DREYFUS CAPITAL VALUE FUND (A Premier Fund)
LETTER TO SHAREHOLDERS
Dear Shareholder:
Dreyfus Capital Value Fund completed its latest fiscal year on April 30,
1996. The fiscal year was changed from a previous closing date of September
30 to the new date of April 30, so the performance figures reported here
cover the seven-month period from October 1, 1995 through April 30, 1996.
For the seven-month period, October 1, 1995 through April 30, 1996
Dreyfus Capital Value Fund's Class A shares posted a total return of 3.81%.
The return for Class B shares was 3.36%, Class C shares, 3.30% and Class R
shares, 3.97%.* During the same seven-month period, the Standard & Poor's 500
Composite Stock Price Index had a total return of 13.35%.**
It should be noted that the Fund has been positioned defensively during
the period under review, prepared for a downturn in equity prices.
After going through a period during the second half of 1995 with minimal
short exposure, in February 1996 we became more confident that the market's
rise might be very near its end and substantially increased the short
positions by buying more put options and selling short both equities and S&P
500 futures. At this time, we are maintaining near maximum short positions in
put options and short securities. During certain periods when it appeared
that the stock market might rise over the short term, the Fund purchased S&P
500 futures in order to lower the short exposure to the stock market.
We have believed that the general stock market has been overvalued for
some time now based on many valuation parameters. Recently, the market rose
to levels where it appeared expensive based on earnings as well as dividends.
In addition, the market euphoria reached dangerous levels as IPOs
skyrocketed, mergers and acquisitions were at excessive levels, and the flow
of money into mutual funds appeared unsustainable. Long-term interest rates
have risen sharply, and the case for low inflation and lower interest rates
is being reconsidered. The mood of the market may be shifting.
The gold share position of the Fund has been reduced. While we still
believe that gold bullion may rise substantially, the risk/reward ratio of
holding gold shares has become less favorable. Since January 1995, the gold
shares have risen over 50% while the bullion has gained less than 10%. The
Fund took profits on some gold securities that were purchased in early 1995,
reducing the position to 13% of assets.
We have 27% of assets in debt securities denominated in Deutschmarks,
Swiss Francs, Italian Lira, Swedish Krona and Australian Dollars. In an
effort to diversify the Fund's nondollar exposure, investments were made in a
number of additional foreign markets while the exposure to the German and
Swiss currencies was reduced. The countries chosen appear to offer favorable
fundamental characteristics such as high real interest rates and stronger
economic growth than expected at present in the U.S.
The Fund holds less than 1% of its assets in two emerging markets, Russia
and Vietnam. These investments had very little impact on the Fund's
performance during the last six months.
Profits on put options linked to the Japanese yen and bond market have
been realized. The profits were taken in order to purchase additional put
options on the U.S. stock market.
The Fund has purchased Japanese equities while hedging the currency
exposure. Japanese equities appear to offer value as earnings may rebound in
response to the liquidity provided by interest rates below 1%.
Interest only securities (IOs) represent approximately 1% of the Fund's
assets. As interest rates have risen, so has the value of IO securities. It
appears that leverage may have been overused in the fixed-income markets
similar to the experience in 1994. If 1994 is any indication, the bond market
may only be part way through its troubles.
In summary, the Fund's positions have become more focused to benefit from
a U.S. equity market decline. In general, the Fund is also positioned to
benefit if the dollar declines, gold shares rise and interest rates rise.
The general stock market appears to be validating some of the concerns
that we have held for some time.
As you know from a Prospectus/Proxy Statement dated April 16, 1996, the
Fund - subject to shareholder approval - is scheduled to be reorganized as of
the close of business on June 21, 1996. Under the reorganization plan, the
Fund will become part of Comstock Partners Capital Value Fund, a separate and
newly created portfolio of Comstock Partners Funds, Inc. The operation of
Comstock Partners Capital Value Fund will be substantially similar to that of
the Fund and the reorganization will not change substantially the Fund's
investment objective or policies, shareholder servicing arrangements or
exchange privileges.
Since 1987, Comstock Partners, Inc. has served as the Fund's
sub-investment adviser with The Dreyfus Corporation serving as the investment
adviser. After the reorganization, Comstock Partners, Inc. will be the
investment adviser and The Dreyfus Corporation will be the sub-investment
adviser and administrator. Comstock Partners, Inc. also serves as investment
adviser to Comstock Partners Strategy Fund.
We look forward to continuing to serve your investment needs in our new
role as your Fund's primary investment adviser.
Sincerely,
Comstock Partners, Inc.
Investment Policy Committee
May 7, 1996
Jersey City, New Jersey
* Total return includes reinvestment of dividends and any capital gains paid
without taking into account 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 shares and Class C shares.
**SOURCE: LIPPER ANALYTICAL SERVICES, INC. - Reflects the reinvestment of
income dividends and, where applicable, capital gain distributions. The
Standard & Poor's 500 Composite Stock Price Index is a widely accepted
unmanaged index of U.S. stock market performance.
