Dreyfus BASIC
California Municipal
Money Market
SEMIANNUAL REPORT December 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. In addition, issuers of securities in
which the fund invests may be adversely affected by year 2000-related problems.
This could have an impact on the value of the fund's investments and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
Dreyfus BASIC
California Municipal
Money Market Fund
The Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus BASIC California
Municipal Money Market Fund, covering the six-month period from July 1, 1999
through December 31, 1999. Inside, you'll find valuable information about how
the fund was managed during the reporting period, including a discussion with
the fund's portfolio manager, John Flahive.
The faster than expected rate of economic growth that became evident during the
first half of the year gained momentum in the second half, reinforcing concerns
that long-dormant inflationary pressures might re-emerge. Consumers continued to
spend heavily, unemployment levels reached new lows and the stock market
continued to climb. Because unsustainable economic growth may trigger unwanted
inflationary pressures, the Federal Reserve Board raised key short-term interest
rates three times between June 30 and year-end in an attempt to forestall an
acceleration of inflation.
The tax-exempt money markets were also affected by their own unique influences.
Because the robust economy has reduced the need for municipalities to issue
short-term debt, the supply of short-term municipal notes has declined amid
tepid demand. As a result, tax-exempt money market yields did not rise as much
as comparable taxable yields during the reporting period.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus BASIC California Municipal Money Market
Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
January 14, 2000
DISCUSSION OF FUND PERFORMANCE
John Flahive, Portfolio Manager
How did Dreyfus BASIC California Municipal Money Market Fund perform during the
period?
For the six-month period ended December 31, 1999, the fund provided an
annualized yield of 2.64% and, after taking into account the effect of
compounding, an annualized effective yield of 2.67%.(1)
We attribute the fund's performance to a rising interest-rate environment, which
increased the yields of many short-term fixed-income securities, including
tax-exempt money market securities.
What is the fund's investment approach?
The fund' s goal is to seek a high level of current income exempt from federal
and California income taxes to the extent consistent with the preservation of
capital and the maintenance of liquidity. To pursue this objective, we attempt
to add value by selecting the individual tax-exempt money market instruments
from California issuers that we believe are most likely to provide high
tax-exempt current income, while focusing on credit risk. We also actively
manage the portfolio' s average weighted maturity in anticipation of
interest-rate and supply-and-demand changes in California's short-term municipal
marketplace.
Rather than focusing on economic or market trends, we search for securities
that, in our opinion, represent better values than those we hold in the
portfolio at that time. When we find securities that we believe will help us
enhance the fund' s yield without sacrificing quality we buy them.
The management of the portfolio's average weighted maturity is a more tactical
approach. If we expect the supply of securities to increase temporarily, we may
reduce the portfolio's average weighted maturity to make cash available for the
purchase of higher yielding securities. That' s because yields tend to rise
temporarily if many issuers are competing for investor interest. If we expect
demand to surge at a
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
time when we anticipate little issuance and, therefore, lower yields, we may
increase the portfolio' s average weighted maturity to maintain current yields
for as long as practical. At other times, we try to maintain a neutral average
weighted maturity.
What other factors influenced the fund's performance?
California' s municipal money market was influenced by global economic events.
Contrary to early expectations, many global economies staged impressive rebounds
as the year progressed, and the U.S. economy continued to grow strongly. As a
result, fixed-income investors grew concerned that the U.S. economy might be
growing too rapidly, increasing the risk that long-dormant inflationary
pressures might re-emerge. In response, the Federal Reserve Board increased
short-term interest rates in late June, August and November, 1999. These changes
in monetary policy caused the yields of most money market instruments to rise,
including many of those held in this fund.
What is the fund's current strategy?
We have continued to search for the most attractive values in California's
tax-exempt money market. We currently prefer school district and local debt,
whose revenues tend to be more predictable, to county-issued debt. Many of the
counties in California find themselves in a fiscal squeeze because they are
forced by the state to provide services without being given the flexibility to
raise revenues.
Later in the reporting period, we invested a substantial portion of the fund's
assets in Variable Rate Demand Notes (VRDNs), which provided the liquidity that
we felt was necessary due to Y2K-related concerns. In addition, the yields on
VRDNs rose quickly as supply exceeded demand at year-end.
As we approached year-end we reduced the fund's average maturity in order to
increase liquidity. This strategy was designed in order to be prepared for any
Y2K-related issues as well as to be more responsive to the year-end rise in
interest rates.
January 14, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-CALIFORNIA
RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. AN INVESTMENT IN THE FUND IS NOT INSURED OR
GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS
TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO
LOSE MONEY BY INVESTING IN THE FUND.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
December 31, 1999 (Unaudited)
Principal
TAX EXEMPT INVESTMENTS--99.8% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA--93.9%
Alameda County Industrial Development Authority, Revenue,
VRDN:
(Ply Properties Project) 5.25%, Series A
(LOC; Wells Fargo Bank) 5,055,000 (a) 5,055,000
(Tool Family Partnership) 4.45%, Series A
(LOC; Wells Fargo Bank) 400,000 (a) 400,000
California Economic Development Finance Authority, IDR, VRDN
(Lion Enterprise Inc, Project) 4.50% (LOC; Bank of America) 1,000,000 (a) 1,000,000
California Health Facilities Finance Authority:
Health Facility Finance Revenue:
Prerefunded (Good Samaritan Health)
7.50%, Series A, 5/1/2000
(Escrowed in; U.S. Government Securities) 2,000,000 2,068,764
Revenue (Catholic Health Care West)
4.75%, 7/1/2000 3,205,000 3,225,935
VRDN 5.75% (Insured; MBIA and
LOC; The Bank of New York) 2,900,000 (a) 2,900,000
HR, VRDN (Scripps Hospital) 4.95% (Insured; MBIA and
LOC; Credit Local de France) 1,600,000 (a) 1,600,000
California Housing Finance Agency:
Home Mortgage Revenue
3.80%, 1/5/2001 (LOC: California State Teachers
Retirement and Commerzbank) 1,600,000 1,600,000
Single-Family Mortgage Purchase Revenue
3%, Series B, 2/1/2000 450,000 450,000
California Pollution Control Financing Authority:
PCR:
(Chevron USA Inc, Project):
3.10%, 5/15/2000 (LOC; Chevron USA Inc.) 700,000 700,000
3.15%, 6/15/2000 (LOC; Chevron USA Inc.) 1,135,000 1,135,000
3.80%, 11/14/2000 (LOC; Chevron USA Inc.) 1,185,000 1,185,000
VRDN, Refunding:
(Pacific Gas and Electric)
4.40%, Series D (LOC; Bank of America) 320,000 (a) 320,000
(Shell Oil Co.)
4.20%, (LOC; Shell Oil Co.) 800,000 (a) 800,000
SWDR, VRDN (Western Waste Industries)
4.75% (LOC; Fleet Bank) 3,000,000 (a) 3,000,000
California Statewide Communities Development Authority,
VRDN, MFHR (Sunrise of Moraga)
5.25%, Series G (LOC; Commerzbank) 755,000 (a) 755,000
State of California, Revenue
7.10%, 4/1/2000 2,000,000 2,020,433
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Contra Costa County,
MFHR, Refunding, VRDN (Del Norte Apartments)
4.60%, Series A (LOC; State Street Bank and Trust Co.) 3,500,000 (a) 3,500,000
Contra Costa Transpitation Authority, Revenue
5%, 3/1/2000 (Insured; FGIC) 500,000 501,360
Fremont, MFHR, VRDN
5%, Series E (LOC: Bayerische Bank and Landesbank ) 3,100,000 (a) 3,100,000
Fremount Unified School District, Revenue
4%, 7/28/2000 3,000,000 3,010,771
Glendale, Revenue Reliance Development, VRDN (Public Parking)
3.65% (LOC; Barclays Bank) 1,900,000 (a) 1,900,000
Irvine Improvement Bond Act of 1915 Assessment District,
VRDN:
4.20% (LOC; Canadian Imperial Bank of Commerce) 100,000 (a) 100,000
Limited Obligation, 4.20% (LOC; Kredietbank) 1,100,000 (a) 1,100,000
Irvine Ranch Water District, VRDN
4.20%, (LOC; Landesbank Hessen) 600,000 (a) 600,000
Kern High School District, TRAN
4%, 7/6/2000 3,000,000 3,009,330
Lassen Municipal Utility District, Revenue, Refunding, VRDN
5.30%, Series A (Insured; FSA and LOC; Credit Local De France) 700,000 (a) 700,000
Los Angeles Department of Water and Power Electric Plant,
Revenue, CP:
3.25%, 1/25/2000 (LOC: Bank of America, Bayerische
Landesbank, Credit Local de France, Morgan Guaranty
Trust Co. and Westdeutsche Landesbank) 3,000,000 2,999,995
3.60%, 2/8/2000 (LOC: Bank of America, Bayerische
Landesbank, Credit Local de France, Morgan Guaranty
Trust Co. and Westdeutsche Landesbank) 4,000,000 4,000,000
3.60%, 2/9/2000 (LOC: Bank of America, Bayerische
Landesbank, Credit Local de France, Morgan Guaranty
Trust Co. and Westdeutsche Landesbank) 3,100,000 3,100,000
Los Angeles Wastewater System, Revenue, Prerefunded
7%, 2/1/2000 (Escrowed In; U.S. Government Securities) 6,000,000 6,137,848
Los Angeles County Housing Authority, MFHR, Refunding,
VRDN (Malibu Meadows)
4.90% (LOC; FNMA) 4,500,000 (a) 4,500,000
Metropolitan Water District, Revenue (Southern California
Water Works)
3.65%, 6/1/2000 (LOC Bank of America) 3,000,000 3,000,000
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Modesto, MFHR, Refunding, VRDN (Shadowbrook)
4.90%, Series A (LOC; Bank of America) 1,000,000 (a) 1,000,000
Monterey County Financing Authority, Revenue, VRDN
(Reclamation and District Project)
4.95% (LOC; Credit Local De France) 2,400,000 (a) 2,400,000
Moreno Valley Union School District, TRAN 4%, 6/30/2000 2,000,000 2,005,732
Oakland, COP, VRDN (Capital Equipment Project)
5.15%, Series A (LOC; National Westminster Bank) 5,900,000 (a) 5,900,000
Orange County Various Sanitation Districts, COP, Refunding, VRDN
4.20% (Insured; AMBAC and LOC; Societe Generale) 300,000 (a) 300,000
Orange County Water District,
COP, VRDN 4.25% (LOC; National Westminster Bank) 700,000 (a) 700,000
Rancho Water District Finance Authority, Revenue, VRDN
5%, Series A ( Liquidity; FGIC) 3,000,000 (a) 3,000,000
Riverside County Housing Authority, Multi-Family Housing
Mortgage Revenue, Refunding, VRDN
(Mountain View Apartments)
3.90%, Series A (LOC; Federal Home Loan Banks) 3,675,000 (a) 3,675,000
Riverside County Special Tax Refunding Community Facility
District, VRDN
5.10% (Insured; AMBAC and LOC; Kredietbank) 3,500,000 (a) 3,500,000
San Bernardino County, COP, Refunding (Medical Center
Finance Project), VRDN
4.95% (Insured MBIA and LOC; Landesbank Hessen) 1,000,000 (a) 1,000,000
San Francisco Bay Area Rapid Transit, CP:
3.55%, 2/11/2000 (LOC; Morgan Guaranty Trust Co.) 1,500,000 1,500,000
3.60%, 2/9/2000 (LOC; Bayererische Landesbank) 2,400,000 2,400,000
San Francisco City and County Redevelopment Agency, MFHR,
Refunding, VRDN (Fillmore Center)
4.95% (LOC; Credit Suisse) 3,000,000 (a) 3,000,000
Santa Paula Public Financing Authority, LR, Water System,
VRDN (Acquis Project)
5% (LOC; California Teachers Retirement) 5,700,000 (a) 5,700,000
Stockton, MFHR, VRDN (Marine Point Association)
5% (LOC; Lasalle National Bank) 2,500,000 (a) 2,500,000
Upland, Apartment Development Revenue, Refunding,
VRDN (Mountain Springs)
4.90%, Series A (LOC; FNMA) 3,000,000 (a) 3,000,000
Waterfuse Finance Authority, Revenue, VRDN
4.65% (Insured; FSA and LOC; Credit Suisse) 4,800,000 (a) 4,800,000
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. RELATED--5.9%
Guam Power Authority, CP:
3.40%, 3/9/2000 (Insured; AMBAC and LOC; Kredeitbank) 1,700,000 1,700,000
3.65%, 2/11/2000 (Insured; AMBAC and LOC; Kredeitbank) 700,000 700,000
Commonwealth of Puerto Rico, Public Improvement Revenue
5.50%, Series B, 7/1/2000 (Insured; AMBAC) 1,000,000 1,011,301
Commonwealth of Puerto Rico Government Development Bank,
Refunding, VRDN
4.95% (Insured; MBIA and LOC; Credit Suisse) 1,000,000 (a) 1,000,000
Commonwealth of Puerto Rico Highway Authority, Highway
Revenue, Refunding, Prerefunded
6.75%, Series R, 7/1/2000 (Escrowed in; U.S. Government
Securities) 900,000 932,541
Commonwealth of Puerto Rico Industrial , Medical and
Environmental Pollution Control Facility Finance Authority,
Revenue
3.50%, 9/1/2000 (LOC; ABN-Amro Bank) 2,000,000 2,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $123,198,986) 99.8% 123,199,010
CASH AND RECEIVABLES (NET) .2% 269,021
NET ASSETS 100.0% 123,468,031
The Fund
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
COP Certificate of Participation
CP Commercial Paper
FGIC Financial Guaranty Insurance
Company
FNMA Federal National Mortgage
Association
FSA Financial Security Assurance
HR Hospital Revenue
IDR Industrial Development Revenue
LOC Letter of Credit
LR Lease Revenue
MBIA Municipal Bond
Investor Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
SWDR Solid Waste Disposal Revenue
TRAN Tax and Revenue Anticipation
Notes
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
F1+,F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 86.1
AAA/AA(b) Aaa/Aa(b) AAA/AA(b) 11.3
Not Rated(c) Not Rated(c) Not Rated(c) 2.6
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST--SUBJECT TO PERIODIC CHANGE.
(B) NOTES WHICH ARE NOT F, MIG OR SP RATED ARE REPRESENTED BY BOND RATINGS OF THE ISSUERS.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD AND POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE RATED
SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 123,198,986 123,199,010
Interest receivable 965,153
124,164,163
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 48,147
Cash overdraft due to Custodian 45,659
Note payable--Note 3 600,000
Interest payable--Note 3 2,326
696,132
- --------------------------------------------------------------------------------
NET ASSETS ($) 123,468,031
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 123,468,310
Accumulated net realized gain (loss) on investments (303)
Accumulated gross unrealized appreciation on investments 24
- --------------------------------------------------------------------------------
NET ASSETS ($) 123,468,031
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized) 123,468,310
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 1,906,212
EXPENSES:
Management fee--Note 2 276,046
Interest expense--Note 3 6,750
TOTAL EXPENSES 282,796
INVESTMENT INCOME--NET 1,623,416
- --------------------------------------------------------------------------------
NET UNREALIZED APPRECIATION (DEPRECIATION) ON INVESTMENTS--NOTE 1(B) ($) 24
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 1,623,440
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,623,416 2,641,256
Net realized gain (loss) from investments -- (166)
Net unrealized appreciation (depreciation)
of investments 24 --
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,623,440 2,641,090
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net (1,623,416) (2,641,256)
Net realized gain on investments -- (8,137)
TOTAL DIVIDENDS (1,623,416) (2,649,393)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 PER SHARE):
Net proceeds from shares sold 146,242,727 280,160,658
Dividends reinvested 976,368 1,677,263
Cost of shares redeemed (133,142,808) (272,699,712)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 14,076,287 9,138,209
TOTAL INCREASE (DECREASE) IN NET ASSETS 14,076,311 9,129,906
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 109,391,720 100,261,814
END OF PERIOD 123,468,031 109,391,720
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months Ended
December 31, 1999 Year Ended June 30,
----------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .013 .026 .031 .031 .031 .031
Distributions:
Dividends from investment
income--net (.013) (.026) (.031) (.031) (.031) (.031)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 2.66(a) 2.62 3.13 3.11 3.19 3.10
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .46(a) .46 .46 .42 .44 .60
Ratio of net investment income
to average net assets 2.64(a) 2.58 3.08 3.09 3.36 3.07
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- -- -- .03 .07 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 123,468 109,392 100,262 80,580 36,728 15,538
(A) ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC California Municipal Money Market Fund (the "fund") is a separate
non-diversified series of the Dreyfus/Laurel Tax-Free Municipal Funds (the
" Trust" ) which is registered under the Investment Company Act of 1940, as
amended (the "Act"), as an open-end management investment company and operates
as a series company currently offering five series including the fund. The
fund' s investment objective is to provide a high level of current income exempt
from Federal income taxes and State of California personal income taxes to the
extent consistent with the preservation of capital and the maintenance of
liquidity by investing in high quality, short-term municipal securities. The
Dreyfus Corporation (" Manager" ) serves as the fund's investment adviser. The
Manager is a direct subsidiary of Mellon Bank, N.A, which is a wholly-owned
subsidiary of Mellon Financial Corporation. Premier Mutual Fund Services, Inc.
is the distributor of the fund's shares.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at amortized cost
in accordance with Rule 2a-7 of the Act, which has been determined by the fund's
Board of Trustees to represent the fair value of the fund's investments.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for the fund; the fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Interest income, adjusted for amortization of
premiums and original issue discounts on investments, is earned from settlement
date and recognized on the
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
accrual basis. Realized gain and loss from securities transactions are recorded
on the identified cost basis. Cost of investments represents amortized cost.
