets of
each fund are required to be segregated on the books of account, and are to
be charged with the expenses in respect to such fund and with a share of the
general expenses of the Trust. Any general expenses of the Trust not
readily identifiable as belonging to a particular fund shall be allocated by
or under the direction of the Trustees in such manner as the Trustees
determine to be fair and equitable, taking into consideration, among other
things, the relative sizes of the funds and the relative difficulty in
administering each fund. Each share of each fund represents an equal
proportionate interest in that fund with each other share and is entitled to
such dividends and distributions out of the income belonging to such fund as
are declared by the Trustees. Upon any liquidation of a fund, shareholders
thereof are entitled to share pro rata in the net assets belonging to that
fund available for distribution.

The Trust does not hold annual meetings of shareholders. There will
normally be no meetings of shareholders for the purpose of electing Trustees
unless and until such time as less than a majority of the Trustees holding
office have been elected by shareholders, at which time the Trustees then in
office will call a shareholders' meeting for the election of Trustees.
Under the Act, shareholders of record of no less than two-thirds of the
outstanding shares of the Trust may remove a Trustee through a declaration
in writing or by a vote cast in person or by proxy at a meeting called for
that purpose. The Trustees are required to call a meeting of shareholders
for the purposes of voting upon the question of removal of any Trustee when
requested in writing to do so by the shareholders of record of not less than
10% of the Trust's outstanding shares.

Under Massachusetts law, shareholders could, under certain
circumstances, be held personally liable for the obligations of the Trust.
However, the Agreement and Declaration of Trust disclaims shareholder
liability for acts or obligations of the Trust and requires that notice of
such disclaimer be given in each agreement, obligation or instrument entered
into or executed by the Trust or a Trustee. The Agreement and Declaration
of Trust provides for indemnification from the Trust's property for all
losses and expenses of any shareholder held personally liable for the
obligations of the Trust. Thus, the risk of a shareholder's incurring
financial loss on account of shareholder liability is limited to
circumstances in which the Trust itself would be unable to meet its
obligations, a possibility which Dreyfus believes is remote. Upon payment
of any liability incurred by the Trust, the shareholder paying such
liability will be entitled to reimbursement from the general assets of the
Trust. The Trustees intend to conduct the operations of each fund in such a
way so as to avoid, as far as possible, ultimate liability of the
shareholders for liabilities of such fund.

PRINCIPAL SHAREHOLDERS

As of ___________, 1998, the following companies/individuals owned
beneficially 5% or more of the outstanding Fund shares:

CUSTODIAN AND TRANSFER AGENT

Mellon Bank, which is located at One Mellon Bank Center, Pittsburgh, PA
15258, serves as the Fund's custodian. Dreyfus Transfer, Inc., a wholly-
owned subsidiary of Dreyfus, P.O. Box 9671, Providence, Rhode Island 02940-
9671, serves as the Trust's transfer and dividend disbursing agent. Under a
transfer agency agreement with the Trust, the Transfer Agent arranges for
the maintenance of shareholder account records for the Trust, the handling
of certain communications between shareholders and the Fund and the payment
of dividends and distributions payable by the Fund. For these services, the
Transfer Agent receives a monthly fee computed on the basis of the number of
shareholder accounts it maintains for the Trust during the month, and is
reimbursed for certain out-of-pocket expenses. Dreyfus Transfer, Inc. and
Mellon Bank, as custodian, have no part in determining the investment
policies of the Fund or which securities are to be purchased or sold by the
Fund.

COUNSEL AND INDEPENDENT AUDITORS

________________________________________________________________, has
passed upon the legality of the shares offered by the Prospectus and this
Statement of Additional Information.

______________________________________________________________, was
appointed by the Board of Trustees to serve as the Fund's independent
auditors for the year ending June 30, 1999, providing audit services
including (1) examination of the annual financial statements, (2)
assistance, review and consultation in connection with the SEC and (3)
review of the annual Federal income tax return filed on behalf of the Fund.

FINANCIAL STATEMENTS

The financial statements of the Fund for the fiscal year ended June 30,
1998, including notes to the financial statements and supplementary
information, and the Independent Auditors Report, are included in the Annual
Report to shareholders. A copy of the Annual Report accompanies this
Statement of Additional Information. The financial statements included in
the Annual Report, and the Independent Auditors Report thereon contained
therein and related notes, are incorporated herein by reference.

APPENDIX A

RISK FACTORS--INVESTING
IN MASSACHUSETTS MUNICIPAL OBLIGATIONS

The following information constitutes only a brief summary, does not
purport to be a complete description, and is based on information drawn from
official statements relating to securities offerings of the Commonwealth of
Massachusetts available as of the date of this Statement of Additional
Information. While the Fund has not independently verified this
information, it has no reason to believe that such information is not
correct in all material aspects.

The economy of the Commonwealth of Massachusetts experienced a slowdown
from mid-1988 through 1992. Massachusetts had benefited from an annual job
growth rate of approximately 2% since the early 1980s, but by 1989
employment started to decline. Between 1988 and 1992, total employment in
Massachusetts declined 10.7%. The economic recovery that began in 1993 has
been accompanied by increased employment levels; since 1994, total
employment levels in Massachusetts have increased at yearly rates greater
than 2.0%. In 1997, employment levels in every industry increased,
including manufacturing employment, which had declined in every year since
1983. Between 1990 and 1992, the Commonwealth's unemployment rate was
considerably higher than the national average; however, unemployment rates
in Massachusetts since 1993 have declined faster than the national average.
As a result, since 1994 the unemployment rate in Massachusetts has been
below the national average.

While the Commonwealth's expenditures for State programs and services
in each of the fiscal years 1987 through 1991 exceeded each year's current
revenues, Massachusetts ended each of the fiscal years 1991 to 1997 with a
positive closing fund balance in its budgeted operating funds.

In recent years, health care related costs have risen dramatically in
Massachusetts and across the nation and the increase in the State's Medicaid
and group heath insurance costs reflects this trend. In fiscal 1993,
Medicaid was the largest item in Massachusetts' budget and has been one of
the fastest growing budge items, although the rate of increase has abated in
recent years. During fiscal years 1989, 1990, 1991 and 1992, Medicaid
expenditures were $1.83 billion, $2.12 billion, $2.77 billion and $2.82
billion, respectively, representing an average increase of 15.4%. During
fiscal years 1993, 1994, 1995, 1996, and 1997, Medicaid expenditures were
$3.151, $3.313 billion, $3.398 billion, $3.416 billion and $3.456 billion,
respectively. The average annual growth from fiscal 1993 to fiscal 1997 was
2.3%.