DREYFUS CAPITAL VALUE FUND APRIL 30, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT IN DREYFUS CAPITAL VALUE
FUND
(A PREMIER FUND) CLASS A SHARES AND THE STANDARD & POOR'S 500 COMPOSITE STOCK
PRICE INDEX
[Exhibit A:
$50,068
Standard & Poor's 500 Composite Stock
Price Index*
Dollars
$23,596
Dreyfus Capital Value
Fund (Class A Shares)
*Source: Lipper Analytical Services, Inc.]
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURNS
CLASS A SHARES CLASS B SHARES
____________________________________________________________ ____________________________________________________________
% Return Reflecting
% Return Applicable Contingent
Reflecting % Return Deferred Sales
% Return Without Maximum Initial Assuming No Charge Upon
PERIOD ENDED 4/30/96 Sales Charge Sales Charge (4.5%) PERIOD ENDED 4/30/96 Redemption Redemption*
- ---------------- --------- --------- ------------ ------ ----------
<S> <C> <C> <C> <C> <C>
1 Year (1.39)% (5.86)% 1 Year (2.10)% (5.87)%
5 Year 0.53 (0.39) From Inception (1/15/93) 1.70 0.83
10 Year 5.85 5.36
From 4/28/87** 5.04 4.50
From Inception (10/10/85) 8.94 8.47
ACTUAL AGGREGATE TOTAL RETURNS
CLASS C SHARES CLASS R SHARES
____________________________________________________________ ____________________________________________________________
% Return Reflecting
Applicable Contingent
% Return Deferred Sales
Assuming No Charge Upon
PERIOD ENDED 4/30/96 Redemption Redemption*** PERIOD ENDED 4/30/96
- --------------- --------- ---------- ------------
From Inception (8/22/95) 0.98% 0.01% From Inception (8/22/95) 1.86%
</TABLE>
Past performance is not predictive of future performance.
The above graph compares a $10,000 investment made in Class A shares of
Dreyfus Capital Value Fund on 10/10/85 (Inception Date) to a $10,000
investment made in the Standard & Poor's 500 Composite Stock Price Index on
that date. For comparative purposes, the value of the Index on 9/30/85 is
used as the beginning value on 10/10/85. All dividends and capital gain
distributions are reinvested. Performance for Class B, Class C and Class R
shares will vary from the performance of Class A shares shown above due to
differences in charges and expenses.
The Fund's performance shown in the line graph takes into account the maximum
initial sales charge on Class A shares and all other applicable fees and
expenses. The Standard & Poor's 500 Composite Stock Price Index is a widely
accepted, unmanaged index of overall stock market performance which does not
take into account charges, fees and other expenses. Further information
relating to Fund performance is contained in the Financial Highlights section
of the Prospectus and elsewhere in this report.
* Maximum contingent deferred sales charge for Class B shares is 4% and is
reduced to 0% after six years.
** The Fund changed its investment objective as of April 28, 1987.
***Maximum contingent deferred sales charge for Class C shares is 1% within
one year of the date of purchase.
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS APRIL 30, 1996
COMMON STOCKS-18.9% SHARES VALUE
__________ _____________
<S> <C> <C>
BASIC INDUSTRIES-13.3%
Gold Mining: Ashanti Goldfields, G.D.R.......................... 329,500 $ 7,207,812
Driefontein Consolidated, A.D.R.................... 127,000 2,016,125
East Rand Gold & Uranium, A.D.R.................... 100,000 275,000
Elandsrand Gold Mining, A.D.R...................... 251,100 1,663,538
Firstmiss Gold..................................(a) 124,200 3,819,150
Free State Consolidated Gold Mines, A.D.R.......... 135,000 1,476,563
Golden Shamrock Mines...........................(a) 440,000 419,105
Hartebeesfontein Gold Mining, A.D.R................ 433,000 1,602,100
Newmont Gold....................................... 23,000 1,334,000
Pegasus Gold....................................(a) 342,300 4,877,775
Royal Oak Mines.................................(a) 1,559,900 6,434,587
Santa Fe Pacific Gold.............................. 344,082 5,118,220
TVX Gold........................................(a) 262,000 2,063,250
Vaal Reefs Exploration & Mining, A.D.R............. 347,500 3,388,125
Western Deep Levels, A.D.R......................... 38,000 1,888,125
_____________
TOTAL BASIC INDUSTRIES............................. $43,583,475
=============
RESTRUCTURING-5.6%
Chemicals-.8% P.T. Tri Polyta Indonesia, A.D.R................... 197,000 2,462,500
_____________
Conglomerates-.7% Teledyne........................................... 63,000 2,338,875
_____________
Electrical Equipment-.3% Hitachi, A.D.R..................................... 10,000 1,076,250
_____________
Energy-.6% Baker Hughes....................................... 65,000 2,063,750
_____________
Foods and Beverages-.4% Castle & Cooke..................................... 84,733 1,376,911
_____________
Holding Companies-.5% Horsham............................................ 113,200 1,598,950
_____________
Miscellaneous-.8% Fleming Russia Securities Fund..................(a) 220,765 1,518,863
Lazard Vietnam Fund.............................(a) 87,000 924,375
_____________
2,443,238
_____________
Retail-.9% Duty Free International............................ 111,200 1,487,300
Hartmarx........................................(a) 260,000 1,430,000
_____________
2,917,300
_____________
Semiconductors-.6% Fujitsu............................................ 27,000 277,609
NEC, A.D.R......................................... 18,400 1,168,400
OKI Electric Industry.............................. 32,000 252,856
Toshiba............................................ 37,000 286,729
_____________
1,985,594
_____________
TOTAL RESTRUCTURING................................ 18,263,368
=============
TOTAL COMMON STOCKS
(cost $ 54,106,314) $ 61,846,843
=============
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996
PREFERRED STOCKS-.1% SHARES VALUE
__________ _____________
Conglomerates; Teledyne, Series E.................................