(c) Concentration of risk: The fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect the ability
of issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the fund.
(d) Distributions to shareholders: It is the policy of the fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain, if any are normally declared and paid
annually, but the fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended, (the "Code" ). To the extent that net realized capital gain can be
offset by capital loss carryovers, if any, it is the policy of the fund not to
distribute such gain.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
At December 31, 1999, the cost of investments for federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 2--Investment Management Fee and Other Transactions With Affiliates:
Investment management fee: Pursuant to an Investment Management agreement with
the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency ser
vices to the fund. The Manager also directs the investments of the fund in
accordance with its investment objective, policies and limitations. For these
services, the fund is contractually obligated to pay the Manager a fee,
calculated daily and paid monthly, at the annual rate of .45% of the value of
the fund's average daily net assets. Out of its fee, the Manager pays all of the
expenses of the fund except brokerage fees, taxes, interest, fees and expenses
of non-interested Trustees (including counsel fees) and extraordinary expenses.
In addition, the Manager is required to reduce its fee in an amount equal to the
fund' s allocable portion of fees and expenses of the non-interested Trustees
(including counsel fees) . Each Trustee receives $40,000 per year, plus $5,000
for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds Trust (the
" Dreyfus/Laurel Funds" ) 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 and is reimbursed 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. These fees and
expenses are charged and allocated to each series based on net assets. Amounts
required to be paid by the Trust directly to the non-interested Trustees, that
would be applied to offset a portion of the management fee payable to the
Manager, are in fact paid directly by the Manager to the non-interested
Trustees. These fees and expenses are allocated to each series based on net
assets. Amounts required to be paid by the Trust directly to the non-interested
Trustees, that would be applied to offset a portion of the management fee
payable to the Manager are in fact paid directly by the Manager to the
non-interested Trustees.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
NOTE 3--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million
unsecured line of credit primarily to be utilized for temporary or emergency
purposes, including the financing of redemptions. Interest is charged to the
fund at rates which are related to the Federal funds rate in effect at the time
of borrowings.
The average daily amount of borrowings outstanding during the period ended
December 31, 1999 was approximately $226,400 with a related weighted average
annualized interest rate of 5.90%.
NOTES
For More Information
Dreyfus
BASIC California Municipal
Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 307SA9912
================================================================================
Dreyfus
BASIC New York
Municipal Money
Market Fund
SEMIANNUAL REPORT December 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. In addition, issuers of securities in
which the fund invests may be adversely affected by year 2000-related problems.
This could have an impact on the value of the fund's investments and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus BASIC
New York Municipal
Money Market Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus BASIC New York
Municipal Money Market Fund, covering the six-month period from July 1, 1999
through December 31, 1999. Inside, you'll find valuable information about how
the fund was managed during the reporting period, including a discussion with
the fund's portfolio manager, John Flahive.
The faster than expected rate of economic growth that became evident during the
first half of the year gained momentum in the second half, reinforcing concerns
that long-dormant inflationary pressures might re-emerge. Consumers continued to
spend heavily, unemployment levels reached new lows and the stock market
continued to climb. Because unsustainable economic growth may trigger unwanted
inflationary pressures, the Federal Reserve Board raised key short-term interest
rates three times between June 30 and year-end in an attempt to forestall an
acceleration of inflation.
The tax-exempt money markets were also affected by their own unique influences.
Because the robust economy has reduced the need for municipalities to issue
short-term debt, the supply of short-term municipal notes has declined amid
tepid demand. As a result, tax-exempt money market yields did not rise as much
as comparable taxable yields during the reporting period.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus BASIC New York Municipal Money Market
Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
January 14, 2000
DISCUSSION OF FUND PERFORMANCE
John Flahive, Portfolio Manager
How did Dreyfus BASIC New York Municipal Money Market Fund perform during the
period?
For the six-month period ended December 31, 1999, the fund provided an
annualized yield of 2.88% and, after taking into account the effect of
compounding, an annualized effective yield of 2.92%.(1) We attribute the fund's
performance to a rising interest-rate environment, which increased the yields of
many short-term fixed-income securities, including tax-exempt money market
securities.
In anticipation of rising interest rates we reduced the fund's average weighted
maturity -- a measure of sensitivity to changes in interest rates -- in an
attempt to capture higher yields more readily.
What is the fund's investment approach?
The fund' s goal is to seek a high level of current income exempt from federal,
New York State and New York City income taxes to the extent consistent with the
preservation of capital and the maintenance of liquidity. To pursue this
objective, we attempt to add value by selecting the individual tax-exempt money
market instruments from New York issuers that we believe are most likely to
provide high tax-exempt current income, while focusing on credit risk. We also
actively manage the portfolio's average weighted maturity in anticipation of
interest-rate and supply-and-demand changes in New York's short-term municipal
marketplace.
Rather than focusing on economic or market trends, we search for securities
that, in our opinion, represent better values than those we hold in the
portfolio at that time. When we find securities that we believe will help us
enhance the fund's yield without sacrificing quality we buy them.
The management of the portfolio's average weighted maturity is a more tactical
approach. If we expect the supply of securities to increase
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
temporarily, we may reduce the portfolio's average weighted maturity to make
cash available for the purchase of higher yielding securities. That's because
yields tend to rise temporarily if many issuers are competing for investor
interest. If we expect demand to surge at a time when we anticipate little
issuance and, therefore, lower yields, we may increase the portfolio's average
weighted maturity to maintain current yields for as long as practical. At other
times, we try to maintain a neutral average weighted maturity.
What other factors influenced the fund's performance?
New York' s municipal money market was influenced by global economic events.
Contrary to early expectations, many global economies staged impressive rebounds
as the year progressed, and the U.S. economy continued to grow strongly. As a
result, fixed-income investors grew concerned that the U.S. economy might be
growing too rapidly, increasing the risk that long-dormant inflationary
pressures might re-emerge. In response, the Federal Reserve Board increased
short-term interest rates in late June, August and November, 1999. These changes
in monetary policy caused the yields of most money market instruments to rise,
including many of those held in this fund.
What is the fund's current strategy?
We have continued to search for the most attractive values in New York's
tax-exempt money markets. We believe that there is a clear dichotomy in New York
issues, between those evidencing strong credit quality and those lacking the
financial cushion required by our rigorous credit analysis. As a result, we have
avoided issuers such as Nassau County, whose finances are deteriorating, unless
they carry a guarantee from a financial institution.
Another strategic move we made was to reduce the fund's average weighted
maturity from 49 days at the beginning of July to 43 days as of December 31,
1999. This strategy was designed to reduce volatility and helped the portfolio
be more responsive to the year-end rise in interest rates.
Finally, later in the year we invested a significant portion of the fund's
assets in Variable Rate Demand Notes (VRDNs), which provided the liquidity that
we felt was necessary due to Y2K-related concerns. In addition, the yields on
VRDNs rose quickly as supply exceeded demand at year-end.
January 14, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-NEW YORK
RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. AN INVESTMENT IN THE FUND IS NOT INSURED OR
GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS
TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO
LOSE MONEY BY INVESTING IN THE FUND.
The Fund
STATEMENT OF INVESTMENTS STATEMENT OF INVESTMENTS
<TABLE>
December 31, 1999 (Unaudited)
(CONTINUED)
Principal
TAX EXEMPT INVESTMENTS--99.6% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
NEW YORK--98.1%
Albany Industrial Development Agency, IDR, VRDN
(Newkirk Products Inc., Project)
5.55%, Series A (LOC; Fleet Bank) 1,600,000 (a) 1,600,000
Babylon Industrial Development Agency, RRR, VRDN
(Equity Babylon Project)
4.75% (LOC; Union Bank of Switzerland) 6,200,000 (a) 6,200,000
Broome County, BAN 3.50%, 4/5/2000 5,000,000 5,005,791
Broome County Industrial Development Agency, IDR,
Refunding, VRDN (Bing Realty Co. Project)
5.55% (LOC; Meridan Bank Corp.) 1,400,000 (a) 1,400,000
Chemung County Industrial Development Agency,
Civic Facility Revenue, VRDN (Arnot Ogden Medical Center)
5.35% (LOC; Chase Manhattan Bank) 2,475,000 (a) 2,475,000
Great Neck North Water Authority, Water System Revenue,
Refunding, VRDN
5.45% Series A (Insured; FGIC and SBPA; FGIC) 8,400,000 (a) 8,400,000
Jefferson County Industrial Development Agency, IDR, VRDN
(Watertown-Carthage IV)
3.75% (LOC; Bank One Corp.) 100,000 (a) 100,000
Long Island Power Authority, Electric System Revenue:
CP:
3.95%, Sub-Series 4, 1/21/2000
(LOC: Bayerische Landesbank and
Westdeutsche Landesbank) 10,000,000 10,000,000
3.65%, Sub-Series 4, 2/11/2000
(LOC: Bayerische Landesbank and
Westdeutsche Landesbank) 5,000,000 5,000,000
VRDN:
4.70%, Sub-Series 5 (LOC: ABN-Amro Bank and
Morgan Guaranty Trust Co.) 4,200,000 (a) 4,200,000
4.75%, Sub-Series 6 (LOC: ABN-Amro Bank and
Morgan Guaranty Trust Co.) 2,900,000 (a) 2,900,000
Metropolitan Transportation Authority, Transport Facility
Revenue, CP:
3.75%, Series 1, 1/24/2000 (LOC; ABN-Amro Bank) 9,800,000 9,800,000
3.70%, Series 1, 2/9/2000 (LOC; ABN-Amro Bank) 6,000,000 6,000,000
3.70%, Series 1, 2/14/2000 (LOC; ABN-Amro Bank) 2,600,000 2,600,000
Monroe County Airport Authority, Revenue, VRDN
5.60% (Insured; MBIA and LOC; Merrill Lynch and Co.) 4,900,000 (a) 4,900,000
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
Nassau County:
BAN:
4.25%, 3/15/2000 (LOC; The Bank of New York) 4,000,000 4,005,132
4.75%, Series C, 12/21/2000 (LOC; First Union
National Bank) 3,000,000 3,019,549
Refunding 4.25%, Series Z, 9/1/2000 (Insured; FGIC) 4,940,000 4,960,698
New York City:
Refunding, CP:
3.80%, Series H-3, 1/26/2000 (LOC; FSA and
SPBA; State Street Bank and Trust Co.) 3,000,000 3,000,000
3.70%, Series H-3, 2/10/2000 (LOC; FSA and
SPBA; State Street Bank and Trust Co.) 2,200,000 2,200,000
3.75%, Series H-3, 2/10/2000 (LOC; FSA and
SPBA; State Street Bank and Trust Co.) 4,500,000 4,500,000
3.75%, Series H-3, 2/10/2000 (Insured; AMBAC and
LOC; KredietBank) 9,000,000 9,000,000
VRDN:
5.45%, Sub-Series A-6 (LOC; Landesbank Hessen) 2,530,000 (a) 2,530,000
5.75%, Series J-2 (LOC; Commerzbank) 11,700,000 (a) 11,700,000
New York City Health and Hospital Corporation, Revenue,
VRDN (Health Systems):
3.75%, Series A (LOC; Morgan Guaranty Trust Co.) 8,800,000 (a) 8,800,000
5.40%, Series B (LOC; Canadian Imperial Bank
of Commerce) 4,800,000 (a) 4,800,000
5.50%, Series D (LOC; Bank of Nova Scotia) 11,800,000 (a) 11,800,000
New York City Housing Development Corporation, VRDN:
MFMR
(West 89th Street) 5.55%, Series A (LOC; Midland Bank) 12,600,000 (a) 12,600,000
Multi-Family Rental Housing Revenue:
(Carnegie Park) 5.50%, Series A (LOC; FNMA) 10,200,000 (a) 10,200,000
(Columbus Green) 5.50%, Series A (LOC; FNMA) 2,075,000 (a) 2,075,000
(Monterey) 5.50%, Series A (LOC; FNMA) 13,000,000 (a) 13,000,000
New York City Municipal Water Finance Authority,
Water and Sewer Systems Revenue, VRDN
4.70%, Series G (Insured; FGIC and Liqudity Facility; FGIC) 5,100,000 (a) 5,100,000
New York City Transitional Finance Authority, Revenue,
VRDN 5.75%, Series A-48 (LOC; The Bank of New York) 10,000,000 (a) 10,000,000
New York City Trust, Cultural Resource Revenue
(American Museum of Natural History)
3.70%, Series B, 7/1/2000 (Insured; AMBAC) 2,125,000 2,125,000
The Fund
STATEMENT OF INVESTMENTS (CONTINUED)
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
New York State Dormitory Authority, Revenues:
Prerefunded:
(State University Educational Facilities):
6.125%, Series C, 5/15/2000
(Escrowed in; U.S. Government Securities) 1,550,000 1,564,628
7.70%, Series A, 5/15/2000
(Escrowed in; U.S. Government Securities) 10,000,000 10,361,625
(United Health Services Inc.)
7.35%, 2/1/2000 (SBPA; Federal Housing Authority) 6,705,000 6,862,906
VRDN:
(Metropolitan Museum of Art):
5.35%, Series A (Guaranty; Metropolitan Museum of Art) 3,000,000 (a) 3,000,000
5.35%, Series B (Guaranty; Metropolitan Museum of Art) 1,760,000 (a) 1,760,000
Refunding (Wagner College)
5.65% (LOC; Morgan Guaranty Trust Co.) 7,100,000 (a) 7,100,000
New York State Energy Research and Development Authority:
PCR (New York State Electric and Gas)
3.90%, Series D, 12/1/2000 (LOC; Fleet Bank) 4,000,000 4,000,000
VRDN:
Gas Facilities Revenue (Union Gas Project):
3.15%, Series A-2 (Insured; MBIA and
SPBA; United Bank of Switzerland) 4,700,000 (a) 4,700,000
3.35%, Series A-1 (Insured; MBIA and
SPBA; United Bank of Switzerland) 4,900,000 (a) 4,900,000
PCR:
(Niagara Mohawk)
5%, Series A (LOC; Toronto-Dominion Bank) 3,000,000 (a) 3,000,000
Refunding (New York State Electric and Gas)
4.65%, Series C (LOC; Morgan Guaranty Trust Co.) 10,420,000 (a) 10,420,000
New York State Environmental Quality:
3.90%, Series G, 10/5/2000
(LOC; Westdeutsche Landesbank) 12,000,000 12,000,000
CP 3.40%, Series A, 2/10/2000 (LOC: Bayerische
Landesbank and Landesbank Hessen) 2,500,000 2,500,000
New York State Housing Finance Agency, VRDN:
HR:
5.50%, Series A (LOC; FNMA) 5,000,000 (a) 5,000,000
(East 84th Street) 5.60%, Series A
(LOC; Hypovereins Bank) 4,600,000 (a) 4,600,000
Service Contract Obligation
5.70%, Series A (LOC; Commerzbank) 6,000,000 (a) 6,000,000
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
New York State Job Development Authority, VRDN
5%, Series B-1 Thru B-9 (Guaranty; New York State) 300,000 (a) 300,000
New York State Local Governmental Assistance Corporation,
VRDN:
5.20%, Series D (LOC; Societe Generale) 10,000,000 (a) 10,000,000
5.75%, Series 22 (Insured; AMBAC and
LOC; The Bank of New York) 6,575,000 (a) 6,575,000
New York State Medical Care Facilities Finance Agency,
Revenue, VRDN (Pooled Equipment Loan Program II)
5.10%, Series A (LOC; Chase Manhattan Bank) 2,200,000 (a) 2,200,000
New York State Thruway Authority, Highway and
Bridge Trust Fund
5%, Series B, 4/1/2000 (Insured; AMBAC) 5,000,000 5,023,065
Rensselaer County Industrial Development Agency,
Civic Facility, Revenue, VRDN
(Polytech Institute Project) 3.40%, Series A
(LOC; Rennselaer Polytech Institute) 4,300,000 (a) 4,300,000
Saint Lawrence Industrial Development Agency,
Environment Improvement, Revenue, VRDN
(Reynolds Metals Co. Project)
3.20% (LOC; Royal Bank of Canada) 1,200,000 (a) 1,200,000
Schenectady Industrial Development Agency,
Civic Facility Revenue, VRDN (Union College Project)
5.40%, Series A 3,041,000 (a) 3,041,000
Suffolk County Water Authority, Waterworks Revenue,
Prerefunded (Union College Project)
6.875%, 6/1/2000 (Insured: AMBAC) 1,315,000 1,358,942
Yonkers Industrial Development Agency,
Civic Facility Revenue, VRDN
(Consumers Union Facility)
(5.65% (Insured; AMBAC and LOC; Commerzbank) 3,400,000 (a) 3,400,000
U.S. RELATED--1.5%
Commonwealth of Puerto Rico Government Development
Bank, Refunding, VRDN
4.95%, (Insured; MBIA and LOC; Credit Suisse) 5,000,000 (a) 5,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $326,163,336) 99.6% 326,163,336
CASH AND RECEIVABLES (NET) .4% 1,349,787
NET ASSETS 100.0% 327,513,123
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond
Assurance Corporation
BAN Bond Anticipation Notes
CP Commercial Paper
FGIC Financial Guaranty Insurance
Company
FNMA Federal National Mortgage
Association
FSA Financial Security Assurance
HR Hospital Revenue
IDR Industrial Development Revenue
LOC Letter of Credit
MBIA Municipal Bond Investors Assurance
Insurance Corporation
MFMR Multi-Family Mortgage Revenue
PCR Pollution Control Revenue
RRR Resources Recovery Revenue
SBPA Standby Bond Purchase
Agreement
VRDN Variable Rate Demand Notes
Summary of Combined Ratings
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 90.1
AAA/AA(b) Aaa/Aa(b) AAA/AA(b) 9.4
Not Rated(c) Not Rated(c) Not Rated(c) .5
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE RATE INTEREST--SUBJECT TO PERIODIC
CHANGE.
