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January 3, 1995
DREYFUS CAPITAL VALUE FUND (A PREMIER FUND)
SUPPLEMENT TO PROSPECTUS DATED JANUARY 28, 1994
THE FOLLOWING ANTICIPATED CHANGES HAVE OCCURRED:
I. CONSUMMATION OF THE MERGER
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES ANY CONTRARY
INFORMATION CONTAINED IN THE FUND'S PROSPECTUS.
On August 24, 1994, the previously announced merger between The
Dreyfus Corporation ("Dreyfus") and a subsidiary of Mellon Bank Corporation
("Mellon") was completed, and as a result, Dreyfus now is a wholly-owned
subsidiary of Mellon Bank, N.A. instead of a publicly-owned corporation.
Mellon is a publicly owned multibank holding company incorporated
under Pennsylvania law in 1971 and registered under the Federal Bank Holding
Company Act of 1956, as amended. Mellon provides a comprehensive range of
financial products and services in domestic and selected international
markets. Mellon is among the twenty-five largest bank holding companies in
the United States based on total assets. Mellon's principal wholly-owned
subsidiaries are Mellon Bank, N.A., Mellon Bank (DE) National Association,
Mellon Bank (MD), The Boston Company, Inc., AFCO Credit Corporation and a
number of companies known as Mellon Financial Services Corporations. Through
its subsidiaries, Mellon managed more than $130 billion in assets as of July
31, 1994, including approximately $6 billion in mutual fund assets. As of
June 30, 1994, various subsidiaries of Mellon provided non-investment
services, such as custodial or administration services, for approximately
$747 billion in assets, including approximately $97 billion in mutual fund
assets.
II. NEW DISTRIBUTOR
THE FOLLOWING INFORMATION SUPERSEDES AND REPLACES ANY CONTRARY
INFORMATION CONTAINED IN THE FUND'S PROSPECTUS AND SPECIFICALLY IN THE
SECTION ENTITLED "HOW TO BUY FUND SHARES."
The Fund's distributor is Premier Mutual Fund Services, Inc. (the
"Distributor"), located at One Exchange Place, Boston, Massachusetts 02109.
The Distributor is a wholly-owned subsidiary of Institutional Administration
Services, Inc., a provider of mutual fund administration services, the parent
company of which is Boston Institutional Group, Inc.
Accordingly, references in the Prospectus to Dreyfus Service
Corporation as the Fund's distributor should be substituted with Premier
Mutual Fund Services, Inc.
III. NEW RULE 12B-1 PLAN ARRANGEMENTS IMPLEMENTED
THE FOLLOWING INFORMATION SUPERSEDES AND REPLACES THE INFORMATION
CONTAINED IN THE SECTION IN THE FUND'S PROSPECTUS ENTITLED "DISTRIBUTION PLAN
AND SHAREHOLDER SERVICES PLAN -- DISTRIBUTION PLAN."
Under the Distribution Plan, adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, the Fund pays the Distributor for
distributing the Fund's Class B shares at an annual rate of .75 of 1% of the
value of the average daily net assets of Class B.
IV. RESULTS OF FUND SHAREHOLDER VOTE
THE FOLLOWING INFORMATION SUPPLEMENTS AND SUPERSEDES ANY CONTRARY
INFORMATION CONTAINED IN THE FUND'S PROSPECTUS.
On August 4, 1994, the Fund's shareholders voted to approve (a) a new
investment advisory agreement with Dreyfus and (b) a new Distribution Plan,
each of which became effective upon consummation of the merger between
Dreyfus and a subsidiary of Mellon.
V. OTHER MATTERS
THE FOLLOWING SENTENCE SUPERSEDES AND REPLACES THE LAST SENTENCE OF
THE FIRST PARAGRAPH IN THE SECTION IN THE FUND'S PROSPECTUS ENTITLED:
"DESCRIPTION OF THE FUND -- MANAGEMENT POLICIES":
The Fund will not invest more than 65% of its assets in securities of
foreign issuers.
THE FOLLOWING SENTENCE SUPPLEMENTS THE FOURTH PARAGRAPH IN THE
SECTION IN THE FUND'S PROSPECTUS ENTITLED "DESCRIPTION OF THE FUND -- EQUITY
AND DEBT SECURITIES":
The Fund may invest in companies whose principal activities are in or
governments of emerging markets.