(cost $ 31,339) 2,130 $ 30,885
=============
CONTRACTS
SUBJECT
PUT OPTIONS-3.4% TO PUT
_____________
Nasdaq 100 Index:
June `96 @ $550.................................. 14,500 $ 9,062
Standard & Poor's 500 Index Flex Options:
December `96 @ $525.............................. 32,500 95,469
March `97 @ $600................................. 167,000 2,463,250
Standard & Poor's 500 Index:
June `96 @ $450.................................. 23,500 1,469
June `96 @ $475.................................. 113,000 14,125
June `96 @ $500.................................. 73,000 11,406
June `96 @ $550.................................. 52,000 32,500
September `96 @ $550............................. 184,000 483,000
September `96 @ $575............................. 113,000 480,250
December `96 @ $525.............................. 32,500 103,594
December `96 @ $550.............................. 270,000 1,299,375
December `96 @ $600.............................. 151,000 1,661,000
June `97 @ $550.................................. 74,000 610,500
June `97 @ $600.................................. 231,000 3,724,875
_____________
TOTAL PUT OPTIONS
(cost $ 23,352,608).............................. $ 10,989,875
=============
PRINCIPAL
BONDS AND NOTES-26.7% AMOUNT
_____________
BONDS-25.7% Australian Securities;
Republic of Australia,
12%, 7/15/1999.............................(b) $15,586,560 $ 17,198,210
Austrian Securities;
Republic of Austria,
4.50%, 2/12/2000...........................(c) 3,295,820 3,486,978
Danish Securities;
Kingdom of Denmark,
4.25%, 9/30/1999...........................(c) 12,057,878 12,696,945
European Investment Bank:
11.45%, 10/14/1997...........................(d) 7,780,980 8,066,931
10.80%, 3/15/1999............................(d) 7,780,980 8,257,565
16,324,496
_____________
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996
PRINCIPAL
BONDS AND NOTES (CONTINUED) AMOUNT VALUE
__________ _____________
BONDS (CONTINUED) German Securities;
Bundesrepublik Deutschland,
9%, 10/20/2000.............................(e) $15,590,520 $ 17,946,248
Swedish Securities;
Republic of Sweden,
11%, 1/21/1999.............................(f) 15,022,122 16,486,778
_____________
84,139,655
_____________
NOTES-1.0% Federal National Mortgage Association,
Non-Callable Strips, (collateralized by
FNMA Strip, 10/1/2024) Cl. 267-2,
8.50%, 10/25/2024
(Interest Only Obligation)...................... 10,115,901(g) 3,186,509
_____________
TOTAL BONDS AND NOTES
(cost $84,257,242).............................. $ 87,326,164
=============
LOAN PARTICIPATIONS-3.0%
FOREIGN LOAN PARTICIPATIONS: Vnesheconombank (Bank for Foreign
Economic Affairs of the USSR)
5/3/2025.................................(c,j) $18,086,817 $ 7,325,161
5/3/2025.................................(e,j) 5,875,824 2,607,397
_____________
TOTAL LOAN PARTICIPATIONS
(cost $6,703,509)............................... $ 9,932,558
=============
SHORT-TERM INVESTMENTS-47.3%
U.S. TREASURY BILLS: 4.85%, 5/2/96..................................... $12,315,000 $ 12,313,276
4.82%, 5/9/96................................(h,i) 33,772,000 33,736,202
4.75%, 5/16/96.................................(h) 23,352,000 23,305,296
5.04%, 5/30/96.................................... 2,473,000 2,463,429
4.97%, 7/5/96..................................... 83,654,000 82,902,787
_____________
TOTAL SHORT-TERM INVESTMENTS
(cost $154,720,595)............................. $154,720,990
=============
TOTAL INVESTMENTS (cost $323,171,607) 99.4% $324,847,315
===== =============
CASH AND RECEIVABLES (NET)............................................................. .6% $ 1,942,988
===== =============
NET ASSETS............................................................................. 100.0% $326,790,303
===== =============
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF INVESTMENTS (CONTINUED) APRIL 30, 1996
NOTES TO STATEMENT OF INVESTMENTS:
(a) Non-income producing.
(b) Denominated in Australian Dollars.