(B) NOTES WHICH ARE NOT F, MIG OR SP RATED ARE REPRESENTED BY BOND RATINGS OF
THE ISSUERS.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD AND POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 326,163,336 326,163,336
Interest receivable 1,856,074
328,019,410
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 124,048
Cash overdraft due to Custodian 380,571
Interest payable--Note 3 1,668
506,287
- --------------------------------------------------------------------------------
NET ASSETS ($) 327,513,123
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 327,513,133
Accumulated net realized gain (loss) on investments (10)
- --------------------------------------------------------------------------------
NET ASSETS ($) 327,513,123
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized) 327,513,114
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 5,378,927
EXPENSES:
Management fee--Note 2 723,423
Interest expense--Note 3 3,586
TOTAL EXPENSES 727,009
INVESTMENT INCOME--NET, representing net increase in net assets
resulting from operations 4,651,918
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
INVESTMENT INCOME--NET 4,651,918 9,005,223
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (4,651,918) (9,005,223)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 PER SHARE):
Net proceeds from shares sold 121,699,524 281,151,852
Dividends reinvested 4,260,766 8,316,374
Cost of shares redeemed (112,542,006) (309,861,859)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 13,418,284 (20,393,633)
TOTAL INCREASE (DECREASE) IN NET ASSETS 13,418,284 (20,393,633)
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 314,094,839 334,488,472
END OF PERIOD 327,513,123 314,094,839
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased
(or decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months
Ended
December 31,
1999 Year Ended June 30,
------------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .015 .027 .031 .031 .031 .029
Distributions:
Dividends from investment
income--net (.015) (.027) (.031) (.031) (.031) (.029)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 2.90(a) 2.69 3.14 3.11 3.14 2.95
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .45(a) .45 .45 .41 .43 .60
Ratio of net investment income
to average net assets 2.89(a) 2.65 3.09 3.08 3.43 2.97
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corportation -- -- -- .04 .09 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 327,513 314,095 334,488 272,544 156,491 21,739
(A) ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC New York Municipal Money Market Fund (the "fund") is a separate
non-diversified series of The Dreyfus/Laurel Tax-Free Municipal Funds (the
" Trust" ) which is registered under the Investment Company Act of 1940, as
amended (the "Act"), as an open-end management investment company and operates
as a series company currently offering five series including the fund. The
fund' s investment objective is to provide a high level of current income exempt
from Federal income taxes and New York State and New York City personal income
taxes to the extent consistent with the preservation of capital and the
maintenance of liquidity by investing in high quality, short-term municipal
securities. The Dreyfus Corporation ("Manager") serves as the fund's investment
adviser. The Manager is a direct subsidiary of Mellon Bank, N.A., which is a
wholly-owned subsidiary of Mellon Financial Corporation. Premier Mutual Fund
Services, Inc. is the distributor of the fund's shares.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at amortized cost
in accordance with Rule 2a-7 of the Act, which has been determined by the fund's
Board of Trustees to represent the fair value of the fund's investments.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for the fund; the fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Interest income, adjusted for amortization of
premiums and original issue discounts on investments, is earned from settlement
date and recognized on the accrual basis.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
Realized gain and loss from securities transactions are recorded on the
identified cost basis. Cost of investments represents amortized cost. Under the
terms of the custody agreement, the fund received net earnings credits of $4,497
during the period ended December 31, 1999, based on available cash balances left
on deposit. Income earned under this arrangement is included in interest income
(c) Concentration of risk: The fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect the ability
of issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the fund.
(d) Distributions to shareholders: It is the policy of the fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended, (the "Code" ). To the extent that net realized capital gain can be
offset by capital loss carryovers, if any, it is the policy of the fund not to
distribute such gain.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
At December 31, 1999, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 2--Investment Management Fee and Other Transactions with Affiliates:
Investment management fee: Pursuant to an Investment Management Agreement with
the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the fund. The Manager also directs
the investments of the fund in accordance with its investment objective,
policies and limitations. For these services, the fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .45% of the value of the fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the fund except brokerage fees,
taxes, interest, fees and expenses of non-interested Trustees (including counsel
fees) and extraordinary expenses. In addition, the Manager is required to reduce
its fee in an amount equal to the fund's allocable portion of fees and expenses
of the non-interested Trustees (including counsel fees). Each Trustee receives
$40,000 per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel
Funds, Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel
Funds Trust (the "Dreyfus/Laurel Funds") 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 and is reimbursed 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 Dreyfus
High Yield Strategies Fund, the $2,000 fee will be allocated between the
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
Dreyfus/Laurel Funds and the Dreyfus High Yield Strategies Fund. These fees and
expenses are charged and allocated to each series based on net assets. Amounts
required to be paid by the Trust directly to the non-interested Trustees, that
would be applied to offset a portion of the management fee payable to the
Manager, are in fact paid directly by the Manager to the non-interested
Trustees.
NOTE 3--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million line of
credit primarily to be utilized for temporary or emergency purposes, including
the financing of redemptions. Interest is charged to the fund at rates which are
related to the Federal funds rate in effect at the time of borrowings.
The average daily amount of borrowings outstanding during the period ended
December 31, 1999, was approximately $122,800 with a related weighted average
annualized interest rate of 5.79%.
NOTES
For More Information
Dreyfus BASIC New York Municipal Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 316SA9912
================================================================================
Dreyfus Premier
Limited Term
Massachusetts
Municipal Fund
SEMIANNUAL REPORT December 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. In addition, issuers of securities in
which the fund invests may be adversely affected by year 2000-related problems.
This could have an impact on the value of the fund's investments and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
12 Statement of Assets and Liabilities
13 Statement of Operations
14 Statement of Changes in Net Assets
17 Financial Highlights
21 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier Limited Term Massachusetts Municipal Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Limited
Term Massachusetts Municipal Fund, covering the six-month period from July 1,
1999 through December 31, 1999. Inside, you'll find valuable information about
how the fund was managed during the reporting period, including a discussion
with the fund's portfolio manager, Kristin Lindquist.
The past six months have been challenging for municipal bond investors. Robust
economic growth fueled concerns that long-dormant inflationary pressures might
re-emerge, potentially reducing the future value of interest and principal
payments for both taxable and tax-exempt bonds. These concerns prompted the
Federal Reserve Board to raise key short-term interest rates three times during
the summer and fall of 1999 in an attempt to prevent a reacceleration of
inflation.
The municipal bond marketplace was also subject to adverse supply-and-demand
influences, which caused tax-exempt securities to decline more sharply than
comparable taxable securities during the reporting period. Lackluster demand for
tax-exempt securities from corporations and institutions more than offset the
positive effects of reduced supply and greater demand from individual investors.
By year-end, tax-exempt fixed-income securities were providing a historically
high percentage of the yield of comparable maturity U.S. Treasury securities,
making them a very good value, in our opinion, for investors seeking tax-exempt
income.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Limited Term Massachusetts
Municipal Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
January 14, 2000
DISCUSSION OF FUND PERFORMANCE
Kristin Lindquist, Portfolio Manager
How did Dreyfus Premier Limited Term Massachusetts Municipal Fund perform during
the period?
For the six-month period ended December 31, 1999, the fund produced a total
return of 0.11% for its Class A shares, -0.15% for Class B shares, -0.22% for
Class C shares, and 0.14% for Class R shares.(1 )This compares to a total return
of -0.71% for the Lipper Massachusetts Intermediate Municipal Debt Fund category
average for the same period.(2)
We attribute the fund's modest performance to a rising interest-rate
environment, which continued throughout the reporting period and resulted in
disappointing returns for many fixed-income securities, including limited-term
municipal securities. However, we took this opportunity to shorten the fund's
average weighted maturity in an attempt to capture higher yields and to improve
the overall credit quality of the portfolio.
What is the fund's investment approach?
The fund's goal is to seek to maximize current income exempt from federal and
Massachusetts personal income taxes consistent with the prudent risk of capital.
To pursue this objective, we attempt to add value by selecting the individual
tax-exempt bonds from Massachusetts issuers that we believe are most likely to
provide high tax-exempt current income, while focusing on credit risk. We also
actively manage the fund's average weighted maturity in anticipation of
interest-rate and supply-and-demand changes in Massachusetts's limited-term
municipal marketplace. The fund's dollar-weighted average portfolio maturity is
not expected to exceed 10 years.
Focusing on individual securities rather than on economic or market trends, we
search for securities that, in our opinion, represent better values than we hold
in the portfolio at that time. When we find securities that we believe will help
us enhance the fund's yield without sacrificing quality we buy them.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
The management of the portfolio's average weighted maturity is a more tactical
approach. If we expect the supply of securities to increase temporarily, we may
reduce the portfolio's average weighted maturity to make cash available for the
purchase of higher yielding securities. If we expect demand to surge at a time
when we anticipate little issuance and, therefore, lower yields, we may increase
the portfolio's average weighted maturity to maintain current yields for as long
as practical. At other times, we try to maintain a neutral average weighted
maturity.
What other factors influenced the fund's performance?
Rising interest rates adversely affected the fund's performance throughout the
reporting period. Contrary to early expectations, many global economies staged
impressive rebounds as the year progressed, and the U.S. economy continued to
grow strongly. As a result, fixed-income investors grew concerned that the U.S.
economy might be growing too rapidly, increasing the risk that long-dormant
inflationary pressures might re-emerge. In response, the Federal Reserve Board
increased short-term interest rates in late June, August and November 1999.
These changes in monetary policy caused the prices of most bonds to fall,
including many of those held in this fund.
However, it is important to note that municipal bonds with intermediate-term
maturities did not fall as sharply as those with longer maturities (more than 10
years). That's because, in general, investors were more cautious with respect to
investing in longer term securities, given the widespread belief that interest
rates would continue to rise. In addition, many investors favored holding
shorter maturity securities at year-end because of Y2K concerns.
What is the fund's current strategy?
We have continued to implement our strategy of searching for the most attractive
values in Massachusetts's tax-exempt marketplace. To that end, we have attempted
to capture higher yields by reducing our holdings of longer maturity municipal
bonds, replacing them with shorter maturity securities. In doing so, we were
able to lower the
fund' s average weighted effective maturity from 8.4 years at the beginning of
July to 8.2 years as of December 31, 1999. In addition, this strategy helped us
reduce volatility, which helped protect the fund as interest rates were rising.
Consistent with the fund' s goal of providing investors with a high credit
quality portfolio, we have also continued to emphasize bonds that carry the
highest credit ratings. As of December 31, 1999, over 60% of the fund's
investments were triple-A rated securities, and the fund's overall credit
quality averaged in the double-A range.
January 14, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR
NON-MASSACHUSETTS RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL
ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN INVESTORS. CAPITAL GAINS, IF ANY, ARE
FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
December 31, 1999 (Unaudited)
Principal
LONG-TERM MUNICIPAL INVESTMENTS--97.3% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MASSACHUSETTS--92.1%
Amesbury 6.75%, 11/1/2000 (Insured; MBIA) 355,000 362,480
Amherst 6%, 1/15/2003 200,000 207,348
Amherst-Pelham Regional School District
5.50%, 5/15/2003 (Insured; AMBAC) 1,000,000 1,001,100
Andover 6%, 12/1/2005 700,000 744,828
Belmont 5.50%, 1/15/2005 585,000 604,521
Boston 5.25%, 10/1/2004 (Insured; MBIA) 2,000,000 2,043,200
Boston Water and Sewer Commission, Revenue
9.25%, 1/1/2011 100,000 130,657
Burlington:
5.25%, 2/1/2012 200,000 198,666
5.25%, 2/1/2013 250,000 245,698
Cambridge:
6.60%, 6/15/2000 675,000 682,864
Municipal Purpose Loan 5.60%, 11/1/2001 500,000 511,090
Chicopee 4.50%, 7/15/2001 (Insured; MBIA) 500,000 501,430
Cohasset, Municipal Purpose Loan
6.90%, 11/1/2000 (Insured; MBIA) 150,000 153,559
Easton, Municipal Purpose Loan 6%, 9/15/2006 105,000 109,618
Fall River 7.20%, 6/1/2010
(Insured; MBIA, Prerefunded 6/1/2001) 500,000 (a) 527,880
Franklin 6.25%, 11/15/2005 (Insured; MBIA) 430,000 460,074
Frontier Regional School District
5.50%, 6/15/2014 (Insured; AMBAC) 1,000,000 986,740
Haverhill 6%, 6/15/2005 (Insured; FGIC) 750,000 790,778
Lynn, 5.25%, 2/15/2008 1,500,000 1,516,515
Martha's Vineyard, Land Bank Revenue 5.50%, 5/1/2011 1,030,000 1,041,649
Mashpee, Municipal Purpose Loan
6.25%, 2/1/2006 (Insured; MBIA) 1,000,000 1,069,850
Massachusetts:
5%, 8/1/2001 1,020,000 1,028,803
6.50%, 8/1/2008 600,000 655,806
Consolidated Loan:
7%, 7/1/2006 (Insured; MBIA, Prerefunded 7/1/2000) 500,000 (a) 517,170
5.50%, 7/1/2008 2,500,000 2,565,600
5.25%, 8/1/2017 500,000 466,000
Massachusetts Bay Transportation Authority,
General Transportation System:
5.90%, 3/1/2004 530,000 552,064
5.90%, 3/1/2004 (Prerefunded 2/1/2003) 20,000 (a) 21,028
5.50%, 3/1/2009 2,000,000 2,049,460
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
Massachusetts Bay Transportation Authority,
General Transportation System (continued):
5.25%, 3/1/2011 (Insured; AMBAC, Prerefunded 3/1/2005) 1,000,000 (a) 1,026,380
5.50%, 3/1/2014 (Insured; FGIC) 2,000,000 1,989,140
5.25%, 3/1/2015 (Insured; FGIC) 1,000,000 955,120
Massachusetts Development Finance Agency, Revenue
(Higher Education--Emerson College):
6%, 7/1/2008 310,000 307,260
6.30%, 7/1/2010 350,000 348,383
6.40%, 7/1/2011 370,000 368,424
6.50%, 7/1/2012 395,000 394,499
6.90%, 12/1/2029 1,000,000 999,920
Massachusetts Education Loan Authority, Education
Loan Revenue 6.20%, 7/1/2013 (Insured; AMBAC) 875,000 891,520
Massachusetts Federal Highway Grant 5.25% 6/15/2013 1,000,000 966,740
Massachusetts Health and Educational Facilities Authority,
Revenue:
(Boston College) 5%, 6/1/2016 500,000 448,940
(Brigham & Womens Hospital)
6.75%, 7/1/2024 (Insured; MBIA,
Prerefunded 7/1/2001) 2,000,000 (a) 2,102,440
(Dana-Farber Cancer Institute)
5.55%, 12/1/2003 (Insured; FGIC) 400,000 410,248
(Harvard University):
6.20%, 12/1/2001 1,000,000 1,033,160
6.50%, 11/1/2004 700,000 754,012
(Institute of Technology) 5.20%, 1/1/2028 1,000,000 886,230
(Jordan Hospital):
5%, 10/1/2010 500,000 454,620
6.875%, 10/1/2015 1,000,000 997,190
(Northeastern University)
5.50%, 10/1/2009 (Insured; MBIA) 420,000 430,731
(Partners Healthcare Systems):
5.25%, 7/1/2004 (Insured; FSA) 1,000,000 1,012,570
5.25%, 7/1/2013 1,595,000 1,470,813
5.125%, 7/1/2019 1,000,000 849,720
(South Shore Hospital):
4.75%, 7/1/2004 700,000 681,898
7.50%, 7/1/2010 (Insured; MBIA, Prerefunded 7/1/2000) 350,000 (a) 362,824
7.50%, 7/1/2020 (Insured; MBIA, Prerefunded 7/1/2000) 500,000 (a) 518,320
(Wenworth Institute of Technology):
7.15%, 4/1/2000 (Insured; AMBAC) 225,000 226,714
7.40%, 4/1/2010 (Insured; AMBAC,
Prerefunded 4/1/2000) 220,000 (a) 226,164
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
(Wenworth Institute of Technology) (continued):
(Williams College) 5.70%, 7/1/2008 520,000 535,428
Massachusetts Housing Finance Agency, SFHR:
6%, 6/1/2014 (Insured; MBIA) 1,150,000 1,148,827
5.75%, 12/1/2029 (Insured; MBIA) 315,000 320,210