Massachusetts' pension costs have risen dramatically as the State has
appropriated funds to address in part the unfunded liabilities that had
accumulated over several decades. Total pension costs increased from $868.2
million in fiscal 1993 to $1.07 billion in fiscal 1997.

Payments for debt service on Massachusetts general obligation bonds and
notes have risen from $1.14 billion in fiscal 1993 to $1.28 billion in fiscal
1997. Debt service payments were $1.15 billion in fiscal 1994, $1.23
billion in fiscal 1995 and $1.18 billion in fiscal 1996. In 1990,
legislation was enacted which generally imposed a 10% limit on the total
appropriations in any fiscal year that may be expended for payment of
interest and principal on general obligation debt.

Certain independent authorities and agencies within the State are
statutorily authorized to issue debt for which Massachusetts is directly, in
whole or in part, or indirectly liable. The State's liabilities are either
in the form of (i) a direct guaranty, (ii) state support through contract
assistance payments for debt service, or (iii) indirect obligations. The
State is indirectly liable for the debt of certain authorities through a
moral obligation to maintain the funding of reserve funds which are pledged
as security for the authorities' debt.

In November 1980, voters in the Commonwealth approved a State-wide tax
limitation initiative petition, commonly known as Proposition 2-1/2, to
constrain levels of property taxation and to limit the charges and fees
imposed on cities and towns by certain government entities, including county
governments. The law is not a constitutional provision and accordingly is
subject to amendment or repeal by the legislature. Proposition 2-1/2 limits
the property taxes which a Massachusetts city or town may assess in any
fiscal year to the lesser of (i) 2.5% of the full and fair cash value of
real estate and personal property therein and (ii) 2.5% over the previous
year's levy limit plus any growth in the tax base from certain new
construction and parcel subdivisions. In addition, Proposition 2-1/2 limits
any increase in the charges and fees assessed by certain governmental
entities, including county governments, on cities and towns to the sum of
(i) 2.5% of the total charges and fees imposed in the proceding fiscal year,
and (ii) an increase in charges for services customarily provided locally or
services obtained by the city or town at its option. The law contains
certain override provisions which require voter approval at a general or
special election. Proposition 2-1/2 also limits any annual increase in the
total assessments on cities and towns by any county, district, authority,
the Commonwealth, or any other governmental entity except regional school
districts and regional water and sewer districts whose budgets are approved
by 2/3 of their member cities and towns. During the 1980s, Massachusetts
increased payments to the cities, towns and regional school districts
("Local Aid") to mitigate the impact of Proposition 2-1/2 on local programs and
services. In fiscal 1998, approximately 20.6% of Massachusetts' budget will
be allocated to Local Aid. Direct Local Aid has increased from $2.55
billion in fiscal 1993 to an estimated $3.89 billion in fiscal 1998. Recent
increases are largely a result of comprehensive education reform legislation
enacted in 1993 that requires annual increase in state expenditures for
education funding, subject to annual legislative appropriations, above a
fiscal 1993 base of approximately $1.288 billion. Increases of $175 million
above the base for fiscal 1994 to $867 million for fiscal 1997 have been
fully funded. Additional increases are called for in future years.

Many factors affect the financial condition of the Commonwealth and its
cities, towns and public bodies, such as social, environmental, and economic
conditions, many of which are not within the control of such entities. As
is the case with most urban States, the continuation of many of
Massachusetts' programs, particularly its human services programs, is in
significant part dependent upon continuing Federal reimbursements which have
been steadily declining. The loss of grants to Massachusetts and its cities
and towns could further slow economic development. To the extent that such
factors may exist, they could have an adverse effect on economic conditions
in Massachusetts, although what effect, if any, such factors would have on
Massachusetts' Municipal Obligations cannot be predicted.

APPENDIX B

Municipal Bond, Municipal Note, Bond, Note and Commercial Paper Ratings

Standard & Poor's ("S&P")

Municipal Bond and Bond Ratings

AAA An obligation rated `AAA' has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation
is extremely strong.

AA An obligation rated `AA' differs from the highest rated issues only in
small degree. The obligors capacity to meet its financial commitment
on the obligation is very strong.

A An obligation rated `A' is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than
obligations in higher rated categories. However, the obligor's capacity
to meet its financial commitment on the obligation is still strong.

BBB An obligation rated `BBB' exhibits adequate protection parameters.
However, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity of the obligor to meet its
financial commitment on the obligation.

The ratings from `AA' to `BBB' may be modified by the addition of a plus (+)
or a minus (-) sign to show relative standing within the major rating
categories

Municipal Note and Note Ratings

SP-1 Strong capacity to pay principal and interest. An issue determined to
possess a very strong capacity to pay debt service is given a plus (+)
designation.

SP-2 Satisfactory capacity to pay principal and interest, with some
vulnerability to adverse finance and economic changes over the term of
the notes.

Commercial Paper Ratings

An S&P commercial paper rating is a current assessment of the
likelihood of timely payment of debt having an original maturity of no more
than 365 days.

A-1 This designation indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong
safety characteristics are denoted with a plus sign (+) designation.

A-2 Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as
for issuers designated `A-1.'

A-3 Issues carrying this designation have an adequate capacity for timely
payment. They are, however, more vulnerable to the adverse effects of
changes in circumstances than obligations carrying the higher
designations.

Moody's

Municipal Bond and Bond Ratings

Aaa Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and generally are referred
to as "gilt edge." Interest payments are protected by a large or by an
exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be
visualized are most unlikely to impair the fundamentally strong
position of such issues.

Aa Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what generally
are known as high-grade bonds. They are rated lower than the best
bonds because margins of protection may not be as large as in Aaa
securities or fluctuation of protective elements may be of greater
amplitude or there may be other elements present which make the
long-term risks appear somewhat larger than in Aaa securities.

A Bonds which are rated A possess many favorable investment attributes
and are to be considered as upper-medium-grade obligations. Factors
giving security to principal and interest are considered adequate, but
elements may be present which suggest a susceptibility to impairment
some time in the future.

Baa Bonds which are rated Baa are considered as medium grade obligations
(i.e., they are neither highly protected nor poorly secured). Interest
payments and principal security appear adequate for the present but
certain protective elements may be lacking or may be characteristically
unreliable over any great length of time. Such bonds lack outstanding
investment characteristics and in fact have speculative characteristics
as well.