(c) Denominated in Swiss Francs.
(d) Denominated in Italian Lira.
(e) Denominated in German Marks.
(f) Denominated in Swedish Krona.
(g) Notional face amount.
(h) Partially held by broker as collateral for open short positions.
(i) Partially held by the custodian in a segregated account as collateral
for open financial futures positions.
(j) Securities restricted as to public resale. Investments in restricted
securities, with an aggregate market value of $9,932,558,
represents approximately 3.0% of the Fund's net assets:
</TABLE>
<TABLE>
<CAPTION>
ACQUISITION PURCHASE PERCENTAGE OF
LOAN PARTICIPATIONS; DATE PRICE NET ASSETS VALUATION*
___________________ ___________ ________ _____________ ___________
<S> <C> <C> <C> <C>
Vnesheconombank (Bank for Foreign Economic
Affairs of the USSR)
5/3/2025............................... 5/2/95 $ .24 3.0% fair value
6/29/95
* The valuation of these securities has been determined in good faith under
the direction of the Board of Directors.
STATEMENT OF FINANCIAL FUTURES APRIL 30, 1996
MARKET VALUE UNREALIZED
NUMBER OF COVERED APPRECIATION
FINANCIAL FUTURES PURCHASED; CONTRACTS BY CONTRACTS EXPIRATION AT 4/30/96
_________________ ____________ ________ _______ ____________
Nikkei 225................................... 22 $ 2,435,950 June `96 $206,250
FINANCIAL FUTURES SOLD SHORT:
________________
Japanese Yen................................. 22 (2,635,325) June `96 13,200
Standard & Poor's 500........................ 36 (11,988,000) December `96 17,100
Standard & Poor's 500........................ 64 (21,516,800) March `97 25,850
__________
$262,400
==========
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF SECURITIES SOLD SHORT APRIL 30, 1996
COMMON STOCKS-23.8% SHARES VALUE
__________ _____________
<S> <C> <C>
AUTO RELATED-.6% Cooper Tire & Rubber............................. 80,000 $ 1,960,000
_____________
BEVERAGES-1.3% Anheuser-Busch................................... 30,000 2,013,750
Seagram.......................................... 61,000 2,066,375
_____________
4,080,125
_____________
CHEMICALS-2.4% Air Products & Chemicals......................... 20,000 1,142,500
Great Lakes Chemical............................. 29,000 1,979,250
Lubrizol......................................... 70,000 2,030,000
Nalco Chemical................................... 34,000 1,037,000
RPM.............................................. 100,000 1,537,500
_____________
7,726,250
_____________
COMPUTERS-.5% Compaq Computer.................................. 32,000 1,492,000
_____________
CONSUMERS-1.1% B.A.T. Industries, A.D.R......................... 23,100 356,606
Reebok International............................. 53,900 1,563,100
Rubbermaid....................................... 60,300 1,703,475
_____________
3,623,181
_____________
COSMETICS-.9% International Flavors & Fragrances............... 40,000 1,965,000
Tambrands........................................ 21,000 1,005,375
_____________
2,970,375
_____________
ELECTRICAL EQUIPMENT-.3% Duracell International........................... 20,000 905,000
_____________
ENVIRONMENTAL CONTROL-.3% Browning-Ferris Industries....................... 35,000 1,128,750
_____________
FINANCE-3.0% Alex Brown....................................... 19,900 1,077,088
Bear Stearns..................................... 122,587 3,079,998
CMAC Investment.................................. 15,000 840,000
Merrill Lynch.................................... 18,000 1,086,750
Paine Webber Group............................... 88,000 1,837,000
Schwab (Charles)................................. 80,000 1,960,000
_____________
9,880,836
_____________
FOOD PROCESSING-3.4% Dean Foods....................................... 44,000 1,028,500
General Mills.................................... 35,000 1,942,500
Heinz (H.J.)..................................... 53,850 1,824,169
Kellogg.......................................... 37,200 2,655,150
Sara Lee......................................... 51,000 1,581,000
Unilever, N.V.................................... 14,500 1,979,250
_____________
11,010,569
_____________
FOOD WHOLESALE-.2% Sysco............................................ 25,000 803,125
_____________
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF SECURITIES SOLD SHORT (CONTINUED) APRIL 30, 1996
COMMON STOCKS (CONTINUED) SHARES VALUE
__________ _____________
FOREST PRODUCTS & PAPER-2.3% Boise Cascade.................................... 51,000 $ 2,371,500
Bowater.......................................... 50,000 2,000,000
International Paper.............................. 50,000 1,993,750
Louisiana Pacific................................ 40,000 1,005,000
_____________
7,370,250
_____________
HOME APPLIANCES-.5% Whirlpool........................................ 25,200 1,515,150
_____________
MACHINERY-CONSTRUCTION
& MATERIAL-.9% Caterpillar...................................... 30,000 1,920,000
Ingersoll-Rand................................... 26,500 1,026,875
_____________
2,946,875
_____________
METALS-.9% ASARCO........................................... 60,000 1,987,500
Aluminum Company of America...................... 16,000 998,000
_____________
2,985,500
_____________
PACKAGING & CONTAINER-.6% Crown Cork & Seal................................ 43,000 2,026,375
_____________
PUBLISHING & PRINTING-.7% Dow Jones & Co................................... 27,000 1,009,125
Houghton Mifflin................................. 12,000 556,500
Reader's Digest Association, Cl. A............... 20,000 820,000
_____________
2,385,625
_____________
RETAIL-1.5% Home Depot....................................... 43,633 2,067,113
Penney (J.C.).................................... 20,000 990,000
Wal-Mart Stores.................................. 81,000 1,933,875
_____________
4,990,988
_____________
TECHNOLOGY-.5% Kulicke & Soffa Industries....................... 38,000 722,000
Novell........................................... 5,000 72,500
Novellus Systems................................. 14,000 759,500
_____________
1,554,000
_____________
TELECOMMUNICATIONS-.7% Hong Kong Telecom, A.D.R......................... 114,000 2,166,000