Massachusetts Industrial Finance Agency:
Electric Revenue (Nantucket Electric Co. Project)
6.75%, 7/1/2006 (Insured; AMBAC) 1,400,000 1,513,988
Museum Revenue, (Museum of Fine Arts of Boston)
5.375%, 1/1/2005 (Insured; MBIA) 1,000,000 1,025,070
5.375%, 1/1/2007 (Insured; MBIA) 1,000,000 1,020,440
Revenue:
(Babson College) 5.75%, 10/1/2007 (Insured; MBIA) 555,000 580,519
(Brooks School):
5.70%, 7/1/2006 (Prerefunded 7/1/2003) 260,000 (a) 271,905
5.75%, 7/1/2007 (Prerefunded 7/1/2003) 275,000 (a) 288,030
5.80%, 7/1/2008 (Prerefunded 7/1/2003) 290,000 (a) 304,184
5.85%, 7/1/2009 (Prerefunded 7/1/2003) 305,000 (a) 320,384
(Concord Academy):
5.45%, 9/1/2017 500,000 451,735
5.50%, 9/1/2027 1,250,000 1,089,187
(College of The Holy Cross):
5.50%, 3/1/2005 (Insured; MBIA) 1,000,000 1,029,690
5.50%, 3/1/2007 (Insured; MBIA) 1,145,000 1,177,312
(St. John's School, Inc.) 5.70%, 6/1/2018 1,000,000 922,000
(The Tabor Academy) 5.40%, 12/1/2028 500,000 426,255
(Tufts University):
5.50%, 2/15/2007 (Insured; MBIA) 750,000 771,060
5.50%, 2/15/2008 (Insured; MBIA) 1,595,000 1,638,815
(Wentworth Institute of Technology) 5.55%, 10/1/2013 500,000 469,290
(Worcester Polytechnic) 5.35%, 9/1/2006 850,000 869,142
Massachusetts Port Authority, Revenue
5.75%, 7/1/2010 2,000,000 2,082,400
5.75%, 7/1/2011 2,500,000 2,599,225
6%, 7/1/2013 2,500,000 2,599,000
Massachusetts Special Obligation, Revenue:
(Highway Improvement Loan) 5.80%, 6/1/2000 880,000 886,371
(Consolidated Loan) 5.25%, 6/1/2010 1,000,000 1,001,150
Massachusetts Turnpike Authority,
Metropolitan Highway System Revenue:
5.25%, 1/1/2015 1,500,000 1,418,805
5.55%, 1/1/2017 1,000,000 994,560
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED) Massachusetts Water Pollution Abatement Trust:
(Pool Loan Program) 6.125%, 2/1/2007 (Insured; FSA) 1,000,000 1,069,620
Water Pollution Abatement Revenue:
(New Bedford Loan Program):
6%, 2/1/2004 745,000 778,823
6%, 2/1/2004 255,000 266,962
5.25%, 2/1/2012 500,000 495,350
(Seso Loan Program) 5.25%, 8/1/2005 1,050,000 1,070,538
Massachusetts Water Resource Authority:
5.875%, 11/1/2004 1,500,000 1,564,440
5.50%, 8/1/2008 (Insured; MBIA) 500,000 514,545
5.30%, 11/1/2010 (Insured; FGIC) 1,000,000 1,002,230
5.50%, 8/1/2011 (Insured; FSA) 1,100,000 1,120,240
6%, 8/1/2020 (Prerefunded 7/1/2003) 5,990,000 (a) 6,360,961
Mendon Upton Regional School District
6%, 6/1/2007 (Insured; FGIC) 600,000 635,820
North Attleborough 5.50%, 3/1/2006 (Insured; AMBAC) 1,000,000 1,029,490
Northampton, School Project Loan
6.40%, 5/15/2004 (Insured; MBIA) 750,000 797,197
Quabbin Regional School District
6%, 6/15/2008 (Insured; AMBAC) 780,000 827,596
Somerville 6%, 2/15/2007 (Insured; FSA) 775,000 822,004
Southeastern University Building Authority, Project Revenue
5.90%, 5/1/2010 (Insured; AMBAC) 500,000 518,055
Springfield (School Project Loan)
6.10%, 9/1/2002 (Insured; AMBAC) 600,000 622,026
Uxbridge, Municipal Purpose Loan:
6.125%, 11/15/2005 (Insured; MBIA) 500,000 531,810
6.125%, 11/15/2007 (Insured; MBIA) 525,000 562,238
Worchester, Municipal Purpose Loan:
6.25%, 7/1/2010 (Insured; MBIA). 755,000 815,355
5.25%, 11/1/2010 (Insured; MBIA) 1,000,000 999,680
Yarmouth 8.60%, 10/1/2000 100,000 103,296
U.S. RELATED--5.2%
Puerto Rico Commonwealth
6.25%, 7/1/2011 (Insured; MBIA) 1,050,000 1,145,959
Puerto Rico Commonwealth Highway and
Transportation Authority, Highway Revenue
6.25%, 7/1/2009 (Insured; MBIA) 1,000,000 1,091,250
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. RELATED (CONTINUED)
Puerto Rico Electric Power Authority, Power Revenue
6.50%, 7/1/2006 (Insured; MBIA) 1,000,000 1,093,090
Puerto Rico Public Buildings Authority, Revenue
6.75%, 7/1/2005 (Insured; AMBAC) 1,000,000 1,097,080
University of Puerto Rico, University Revenue
6.25%, 6/1/2005 750,000 804,172
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $99,966,956) 98,355,265
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--3.0%
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS:
Massachusetts Health and Educational Facilities Authority,
Revenue, VRDN (Capital Asset Program):
4.45% (Insured; MBIA) 1,900,000 (b) 1,900,000
4.40% (Insured; MBIA) 1,000,000 (b) 1,000,000
Massachusetts Industrial Finance Agency, Revenue, VRDN
(Showa Womans Institute, Inc.) 4.25% 100,000 (b) 100,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $3,000,000) 3,000,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $102,966,956) 100.3% 101,355,265
LIABILITIES, LESS CASH AND RECEIVABLES (.3%) (241,245)
NET ASSETS 100.0% 101,114,020
Summary of Abbreviations
AMBAC American Municipal Bond LOC Letter of Credit
Assurance Corporation MBIA Municipal Bond Investors
FGIC Financial Guaranty Insurance Assurance Insurance Corporation
FSA Financial Security Assurance SFHR Single Family Housing Revenue
Company VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 64.9
AA Aa AA 21.4
A A A 3.6
BBB Baa BBB 7.1
F1+, F-1 MIG1, VMIG1 & P1 SP1, A1 3.0
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE SUBJECT TO PERIODIC
CHANGE.
(C) AT DECEMBER 31, 1999, 34.3% OF THE FUND'S NET ASSETS ARE INSURED BY MBIA.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 102,966,956 101,355,265
Cash 476,247
Interest receivable 1,850,651
103,682,163
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 42,704
Due to Distributor 3,679
Payable for investment securities purchased 1,431,714
Payable for shares of Beneficial Interest redeemed 1,090,046
2,568,143
- --------------------------------------------------------------------------------
NET ASSETS ($) 101,114,020
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 102,978,585
Accumulated net realized gain (loss) on investments (252,874)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 (1,611,691)
- --------------------------------------------------------------------------------
NET ASSETS ($) 101,114,020
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C Class R
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 12,700,704 914,864 196,939 87,301,513
Shares Outstanding 1,077,524 77,430 16,647 7,405,932
- ------------------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE PER SHARE ($) 11.79 11.82 11.83 11.79
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 2,346,851
EXPENSES:
Management fee--Note 2(a) 235,809
Distribution and service fees--Note 2(b) 23,188
Loan commitment fees--Note 4 597
TOTAL EXPENSES 259,594
INVESTMENT INCOME--NET 2,087,257
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (406,556)
Net realized gain (loss) on financial futures 227,158
NET REALIZED GAIN (LOSS) (179,398)
Net unrealized appreciation (depreciation) on investments (1,798,252)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,977,650)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 109,607
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,087,257 3,450,946
Net realized gain (loss) on investments (179,398) (72,859)
Net unrealized appreciation (depreciation)
on investments (1,798,252) (2,223,377)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS 109,607 1,154,710
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (310,606) (679,400)
Class B shares (18,086) (32,547)
Class C shares (5,721) (10,697)
Class R shares (1,752,844) (2,728,302)
Net realized gain on investments:
Class A shares -- (7,443)
Class B shares -- (444)
Class C shares -- (124)
Class R shares -- (26,730)
TOTAL DIVIDENDS (2,087,257) (3,485,687)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 736,612 1,385,254
Class B shares 152,016 536,215
Class C shares -- 126,450
Class R shares 28,336,508 34,270,298
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($) (CONTINUED):
Dividends reinvested:
Class A shares 185,879 466,046
Class B shares 5,242 9,718
Class C shares 3,690 6,288
Class R shares 719,021 1,128,686
Cost of shares redeemed:
Class A shares (2,958,519) (2,784,916)
Class B shares (122,845) (253,992)
Class C shares (132,581) (75,000)
Class R shares (11,012,864) (13,537,327)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS 15,912,159 21,277,720
TOTAL INCREASE (DECREASE) IN NET ASSETS 13,934,509 18,946,743
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 87,179,511 68,232,768
END OF PERIOD 101,114,020 87,179,511
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A
Shares sold 61,413 112,386
Shares issued for dividends reinvested 15,610 37,514
Shares redeemed (249,750) (225,095)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (172,727) (75,195)
- --------------------------------------------------------------------------------
CLASS B
Shares sold 12,605 42,719
Shares issued for dividends reinvested 440 780
Shares redeemed (10,301) (20,283)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 2,744 23,216
- --------------------------------------------------------------------------------
CLASS C
Shares sold -- 10,127
Shares issued for dividends reinvested 309 506
Shares redeemed (11,138) (5,957)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (10,829) 4,676
- --------------------------------------------------------------------------------
CLASS R
Shares sold 2,382,562 2,761,644
Shares issued for dividends reinvested 60,451 90,921
Shares redeemed (928,174) (1,090,901)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 1,514,839 1,761,664
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
December 31, 1999 Year Ended June 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning
of period 12.03 12.34 12.15 11.97 11.91 11.74
Investment Operations:
Investment income--net .25 .51 .53 .54 .54 .55
Net realized and unrealized gain
(loss) on investments (.24) (.30) .24 .20 .08 .20
Total from Investment Operations .01 .21 .77 .74 .62 .75
Distributions:
Dividends from investment
income--net (.25) (.51) (.53) (.54) (.54) (.54)
Dividends from net realized
gain on investments -- (.01) (.05) (.02) (.02) (.04)
Total Distributions (.25) (.52) (.58) (.56) (.56) (.58)
Net asset value, end of period 11.79 12.03 12.34 12.15 11.97 11.91
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) .22(b) 1.60 6.41 6.36 5.22 6.60
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .75(b) .75 .75 .75 .75 .75
Ratio of net investment income
to average net assets 4.21(b) 4.10 4.30 4.47 4.44 4.65
Portfolio Turnover Rate 11.12(c) 16.35 6.63 22.57 39.16 25.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 12,701 15,045 16,355 16,093 15,689 16,501
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
Six Months Ended
December 31, 1999 Year Ended June 30,
---------------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996(a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 12.06 12.37 12.18 11.99 11.91
Investment Operations:
Investment income--net .22 .44 .47 .48 .48
Net realized and unrealized gain (loss)
on investments (.24) (.30) .24 .21 .10
Total from Investment Operations (.02) .14 .71 .69 .58
Distributions:
Dividends from investment income--net (.22) (.44) (.47) (.48) (.48)
Dividends from net realized gain on investments -- (.01) (.05) (.02) (.02)
Total Distributions (.22) (.45) (.52) (.50) (.50)
Net asset value, end of period 11.82 12.06 12.37 12.18 11.99
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) (.30)(c) 1.09 5.87 5.90 4.87
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.25(c) 1.25 1.25 1.25 1.25
Ratio of net investment income
to average net assets 3.69(c) 3.56 3.78 3.96 3.67
Portfolio Turnover Rate 11.12(d) 16.35 6.63 22.57 39.16
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 915 901 637 464 452
(A) THE FUND COMMENCED SELLING CLASS B SHARES ON DECEMBER 28, 1994. FINANCIAL
HIGHLIGHTS FOR THE PERIOD ENDED JUNE 30, 1995 FOR CLASS B SHARES ARE NOT
PRESENTED BECAUSE NO SHARES HAD BEEN ISSUED TO THE PUBLIC AS OF THAT DATE.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
<TABLE>
Six Months Ended Period Ended
December 31, 1999 Year Ended June 30, June 30,
-------------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996 1995(a)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning of period 12.08 12.38 12.15 11.97 11.91 11.45
Investment Operations:
Investment income--net .22 .44 .46 .49 .48 .26
Net realized and unrealized gain (loss)
on investments (.25) (.29) .28 .20 .08 .45
Total from Investment Operations (.03) .15 .74 .69 .56 .71
Distributions:
Dividends from investment income--net (.22) (.44) (.46) (.49) (.48) (.25)
Dividends from net realized gain
on investments -- (.01) (.05) (.02) (.02) --
Total Distributions (.22) (.45) (.51) (.51) (.50) (.25)
Net asset value, end of period 11.83 12.08 12.38 12.15 11.97 11.91
- ----------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%)( B) (.44)(c) 1.18 6.19 5.87 4.68 6.24
- ----------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.25(c) 1.25 1.23 1.25 1.25 1.25(c)
Ratio of net investment income
to average net assets 3.73(c) 3.58 3.64 4.05 3.93 4.15(c)
Portfolio Turnover Rate 11.12(d) 16.35 6.63 22.57 39.16 25.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period ($ x 1,000) 197 332 282 7 16 18
(A) THE FUND COMMENCED SELLING CLASS C SHARES ON DECEMBER 28, 1994.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED
(D) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
<TABLE>
Six Months Ended
December 31, 1999 Year Ended June 30,
----------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.04 12.34 12.16 11.97 11.91 11.74
Investment Operations:
Investment income--net .27 .54 .56 .57 .57 .57
Net realized and unrealized gain
(loss) on investments (.25) (.29) .23 .21 .08 .21
Total from Investment Operations .02 .25 .79 .78 .65 .78
Distributions:
Dividends from investment
income--net (.27) (.54) (.56) (.57) (.57) (.57)
Dividends from net realized
gain on investments -- (.01) (.05) (.02) (.02) (.04)
Total Distributions (.27) (.55) (.61) (.59) (.59) (.61)
Net asset value, end of period 11.79 12.04 12.34 12.16 11.97 11.91
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) .28(b) 1.93 6.58 6.70 5.46 6.87
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .50(b) .50 .50 .50 .50 .50
Ratio of net investment income
to average net assets 4.46(b) 4.35 4.54 4.73 4.68 4.90
Portfolio Turnover Rate 11.12(c) 16.35 6.63 22.57 39.16 25.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 87,302 70,901 50,959 33,188 25,981 19,700
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Limited Term Massachusetts Municipal Fund (the "fund") is a
separate non-diversified series of the Dreyfus/Laurel Tax-Free Municipal Funds
(the "Trust" ) which is registered under the Investment Company Act of 1940, as
amended (the "Act"), as an open-end management investment company and operates
as a series company currently offering five series including the fund. The
fund's investment objective is to maximize current income exempt from Federal
income taxes and state personal income taxes for resident shareholders of
Massachusetts consistent with the prudent risk of capital by investing in
municipal obligations of the named state which are of investment-grade quality
and intermediate maturities. The Dreyfus Corporation (the "Manager") serves as
the fund's investment adviser. The Manager is a direct subsidiary of Mellon
Bank, N.A. (" Mellon Bank" ), which is a wholly-owned subsidiary of Mellon
Financial Corporation.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund's shares. The fund is authorized to issue an unlimited number of shares of
Beneficial Interest in the following classes of shares: Class A, Class B, Class
C and Class R shares. Class A, Class B and Class C shares are sold primarily to
retail investors through financial intermediaries and bear a distribution fee
and/or service fee. Class A shares are sold with a front-end sales charge, while
Class B and Class C shares are subject to a contingent deferred sales charge
("CDSC"). Class R shares are sold primarily to bank trust departments and other
financial service providers (including Mellon Bank and its affiliates) acting on
behalf of customers having a qualified trust or investment account or
relationship at such institution, and bear no distribution fee or service fee.
Class R shares are offered without a front-end sales load or CDSC. Each class of
shares has identical rights and privileges, except with respect to distribution
fees and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses) and
realized and unrealized gains and losses are allocated
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
daily to each class of shares based upon the relative proportion of net assets
of each class.
The fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management
estimates. Actual results could differ from those estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized on the accrual basis.
Securities purchased or sold on a when-issued or delayed-delivery basis may be
settled a month or more after the trade date.
(C) FINANCIAL FUTURES: The fund may invest in trading financial futures
contracts in order to gain exposure to or protect against changes in the market.
The fund is exposed to market risk as a result of changes in the value of the
underlying financial instruments. Investments in financial futures require the
fund to "mark to market" on a daily basis, which reflects the change in the
market value of the contract at the close of each day's trading. Typically,
variation margin payments are received or made to reflect daily unrealized gains
or losses. When the contracts are closed, the fund recognizes a realized gain or
loss. These investments require initial margin deposits with a custodian, which
consist of cash or cash equivalents, up to approximately 10% of the contract
amount. The amount of these deposits is determined by the exchange or Board of
Trade on which the contract is traded and is subject to change. At December 31,
1999, there were no financial futures contracts outstanding.
(D) CONCENTRATION OF RISK: The fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
state and certain of its public bodies and municipalities may affect the ability
of issuers within the state to pay interest on, or repay principal of, municipal
obligations held by the fund.
(E) DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). To the extent that net realized capital, if any, gain can
be offset by capital loss carryovers, it is the policy of the fund not to
distribute such gain.
(F) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The fund has an unused capital loss carryover of approximately $36,000 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to December 31, 1999. This amount is
calculated based on Federal income tax regulations which may differ from
financial reporting in accordance with general accounting principles. If not
applied, the carryover expires in fiscal 2007.