Moody's applies the numerical modifiers 1, 2 and 3 to show relative
standing within each generic rating classification from Aa through Baa.
The modifier 1 indicates a ranking for the security in the higher end
of a rating category; the modifier 2 indicates a mid-range ranking; and
the modifier 3 indicates a ranking in the lower end of a rating
category.

Municipal Note, Note and other Short-Term Obligations

There are four rating categories for short-term obligations that define
an investment grade situation. These are designated Moody's Investment
Grade as MIG 1 (best quality) through MIG 4 (adequate quality). Short-term
obligations of speculative quality are designated SG.

In the case of variable rate demand obligations (VRDOs), a two
component rating is assigned. The first element represents an evaluation of
the degree of risk associated with scheduled principal and interest
payments, and the other represents an evaluation of the degree of risk
associated with the demand feature. The short-term rating assigned to the
demand feature of VRDOs is designated as VMIG. When either the long- or
short-term aspect of a VRDO is not rated, that piece is designated NR, e.g.,
Aaa/NR or NR/VMIG 1.

MIG 1/
VMIG 1 This designation denotes best quality. There is present strong
protection by established cash flows, superior liquidity support
or demonstrated broad-based access to the market for refinancing.

MIG-2/
MIG 2 This designation denotes high quality. Margins of protection
are ample although not so large as in the preceding group.

MIG 3/
VMIG 3 This designation denotes favorable quality. All security elements
are accounted for but there is lacking the undeniable strength of
the preceding grades. Liquidity and cash flow protection may be
narrow and market access for refinancing is likely to be less well
established.

MIG 4/
VMIG 4 This designation denotes adequate quality. Protection commonly
regarded as required of an investment security is present and
although not distinctly or predominantly speculative, there is
specific risk.

Commercial Paper Rating

Moody's employs the following three designations, all judged to be
investment grade, to indicate the relative repayment ability of rated
issuers:

Prime-1 Issuers rated Prime-1 (or supporting institutions) have a superior
ability for repayment of senior short-term debt obligations. Prime-1
repayment ability will often be evidenced by many of the following
characteristics:

. Leading market positions in well-established industries.
. High rates of return on funds employed.
. Conservative capitalization structure with moderate reliance on
debt and ample asset protection.
. Broad margins in earnings coverage of fixed financial charges and
high internal cash generation.
. Well-established access to a range of financial markets and assured
sources of alternate liquidity.

Prime-2 Issuers rated Prime-2 (or supporting institutions) have a strong
ability for repayment of senior short-term debt obligations. This
will normally be evidenced by many of the characteristics cited
above but to a lesser agree. Earnings trends and coverage ratios,
while sound, may be more subject to variation. Capitalization
characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

Prime-3 Issuers rated Prime-3 (or supporting institutions) have an
acceptable ability for repayment of senior short-term
obligations. The effect of industry characteristics and market
compositions may be more pronounced. Variability in earnings and
profitability may result in changes in the level of debt
protection measurements and may require relatively high financial
leverage. Adequate alternative liquidity is maintained.

Fitch Investor Services, Inc. ("Fitch")

Municipal Bond and Bond Ratings

AAA Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay
interest and repay principal, which is unlikely to be affected by
reasonably forseeable events.

AA Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is
very strong, although not quite as strong as bonds rated `AAA'.
Because bonds rated in the `AAA' and `AA' categories are not
significantly vulnerable to foreseeable future developments, short-term
debt of these issuers is generally rated `F-1+'.

A Bonds considered to be investment grade and of high credit quality,
The obligor's ability to pay interest an repay principal is considered
to be strong, but may be more vulnerable to adverse changes in economic
conditions and circumstances than bonds with higher ratings.

BBB Bonds considered to be investment grade and satisfactory credit
quality. The obligor's ability to pay interest and repay principal is
considered to be adequate. Adverse changes in economic conditions and
circumstances, however, are more likely to have adverse impact on these
bonds and, therefore, impair timely payment. The likelihood that the
ratings of these bonds will fall below investment grade is higher than
for bonds with higher ratings

+/- Plus and minus signs are used with a rating symbol to indicate the
relative position of a credit within the rating category.

Short-Term and Commercial Paper Ratings

Fitch's short-term ratings apply to debt obligations that are payable
on demand or have original maturities of up to three years, including
commercial paper, certificates of deposit, medium-term notes, and municipal
and investment notes.

Although the credit analysis is similar to Fitch's bond rating
analysis, the short-term rating places greater emphasis than bond ratings on
the existence of liquidity necessary to meet the issuer's obligations in a
timely manner.

F-1+ Exceptionally Strong Credit Quality. Issues assigned this rating are
regarded as having the strongest degree of assurance for timely
payment.

F-1 Very Strong Credit Quality. Issues assigned this rating reflect an
assurance of timely payment only slightly less in degree than issues
rated `F-1+'.

F-2 Good Credit Quality. Issues assigned this rating have a satisfactory
degree of assurance for timely payment, but the margin of safety is not
as great as for issues assigned `F-1+' and `F-1' ratings.

Duff & Phelps Inc. ("Duff & Phelps")

Long-Term Ratings

AAA Highest credit quality. The risks factors are negligible, being
only slightly more than for risk-free U.S. Treasury debt.

AA+ High credit quality. Protection factors are strong. Risk is
modest but
AA may vary slightly from time to time because of economic
conditions.
AA-

A+ Protections factors are average but adequate. However, risk
factors are
A more variable and greater in periods of economic stress.
A-

BBB+ Below-average protection factors but still considered sufficient
for prudent
BBB investment. Considerable variability in risk during economic
cycles.
BBB-

Short-Term and Commercial Paper Ratings

D-1+ Highest certainty of timely payment. Short-term liquidity, including
internal operating factors and/or access to alternative sources of
funds, is outstanding, and safety is just below risk-free U.S. Treasury
short-term obligations.

D-1 Very high certainty of timely payment. Liquidity factors are excellent
and supported by good fundamental protection factors. Risk factors are
minor.

D-1- High certainly of timely payment. Liquidity factors are strong and
supported by good fundamental protection factors. Risk factors are
very small.

D-2 Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge
total financial requirements, access to capital markets is good. Risk
factors are small.

D-3 Satisfactory liquidity and other protection factors qualify issues as
to investment grade. Risk factors are larger and subject to more
variation. Nevertheless, timely payment is expected.