_____________
TEXTILES-.6% V.F.............................................. 35,000 1,995,000
_____________
TRANSPORTATION-.6% Federal Express.................................. 26,000
2,099,500
_____________
TOTAL SECURITIES SOLD SHORT
(proceeds $75,570,492)......................... $ 77,615,474
=============
See notes to financial statements.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF ASSETS AND LIABILITIES APRIL 30, 1996
ASSETS:
Investments in securities, at value
(cost $323,171,607)-see statement.................................. $324,847,315
Cash................................................................. 1,655,957
Receivable from broker for proceeds on securities sold short......... 75,570,492
Dividends and interest receivable.................................... 2,906,235
Receivable for subscriptions to Common Stock......................... 340,787
Receivable from broker for gains on securities sold short............ 321,830
Net unrealized appreciation on forward currency exchange
contracts-Note 4(a)................................................ 293,158
Receivable for futures variation margin-Note 4(a).................... 30,126
Prepaid expenses..................................................... 42,719
_____________
406,008,619
LIABILITIES:
Due to investment adviser............................................ $ 121,544
Due to sub-investment adviser........................................ 82,610
Due to Distributor................................................... 120,875
Securities sold short, at value
(proceeds $75,570,492)-see statement............................... 77,615,474
Payable for Common Stock redeemed.................................... 908,800
Accrued expenses..................................................... 369,013 79,218,316
_____________ _____________
NET ASSETS............................................................... $326,790,303
==============
REPRESENTED BY:
Paid-in capital...................................................... $439,826,841
Accumulated undistributed investment income-net...................... 7,141,282
Accumulated net realized (loss) on investments....................... (120,306,438)
Accumulated net unrealized appreciation on investments, securities
sold short, and foreign currency transactions [including $262,400
net unrealized appreciation on financial futures].................. 128,618
_____________
NET ASSETS at value...................................................... $326,790,303
==============
Shares of Common Stock outstanding:
Class A Shares
(100 million shares of $.01 par value authorized).................. 22,913,826
==============
Class B Shares
(100 million shares of $.01 par value authorized).................. 7,881,479
==============
Class C Shares
(100 million shares of $.01 par value authorized).................. 344,669
==============
Class R Shares
(100 million shares of $.01 par value authorized).................. 122
==============
NET ASSET VALUE per share:
Class A Shares
($241,471,817 / 22,913,826 shares)................................. $10.54
========
Class B Shares
($81,786,205 / 7,881,479 shares)................................... $10.38
========
Class C Shares
($3,530,994 / 344,669 shares)...................................... $10.24
========
Class R Shares
($1,287 / 122.215 shares).......................................... $10.53
========
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF OPERATIONS
YEAR ENDED SEVEN MONTHS ENDED
INVESTMENT INCOME: SEPTEMBER 30, 1995 APRIL 30, 1996
____________________ ___________________
<S> <C> <C>
INCOME:
Interest............................... $ 20,726,708 $ 9,708,892
Cash dividends (net of $75,753 in 1995 and
$20,964 in 1996 foreign taxes withheld
at source)............................. 1,924,318 699,074
_____________ ___________
TOTAL INCOME........................... $ 22,651,026 $ 10,407,966
EXPENSES:
Investment advisory fee-Note 3(a)...... 1,840,790 879,030
Sub-investment advisory fee-Note 3(a).. 1,365,789 602,595
Dividends on securities sold short..... 1,861,794 580,873
Shareholder servicing costs-Note 3(c).. 1,659,621 795,623
Distribution fees-Note 3(b)............ 738,585 367,088
Prospectus and shareholders' reports... 120,170 3,167
Custodian fees......................... 106,205 48,042
Professional fees...................... 73,048 103,737
Registration fees...................... 72,468 42,449
Interest expense-Note 2................ 59,145 45,028
Directors' fees and expenses-Note 3(d). 49,789 36,174
Miscellaneous.......................... 22,130 24,988
_____________ _____________
TOTAL EXPENSES......................... 7,969,534 3,528,794
_____________ _____________
INVESTMENT INCOME-NET.................. 14,681,492 6,879,172
_____________ _____________
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain (loss) on investments-Note 4(a):
Long transactions (including options transactions
and foreign currency transactions)..... $ 2,696,163 $ 27,541,930
Short sale transactions................ (22,403,778) (3,510,946)
Net realized gain (loss) on forward currency
exchange contracts-Note 4(a):
Long transactions...................... 118,547 86,001
Short transactions..................... - (796,761)
Net realized (loss) on financial futures-Note 4(a):
Long transactions...................... - (1,238,406)
Short transactions..................... (7,893,569) (1,836,215)
_____________ _____________
NET REALIZED GAIN (LOSS)............... (27,482,637) 20,245,603
Net unrealized (depreciation) on investments,
securities sold short and foreign currency
transactions [including $1,427,125 in 1995
and $205,425 in 1996 net unrealized
appreciation on financial futures]..... (28,971,658) (15,354,865)
_____________ _____________
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS.................. (56,454,295) 4,890,738
_____________ _____________
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS.............. $(41,772,803) $ 11,769,910
=============== =================
</TABLE>
See notes to financial statements.