NOTE 2--Investment Management Fee and Other Transactions With Affiliates:
(A) INVESTMENT MANAGEMENT FEE: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the fund. The Manager also directs
the investments of the fund in accordance with its investment objective,
policies and limitations. For these services, the fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the fund except brokerage fees,
taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses,
fees and expenses of non-interested trustees (including counsel fees) and
extraordinary expenses. In addition, the Manager is required to reduce its fee
in an amount equal to the fund's allocable portion of fees and expenses of the
non-interested trustees (including counsel). Each trustee receives $40,000 per
year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust (the "Dreyfus/Laurel Funds" ) 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 and is reimbursed 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. These fees and expenses are
allocated to each series based on net assets. Amounts required to be paid by the
Trust directly to non-interested trustees, that would be applied to offset a
portion of the management fee payable to the Manager, are in fact paid directly
by the Manager to the non-interested Trustees.
Dreyfus Service Corporation, a wholly-owned subsidiary of the Manager, retained
$1,914 during the period ended December 31, 1999, from commissions earned on
sales of the fund's shares.
(B) DISTRIBUTION AND SERVICE PLAN: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, Class A shares may pay annually up
to .25% of the value of its average daily net assets to compensate the
Distributor and Dreyfus Service Corporation, an affiliate of the Manager, for
shareholder servicing activities and the Distributor for activities and expenses
primarily intended to result in the sale of Class A shares. Under the Plan,
Class B and Class C shares may pay the Distributor for distributing shares at an
aggregate annual rate of .50% of the value of the average daily net assets of
Class B and Class C shares. Class B and Class C shares are also subject to a
Service Plan adopted pursuant to Rule 12b-1, under which the fund pays Dreyfus
Service Corporation or the Distributor for providing certain services to the
holders of Class B and Class C shares a fee at the annual rate of .25% of the
value of the average daily net assets of Class B and Class C shares. Class R
shares bear no distribution or service fee. During the period ended December 31,
1999, Class A, Class B and Class C shares were charged $18,379, $2,441 and $765
respectively, pursuant to the Plan. During the period ended December 31, 1999,
Class B and Class C shares were charged $1,220 and $383, respectively, pursuant
to the Service Plan.
Under its terms, the Plan and Service Plan shall remain in effect from year to
year, provided such continuance is approved annually by a vote of majority of
those Trustees who are not "interested persons" of the Trust
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreement related to the Plan and Service Plan.
NOTE 3--Securities transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities and financial futures, during the period ended December
31, 1999, amounted to $29,070,826 and $9,809,210, respectively.
At December 31, 1999, accumulated net unrealized depreciation on investments was
$1,611,691 consisting of $601,361 gross unrealized appreciation and $2,213,052
gross unrealized depreciation.
At December 31, 1999, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
December 31, 1999, the fund did not borrow under the Facility.
NOTES
For More Information
Dreyfus Premier Limited Term Massachusetts Municipal
Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE Call your financial representative
or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 346SA9912
================================================================================
Dreyfus Premier
Limited Term
Municipal Fund
SEMIANNUAL REPORT December 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. In addition, issuers of securities in
which the fund invests may be adversely affected by year 2000-related problems.
This could have an impact on the value of the fund's investments and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
15 Statement of Assets and Liabilities
16 Statement of Operations
17 Statement of Changes in Net Assets
21 Financial Highlights
25 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus Premier Limited Term Municipal Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus Premier Limited
Term Municipal Fund, covering the six-month period from July 1, 1999 through
December 31, 1999. Inside, you'll find valuable information about how the fund
was managed during the reporting period, including a discussion with the fund's
portfolio manager, John Flahive.
The past six months have been challenging for municipal bond investors. Robust
economic growth fueled concerns that long-dormant inflationary pressures might
re-emerge, potentially reducing the future value of interest and principal
payments for both taxable and tax-exempt bonds. These concerns prompted the
Federal Reserve Board to raise key short-term interest rates three times during
the summer and fall of 1999 in an attempt to prevent a reacceleration of
inflation.
The municipal bond marketplace was also subject to adverse supply-and-demand
influences, which caused tax-exempt securities to decline more sharply than
comparable taxable securities during the reporting period. Lackluster demand for
tax-exempt securities from corporations and institutions more than offset the
positive effects of reduced supply and greater demand from individual investors.
By year-end, tax-exempt fixed-income securities were providing a historically
high percentage of the yield of comparable maturity U.S. Treasury securities,
making them a very good value, in our opinion, for investors seeking tax-exempt
income.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus Premier Limited Term Municipal Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
January 14, 2000
DISCUSSION OF FUND PERFORMANCE
John Flahive, Portfolio Manager
How did Dreyfus Premier Limited Term Municipal Fund perform during the period?
For the six-month period ended December 31, 1999, the fund produced a total
return of 0.32% for its Class A shares, 0.06% for Class B shares, 0.07% for
Class C shares and 0.44% for Class R shares.(1) This compares to a total return
of -0.38% for the Lipper Intermediate Municipal Debt Fund category average for
the same period.(2)
We attribute the fund's modest performance to a rising interest-rate
environment, which continued throughout the reporting period and resulted in
disappointing returns for many fixed-income securities, including limited-term
municipal securities. However, we took this opportunity to shorten the fund's
average weighted maturity -- a measure of sensitivity to changes in interest
rates -- in an attempt to capture higher yields and to improve the overall
credit quality of the portfolio.
What is the fund's investment approach?
The fund' s goal is to seek to maximize current income consistent with the
prudent risk of capital. To pursue this objective, we attempt to add value by
selecting the individual tax-exempt bonds that we believe are most likely to
provide high tax-exempt current income. We also actively manage the portfolio's
average weighted maturity in anticipation of interest-rate and supply-and-demand
changes in the limited-term municipal marketplace. The fund's dollar-weighted
average portfolio maturity is not expected to exceed 10 years.
Focusing on individual securities rather than on economic or market trends, we
search for securities that, in our opinion, represent better values than those
we hold in the portfolio at that time. When we find securities that we believe
will help us enhance the fund's yield without sacrificing quality we buy them.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
The management of the portfolio's average weighted maturity is a more tactical
approach. If we expect the supply of securities to increase temporarily, we may
reduce the portfolio's average weighted maturity to make cash available for the
purchase of higher yielding securities. If we expect demand to surge at a time
when we anticipate little issuance and, therefore, lower yields, we may increase
the portfolio's average weighted maturity to maintain current yields for as long
as practical. At other times, we try to maintain a neutral average weighted
maturity.
What other factors influenced the fund's performance?
Rising interest rates adversely affected the fund's performance throughout the
reporting period. Contrary to early expectations, many global economies staged
impressive rebounds as the year progressed, and the U.S. economy continued to
grow strongly. As a result, fixed-income investors grew concerned that the U.S.
economy might be growing too rapidly, increasing the risk that long-dormant
inflationary pressures might re-emerge. In response, the Federal Reserve Board
increased short-term interest rates in late June, August and November, 1999.
These changes in monetary policy caused the prices of most bonds to fall,
including many of those held in the fund's portfolio.
However, it is important to note that municipal bonds with intermediate-term
maturities did not fall as sharply as those with longer maturities (more than 10
years). That's because, in general, investors were more cautious with respect to
investing in longer term securities, given the widespread belief that interest
rates would continue to rise. In addition, many investors favored holding
shorter maturity securities at year-end because of Y2K concerns.
What is the fund's current strategy?
We have continued to implement our strategy of searching for the most attractive
values in the tax-exempt marketplace. To that end, we have attempted to capture
higher yields by reducing our holdings of longer maturity municipal bonds,
replacing them with shorter maturity secu
rities. In doing so, we were able to lower the fund's average weighted effective
maturity from 7.27 years at the beginning of July to 7.05 years as of December
31, 1999. In addition, this strategy helped us reduce volatility, which helped
protect the portfolio as interest rates were rising.
Consistent with the fund's goal of providing investors with a high credit
quality portfolio, we have also continued to emphasize bonds that carry the
highest credit ratings. As of December 31, 1999, over 60% of the portfolio's
investments were triple-A rated securities, and the fund's overall credit
quality averaged in the double-A range.
January 14, 2000
(1) TOTAL RETURN INCLUDES REINVESTMENT OF DIVIDENDS AND ANY CAPITAL GAINS PAID,
AND DOES NOT TAKE INTO CONSIDERATION THE MAXIMUM INITIAL SALES CHARGE IN THE
CASE OF CLASS A SHARES, OR THE APPLICABLE CONTINGENT DEFERRED SALES CHARGE
IMPOSED ON REDEMPTIONS IN THE CASE OF CLASS B AND CLASS C SHARES. HAD THESE
CHARGES BEEN REFLECTED, RETURNS WOULD HAVE BEEN LOWER. PAST PERFORMANCE IS NO
GUARANTEE OF FUTURE RESULTS. SHARE PRICE, YIELD AND INVESTMENT RETURN FLUCTUATE
SUCH THAT UPON REDEMPTION FUND SHARES MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES AND SOME INCOME
MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX (AMT) FOR CERTAIN
INVESTORS. CAPITAL GAINS, IF ANY, ARE FULLY TAXABLE.
(2) SOURCE: LIPPER ANALYTICAL SERVICES, INC.
The Fund
STATEMENT OF INVESTMENTS
December 31, 1999 (Unaudited)
<TABLE>
Principal
LONG-TERM MUNICIPAL INVESTMENTS--94.7% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ALASKA--1.2%
Anchorage Port and Term Facilities, Revenue
6%, 2/1/2003 (Insured; MBIA) 1,110,000 1,150,537
ARIZONA--2.6%
Maricopa County Unified School District Number 69
(Paradise Valley)
6.35%, 7/1/2010 (Insured; MBIA) 550,000 599,055
Mesa, 5.90%, 7/1/2000 (Insured; AMBAC) 500,000 504,695
Phoenix, 6.25%, 7/1/2016 1,250,000 1,333,275
ARKANSAS--.5%
North Little Rock, Electric Revenue, 6%, 7/1/2001
(Insured; MBIA) 500,000 511,310
CALIFORNIA--19.5%
State of California:
6.80%, 10/1/2005 700,000 768,782
6.60%, 10/1/2005 510,000 565,034
6%, 8/1/2015 (Insured; FGIC) (Prerefunded 8/1/2004) 1,000,000 (a) 1,075,390
California Educational Facilities Authority, College and
University Revenue,
(Los Angeles College Chiropractic) 5.75%, 11/1/2006 780,000 794,383
California Housing Finance Agency, Home Mortgage Revenue
5.65%, 8/1/2006 (Insured; MBIA) 655,000 666,076
California Public Works Board, LR
(California State University) 5.50%, 10/1/2007 500,000 515,535
California Rural Home Mortgage Finance Authority, SFMR
5.75%, 8/1/2009 20,000 19,759
California Statewide Communities Development Authority,
Multi-Family Revenue
(Archstone/Leclub) 5.30%, 6/1/2020 1,000,000 968,310
Franklin-McKinley School District, 5.20%, 7/1/2004
(Insured; MBIA) 375,000 383,516
Fremont Unified School District, 5.875%, 8/1/2020
(Insured; MBIA) (Prerefunded 8/1/2006) 2,500,000 (a) 2,703,475
Kern High School District, 6.40%, 2/1/2012 (Insured; MBIA) 750,000 825,068
Metropolitan Water District of Southern California,
Waterworks Revenue
6.375%, 7/1/2002 835,000 872,734
Modesto, Wastewater Treatment Facilities Revenue
6%, 11/1/2009 (Insured; MBIA) 500,000 536,300
Redding JT Powers Financing Authority, Electrical Systems
Revenue
5.25%, 6/1/2015 (Insured; MBIA) 670,000 640,299
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Riverside County Transportation Commission, Sales Tax Revenue
6.50%, 6/1/2001 (Insured; AMBAC) 520,000 535,714
Sacramento Municipal Utilities District, Electrical Revenue
6.30%, 9/1/2001 (Insured; MBIA) 500,000 515,985
San Diego County Regional Transportation Commission,
Sales Tax Revenue
6%, 4/1/2004 (Insured; FGIC) 750,000 789,023
San Francisco City and County Airport Commission,
International Airport Revenue
5.625%, 5/1/2006 (Insured; FGIC) 500,000 518,340
San Francisco City and County Public Utilities Commission,
Water Revenue, Refunding:
6%, 11/1/2003 750,000 788,213
6.375%, 11/1/2006 500,000 531,845
San Jose Redevelopment Agency, Tax Allocation
(Merged Area Redevelopment Project) 6%, 8/1/2009
(Insured; MBIA) 625,000 668,613
Santa Margarita-Dana Point Authority, Revenue
7.25%, 8/1/2007 (Insured; MBIA) 500,000 571,880
Santa Rosa, Wastewater Revenue
6.20%, 9/1/2003 (Prerefunded 9/1/2002) (Insured; FGIC) 350,000 (a) 370,111
Simi Valley Unified School District,
6.25%, 8/1/2004 (Insured; FGIC) 700,000 745,276
Southern California Public Power Authority, Power Project
Revenue
(Hydroelectric-Hoover Uprating Project) 6.30%, 10/1/2002 420,000 439,324
Westside Unified School District, 6%, 8/1/2014
(Insured; AMBAC) 385,000 409,290
CONNECTICUT--.6%
Stamford 6.60%, 1/15/2007 500,000 550,515
FLORIDA--2.2%
Dade County,
Sales Tax Revenue, 6%, 10/1/2002 (Insured; AMBAC) 1,000,000 1,037,660
Miami Health Facilities Authority, Health Facilities Revenue
(Mercy Hospital Project)
6.75%, 8/1/2020 (Insured; AMBAC) (Prerefunded 8/1/2001) 1,000,000 (a) 1,052,680
GEORGIA--1.0%
Georgia Municipal Electric Authority, Power Revenue,
6%, 1/1/2006 900,000 935,064
HAWAII--1.0%
Hawaii, 4.75%, 11/1/2013 (Insured; MBIA) 1,000,000 890,030
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS--5.3%
Chicago Metropolitan Water Reclamation District
(Chicago Capital Improvement)
7.25%, 12/1/2012 1,000,000 1,170,900
Illinois 5.60%, 6/1/2004 750,000 773,138
McHenry County Community Unit School District No. 012:
5.50%, 12/1/2012 1,065,000 1,061,539
5.50%, 12/1/2013 1,215,000 1,199,266
Regional Transportation Authority
7.75%, 6/1/2012 (Insured; FGIC) 390,000 468,374
Sangamon County School District Number 186 (Springfield)
7.70%, 6/1/2001 (Insured; MBIA) 300,000 313,008
INDIANA--.6%
Indianapolis Airport Authority, Special Facilities Revenue
(Federal Express Corp. Project) 7.10%, 1/15/2017 500,000 517,230
IOWA--1.1%
Iowa Student Loan Liquidity Corp., Student Loan Revenue
5.65%, 12/1/2005 1,000,000 1,023,390
KENTUCKY--1.2%
Kentucky Turnpike Authority, Economic Development Road
Revenue
(Revitalization Projects) 6.50%, 7/1/2007 (Insured; AMBAC) 1,000,000 1,089,930
LOUISANA--.4%
Louisana Public Facilities Authority, HR
(Touro Infirmary Project) 5.625%,8/15/2029 500,000 415,070
MARYLAND--1.5%
Maryland, State and Local Facilities Loan 5.25%, 6/15/2006 1,400,000 1,433,488
MASSACHUSETTS--3.6%
Massachusetts:
5.75%, 9/1/2013 500,000 509,535
Special Obligation Revenue 7%, 6/1/2002 1,000,000 1,053,270
Worcester:
(Municipal Purpose Loan) 5.75%, 10/1/2014 (Insured; MBIA) 1,000,000 1,004,550
6.25%, 7/1/2009 (Insured; MBIA) 720,000 777,794
MICHIGAN--2.4%
Flowerville Community School District
6.50%, 5/1/2006 (Insured; MBIA) 555,000 600,543
Michigan Building Authority,
Revenue 6.40%, 10/1/2004 (Insured; FSA) 1,000,000 1,046,930