IBCA Limited/IBCA Inc. ("IBCA")

Commercial Paper Ratings

Short-term obligations, including commercial paper, rated A-1+ by IBCA
are obligations supported by the highest capacity for timely repayment.
Obligations rated A-1 have a strong capacity for timely repayment.
Obligations rated A-1 have a very strong capacity for timely repayment.
Obligations rated A-2 have a strong capacity for timely repayment,
although such capacity may be susceptible to adverse changes in
business, economic or financial conditions.

PART C
OTHER INFORMATION

Item 24. Financial Statements and Exhibits
---------------------------------

(a) Financial Statements:

Included in Part A:

Financial Highlights for each of the periods indicated therein.

Included in Part B:

The following are incorporated by reference to the Registrant's
Annual Report to Shareholders and the Registrant's Semi Annual
Report for the fiscal year ending June
30, 1998:

- Reports of Independent Auditors
- Portfolios of Investments
- Statements of Assets and Liabilities
- Statements of Operations
- Statements of Changes in Net Assets
- Notes to Financial Statements

(b) Exhibits:

1(a) Third Amended and Restated Master Trust Agreement filed
January 8, 1993, incorporated by reference to Post-Effective
Amendment No. 22, filed on January 29, 1993.

1(b) Amendment No. 1 to the Third Amended and Restated Master
Trust Agreement filed on May 21, 1993, incorporated by
reference to Post-Effective Amendment No. 24, filed on June
29, 1993.

1(c) Amendment No. 2 to the Third Amended and Restated Master
Trust Agreement filed on February 7, 1994, incorporated by
reference to Post-Effective Amendment No. 29, filed on April
1, 1994.

1(d) Amendment No. 3 to the Third Amended and Restated Master
Trust Agreement filed on March 31, 1994, incorporated by
reference to Post-Effective Amendment No. 29, filed on April
1, 1994.

1(e) Amendment No. 4 to the Third Amended and Restated Master
Trust Agreement. Incorporated by reference to Post-Effective
Amendment No. 32, filed on December 13, 1994.

1(f) Amendment No. 5 to the Third Amended and Restated Master
Trust. Incorporated by reference to Post-Effective Amendment
No. 32, filed on December 13, 1994.

2 By-Laws of the Trust, incorporated by reference to the
Registrant's Registration Statement (No. 33-43845), filed on
July 3, 1985 (the "Registration Statement").

3 Not Applicable.

4 Specimen security. To be filed by amendment.

5(a) Investment Management Agreement between the Registrant and
Mellon Bank, N.A., dated April 4, 1994, incorporated by
reference to Post-Effective Amendment No. 29, filed on April
1, 1994.

5(b) Assignment Agreement among the Registrant, Mellon Bank, N.A.
and The Dreyfus Corporation, dated as of October 17, 1994,
(relating to Investment Management Agreement dated April 4,
1994). Incorporated by reference to Post-Effective Amendment
No. 33 filed on December 19, 1994.

6 Distribution Agreement between the Registrant and Premier
Mutual Fund Services, Inc., dated as of October 17, 1994.
Incorporated by reference to Post-Effective Amendment No. 33
filed on December 19, 1994.

7 Not Applicable.

8(a) Custody and Fund Accounting Agreement between the Registrant
and Mellon Bank, N.A., dated April 4, 1994, incorporated by
reference to Post-Effective Amendment No. 29, filed on April
1, 1994.

8(b) Sub-Custodian Agreement between Mellon Bank, N.A. and Boston
Safe Deposit and Trust Company, dated April 4, 1994,
incorporated by reference to Post-Effective Amendment No. 30,
filed on October 11, 1994.

8(c) Amendment to Custody and Fund Accounting Agreement, dated
August 1, 1994,incorporated by reference to Post-Effective
Amendment No. 30, filed on October 11, 1994.

9(a) Transfer Agent Agreement between the Registrant and Boston
Safe Deposit and Trust Company (currently known as The
Shareholder Services Group, Inc.), incorporated by reference
to Post-Effective Amendment No. 10, filed on February 24,
1984.

9(b) Supplement to Transfer Agent Agreement relating to the
Tax-Free Bond Fund and the Massachusetts Tax-Free Bond Fund,
dated September 3, 1985, incorporated by reference to
Post-Effective Amendment No. 9, filed on November 23, 1987.

9(c) Supplement to Transfer Agent Agreement relating to the
California Tax-Free Money Fund, the California Tax-Free Bond
Fund, the New York Tax-Free Money Fund and the New York
Tax-Free Bond Fund, dated January 28, 1988, incorporated by
reference to Post-Effective Amendment No. 10, filed on
January 28, 1988.

9(d) Supplement to Transfer Agent Agreement for the Registrant,
dated June 1, 1989, incorporated by reference to
Post-Effective Amendment No. 14, filed on September 5, 1989.

9(e) Supplement to Transfer Agent Agreement for the Registrant,
dated April 4, 1994, incorporated by reference to
Post-Effective Amendment No. 30, filed on October 11, 1994.

10 Opinion of counsel is incorporated by reference to the
Registration Statement and to Post-Effective Amendment Number
34 filed on December 28, 1994. Consent of Counsel is Filed
herewith.

11(a) Not Applicable.

12 Not Applicable.

13 Not Applicable.

14 Not Applicable.

15(a) Restated Distribution Plan (relating to Investor Shares and
Class A Shares). Incorporated by reference to Post-Effective
Amendment No. 33 filed on December 19, 1994.

15(b) Distribution and Service Plans (relating to Class B Shares
and Class C Shares). Incorporated by reference to
Post-Effective Amendment No. 33 filed on December 19, 1994.

16 Performance Information, incorporated by reference to
Post-Effective Amendment No. 12, filed on September 1, 1988.

18 18f-3 Plan, incorporated by reference to Post-Effective
Amendment No. 45, filed on October 30, 1996.

Other Exhibits
______________

(a) Powers of Attorney of Trustees filed herewith.

(b) Powers of Officer filed herewith.

Item 25. Persons Controlled by or under Common Control with
Registrant
--------------------------------------------------
Not applicable.

Item 26. Number of Holders of Securities
-------------------------------

Set forth below are the number of recordholders of securities
of each series of the Registrant as of October __, 1998:

Number of Record Holders
------------------------

Title of Class
- ----------------
Dreyfus BASIC Massachusetts Municipal Money Market Fund
Dreyfus BASIC California Municipal Money Market Fund
Dreyfus BASIC New York Municipal Money Market Fund

Dreyfus Premier Limited Term Municipal Fund
Dreyfus Premier Limited Term California Municipal Fund
Dreyfus Premier Limited Term Massachusetts Municipal Fund
Dreyfus Premier Limited Term New York Municipal Fund

Item 27. Indemnification
---------------

Under a provision of the Registrant's Second Amended and Restated
Agreement and Declaration of Trust (the "Declaration of Trust"), any past or
present Trustee or officer of the Registrant is indemnified to the fullest
extent permitted by law against liability and all expenses reasonably
incurred by him/her in connection with any action, suit or proceeding to
which he/she may be a party or otherwise involved by reason of his/her being
or having been a Trustee or officer of the Registrant.