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF CHANGES IN NET ASSETS
YEAR ENDED SEPTEMBER 30, SEVEN MONTHS
______________________________ ENDED
OPERATIONS: 1994 1995 APRIL 30, 1996
_____________ _____________ ______________
<S> <C> <C> <C>
Investment income-net.............................. $ 9,823,170 $ 14,681,492 $ 6,879,172
Net realized gain (loss) on investments............ (9,217,163) (27,482,637) 20,245,603
Net unrealized appreciation (depreciation) on investments,
securities sold short, foreign currency transactions and
financial futures for the period................... 26,168,303 (28,971,658) (15,354,865)
_____________ _____________ _____________ _____________
NET INCREASE (DECREASE) IN NET ASSETS RESULTING
FROM OPERATIONS.................................... 26,774,310 (41,772,803) 11,769,910
_____________ _____________ _____________ _____________
DIVIDENDS TO SHAREHOLDERS FROM;
Investment income-net:
Class A shares..................................... (8,633,848) (8,406,886) (10,905,352)
Class B shares..................................... (913,770) (1,940,644) (2,909,347)
Class C shares................................. - - (29,071)
Class R shares..................................... - - (44)
_____________ _____________ _____________ _____________
TOTAL DIVIDENDS.................................... (9,547,618) (10,347,530) (13,843,814)
_____________ _____________ _____________ _____________
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold:
Class A shares..................................... 116,664,797 39,533,363 27,095,651
Class B shares..................................... 85,400,651 26,973,391 18,392,593
Class C shares..................................... - 1,000 3,593,718
Class R shares..................................... - 1,000 270
Dividends reinvested:
Class A shares..................................... 4,857,514 5,143,774 6,964,456
Class B shares..................................... 489,988 990,338 1,653,446
Class C shares..................................... - - 29,071
Class R shares..................................... - - 44
Cost of shares redeemed:
Class A shares..................................... (147,154,408) (136,312,596) (61,921,614)
Class B shares..................................... (8,939,968) (36,549,208) (25,781,438)
Class C shares..................................... - - (62,459)
_____________ _____________ _____________ _____________
INCREASE (DECREASE) IN NET ASSETS FROM CAPITAL
STOCK TRANSACTIONS................................. 51,318,574 (100,218,938) (30,036,262)
_____________ _____________ _____________ _____________
TOTAL INCREASE (DECREASE) IN NET ASSETS.......... 68,545,266 (152,339,271) (32,110,166)
NET ASSETS:
Beginning of period........................... 442,694,474 511,239,740 358,900,469
End of period (including undistributed investment _____________ _____________ _____________
income-net: $9,771,962 in 1994, $14,105,924
in 1995 and $7,141,282 in 1996).................... $ 511,239,740 $ 358,900,469 $ 326,790,303
_____________ =============== =============== ===============
</TABLE>
<TABLE>
<CAPTION>
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
STATEMENT OF CHANGES IN NET ASSETS (CONTINUED)
SHARES
______________________________________________________________________________________
CLASS A CLASS B
_____________________________________________ _______________________________________
SEVEN MONTHS SEVEN MONTHS
YEAR ENDED SEPTEMBER 30, ENDED YEAR ENDED SEPTEMBER 30, ENDED
______________________________ APRIL 30, _______________________ APRIL 30,
1994 1995 1996 1994 1995 1996
____________ ____________ ____________ ____________ _____________ ____________
<S> <C> <C> <C> <C> <C> <C>
CAPITAL SHARE TRANSACTIONS:
Shares sold............. 9,919,385 3,569,389 2,562,332 7,342,835 2,464,126 1,768,677
Shares issued for dividends
reinvested............ 411,308 466,343 688,868 41,951 91,024 165,676
Shares redeemed......... (12,560,968) (12,382,551) (5,880,857) ( 783,960) (3,400,272) (2,491,504)
__________ ___________ __________ __________ _________ __________
NET INCREASE (DECREASE)
IN SHARES OUTSTANDING (2,230,275) (8,346,819) (2,629,657) 6,600,826 (845,122) (557,151)
========== =========== ========== ========== ========= ==========
</TABLE>
<TABLE>
<CAPTION>
SHARES
_________________________________________________________
CLASS C CLASS R
__________________________ __________________________
PERIOD ENDED SEVEN MONTHS ENDED PERIOD ENDED SEVEN MONTHS ENDED
SEPTEMBER 30, APRIL 30, SEPTEMBER 30, APRIL 30,
1995* 1996 1995* 1996
_____________________________ ____________________________
<S>
CAPITAL SHARE TRANSACTIONS (continued): <C> <C> <C> <C>
Shares sold......................... 94 347,688 92 26
Shares issued for dividends reinvested - 2,948 - 4
Shares redeemed..................... - (6,061) - -
________ ________ ________ ________
NET INCREASE
IN SHARES OUTSTANDING........... 94 344,575 92 30
======== ======== ======== ========
</TABLE>
__________________
* From August 22, 1995 (commencement of initial offering) to September 30,
1995.