Saint John's Public Schools (Qualified School Board Loan Fund)
6.50%, 5/1/2006 (Insured; FGIC) 525,000 568,082
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI--.4%
Mississippi Higher Education Assisstance Corporation,
Student Loan Revenue
6.05%, 9/1/2007 410,000 411,808
NEBRASKA--1.1%
Omaha, 4.70%, 5/1/2003 1,000,000 1,003,860
NEW JERSEY--3.3%
Ocean County Utilities Authority, Wastewater Revenue
5%, 1/1/2004 1,000,000 1,009,550
New Jersey Economic Development Authority,
Revenue (Transportation Project)
5.875%, 5/1/2014 (Insured FSA) 1,000,000 1,020,780
New Jersey Transportation Corporation, Capital Grant
Anticipation Notes
5.50%, 9/1/2003 (Insured; FSA) 1,000,000 1,023,950
NEW YORK--15.9%
Amherst, Public Improvement 6.20%, 4/1/2002 (Insured; FGIC) 150,000 155,273
Erie County Water Authority, Water Revenue
7%, 12/1/2000 (Insured; AMBAC) 200,000 205,352
Greece Central School District 6%, 6/15/2010 225,000 238,439
Metropolitan Transportation Authority:
Commuter Facilities Revenue (Grand Central Terminal)
5.70%, 7/1/2024 (Insured; FSA) 200,000 190,798
Transportation Facilities Revenue 6.30%, 7/1/2007
(Insured; MBIA) 250,000 268,713
Monroe County, Public Improvement 7%, 6/1/2003
(Insured; FGIC) 200,000 214,536
Municipal Assistance Corporation for the City of New York
6%, 7/1/2005 (Insured; AMBAC) 100,000 105,371
Nassau County:
7%, 7/1/2002 (Insured; AMBAC)(Prerefunded 7/1/2000) 100,000 (a) 102,459
6.30%, 11/1/2003 (Insured; FGIC) 200,000 210,538
New York City:
5%, 8/1/2006 (Insured; FGIC) 1,000,000 1,000,680
7%, 8/1/2006 300,000 328,938
5.75%, 8/1/2007 (Insured; MBIA) 1,000,000 1,042,510
6.20%, 8/1/2007 (Prerefunded 8/1/2004) 55,000 (a) 58,690
6.20%, 8/1/2007 945,000 991,607
5.75%, 8/1/2012 545,000 549,965
New York City Municipal Water Finance Authority,
Water and Sewer Systems Revenue 5.50%, 6/15/2027
(Insured; MBIA) 250,000 229,040
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
New York State, 6.25%, 8/15/2004 1,000,000 1,057,920
New York State Dormitory Authority, Revenue:
(Consolidated City University) 5.75%, 7/1/2018
(Insured; FSA) 200,000 199,212
(FIT Student Housing) 5.75%, 7/1/2006 (Insured; AMBAC) 130,000 135,391
(Mental Health Services Facilities) 6%, 8/15/2005 1,000,000 1,038,150
(Vassar College) 6%, 7/1/2005 250,000 263,058
(Rochester Institute of Technology) 5.50%, 7/1/2006
(Insured; MBIA) 200,000 206,106
New York State Environmental Facilities Corporation, PCR
(State Water Revolving Fund) 7.50%, 6/15/2012 500,000 516,830
New York State Local Government Assistance Corporation
6.375%, 4/1/2000 200,000 201,084
New York State Power Authority, General Purpose Revenue
7%, 1/1/2018 (Prerefunded 1/1/2010) 300,000 (a) 342,576
New York State Thruway Authority
(Highway and Bridge Trust Fund)
5.50%, 4/1/2007 (Insured; FGIC) 1,000,000 1,028,790
New York State Urban Development Corporation, Revenue:
(Corporation Purpose) 5.50%, 7/1/2005 200,000 205,482
(Higher Education Technology Grants)
5.75%, 4/1/2015 (Insured; MBIA) 500,000 498,695
Orange County:
5.10%, 11/15/2002 130,000 131,925
5.50%, 11/15/2007 250,000 258,333
Oyster Bay 7.125%, 4/15/2000 (Insured; FGIC) 180,000 181,580
Port Washington Union Free School District 6%, 8/1/2001 125,000 128,011
Putman County, Public Improvement, 5.25%, 4/15/2011 150,000 150,177
St. Lawrence County Industrial Development Agency,
Civic Facility Revenue
(Lawrence University Project)
5.50%, 7/1/2013 (Insured; MBIA) 250,000 249,175
Suffolk County, Public Improvement
7%, 4/1/2002 (Insured; MBIA) (Prerefunded 4/1/2000) 150,000 (a) 154,064
Town of Hempstead 6.30%, 1/1/2002 (Insured; AMBAC) 150,000 154,742
Triborough Bridge and Tunnel Authority:
General Purpose Revenue:
5.75%, 1/1/2005 250,000 259,380
5.90%, 1/1/2007 100,000 104,858
Special Oligation 5.25%, 1/1/2013 1,000,000 965,750
Westchester County 6.625%, 11/1/2004 250,000 271,190
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
Western Nassau County Water Authority,
Water Systems Revenue 5.50%, 5/1/2004 (Insured; AMBAC) 250,000 257,070
NORTH CAROLINA--1.1%
Dare County, Utility System Revenue
5.25%, 6/1/2014 (Insured; MBIA) 1,085,000 1,042,012
OHIO--4.3%
Clermont County, Hospital Facilities Revenue,
(Mercy Health System) 5.25%, 9/1/2003 (Insured; AMBAC) 685,000 695,939
Hamilton County, Sales Tax
(Hamilton County Football Project)
5.50%, 12/1/2013 (Insured; MBIA) 1,500,000 1,494,870
Ohio Building Authority
(State Facilities Adult Correction Building)
5%, 4/1/2001 1,795,000 1,807,727
OREGON--.3%
Tri County Metropolitan Transportation District
(Light Rail Extension)
5.60%, 7/1/2003 (Prerefunded 7/1/2002) 250,000 (a) 258,043
PENNSYLVANIA--3.3%
Montgomery County Industrial Development Authority
( Peco Energy Company Project)
5.30%, 10/1/2004 1,000,000 989,600
Pennsylvania Intergovernmental Cooperative Authority,
Special Tax Revenue
(City of Philadelphia Funding Program) 6.80%, 6/15/2022
(Prerefunded 6/15/2002) 1,000,000 (a) 1,049,910
Somerset County General Authority, Commonwealth LR
6.70%, 10/15/2003 (Insured; FGIC)
(Prerefunded 10/15/2001) 1,000,000 (a) 1,037,580
TENNESSEE--1.0%
Shelby County Health and Educational Housing Facilities Board
(St. Judes Childrens Research)
5%, 7/1/2009 1,000,000 976,380
TEXAS--8.1%
Austin, Utility System Revenue
8%, 11/15/2016 (Prerefunded 5/15/2001) 200,000 (a) 209,282
Fort Bend Independant School District
(Permanent School Fund Guaranteed)
6.60%, 2/15/2004 875,000 933,546
Houston (Public Improvement) 5%, 3/1/2001 1,550,000 1,561,331
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
Lewisville Independant School District (Building Bonds):
(Permanent School Fund Guaranteed):
7.50%, 8/15/2006 650,000 737,978
7.50%, 8/15/2007 600,000 688,446
Lower Colorado River Authority, Revenue
5.50%, 5/15/2008 (Insured; FSA) 1,250,000 1,277,488
Socorro Independant School District
(Permanent School Fund Guaranteed) 6%, 8/15/2014 2,085,000 2,129,119
UTAH--2.1%
Intermountain Power Agency, Power Supply Revenue
6.25%, 7/1/2009 (Insured; FSA) 500,000 538,190
5.25%, 7/1/2014 1,000,000 955,530
Salt Lake City, HR (IHC Hospitals Inc.) 6.25%, 2/15/2023 500,000 493,640
VIRGINIA--1.7%
Richmond Metropolitan Authority, Expressway Revenue
5.25%, 7/15/2011 (Insuered; FGIC) 525,000 521,624
Virginia Transportation Board, Transportation Contract Revenue
(Route 28 Project) 6%, 4/1/2005 1,000,000 1,040,900
WASHINGTON--1.8%
Washington Public Power Supply System, Revenue
(Nuclear Project No. 1):
6%, 7/1/2006 (Insured; MBIA) 500,000 525,900
7%, 7/1/2008 1,000,000 1,114,770
WISCONSIN--1.8%
Kenosha, Waterworks Revenue, 5%, 12/1/2012 (Insured; FGIC) 750,000 709,313
Wisconsin, 5.40%, 11/1/2023 500,000 444,419
Wisconsin, Health and Educational Facilities Revenue
(Aurora Medical Group Inc.) 5.75%, 11/15/2007 (Insured; FSA) 500,000 517,479
U. S. RELATED--3.8%
Puerto Rico Commonwealth,
6.25%, 7/1/2011 (Insured; MBIA) 950,000 1,036,820
Puerto Rico Commonwealth
Highway and Transporation Authority,
Highway Revenue 6.25%, 7/1/2009 (Insured; MBIA) 150,000 163,687
Puerto Rico Electric Power Authority, Power Revenue
6.50%, 7/1/2006 (Insured; MBIA) 625,000 683,180
Principal
LONG-TERM MUNICIPAL INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
U. S. RELATED (CONTINUED)
Puerto Rico Public Buildings Authority,
Government Guaranteed Facilities
6.25%, 7/1/2010 (Insured; AMBAC) 750,000 820,094
University of Puerto Rico, University Revenue
6.25%, 6/1/2008 (Insured; MBIA) 750,000 816,254
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $88,521,537) 88,402,590
- ------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM MUNICIPAL INVESTMENTS--3.9%
- ------------------------------------------------------------------------------------------------------------------------------------
ALASKA--.3%
Anchorage Higher Education, Revenue,
VRDN, (Alaska Pacific University)
5.50% (LOC; Bank of America National Association) 300,000 (b) 300,000
NEW MEXICO--1.2%
Farmington, PCR, VRDN (Arizona Public Service Co.)
4.50% (LOC; Bank of America NT&SA) 1,100,000 (b) 1,100,000
NORTH DAKOTA--.6%
Grand Forks, Hospital Facilities Revenue, VRDN
(United Hospital Obligation Group Project) 4.80% 500,000 (b) 500,000
MONTANA--.4%
Montana Health Facilities Authority, Revenue, VRDN
(Health Care Pooled Loan Program) 5.40% (Insured; FGIC) 400,000 (b) 400,000
TENNESSEE--1.2%
Sullivan County Industrial Development Board, PCR, VRDN
(Mead Corporation Project) 4.20%
(LOC; Union Bank of Switzerland) 1,100,000 (b) 1,100,000
TEXAS--.2%
Grapevine Industrial Development Corporation, Revenue, VRDN
(American Airlines) 4.25% 200,000 (b) 200,000
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $3,600,000) 3,600,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $92,121,537) 98.6% 92,002,590
CASH AND RECEIVABLES (NET) 1.4% 1,348,267
NET ASSETS 100.0% 93,350,857
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond MBIA Municipal Bond Investors
Assurance Corporation Assurance Insurance
FGIC Financial Guaranty Insurance Company Corporation
FSA Financial Security Assurance PCR Pollution Control Revenue
HR Hospital Revenue SFMR Single Family Mortgage
LOC Letter of Credit Revenue
LR Lease Revenue VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
AAA Aaa AAA 63.7
AA Aa AA 21.0
A a A 7.4
BBB Baa BBB 4.0
F1 MIG1/P1 SP1/A1 3.9
100.0
(A) BONDS WHICH ARE PREREFUNDED ARE COLLATERALIZED BY U.S. GOVERNMENT
SECURITIES WHICH ARE HELD IN ESCROW AND ARE USED TO PAY PRINCIPAL AND
INTEREST ON THE MUNICIPAL ISSUE AND TO RETIRE THE BONDS IN FULL AT THE
EARLIEST REFUNDING DATE.
(B) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENTS OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of Investments 92,121,537 92,002,590
Interest receivable 1,579,015
93,581,605
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 45,641
Due to Distributor 1,951
Cash overdraft due to Custodian 111,816
Other liabilities 71,340
230,748
- --------------------------------------------------------------------------------
NET ASSETS ($) 93,350,857
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 93,487,939
Accumulated net realized gain (loss) on investments (18,135)
Accumulated net unrealized appreciation (depreciation)
on investments--Note 3 (118,947)
- --------------------------------------------------------------------------------
NET ASSETS ($) 93,350,857
NET ASSET VALUE PER SHARE
<TABLE>
Class A Class B Class C Class R
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Assets ($) 24,679,309 3,870,672 1,246,975 63,553,901
Shares Outstanding 2,090,508 327,952 105,304 5,384,267
NET ASSET VALUE PER SHARE ($) 11.81 11.80 11.84 11.80
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENTS OF OPERATIONS
Six Months Ended December 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 2,411,263
EXPENSES:
Management fee--Note 2(a) 238,866
Distribution and service fees--Note 2(b) 48,438
Loan commitment fees--Note 4 622
TOTAL EXPENSES 287,926
INVESTMENT INCOME--NET 2,123,337
- --------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 3 ($):
Net realized gain (loss) on investments (234,415)
Net realized gain (loss) on financial futures 229,489
NET REALIZED GAIN (LOSS) (4,926)
Net unrealized appreciation (depreciation) on investments (1,785,884)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS (1,790,810)
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 332,527
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,123,337 3,666,817
Net realized gain (loss) on investments (4,926) 35,729
Net unrealized appreciation (depreciation)
on investments (1,785,884) (691,521)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 332,527 3,011,025
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
Investment income--net:
Class A shares (555,811) (1,090,877)
Class B shares (55,226) (87,000)
Class C shares (26,320) (29,934)
Class R shares (1,485,980) (2,459,006)
Net realized gain on investments:
Class A shares -- (26,111)
Class B shares -- (2,389)
Class C shares -- (790)
Class R shares -- (58,521)
TOTAL DIVIDENDS (2,123,337) (3,754,628)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($):
Net proceeds from shares sold:
Class A shares 2,876,931 12,748,480
Class B shares 1,819,437 1,370,541
Class C shares 141,300 1,515,094
Class R shares 13,674,157 19,087,979
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($) (CONTINUED):
Dividends reinvested:
Class A shares 388,459 856,147
Class B shares 27,470 44,509
Class C shares 24,361 17,759
Class R shares 627,803 1,046,181
Cost of shares redeemed:
Class A shares (5,189,812) (13,066,638)
Class B shares (699,094) (714,277)
Class C shares (428,353) (492,357)
Class R shares (14,093,120) (16,675,376)
Net assets received in connection with
reorganization of Dreyfus Premier
Limited Term California Municipal Fund--Note 1 -- 21,310,517
Net assets received in connection with
reorganization of Dreyfus Premier
Limited Term New York Municipal Fund--Note 1 -- 7,777,417
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (830,461) 34,825,976
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,621,271) 34,082,373
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 95,972,128 61,889,755
END OF PERIOD 93,350,857 95,972,128
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS:
CLASS A
Shares sold 241,553 1,097,666
Shares issued in connection with reorganization
of Dreyfus Premier Limited Term California
Municipal Fund--Note 1 -- 570,050
Shares issued in connection with reorganization of
Dreyfus Premier Limited Term New York
Municipal Fund--Note 1 -- 156,647
Shares issued for dividends reinvested 32,608 69,015
Shares redeemed (435,814) (1,055,869)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (161,653) 837,509
- --------------------------------------------------------------------------------
CLASS B
Shares sold 153,226 110,983
Shares issued in connection with reorganization
of Dreyfus Premier Limited Term California
Municipal Fund--Note 1 -- 52,551
Shares issued in connection with reorganization
of Dreyfus Premier Limited Term New York
Municipal Fund--Note 1 -- 21,313
Shares issued for dividends reinvested 2,310 3,591
Shares redeemed (58,689) (58,059)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 96,847 130,379
The Fund
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (CONTINUED):
CLASS C
Shares sold 11,898 122,301
Shares issued in connection with reorganization
of Dreyfus Premier Limited Term California
Municipal Fund--Note 1 -- 11,009
Shares issued in connection with reorganization
of Dreyfus Premier Limited Term New York
Municipal Fund--Note 1 -- 15,617
Shares issued for dividends reinvested 2,038 1,434
Shares redeemed (35,826) (40,102)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING (21,890) 110,259
- --------------------------------------------------------------------------------
CLASS R
Shares sold 1,145,218 1,623,187
Shares issued in connection with reorganization
of Dreyfus Premier Limited Term California
Municipal Fund--Note 1 -- 1,082,177
Shares issued in connection with
reorganization of Dreyfus Premier Limited Term
New York Municipal Fund--Note 1 -- 432,574
Shares issued for dividends reinvested 52,708 84,427
Shares redeemed (1,183,907) (1,345,302)
NET INCREASE (DECREASE) IN SHARES OUTSTANDING 14,019 1,877,063
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following tables describe the performance for each share class for the
fiscal periods indicated. All information (except portfolio turnover rate)
reflects financial results for a single fund share. Total return shows how much
your investment in the fund would have increased (or decreased) during each
period, assuming you had reinvested all dividends and distributions. These
figures have been derived from the fund's financial statements.
<TABLE>
Six Months Ended
December 31, 1999 Year Ended June 30,
----------------------------------------------------------------
CLASS A SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value,
beginning of period 12.03 12.32 12.12 11.89 11.82 11.66
Investment Operations:
Investment income--net .26 .50 .52 .54 .54 .53
Net realized and unrealized
gain (loss) on investments (.22) (.28) .26 .26 .08 .19
Total from investment operations .04 .22 .78 .80 .62 .72
Distributions:
Dividends from investment
income--net (.26) (.50) (.52) (.54) (.55) (.53)
Dividends from net realized
gain on investments -- (.01) (.06) (.03) -- (.03)
Total Distributions (.26) (.51) (.58) (.57) (.55) (.56)
Net asset value, end of period 11.81 12.03 12.32 12.12 11.89 11.82
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (A) .63(b) 1.78 6.52 6.92 5.25 6.37
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average
net assets .75(b) .79 .77 .75 .75 .75
Ratio of net investment income
to average net assets 4.30(b) 4.06 4.24 4.52 4.53 4.59
Portfolio Turnover Rate 17.43(c) 28.19 14.62 30.50 55.07 61.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 24,679 27,084 17,423 17,323 18,751 21,375
(A) EXCLUSIVE OF SALES CHARGE.
(B) ANNUALIZED.