This provision does not authorize indemnification against any
liability to the Registrant or its shareholders to which such Trustee or
officer would otherwise be subject by reason of willful misfeasance, bad
faith, gross negligence or reckless disregard of his/her duties. Moreover,
this provision does not authorize indemnification where such Trustee or
officer is finally adjudicated not to have acted in good faith in the
reasonable belief that his/her actions were in or not opposed to the best
interests of the Registrant. Expenses may be paid by the Registrant in
advance of the final disposition of any action, suit or proceeding upon
receipt of an undertaking by such Trustee or officer to repay such expenses
to the Registrant if it is ultimately determined that indemnification of
such expenses is not authorized under the Declaration of Trust.

Item 28. Business and Other Connections of Investment Adviser
----------------------------------------------------

Investment Adviser -- The Dreyfus Corporation

The Dreyfus Corporation ("Dreyfus") and subsidiary companies
comprise a financial service organization whose business consists primarily
of providing investment management services as the investment adviser,
manager and distributor for sponsored investment companies registered under
the Investment Company Act of 1940 and as an investment adviser to
institutional and individual accounts. Dreyfus also serves as
sub-investment adviser to and/or administrator of other investment
companies. Dreyfus Service Corporation, a wholly-owned subsidiary of
Dreyfus, serves primarily as a registered broker-dealer of shares of
investment companies sponsored by Dreyfus and of other investment companies
for which Dreyfus acts as investment adviser, sub-investment adviser or
administrator. Dreyfus Management, Inc., another wholly-owned subsidiary,
provides investment management services to various pension plans,
institutions and individuals.

Item 28. Business and Other Connections of Investment Adviser (continued)
________ ________________________________________________________________

Officers and Directors of Investment Adviser
____________________________________________

Name and Position
with Dreyfus Other Businesses
_________________ ________________

W. KEITH SMITH Senior Vice Chairman:
Chairman of the Mellon Bank, N.A.*;
Board President and Director:
The Bridgewater Land Co., Inc.**;
Mellon Preferred Capital Corporation**;
TBC Securities Co., Inc.**;
Wellington-Medford II Properties, Inc.**;
Chairman, President and Chief Executive Officer:
Shearson Summit Euromanagement, Inc.*;
Shearson Summit EuroPartners, Inc.*;
Shearson Summit Management, Inc.*;
Shearson Summit Partners, Inc.*;
Shearson Venture Capital, Inc.*;
Chairman and Chief Executive Officer:
The Boston Company, Inc.**;
Boston Safe Deposit and Trust Company**;
Boston Group Holdings, Inc.**;
Director:
Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
The Boston Company Asset Management, Inc.**;
Mellon Europe Limited
London, England;
Mellon Global Investing Corp.*;
Mellon Accounting Services, Inc.*;
MGIC-UK Ltd.;
Mellon Capital Management Corporation***;
Chairman:
Mellon Financial Company*;
Buck Consultants, Inc.
1 Pennsylvania Plaza, 29th Floor
New York, New York 10019;
Director and Vice Chairman:
Mellon Financial Services Corporation*;
Mellon Bank Corporation*;
Trustee:
Laurel Capital Advisors, LLP*;
Mellon Equity Associates, LLP*;
Mellon Bond Associates, LLP*;
Past Director:
Access Capital Strategies Corp.
124 Mount Auburn Street
Suite 200 North
Cambridge, MA 02138
W. KEITH SMITH Past Trustee:
Chairman of the Board Franklin Portfolio Associates Trust
(continued) 2 International Place, 22nd Floor
Boston, MA 02110

MANDELL L. BERMAN Real estate consultant and private investor
Director 29100 Northwestern Highway, Suite 370
Southfield, Michigan 48034

BURTON C. BORGELT Director:
Director Dentsply International, Inc.
570 West College Avenue
York, Pennsylvania 17405;
DeVlieg-Bullard, Inc.
1 Gorham Island
Westport, Connecticut 06880;
Mellon Bank Corporation*;
Mellon Bank, N.A.*

FRANK V. CAHOUET Chairman of the Board, President and
Director Chief Executive Officer:
Mellon Bank Corporation*;
Director:
Avery Dennison Corporation
150 North Orange Grove Boulevard
Pasadena, California 91103;
Saint-Gobain Corporation
750 East Swedesford Road
Valley Forge, Pennsylvania 19482;
Alleghany Teledyne, Inc.
1901 Avenue of the Stars
Los Angeles, California 90067;
Past Chairman, President and Chief Executive
Officer:
Mellon Bank, N.A.*

STEPHEN E. CANTER Chairman and President:
Vice Chairman, Dreyfus Investment Advisors, Inc.****
Chief Investment Officer, Director:
and a Director The Dreyfus Trust Company+

CHRISTOPHER M. CONDRON President and Chief Operating Officer:
President, Chief Mellon Bank, N.A.*;
Executive Officer, President and Director:
Chief Operating Boston Safe Advisors, Inc.**;
Officer and a Vice-Chairman and Director:
Director Mellon Bank Corporation*;
The Boston Company, Inc.**;
Director:
Certus Asset Advisors Corporation++;
Mellon Capital Management Corporation***;
Boston Safe Deposit and Trust Company**;
Past President and Director:
The Boston Company Financial Services, Inc.**;
Past President:
The Boston Company Financial Strategies,
Inc.**;
CHRISTOPHER M. CONDRON Boston Safe Deposit and Trust Company**;
President, Chief Past Director:
Executive Officer, Mellon Preferred Capital Corporation**;
Chief Operating Access Capital Strategies Corp.
Officer and a Director 124 Mount Auburn Street
(continued) Suite 200 North
Cambridge, MA 02138;
Past Chairman, President, and Chief Executive
Officer:
The Boston Company Asset Management, Inc.**;
Past Partner Representative:
Pareto Partners
271 Regent Street
London, England W1R 8PP;
Past Trustee:
Franklin Portfolio Associates Trust
2 International Place, 22nd Floor
Boston, MA. 02710;
Mellon Bond Associates, LLP*;
Mellon Equity Associates, LLP*;