See notes to financial statements.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
FINANCIAL HIGHLIGHTS
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return,
ratios to average net assets and other supplemental data for each period
indicated. This information has been derived from the Fund's financial
statements.
<TABLE>
<CAPTION>
CLASS A SHARES
__________________________________________________________________________
SEVEN MONTHS
YEAR ENDED SEPTEMBER 30, ENDED
____________________________________________________________
PER SHARE DATA: 1991 1992 1993 1994 1995 APRIL 30, 1996
____ ____ ____ ____ ____ _________
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period............... $15.08 $12.97 $12.41 $11.42 $11.88 $10.61
______ ______ ______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net..... .73 .40 .24 .24 .36 .22
Net realized and unrealized
gain (loss) on investments,
securities sold short,
foreign currency transactions
and financial futures... (.89) (.39) (.62) .46 (1.37) .17
______ ______ ______ ______ ______ ______
TOTAL FROM INVESTMENT
OPERATIONS........ (.16) .01 (.38) .70 (1.01) .39
______ ______ ______ ______ ______ ______
DISTRIBUTIONS:
Dividends from investment
income-net.............. (.99) (.57) (.61) (.24) (.26) (.46)
Dividends from net realized gain
on investments.......... (.96) - - - - -
______ ______ ______ ______ ______ ______
TOTAL DISTRIBUTIONS. (1.95) (.57) (.61) (.24) (.26) (.46)
______ ______ ______ ______ ______ ______
Net asset value, end of period $12.97 $12.41 $11.42 $11.88 $10.61 $10.54
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN(1).... (.70%) (.02%) (2.70%) 6.14% (8.58%) 3.81%(2)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to
average net assets...... 1.19% 1.19% 1.23% 1.21% 1.24% .75%(2)
Ratio of interest expense and
dividends on securities sold short
to average net assets... .49% .39% .45% .39% .45% .18%(2)
Ratio of net investment income to
average net assets...... 5.58% 2.83% 1.94% 2.06% 3.61% 2.13%(2)
Portfolio Turnover Rate... 154.07% 344.29% 41.78% 45.57% 54.70% 55.69%(2)
Average commission rate paid(3) - - - - - $.0531
Net Assets, end of period
(000's Omitted)......... $755,450 $537,392 $412,316 $402,708 $271,052 $241,472
___________________
(1) Exclusive of sales load.
(2) Not annualized.
(3) For fiscal years beginning on or after October 1, 1995, the Fund is
required to disclose its average commission rate paid per share for purchases
and sales of investment securities.
</TABLE>
See notes to financial statements.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS B SHARES
______________________________________________________
SEVEN MONTHS
YEAR ENDED SEPTEMBER 30, ENDED
_________________________________________
PER SHARE DATA: 1993(1) 1994 1995 APRIL 30, 1996
_______ _______ _______ ______________
<S> <C> <C> <C> <C>
Net asset value, beginning of period...... $10.58 $11.32 $11.69 $10.41
______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net..................... .03 .23 .31 .18
Net realized and unrealized gain (loss) on
investments, securities sold short, foreign currency
transactions and financial futures...... .71 .38 (1.38) .16
______ ______ ______ ______
TOTAL FROM INVESTMENT OPERATIONS.... .74 .61 (1.07) .34
______ ______ ______ ______
DISTRIBUTIONS;
Dividends from investment income-net...... - (.24) (.21) (.37)
______ ______ ______ ______
Net asset value, end of period............ $11.32 $11.69 $10.41 $10.38
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2).................... 6.99%(3) 5.35% (9.27%) 3.36%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average net assets 1.49%(3) 1.99% 1.99% 1.18%(3)
Ratio of interest expense and dividends on
securities sold short to average net assets .31%(3) .40% .45% .19%(3)
Ratio of net investment income to average
net assets.............................. .83%(3) 1.39% 2.86% 1.70%(3)
Portfolio Turnover Rate................... 41.78% 45.57% 54.70% 55.69%(3)
Average commission rate paid(4)........... - - - $.0531
Net Assets, end of period (000's Omitted). $30,378 $108,532 $87,847 $81,786
_________________
(1) From January 15, 1993 (commencement of initial offering) to September 30,
1993.