(C) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended Period Ended
December 31, 1999 Year Ended December 31, June 30,
-----------------------------------------
CLASS B SHARES (Unaudited) 1999 1998 1997 1996 1995(a)
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.02 12.31 12.12 11.89 11.82 11.32
Investment Operations:
Investment income--net .23 .44 .46 .48 .48 .24
Net realized and unrealized
gain (loss) on investments (.22) (.28) .25 .26 .07 .50
Total from investment operations .01 .16 .71 .74 .55 .74
Distributions:
Dividends from investment
income--net (.23) (.44) (.46) (.48) (.48) (.24)
Dividends from net realized
gain on investments -- (.01) (.06) (.03) -- --
Total Distributions (.23) (.45) (.52) (.51) (.48) (.24)
Net asset value, end of period 11.80 12.02 12.31 12.12 11.89 11.82
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) .12(c) 1.25 5.89 6.38 4.71 6.59(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets 1.25(c) 1.28 1.27 1.25 1.25 1.25(c)
Ratio of net investment income
to average net assets 3.80(c) 3.55 3.68 4.01 3.98 4.09(c)
Portfolio Turnover Rate 17.43(d) 28.19 14.62 30.50 55.07 61.00
Net Assets, end of period
($ x 1,000) 3,871 2,779 1,240 551 500 85
A THE FUND COMMENCED SELLING CLASS B SHARES ON DECEMBER 28, 1994.
B EXCLUSIVE OF SALES CHARGE.
C ANNUALIZED.
D NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
Six Months Ended Period Ended
December 31, 1999 Year Ended December 31, June 30,
-------------------------------------
CLASS C SHARES (Unaudited) 1999 1998 1997 1996 1995(a)
- -----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.06 12.34 12.14 11.90 11.82 11.32
Investment Operations:
Investment income--net .23 .44 .46 .49 .48 .24
Net realized and unrealized
gain (loss) on investments (.22) (.27) .26 .27 .08 .50
Total from investment operations .01 .17 .72 .76 .56 .74
Distributions:
Dividends from investment
income--net (.23) (.44) (.46) (.49) (.48) (.24)
Dividends from net realized
gain on investments -- (.01) (.06) (.03) -- --
Total Distributions (.23) (.45) (.52) (.52) (.48) (.24)
Net asset value, end of period 11.84 12.06 12.34 12.14 11.90 11.82
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) (B) .14(c) 1.35 6.02 6.50 4.81 6.59(d)
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to average net assets 1.25(c) 1.26 1.27 1.27 1.24 1.25(c
Ratio of net investment income
to average net assets 3.80(c) 3.58 3.71 4.17 4.00 4.09(c)
Portfolio Turnover Rate 17.43(d) 28.19 14.62 30.50 55.07 61.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 1,247 1,534 209 74 150 84
(A) THE FUND COMMENCED SELLING CLASS C SHARES ON DECEMBER 28, 1994.
(B) EXCLUSIVE OF SALES CHARGE.
(C) ANNUALIZED.
(D) NOT ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS (CONTINUED)
Six Months Ended
December 31, 1999 Year Ended June 30,
-----------------------------------------------------------------
CLASS R SHARES (Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
Net asset value,
beginning of period 12.02 12.31 12.12 11.89 11.82 11.66
Investment Operations:
Investment income--net .27 .53 .55 .57 .57 .56
Net realized and unrealized
gain (loss) on investments (.22) (.28) .25 .26 .08 .19
Total from investment operations .05 .25 .80 .83 .65 .75
Distributions:
Dividends from investment
income--net (.27) (.53) (.55) (.57) (.58) (.56)
Dividends from net realized
gain on investments -- (.01) (.06) (.03) -- (.03)
Total Distributions (.27) (.54) (.61) (.60) (.58) (.59)
Net asset value, end of period 11.80 12.02 12.31 12.12 11.89 11.82
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%): .87(a) 2.02 6.69 7.17 5.51 6.64
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA ($):
Ratio of expenses to average
net assets .50(a) .54 .52 .50 .50 .50
Ratio of net investment income
to average net assets 4.55(a) 4.32 4.47 4.77 4.77 4.84
Portfolio Turnover Rate 17.43(b) 28.19 14.62 30.50 55.07 61.00
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 63,554 64,575 43,018 25,741 17,870 16,727
(A) ANNUALIZED.
(B) NOT ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Premier Limited Term Municipal Fund (the "fund" ) is a separate
non-diversified series of The Dreyfus/Laurel Tax-Free Municipal Funds (the
"Trust" ) which is registered under the Investment Company Act of 1940, as
amended (the "Act"), as an open-end management investment company and operates
as a series company currently offering five series including the fund. The
fund's investment objective is to maximize current income exempt from Federal
income taxes consistent with the prudent risk of capital by investing in
municipal securities which are of investment-grade quality and intermediate
maturities. The Dreyfus Corporation (the "Manager" ) serves as the fund's
investment adviser. The Manager is a direct subsidiary of Mellon Bank, N.A.
("Mellon Bank" ), which is a wholly-owned subsidiary of Mellon Financial
Corporation.
On September 15, 1998, the Board Members of the Trust approved, subject to
approval by the shareholders of the Dreyfus Premier Limited Term Municipal Fund,
an Agreement and Plan of Reorganization providing for the transfer of all or
substantially all of the Dreyfus Premier Limited Term California Municipal
Fund's assets and liabilities to the fund in a tax free exchange for shares of
beneficial interest of the fund, and the assumption by the fund of stated
liabilities (the "Exchange"). The Exchange was approved by the shareholders of
Premier Limited Term California Municipal Fund on November 12, 1998, and was
consummated after the close of business on November 12, 1998, at which time
531,135 Class A shares valued at $13.33 per share, 48,964 Class B shares valued
at $13.33 per share, 10,268 Class C shares valued at $13.36 per share and
1,009,057 Class R shares valued at $13.32 per share, representing combined net
assets of $21,310,517, (including $1,460,492 net unrealized appreciation on
investments) were exchanged by Dreyfus Premier Limited Term California Municipal
Fund for the equivalent number of Class A, Class B, Class C shares and Class R
shares of the fund.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
On September 15, 1998, the Board Members of the Trust approved, subject to
approval by the shareholders of the Dreyfus Premier Limited Term Municipal Fund,
an Agreement and Plan of Reorganization providing for the transfer of all or
substantially all of the Dreyfus Premier Limited Term New York Municipal Fund's
assets and liabilities to the fund in a tax free exchange for shares of
beneficial interest of the fund, and the assumption by the fund of stated
liabilities (the "Exchange"). The Exchange was approved by the shareholders of
Premier Limited Term New York Municipal Fund on November 12, 1998, and was
consummated after the close of business on November 12, 1998, at which time
150,236 Class A shares valued at $12.95 per share, 20,425 Class B shares valued
at $12.96 per share, 14,991 Class C shares valued at $12.98 per share and
414,870 Class R shares valued at $12.95 per share, representing combined net
assets of $7,777,417, (including $390,164 net unrealized appreciation on
investments) were exchanged by Dreyfus Premier Limited Term New York Municipal
Fund for the equivalent number of Class A, Class B, Class C shares and Class R
shares of the fund.
Premier Mutual Fund Services, Inc. (the "Distributor") is the distributor of the
fund' s shares. The fund is authorized to issue an unlimited number of shares of
Beneficial Interest in the following classes of shares: Class A, Class B, Class
C and Class R. Class A, Class B and Class C shares are sold primarily to retail
investors through financial intermediaries and bear a distribution fee and/or
service fee. Class A shares are sold with a front-end sales charge, while Class
B and Class C shares are subject to a contingent deferred sales charge ("CDSC").
Class R shares are sold primarily to bank trust departments and other financial
service providers (including Mellon Bank and its affiliates) acting on behalf of
customers having a qualified trust or investment account or relationship at such
institution, and bear no distribution or service fees. Class R shares are
offered without a front-end sales load or CDSC. Each class of shares has
identical rights and privileges, except with respect to distribution and service
fees and voting rights on matters affecting a single class.
Investment income, net of expenses (other than class specific expenses) and
realized and unrealized gains and losses are allocated daily to each class of
shares based upon the relative proportion of net assets of each class.
The fund's financial statements are prepared in accordance with generally
accepted accounting principles which require the use of management estimates.
Actual results may differ from estimates.
(A) PORTFOLIO VALUATION: Investments in securities (excluding options and
financial futures on municipal and U.S. treasury securities) are valued each
business day by an independent pricing service ("Service") approved by the Board
of Trustees. Investments for which quoted bid prices are readily available and
are representative of the bid side of the market in the judgment of the Service
are valued at the mean between the quoted bid prices (as obtained by the Service
from dealers in such securities) and asked prices (as calculated by the Service
based upon its evaluation of the market for such securities). Other investments
(which constitute a majority of the portfolio securities) are carried at fair
value as determined by the Service, based on methods which include consideration
of: yields or prices of municipal securities of comparable quality, coupon,
maturity and type; indications as to values from dealers; and general market
conditions. Options and financial futures on municipal and U.S. treasury
securities are valued at the last sales price on the securities exchange on
which such securities are primarily traded or at the last sales price on the
national securities market on each business day. Investments not listed on an
exchange or the national securities market, or securities for which there were
no transactions, are valued at the average of the most recent bid and asked
prices. Bid price is used when no asked price is available.
(B) SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on a trade date basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Interest income,
adjusted for amortization of premiums and original issue discounts on
investments, is earned from settlement date and recognized
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
on the accrual basis. Securities purchased or sold on a when-issued or
delayed-delivery basis may be settled a month or more after the trade date.
(C) FINANCIAL FUTURES: The fund may invest in financial futures contracts in
order to gain exposure to or protect against changes in the market. The fund is
exposed to market risk as a result of changes in the value of the underlying
financial instruments. Investments in financial futures require the fund to
"mark to market" on a daily basis, which reflects the change in the market value
of the contract at the close of each day's trading. Typically, variation margin
payments are received or made to reflect daily unrealized gains or losses. When
the contracts are closed, the fund recognizes a realized gain or loss. These
investments require initial margin deposits with a custodian, which consist of
cash or cash equivalents, up to approximately 10% of the contract amount. The
amount of these deposits is determined by the exchange or Board of Trade on
which the contract is traded and is subject to change. At December 31, 1999,
there were no financial futures contracts outstanding.
(D) DISTRIBUTIONS TO SHAREHOLDERS: It is the policy of the fund to declare
dividends daily from investment income-net. Such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, if any, it is the policy of the fund not to
distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
NOTE 2--Investment Management Fee and Other Transactions With Affiliates:
(A) Investment management fee: Pursuant to an Investment Management agreement
with the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the fund. The Manager also directs
the investments of the fund in accordance with its investment objective,
policies and limitations. For these services, the fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .50% of the value of the fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the fund except brokerage fees,
taxes, interest, commitment fees, Rule 12b-1 distribution fees and expenses,
fees and expenses of non-interested Trustees (including counsel fees) and
extraordinary expenses. In addition, the Manager is required to reduce its fee
in an amount equal to the fund's allocable portion of fees and expenses of the
non-interested Trustees (including counsel fees). Each Trustee receives $40,000
per year, plus $5,000 for each joint Board meeting of The Dreyfus/Laurel Funds,
Inc., The Dreyfus/Laurel Tax-Free Municipal Funds, and The Dreyfus/Laurel Funds
Trust (the "Dreyfus/Laurel Funds" ) 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 and is reimbursed 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. These fees and
expenses are charged and allocated to each series based on net assets.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
Amounts required to be paid by the Company directly to the non-interested
Trustees, that would be applied to offset a portion of the management fee
payable to the Manager, are in fact paid directly by the Manager to the
non-interested Trustees.
(B) Distribution and service plan: Under the Distribution Plan (the "Plan")
adopted pursuant to Rule 12b-1 under the Act, the fund may pay annually up to
. 25% of the value of its average daily net assets attributable to its Class A
shares to compensate the Distributor and Dreyfus Service Corporation, an
affiliate of the Manager, for shareholder servicing activities and the
Distributor for activities and expenses primarily intended to result in the sale
of Class A shares. Under the Plan, Class B and Class C may pay the Distributor
for distributing their shares at an aggregate annual rate of .50% of the value
of the average daily net assets of Class B and Class C shares. Class B shares
and Class C shares are also subject to a Service Plan adopted pursuant to Rule
12b-1, under which the Class B shares and Class C shares pay Dreyfus Service
Corporation or the Distributor for providing certain services to the holders of
Class B and Class C shares a fee at the annual rate of .25% of the value of the
average daily net assets of Class B and Class C shares. Class R shares bear no
distribution or service fee. During the period ended December 31, 1999, Class A,
Class B and Class C shares were charged $32,348, $7,264 and $3,463,
respectively, pursuant to the Plan and Class B and Class C were charged $3,632
and $1,731, respectively, pursuant to the Service Plan.
Under its terms, the Plan and Service Plan shall remain in effect from year to
year, provided such continuance is approved annually by a vote of majority of
those Trustees who are not "interested persons" of the Company and who have no
direct or indirect financial interest in the operation of or in any agreement
related to the Plan or Service Plan.
NOTE 3--Securities Transactions:
The aggregate amount of purchases and sales of investment securities, excluding
short-term securities and financial futures, during the period ended December
31, 1999, amounted to $15,922,378 and $16,715,043, respectively.
At December 31, 1999, accumulated net unrealized depreciation on investments was
$118,947, consisting of $1,088,120 gross unrealized appreciation and $1,207,067
gross unrealized depreciation.
At December 31, 1999, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
NOTE 4--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $500 million
redemption credit facility (the "Facility" ) to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
December 31, 1999, the fund did not borrow under the Facility.
The Fund
NOTES
For More Information
Dreyfus Premier Limited Term Municipal Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent & Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE Call your financial representative
or 1-800-554-4611
BY MAIL Write to:
The Dreyfus Premier Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
(c) 2000 Dreyfus Service Corporation 347SA9912
================================================================================
Dreyfus BASIC Massachusetts Municipal Money Market Fund
SEMIANNUAL REPORT December 31, 1999
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured
* Not Bank-Guaranteed
* May Lose Value
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by Dreyfus and
the fund's other service providers do not properly process and calculate
date-related information from and after January 1, 2000. Dreyfus has taken steps
designed to avoid year 2000-related problems in its systems and to monitor the
readiness of other service providers. In addition, issuers of securities in
which the fund invests may be adversely affected by year 2000-related problems.
This could have an impact on the value of the fund's investments and its share
price.
Contents
THE FUND
- --------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
10 Statement of Assets and Liabilities
11 Statement of Operations
12 Statement of Changes in Net Assets
13 Financial Highlights
14 Notes to Financial Statements
FOR MORE INFORMATION
- ---------------------------------------------------------------------------
Back Cover
The Fund
Dreyfus BASIC
Massachusetts Municipal
Money Market Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus BASIC Massachusetts
Municipal Money Market Fund, covering the six-month period from July 1, 1999
through December 31, 1999. Inside, you'll find valuable information about how
the fund was managed during the reporting period, including a discussion with
the fund's portfolio manager, John Flahive.
The faster than expected rate of economic growth that became evident during the
first half of the year gained momentum in the second half, reinforcing concerns
that long-dormant inflationary pressures might re-emerge. Consumers continued to
spend heavily, unemployment levels reached new lows and the stock market
continued to climb. Because unsustainable economic growth may trigger unwanted
inflationary pressures, the Federal Reserve Board raised key short-term interest
rates three times between June 30 and year-end in an attempt to forestall an
acceleration of inflation.
The tax-exempt money markets were also affected by their own unique influences.
Because the robust economy has reduced the need for municipalities to issue
short-term debt, the supply of short-term municipal notes has declined amid
tepid demand. As a result, tax-exempt money market yields did not rise as much
as comparable taxable yields during the reporting period.
We appreciate your confidence over the past six months, and we look forward to
your continued participation in Dreyfus BASIC Massachusetts Municipal Money
Market Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
January 14, 2000
DISCUSSION OF FUND PERFORMANCE
John Flahive, Portfolio Manager
How did Dreyfus BASIC Massachusetts Municipal Money Market Fund perform during
the period?
For the six-month period ended December 31, 1999, the fund provided an
annualized yield of 2.89%, and after taking into account the effect of
compounding, an annualized effective yield of 2.92%.(1)
We attribute the fund's performance to a rising interest-rate environment, which
increased the yields of many short-term fixed-income securities, including
tax-exempt money market securities. In anticipation of rising interest rates we
reduced the fund's average weighted maturity -- a measure of sensitivity to
changes in interest rates -- in an attempt to capture higher yields more
readily.
What is the fund's investment approach?
The fund's goal is to seek 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. To pursue this objective, we attempt
to add value by selecting the individual tax-exempt money market instruments
from Massachusetts issuers that we believe are most likely to provide high
tax-exempt current income, while focusing on credit risk. We also actively
manage the portfolio' s average weighted maturity in anticipation of
interest-rate and supply-and-demand changes in Massachusetts' s short-term
municipal marketplace.
Rather than focusing on economic or market trends, we search for securities
that, in our opinion, represent better values than those we hold in the
portfolio at that time. When we find securities that we believe will help us
enhance the fund's yield without sacrificing quality we buy them.
The management of the portfolio's average weighted maturity is a more tactical
approach. If we expect the supply of securities to increase temporarily, we may
reduce the portfolio's average
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
weighted maturity to make cash available for the purchase of higher yielding
securities. That's because yields tend to rise temporarily if many issuers are
competing for investor interest. If we expect demand to surge at a time when we
anticipate little issuance and, therefore, lower yields, we may increase the
portfolio's average weighted maturity to maintain current yields for as long as
practical. At other times, we try to maintain a neutral average weighted
maturity.
What other factors influenced the fund's performance?
Massachusetts' municipal money market was influenced by global economic events.