LAWRENCE S. KASH Executive Vice President:
Vice Chairman-Distribution Mellon Bank, N.A.*;
and a Director Chairman, President and Director:
The Dreyfus Consumer Credit
Corporation****;
Trustee, President and Chief Executive
Officer:
Laurel Capital Advisors, LLP*;
Director:
Dreyfus Investment Advisors, Inc.****;
Seven Six Seven Agency, Inc.****;
President and Director:
Dreyfus Service Corporation+;
Dreyfus Precious Metals, Inc.+;
Dreyfus Service Organization, Inc.****;
The Boston Company, Inc.**;
Boston Group Holdings, Inc.**;
Chairman and Chief Executive Officer:
Dreyfus Brokerage Services, Inc.
401 North Maple Avenue
Beverly Hills, CA 90210;
Chairman, President and Chief Executive
Officer:
The Dreyfus Trust Company+;
The Boston Company Advisors, Inc.
Wilmington, DE.

J. DAVID OFFICER Director:
Vice Chairman Dreyfus Financial Services
and a Director Corporation*****;
Dreyfus Investment Services
Corporation*****;
Mellon Trust of Florida
2875 Northeast 191st Street
North Miami Beach, Florida 33180;
Mellon Preferred Capital Corporation**;
Boston Group Holdings, Inc.**;
Mellon Trust of New York
1301 Avenue of the Americas - 41st Floor
New York, New York 10019;
J. DAVID OFFICER Mellon Trust of California
Vice Chairman 400 South Hope Street
and a Director Los Angeles, California 90071-2806;
(continued) Executive Vice President:
Dreyfus Service Corporation****;
Mellon Bank, N.A.*;
Vice Chairman and Director:
The Boston Company, Inc.**;
President and Director:
RECO, Inc.**;
The Boston Company Financial Services,
Inc.**;
Boston Safe Deposit and Trust Company**;

RICHARD F. SYRON Chairman of the Board and Chief Executive Officer:
Director American Stock Exchange
86 Trinity Place
New York, New York 10006;
Director:
John Hancock Mutual Life Insurance
Company
John Hancock Place, Box 111
Boston, Massachusetts 02117;
Thermo Electron Corporation
81 Wyman Street, Box 9046
Waltham, Massachusetts 02254-9046;
American Business Conference
1730 K Street, NW, Suite 120
Washington, D.C. 20006;
Trustee:
Boston College - Board of Trustees
140 Commonwealth Ave.
Chestnut Hill, Massachusetts 02167-3934

RONALD P. O'HANLEY III Director:
Vice Chairman The Boston Company Asset Management,
LLC**;
TBCAM Holding, Inc.**;
Franklin Portfolio Holdings, Inc.
Two International Place - 22nd Floor
Boston, Massachusetts 02110;
Mellon Capital Management Corporation***;
Certus Asset Advisors Corporation++;
Mellon-France Corporation***;
Chairman and Director:
Boston Safe Advisors, Inc.**;
Partner Representative:
Pareto Partners
271 Regent Street
London, England W1R 8PP;
Chairman and Trustee:
Mellon Bond Associates, LLP*;
Mellon Equity Associates, LLP*;
Trustee:
Laurel Capital Advisors, LLP*;
Chairman, President and Chief Executive Officer:
Mellon Global Investing Corp.*;

RONALD P. O'HANLEY III Partner:
Vice Chairman McKinsey & Company, Inc.
(continued) Boston, Massachusetts

WILLIAM T. SANDALLS, JR. Chairman and Director:
Senior Vice President Dreyfus Transfer, Inc.
and Chief Financial One American Express Plaza
Officer Providence, Rhode Island 02903;
President and Director:
Dreyfus-Lincoln, Inc.
4500 New Linden Hill Rd.
Wilmington, DE 19808;
Executive Vice President and Chief Financial
Officer:
Dreyfus Service Corporation****;
Executive Vice President, Treasurer and Director:
Dreyfus Service Organization, Inc.****;
Director and Treasurer:
Dreyfus Investment Advisors, Inc.****;
Seven Six Seven Agency, Inc.****;
Dreyfus Precious Metals, Inc.+;
Director, Vice President and Treasurer:
The Dreyfus Consumer Credit
Corporation****;
The TruePenny Corporation****
Director, Treasurer and Chief Financial Officer:
The Dreyfus Trust Company+;
Past Director and President:
Lion Management, Inc.****;
Dreyfus Partnership Management, Inc.****;
Past Director and Executive Vice President:
Dreyfus Service Organization, Inc.****;
Past Director and Treasurer:
Dreyfus Personal Management, Inc.****

MARK N. JACOBS Director:
Vice President, Dreyfus Service Organization, Inc.****;
General Counsel The Dreyfus Trust Company+;
and Secretary Director and Secretary:
Dreyfus Investment Advisors, Inc.****;
The TruePenny Corporation****;
Past Director, Vice President and Secretary:
Lion Management, Inc.****

PATRICE M. KOZLOWSKI None
Vice President-
Corporate Communications

MARY BETH LEIBIG None
Vice President-
Human Resources

ANDREW S. WASSER Vice President:
Vice President- Mellon Bank Corporation*
Information Services

JAMES BITETTO None
Assistant Secretary

STEVEN F. NEWMAN Vice President, Secretary and Director:
Assistant Secretary Dreyfus Transfer, Inc.
One American Express Plaza
Providence, Rhode Island 02903;
Assistant Secretary:
Dreyfus Service Organization, Inc.****
______________________________________
* The address of the business so indicated is One Mellon Bank Center,
Pittsburgh, Pennsylvania 15258.
** The address of the business so indicated is One Mellon Bank Place,
Boston, Massachusetts, 02108.
*** The address of the business so indicated is 595 Market Street, Suite
#3000, San Francisco CA 94105.
**** The address of the business so indicated is 200 Park Avenue, New York,
New York 10166.
***** The address of the business so indicated is Union Trust Building,
501 Grant Street, Pittsburgh, PA 15259.
+ The address of the business so indicated is 144 Glenn Curtiss
Boulevard, Uniondale, New York, 11556-0144.
++ The address of the business so indicated is One Bush Street, Suite
450, San Francisco, CA. 94104.