THE FOLLOWING INFORMATION SUPPLEMENTS THE SECTION IN THE FUND'S
PROSPECTUS ENTITLED "CERTAIN PORTFOLIO SECURITIES":
Emerging markets will include any countries (i) having an "emerging
stock market" as defined by the International Finance Corporation; (ii) with
low- to middle-income economies according to the World Bank; or (iii) listed
in World Bank publications as developing. Currently, the countries not
included in these categories are Australia, Austria, Belgium, Canada,
Denmark, Finland, France, Germany, Ireland, Italy, Japan, the Netherlands,
New Zealand, Norway, Spain, Sweden, Switzerland, the United Kingdom and the
Unites States. Issuers whose principal activities are in countries with
emerging markets include issuers: (1) organized under the laws of, (2) whose
securities have their primary trading market in, (3) deriving at least 50% of
their revenues or profits from goods sold, investments made, or services
performed in, or (4) having at least 50% of their assets located in, a
country with an emerging market.
In emerging markets, the Fund may purchase debt securities issued or
guaranteed by foreign governments, including participations in loans between
foreign governments and financial institutions, and interests in entities
organized and operated for the purpose of restructuring the investment
characteristics of instruments issued or guaranteed by foreign governments
("Sovereign Debt Obligations"). These include Brady Bonds, Structured
Securities and Loan Participations and Assignments (as defined below).
BRADY BONDS. Brady Bonds are debt obligations created through the
exchange of existing commercial bank loans to foreign entities for new
obligations in connection with debt restructurings under a plan introduced by
former U.S. Secretary of the Treasury, Nicholas F.Brady.
Brady Bonds have been issued only relatively recently, and,
accordingly do not have a long payment history. They may be collateralized or
uncollateralized and issued in various currencies (although most are U.S.
dollar-denominated). They are actively traded in the over-the-counter
secondary market.
STRUCTURED SECURITIES. Structured Securities are interests in
entities organized and operated solely for the purpose of restructuring the
investment characteristics of Sovereign Debt Obligations. This type of
restructuring involves the deposit with or purchase by an entity, such as a
corporation or trust, of specified instruments (such as commercial bank loans
or Brady Bonds) and the issuance by that entity of one or more classes of
securities ("Structured Securities") backed by,
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or representing interests in, the underlying instruments. The cash flow on the
underlying instruments may be apportioned among the newly-issued Structured
Securities to create securities with different investment characteristics such
as varying maturities, payment priorities and interest rate provisions, and
the extent of the payments made with respect to Structured Securities is
dependent on the extent of the cash flow on the underlying instruments.
Because Structured Securities of the type in which the Fund anticipates it
will invest typically involve no credit enhancement, their credit risk
generally will be equivalent to that of the underlying instruments.
The Fund is permitted to invest in a class of Structured Securities
that is either subordinated or unsubordinated to the right of payment of
another class. Subordinated Structured Securities typically have higher
yields and present greater risks than unsubordinated Structured Securities.
Certain issuers of Structured Securities may be deemed to be
"investment companies" as defined in the Investment Company Act of 1940. As a
result, the Fund's investment in these Structured Securities may be limited
by the restrictions contained in the Investment Company Act of 1940.
LOAN PARTICIPATIONS AND ASSIGNMENTS. The Fund may invest in fixed and
floating rate loans ("Loans") arranged through private negotiations between
an issuer of Sovereign Debt Obligations and one or more financial
institutions ("Lenders"). The Fund's investments in Loans are expected in
most instances to be in the form of participations in Loans
("Participations") and assignments of all or a portion of Loans
("Assignments") from third parties. The government that is the borrower on
the Loan will be considered by the Fund to be the issuer of a Participation
or Assignment. The Fund's investment in Participations typically will result
in the Fund having a contractual relationship only with the Lender and not
with the borrower. The Fund will have the right to receive payments of
principal, interest and any fees to which it is entitled only from the Lender
selling the Participation and only upon receipt by the Lender of the payments
from the borrower. In connection with purchasing Participations, the Fund
generally will have no right to enforce compliance by the borrower with the
terms of the loan agreement relating to the Loan, nor any rights of set-off
against the borrower, and the Fund may not directly benefit from any
collateral supporting the Loan in which it has purchased the Participation.
As a result, the Fund may be subject to the credit risk of both the borrower
and the Lender that is selling the Participation. In the event of the
insolvency of the Lender selling a Participation, the Fund may be treated as
a general creditor of the Lender and may not benefit from any set-off between
the Lender and the borrower. Certain Participations may be structured in a
manner designed to avoid purchasers of Participations being subject to the
credit risk of the Lender with respect to the Participation, but even under
such a structure, in the event of the Lender's insolvency, the Lender's
servicing of the Participation may be delayed and the assignability of the
Participation impaired. The Fund will acquire Participations only if the
Lender interpositioned between the Fund and the borrower is a Lender having
total assets of more than $25 billion and whose senior unsecured debt is
rated investment grade or higher (i.e., Baa/BBB or higher).
107/stkr010395
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