Contrary to early expectations, many global economies staged impressive rebounds
as the year progressed, and the U.S. economy continued to grow strongly. As a
result, fixed-income investors grew concerned that the U.S. economy might be
growing too rapidly, increasing the risk that long-dormant inflationary
pressures might re-emerge. In response, the Federal Reserve Board increased
short-term interest rates in late June, August and November, 1999. These changes
in monetary policy caused the yields of most money market instruments to rise,
including many of those held in this fund.
What is the fund's current strategy?
We have continued to search for the most attractive values in Massachusetts'
tax-exempt money market. Given the strength of the economy, many issuers'
finances look strong. However, our focus has been on finding those issuers that
we believe will demonstrate sound management and strong fiscal conditions even
if the economy slows. Thus, we continue to concentrate on the strongest issues
in the state.
Another strategic move we made was to reduce the fund's average weighted
maturity from 45 days at the beginning of July to 41 days as of December 31,
1999. This strategy was designed to reduce volatility and helped the portfolio
be more responsive to the year-end rise in interest rates.
Later in the year, we chose at times to invest a significant portion of the
fund' s assets in Variable Rate Demand Notes (VRDNs) , which provided the
liquidity that we felt was necessary due to Y2K-related concerns. In addition,
the yields on VRDNs rose quickly as supply exceeded demand at year-end.
January 14, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-MASSACHUSETTS
RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. AN INVESTMENT IN THE FUND IS NOT INSURED OR
GUARANTEED BY THE FDIC OR ANY OTHER GOVERNMENT AGENCY. ALTHOUGH THE FUND SEEKS
TO PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO
LOSE MONEY BY INVESTING IN THE FUND.
The Fund
STATEMENT OF INVESTMENTS
<TABLE>
December 31, 1999 (Unaudited)
Principal
TAX EXEMPT INVESTMENTS--99.3% Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
MASSACHUSETTS--99.2%
City of Boston, Revenue 7%, 2/1/2000 (Insured; AMBAC) 1,000,000 1,002,567
Boston Water and Sewer Commission, Revenue, VRDN
5.20%, Series A (LOC; State Street Bank and Trust Co.) 1,700,000 (a) 1,700,000
Central Berkshire Regional School District
4.50%, 3/15/2000 (Insured: FSA) 805,000 806,986
Chicopee 4.125%, 7/15/2000 (Insured; MBIA) 750,000 752,436
Dedham 6.80%, 8/15/2000 675,000 686,380
Falmouth 6%, 2/1/2000 582,000 583,335
Fitchburg 4%, 2/15/2000 (Insured: MBIA) 1,305,000 1,306,569
Town of Gloucester, BAN 4.25%, 8/3/2000 2,985,500 2,990,267
Groton 6.75%, 7/15/2000 (Insured; FSA) 415,000 421,923
Lowell, Refunding 4.50%, Series A, 1/15/2000 (Insured: FSA) 680,000 680,316
Marblehead, BAN 4%, 8/25/2000 2,225,000 2,229,870
Massachusetts Bay Transportation Authority,
General Transportation Systems,
(Consolidated Loan)
4%, Series A, 1/1/2000 1,000,000 1,000,000
Refunding 6%, Series A, 3/1/2000 1,050,000 1,055,158
Commonwealth of Massachusetts:
Refunding, VRDN:
5.20%, Series B (LOC; Landesbank Hessen-Thueringen) 7,200,000 (a) 7,200,000
5.50%, Series A (BPA; Commerzbank) 2,700,000 (a) 2,700,000
Massachusetts Development Finance Agency, Revenue, VRDN
(LaSalle Village) 5%, Series C (LOC; Fleet Bank) 3,700,000 (a) 3,700,000
Massachusetts Health and Educational Facilities
Authority, Revenue, VRDN:
(Amherst College) 5.10%, Series F
(Guaranty; Amherst College) 4,600,000 (a) 4,600,000
(Capital Asset Program) 4.90%, Series C
(Insured; MBIA and LOC; State Street Bank Trust Co.) 900,000 (a) 900,000
(Falmouth Assistance For Living)
5.40%, Series A (LOC; Fleet Bank) 4,800,000 (a) 4,800,000
(Hallmark Health Systems) 5.65%, Series B
(Insured; FSA and LOC; Fleet Bank) 3,000,000 (a) 3,000,000
(Harvard University) 5.10%, Series L
(Guaranty; Harvard University) 7,800,000 (a) 7,800,000
(Partners Healthcare Systems) 5.60%, Series P-2
(Insured; FSA, LOC; Morgan Guaranty
Trust Co. and SBPA; Bayerishe Landesbank) 3,000,000 (a) 3,000,000
Refunding (Harvard University)
5.40%, Series R (Guaranty; Harvard University) 2,000,000 (a) 2,000,000
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
Massachusetts Health and Educational Facilities
Authority, Revenue, VRDN (continued):
(Wellesley College) 5.30%, Series E
(Guaranty; Wellesley College) 3,915,000 (a) 3,915,000
(Williams College) 5.28%, Series E
(Guaranty; Williams College) 2,995,000 (a) 2,995,000
Massachusetts Housing Finance Agency, VRDN:
5.46% (Insured; MBIA and LOC; Hypovereinsbank) 2,600,000 (a) 2,600,000
Housing Revenue:
5.55% (Insured; AMBAC and LOC; Commerzbank) 5,980,000 (a) 5,980,000
5.55% (Insured; AMBAC and LOC; Merrill Lynch and Co.) 1,415,000 (a) 1,415,000
Multi-Family Housing, Refunding
5.50%, Series A (LOC; Federal
National Management Association) 4,900,000 (a) 4,900,000
Massachusetts Industrial Finance Agency, VRDN:
Industrial Revenue, Refunding,
(Quamco Inc.) 5.55%, Series A (LOC; Bank of Nova Scotia) 980,000 (a) 980,000
PCR (Holyoke Water Power Co. Project)
5.10% (LOC; Toronto-Dominion Bank) 4,000,000 (a) 4,000,000
Revenue:
(Goddard House) 5.65% (LOC; Fleet Bank) 1,765,000 (a) 1,765,000
(Gordon College) 5.30% (LOC; State Street
Bank and Trust Co.). 3,900,000 (a) 3,900,000
(Heritage At Dartmouth) 5.50% (LOC; Bank of Boston) 1,500,000 (a) 1,500,000
(Milton Academy) 5.45% (Insured; MBIA and LOC; Fleet Bank) 1,000,000 (a) 1,000,000
(Mount IDA College) 5.30% (LOC; Credit Local de France) 1,900,000 (a) 1,900,000
Refunding (Showa Women's Institute) 4.50% (LOC;
The Bank of New York) 600,000 (a) 600,000
(Society for the Prevention of Cruelty)
5.30% (LOC; Fleet Bank) 1,000,000 (a) 1,000,000
Massachusetts Water Pollution Abatement Trust Pool Program
4.25, Series 5, 8/1/2000 2,000,000 2,006,859
Massachusetts Water Resource Authority:
CP:
3.45%, 1/20/2000 (LOC; Morgan Guaranty Trust Co.) 1,000,000 1,000,000
3.75%, 2/16/2000 (LOC; State Street Bank and Trust Co.) 3,500,000 3,500,000
Prerefunded 7.625, Series A, 4/1/2000
(Escrowed in; U.S. Government Securities) 1,580,000 1,627,195
VRDN (Multi-Modal):
5.30% Series A (Insured; AMBAC, LOC: Commerzbank and
Credit Local de France and SBPA; Bank of Nova Scotia) 2,500,000 (a) 2,500,000
5.50%, Series A (LOC; Landesbank Hessen-Thueringen) 3,700,000 (a) 3,700,000
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
- ------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
Natick 6%, 8/1/2000. 1,220,000 1,237,362
Needham 5.75%, 6/15/2000 1,136,000 1,148,623
Northampton 5%, 10/15/2000 (Insured; FGIC) 606,000 610,618
Norwell, BAN 4.50%,7/20/2000 2,000,000 2,005,329
Randolph, BAN 3.65%, 6/16/2000 1,000,000 1,000,517
Sandwich 6.75%, 7/16/2000 405,000 411,646
Springfield, Municipal Purpose Loan
4.50%, 10/1/2000 (Insured; FSA) 1,020,000 1,023,663
Westfield:
BAN 4%, 2/1/2000 3,000,000 3,001,113
SAAN 4.10%, 3/21/2000 1,000,000 1,000,645
U.S. RELATED--.1%
Commonwealth of Puerto Rico Government
Development Bank, Refunding, VRDN
4.95% (Insured; MBIA and LOC; Credit Suisse) 100,000 (a) 100,000
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $119,239,377) 99.3% 119,239,377
CASH AND RECEIVABLES (NET) .7% 830,226
NET ASSETS 100.0% 120,069,603
Summary of Abbreviations
AMBAC American Municipal Bond Assurance LOC Letter of Credit
Corporation MBIA Municipal Bond Investors Assurance
BAN Bond Anticipation Notes Insurance Corporation
BPA Bond Purchase Agreement PCR Pollution Control Revenue
CP Commercial Paper SBPA Standby Bond Purchase Agreement
FGIC Financial Guaranty Insurance Company SAAN State Aid Anticipation Notes
FSA Financial Security Assurance VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
Fitch or Moody's or Standard & Poor's Value (%)
- ------------------------------------------------------------------------------------------------------------------------------------
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1 78.5
AAA/AA (b) Aaa/Aa (b) AAA/AA (b) 10.3
Not Rated (c) Not Rated (c) Not Rated (c) 11.2
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE--SUBJECT TO PERIODIC
CHANGE.
(B) NOTES WHICH ARE NOT F, MIG OR SP RATED ARE REPRESENTED BY BOND RATINGS OF
THE ISSUERS.
(C) SECURITIES WHICH, WHILE NOT RATED BY FITCH, MOODY'S AND STANDARD & POOR'S
HAVE BEEN DETERMINED BY THE MANAGER TO BE OF COMPARABLE QUALITY TO THOSE
RATED SECURITIES IN WHICH THE FUND MAY INVEST.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1999 (Unaudited)
Cost Value
- --------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 119,239,377 119,239,377
Interest receivable 909,945
120,149,322
- --------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 44,095
Cash overdraft due to Custodian 34,839
Interest payable--Note 3 785
79,719
- --------------------------------------------------------------------------------
NET ASSETS ($) 120,069,603
- --------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 120,080,688
Accumulated net realized gain (loss) on investments (11,085)
- --------------------------------------------------------------------------------
NET ASSETS ($) 120,069,603
- --------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of shares of Beneficial Interest authorized) 120,078,638
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF OPERATIONS
Six Months Ended December 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 1,887,078
EXPENSES:
Management fee--Note 2 253,562
Interest expense--Note 3 2,948
TOTAL EXPENSES 256,510
INVESTMENT INCOME--NET, representing net increase in net assets
resulting from operations 1,630,568
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
December 31, 1999 Year Ended
(Unaudited) June 30, 1999
- --------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 1,630,568 3,488,075
Net realized gain (loss) from investments -- 140
Net unrealized appreciation (depreciation)
of investments -- (28)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 1,630,568 3,488,187
- --------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (1,630,568) (3,488,075)
- --------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 PER SHARE):
Net proceeds from shares sold 100,438,765 272,439,342
Dividends reinvested 653,562 1,491,979
Cost of shares redeemed (103,773,668) (262,574,293)
INCREASE (DECREASE) IN NET ASSETS FROM
BENEFICIAL INTEREST TRANSACTIONS (2,681,341) 11,357,028
TOTAL INCREASE (DECREASE) IN NET ASSETS (2,681,341) 11,357,140
- --------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 122,750,944 111,393,804
END OF PERIOD 120,069,603 122,750,944
SEE NOTES TO FINANCIAL STATEMENTS.
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
Six Months Ended
December 31, 1999 Year Ended June 30,
-----------------------------------------------------------------
(Unaudited) 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE DATA ($):
Net asset value, beginning
of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .015 .027 .031 .031 .033 .032
Distributions:
Dividends from investment
income--net (.015) (.027) (.031) (.031) (.033) (.032)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 2.90(a) 2.76 3.17 3.12 3.31 3.25
- ------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of operating expenses to
average net assets .45(a) .45 .47 .37 .35 .35
Ratio of interest expense to
average net assets .01(a) -- -- -- -- --
Ratio of net investment income
to average net assets 2.89(a) 2.71 3.15 3.09 3.24 3.19
Decrease reflected in above
expense ratios due to
undertakings by
The Dreyfus Corporation -- -- -- .09 .02 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 120,070 122,751 111,394 90,264 52,317 25,485
A ANNUALIZED.
</TABLE>
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus BASIC Massachusetts Municipal Money Market Fund (the "fund") is a
separate non-diversified series of The Dreyfus/Laurel Tax-Free Municipal Funds
(the "Trust" ) which is registered under the Investment Company Act of 1940, as
amended (the "Act"), as an open-end management investment company and operates
as a series company currently offering five series including the fund. The
fund' s investment objective is to provide a high level of current income exempt
from Federal income taxes and Massachusetts personal income taxes to the extent
consistent with the preservation of capital and the maintenance of liquidity by
investing in high quality, short-term municipal securities. The Dreyfus
Corporation (the "Manager") serves as the fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary
of Mellon Financial Corporation. Premier Mutual Fund Services, Inc. is the
distributor of the fund's shares.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at amortized cost
in accordance with Rule 2a-7 of the Act, which has been determined by the fund's
Board of Trustees to represent the fair value of the fund's investments.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00 for the fund; the fund has adopted certain investment, portfolio valuation
and dividend and distribution policies to enable it to do so. There is no
assurance, however, that the fund will be able to maintain a stable net asset
value per share of $1.00.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date basis. Interest income, adjusted for amortization of
premiums and original issue discounts on investments, is earned from settlement
date and recognized on the accrual basis. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Cost of investments
represents amortized cost. Under the terms of the custody agreement, the fund
receives net earnings credits based on available cash balances left on deposit.
(c) Concentration of risk: The fund follows an investment policy of investing
primarily in municipal obligations of one state. Economic changes affecting the
commonwealth and certain of its public bodies and municipalities may affect the
ability of issuers within the state to pay interest on, or repay principal of,
municipal obligations held by the fund.
(d) Distributions to shareholders: It is the policy of the fund to declare
dividends daily from investment income-net; such dividends are paid monthly.
Dividends from net realized capital gain are normally declared and paid
annually, but the fund may make distributions on a more frequent basis to comply
with the distribution requirements of the Internal Revenue Code of 1986, as
amended (the "Code"). To the extent that net realized capital gain can be offset
by capital loss carryovers, it is the policy of the fund not to distribute such
gain.
(e) Federal income taxes: It is the policy of the fund to continue to qualify as
a regulated investment company, which can distribute tax exempt dividends, by
complying with the applicable provisions of the Code, and to make distributions
of income and net realized capital gain sufficient to relieve it from
substantially all Federal income and excise taxes.
The fund has an unused capital loss carryover of approximately $3,000 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to June 30, 1999. If not applied, $2,000 of
the carryover expires in fiscal 2000 and $1,000 expires in fiscal 2002
At December 31, 1999, the cost of investments for Federal income tax purposes
was substantially the same as the cost for financial reporting purposes (see the
Statement of Investments).
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
NOTE 2--Investment Management Fee And Other Transactions With Affiliates:
Investment management fee: Pursuant to an Investment Management Agreement with
the Manager, the Manager provides or arranges for one or more third parties
and/or affiliates to provide investment advisory, administrative, custody, fund
accounting and transfer agency services to the fund. The Manager also directs
the investments of the fund in accordance with its investment objective,
policies and limitations. For these services, the fund is contractually
obligated to pay the Manager a fee, calculated daily and paid monthly, at the
annual rate of .45% of the value of the fund's average daily net assets. Out of
its fee, the Manager pays all of the expenses of the fund except brokerage fees,
taxes, interest, Rule 12b-1 distribution fees and expenses, fees and expenses of
non-interested Trustees (including counsel fees) and extraordinary expenses. In
addition, the Manager is required to reduce its fee in an amount equal to the
fund' s allocable portion of fees and expenses of the non-interested Trustees
(including counsel fees) . Each trustee receives $40,000 per year, plus $5,000
for each joint Board meeting of The Dreyfus/Laurel Funds, Inc., The
Dreyfus/Laurel Tax-Free Municipal Funds and The Dreyfus/Laurel Funds Trust (the
" Dreyfus/Laurel Funds" ) 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 and is reimbursed 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/Laurels 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. These fees and
expenses are charged and allocated to each series based on net assets. Amounts
required to be paid by the Trust directly to the non-interested Trustees, that
would be applied to offset a portion of the management fee payable to the
Manager, are in fact paid directly by the Manager to the non-interested
Trustees.
NOTE 3--Bank Line of Credit:
The fund participates with other Dreyfus-managed funds in a $100 million line of
credit primarily to be utilized for temporary or emergency purposes, including
the financing of redemptions. Interest is charged to the fund at rates which are
related to the Federal funds rate in effect at the time of borrowings.
The average daily amount of borrowings outstanding during the period ended
December 31, 1999 was approximately $100,800 with a related weighted average
annualized interest rate of 5.80%.
The Fund
For More Information
Dreyfus
BASIC Massachusetts Municipal
Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
Mellon Bank, N.A.
One Mellon Bank Center
Pittsburgh, PA 15258
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Premier Mutual Fund Services, Inc.
60 State Street
Boston, MA 02109
To obtain information:
BY TELEPHONE
Call 1-800-645-6561
BY MAIL Write to:
The Dreyfus Family of Funds
144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request
to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 715SA9912