Item 29. Principal Underwriters
________ ______________________

(a) Other investment companies for which Registrant's principal
underwriter (exclusive distributor) acts as principal underwriter or
exclusive distributor:

1) Comstock Partners Funds, Inc.
2) Dreyfus A Bonds Plus, Inc.
3) Dreyfus Appreciation Fund, Inc.
4) Dreyfus Asset Allocation Fund, Inc.
5) Dreyfus Balanced Fund, Inc.
6) Dreyfus BASIC GNMA Fund
7) Dreyfus BASIC Money Market Fund, Inc.
8) Dreyfus BASIC Municipal Fund, Inc.
9) Dreyfus BASIC U.S. Government Money Market Fund
10) Dreyfus California Intermediate Municipal Bond Fund
11) Dreyfus California Tax Exempt Bond Fund, Inc.
12) Dreyfus California Tax Exempt Money Market Fund
13) Dreyfus Cash Management
14) Dreyfus Cash Management Plus, Inc.
15) Dreyfus Connecticut Intermediate Municipal Bond Fund
16) Dreyfus Connecticut Municipal Money Market Fund, Inc.
17) Dreyfus Florida Intermediate Municipal Bond Fund
18) Dreyfus Florida Municipal Money Market Fund
19) The Dreyfus Fund Incorporated
20) Dreyfus Global Bond Fund, Inc.
21) Dreyfus Global Growth Fund
22) Dreyfus GNMA Fund, Inc.
23) Dreyfus Government Cash Management Funds
24) Dreyfus Growth and Income Fund, Inc.
25) Dreyfus Growth and Value Funds, Inc.
26) Dreyfus Growth Opportunity Fund, Inc.
27) Dreyfus Income Funds
28) Dreyfus Index Funds, Inc.
29) Dreyfus Institutional Money Market Fund
30) Dreyfus Institutional Preferred Money Market Fund
31) Dreyfus Institutional Short Term Treasury Fund
32) Dreyfus Insured Municipal Bond Fund, Inc.
33) Dreyfus Intermediate Municipal Bond Fund, Inc.
34) Dreyfus International Funds, Inc.
35) Dreyfus Investment Grade Bond Funds, Inc.
36) Dreyfus Investment Portfolios
37) The Dreyfus/Laurel Funds, Inc.
38) The Dreyfus/Laurel Funds Trust
39) Dreyfus LifeTime Portfolios, Inc.
40) Dreyfus Liquid Assets, Inc.
41) Dreyfus Massachusetts Intermediate Municipal Bond Fund
42) Dreyfus Massachusetts Municipal Money Market Fund
43) Dreyfus Massachusetts Tax Exempt Bond Fund
44) Dreyfus MidCap Index Fund
45) Dreyfus Money Market Instruments, Inc.
46) Dreyfus Municipal Bond Fund, Inc.
47) Dreyfus Municipal Cash Management Plus
48) Dreyfus Municipal Money Market Fund, Inc.
49) Dreyfus New Jersey Intermediate Municipal Bond Fund
50) Dreyfus New Jersey Municipal Bond Fund, Inc.
51) Dreyfus New Jersey Municipal Money Market Fund, Inc.
52) Dreyfus New Leaders Fund, Inc.
53) Dreyfus New York Insured Tax Exempt Bond Fund
54) Dreyfus New York Municipal Cash Management
55) Dreyfus New York Tax Exempt Bond Fund, Inc.
56) Dreyfus New York Tax Exempt Intermediate Bond Fund
57) Dreyfus New York Tax Exempt Money Market Fund
58) Dreyfus 100% U.S. Treasury Intermediate Term Fund
59) Dreyfus 100% U.S. Treasury Long Term Fund
60) Dreyfus 100% U.S. Treasury Money Market Fund
61) Dreyfus 100% U.S. Treasury Short Term Fund
62) Dreyfus Pennsylvania Intermediate Municipal Bond Fund
63) Dreyfus Pennsylvania Municipal Money Market Fund
64) Dreyfus Premier California Municipal Bond Fund
65) Dreyfus Premier Equity Funds, Inc.
66) Dreyfus Premier International Funds, Inc.
67) Dreyfus Premier GNMA Fund
68) Dreyfus Premier Worldwide Growth Fund, Inc.
69) Dreyfus Premier Insured Municipal Bond Fund
70) Dreyfus Premier Municipal Bond Fund
71) Dreyfus Premier New York Municipal Bond Fund
72) Dreyfus Premier State Municipal Bond Fund
73) Dreyfus Premier Value Fund
74) Dreyfus Short-Intermediate Government Fund
75) Dreyfus Short-Intermediate Municipal Bond Fund
76) The Dreyfus Socially Responsible Growth Fund, Inc.
77) Dreyfus Stock Index Fund, Inc.
78) Dreyfus Tax Exempt Cash Management
79) The Dreyfus Third Century Fund, Inc.
80) Dreyfus Treasury Cash Management
81) Dreyfus Treasury Prime Cash Management
82) Dreyfus Variable Investment Fund
83) Dreyfus Worldwide Dollar Money Market Fund, Inc.
84) General California Municipal Bond Fund, Inc.
85) General California Municipal Money Market Fund
86) General Government Securities Money Market Fund, Inc.
87) General Money Market Fund, Inc.
88) General Municipal Bond Fund, Inc.
89) General Municipal Money Market Fund, Inc.
90) General New York Municipal Bond Fund, Inc.
91) General New York Municipal Money Market Fund

(b)
Positions and
Name and principal Positions and offices with offices with
business address the Distributor Registrant
__________________ ___________________________ _____________

Marie E. Connolly+ Director, President, Chief President and
Executive Officer and Compliance Treasurer
Officer

Joseph F. Tower, III+ Director, Senior Vice President, Vice President
Treasurer and Chief Financial and Assistant
Officer Treasurer

Mary A. Nelson+ Vice President Vice President
and Assistant
Treasurer

Paul Prescott+ Vice President None

Jean M. O'Leary+ Assistant Secretary and None
Assistant Clerk

John W. Gomez+ Director None

William J. Nutt+ Director None

________________________________
+ Principal business address is 60 State Street, Boston, Massachusetts
02109.
++ Principal business address is 200 Park Avenue, New York, New York 10166.

Item 30. Location of Accounts and Records
________________________________

1. First Data Investor Services Group, Inc.,
a subsidiary of First Data Corporation
P.O. Box 9671
Providence, Rhode Island 02940-9671

2. Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258

3. Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, Rhode Island 02940-9671

4. The Dreyfus Corporation
200 Park Avenue
New York, New York 10166

Item 31. Management Services
_______ ___________________

Not Applicable

Item 32. Undertakings
________ ____________

(1) To call a meeting of shareholders for the purpose of voting upon
the question of removal of a Board member or Board members when
requested in writing to do so by the holders of at least 10% of
the Registrant's outstanding shares and in connection with such
meeting to comply with the provisions of Section 16(c) of the
Investment Company Act of 1940 relating to shareholder
communications.

(2) To furnish each person to whom a prospectus is delivered with a
copy of the Fund's latest Annual Report to Shareholders, upon
request and without charge.

SIGNATURES
__________

Pursuant to the requirements of the Securities Act of 1933 and has
duly caused this Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New
York, and State of New York on the 28th day of August, 1998.

THE DREYFUS/LAUREL TAX-FREE MUNICIPAL FUNDS

BY: /s/Marie E. Connolly*
______________________________________
Marie E. Connolly, President

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, this Amendment to the Registration Statement
has been signed below by the following persons in the capacities and on the
dates indicated.

Signatures Title Date
________________________ ______________________________ __________

/s/Marie E. Connolly* President, Treasurer 8/28/98
- ---------------------------
Marie E. Connolly

/s/Francis P. Brennan* Trustee, 8/28/98
- --------------------------- Chairman of the Board
Francis P. Brennan

/s/Ruth Marie Adams* Trustee 8/28/98
- ---------------------------
Ruth Marie Adams

/s/Joseph S. DiMartino* Trustee 8/28/98
- ---------------------------
Joseph S. DiMartino

/s/James M. Fitzgibbons* Trustee 8/28/98
- ---------------------------
James M. Fitzgibbons

/s/Kenneth A. Himmel* Trustee 8/28/98
- ---------------------------
Kenneth A. Himmel

/s/Stephen J. Lockwood* Trustee 8/28/98
- ---------------------------
Stephen J. Lockwood

/s/Roslyn M. Watson* Trustee 8/28/98
- ---------------------------
Roslyn M. Watson

/s/J. Tomlinson Fort* Trustee 8/28/98
- ---------------------------
J. Tomlinson Fort

/s/Arthur L. Goeschel* Trustee 8/28/98
- ---------------------------
Arthur L. Goeschel

/s/Arch S. Jeffery* Trustee 8/28/98
- ---------------------------
Arch S. Jeffery

/s/John Sciullo* Trustee 8/28/98
- ---------------------------
John Sciullo

/s/Benaree Pratt Wiley Trustee 8/28/98
- ----------------------------
Benaree Pratt Wiley

*By: /s/Stephanie Pierce
---------------------------
Stephanie Pierce
Attorney-in-Fact

POWER OF ATTORNEY

The undersigned hereby constitute and appoint Margaret
W. Chambers, Marie E. Connolly, Christopher J. Kelley,
Kathleen K. Morrisey, Michael S. Petrucelli, Stephanie
Pierce and Elba Vasquez, and each of them, with full power
to act without the other, his or her true and lawful
attorney-in-fact and agent, with full power of substitution
and resubstitution, for him or her, and in his or her name,
place and stead, in any and all capacities (until revoked in
writing) to sign any and all amendments to the Registration
Statement of each Fund enumerated on Exhibit A hereto
(including post-effective amendments and amendments
thereto), and to file the same, with all exhibits thereto,
and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ Francis P. Brennan June 15, 1998

/s/ Ruth Marie Adams June 15, 1998

/s/ Joseph S. DiMartino June 15, 1998

/s/ James M. Fitzgibbons June 15, 1998

/s/ J. Tomlinson Fort June 15, 1998

/s/ Arthur L. Goeschel June 15, 1998

/s/ Kenneth Himmel June 15, 1998

/s/ Arch S. Jeffery June 15, 1998

/s/ Stephen J. Lockwood June 15, 1998

/s/ John J. Sciullo June 15, 1998

/s/ Roslyn Watson June 15, 1998

/s/ Benaree Pratt Wiely June 15, 1998

EXHIBIT A

The Dreyfus/Laurel Funds, Inc.:
Dreyfus International Equity Allocation Fund
Dreyfus Bond Market Index Fund
Dreyfus Premier Midcap Stock Fund
Dreyfus Disciplined Intermediate Bond Fund
Dreyfus Disciplined Stock Fund
Dreyfus Institutional Government Money Market Fund
Dreyfus Institutional Prime Money Market Fund
Dreyfus Institutional U.S. Treasury Money Market Fund
Dreyfus Money Market Reserves
Dreyfus Municipal Reserves
Dreyfus BASIC S&P 500 Stock Index Fund
Dreyfus U.S. Treasury Reserves
Dreyfus Premier Balanced Fund
Dreyfus Premier Limited Term Income Fund
Dreyfus Premier Small Company Stock Fund
Dreyfus Premier Tax Managed Growth Fund
Dreyfus Premier Large Company Stock Fund
Dreyfus Premier Small Cap Value Fund

The Dreyfus/Laurel Funds Trust:
Dreyfus Premier Core Value Fund
Dreyfus Premier Managed Income Fund
Dreyfus Premier Limited Term High Income Fund

The Dreyfus/Laurel Tax-Free Municipal Funds:
Dreyfus BASIC California Municipal Money Market Fund
Dreyfus BASIC Massachusetts Municipal Money Market Fund
Dreyfus BASIC New York Municipal Money Market Fund
Dreyfus Premier Limited Term California Municipal Fund
Dreyfus Premier Limited Term Massachusetts Municipal Fund
Dreyfus Premier Limited Term Municipal Fund
Dreyfus Premier Limited Term New York Municipal Fund

Dreyfus High Yield Strategies Fund

POWER OF ATTORNEY

The undersigned hereby constitutes and appoints
Margaret W. Chambers, Christopher J. Kelley, Kathleen K.
Morrisey, Michael S. Petrucelli, Stephanie Pierce and Elba
Vasquez, and each of them, with full power to act without
the other, her true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for her,
and in her name, place and stead, in any and all capacities
(until revoked in writing) to sign any and all amendments to
the Registration Statement of each Fund enumerated on
Exhibit A hereto (including post-effective amendments and
amendments thereto), and to file the same, with all exhibits
thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing
ratifying and confirming all that said attorneys-in-fact and
agents or any of them, or their or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ Marie E. Connolly July 6, 1998

EXHIBIT A

The Dreyfus/Laurel Funds Trust:
Dreyfus Premier Core Value Fund
Dreyfus Premier Managed Income Fund
Dreyfus Premier Limited Term High Income Fund

Dreyfus High Yield Strategies Fund