(2) Exclusive of sales load.
(3) Not annualized.
(4) For fiscal years beginning on or after October 1, 1995, the Fund is
required to disclose its average commission rate paid per share for purchases
and sales of investment securities.
</TABLE>
See notes to financial statements.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
FINANCIAL HIGHLIGHTS (CONTINUED)
Contained below is per share operating performance data for a share of
Common Stock outstanding, total investment return, ratios to average net
assets and other supplemental data for each period indicated. This
information has been derived from the Fund's financial statements.
<TABLE>
<CAPTION>
CLASS C SHARES CLASS R SHARES
________________________________ _________________________________
SEVEN MONTHS SEVEN MONTHS
PERIOD ENDED ENDED PERIOD ENDED ENDED
SEPTEMBER 30, APRIL 30, SEPTEMBER 30, APRIL 30,
1995(1) 1996 1995(1) 1996
_______ _______ _______ ______
<S> <C> <C> <C> <C>
PER SHARE DATA:
Net asset value, beginning of period $10.64 $10.41 $10.84 $10.62
______ ______ ______ ______
INVESTMENT OPERATIONS:
Investment income-net............... .02 .44 .04 .30
Net realized and unrealized gain (loss) on
investments, securities sold short, foreign
currency transactions and financial futures (.25) (.12) (.26) .09
______ ______ ______ ______
TOTAL FROM INVESTMENT OPERATIONS (.23) .32 (.22) .39
______ ______ ______ ______
DISTRIBUTIONS;
Dividends from investment income-net - (.49) - (.48)
______ ______ ______ ______
Net asset value, end of period...... $10.41 $10.24 $10.62 $10.53
====== ====== ====== ======
TOTAL INVESTMENT RETURN(2).............. (2.26%)(3) 3.30%(3) (2.03%)(3) 3.97%(3)
RATIOS/SUPPLEMENTAL DATA:
Ratio of operating expenses to average
net assets........................ .26%(3) 1.28%(3) .14%(3) .61%(3)
Ratio of interest expense and dividends on
securities sold short to average net assets .06%(3) .18%(3) .04%(3) .17%(3)
Ratio of net investment income to average
net assets........................ .23%(3) 1.71%(3) .38%(3) 2.28%(3)
Portfolio Turnover Rate............. 54.70% 55.69%(3) 54.70% 55.69%(3)
Average commission rate paid(4)..... - $.0531 - $.0531
Net Assets, end of period (000's Omitted) $1 $3,531 $1 $1
_________________
(1) From August 22, 1995 (commencement of initial offering) to September 30,
1995.
(2) Exclusive of sales load.
(3) Not annualized.
(4) For fiscal years beginning on or after October 1, 1995, the Fund is
required to disclose its average commission rate paid per share for purchases
and sales of investment securities.
</TABLE>
See notes to financial statements.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS
NOTE 1-SIGNIFICANT ACCOUNTING POLICIES:
Dreyfus Capital Value Fund (A Premier Fund) (the "Fund") is
registered under the Investment Company Act of 1940 ("Act") as a diversified
open-end management investment company. The Fund's investment objective is to
maximize total return, consisting of capital appreciation and current income.
The Dreyfus Corporation ("Dreyfus") serves as the Fund's investment adviser.
Comstock Partners, Inc. ("Comstock Partners") serves as the Fund's
sub-investment adviser. Dreyfus is a direct subsidiary of Mellon Bank, N.A.
On January 29, 1996, the Board of Directors of the Fund voted to
approve, and to submit for shareholder approval, an Agreement and Plan of
Reorganization (the "Reorganization") providing for the transfer of all or
substantially all of the Fund's assets, subject to liabilities, attributable
to the Fund's Class A, Class B, Class C and Class R shares in a tax-free
exchange for corresponding Class A, Class B, Class C and Class R shares of
common stock of Comstock Partners Capital Value Fund, a portfolio of Comstock
Partners Funds, Inc., and the assumption by Comstock Partners Capital Value
Fund of stated liabilities. A special meeting of the Fund's shareholders to
consider the Reorganization currently is scheduled to be held on June 19,
1996. The Comstock Partners Capital Value Fund is a newly formed portfolio of
Comstock Partners Funds, Inc. Comstock Partners, Inc., the Fund's
sub-investment adviser, will serve as investment adviser to the Comstock
Partners Capital Value Fund, and The Dreyfus Corporation, the Fund's
investment adviser, will serve as sub-investment adviser and administrator to
the Comstock Partners Capital Value Fund. The Comstock Partners Capital Value
Fund's investment objective and policies are substantially identical to those
of the Fund and the Comstock Partners Capital Value Fund is intended to be
operated in a manner that is substantially similar to the current operation
of the Fund. In connection therewith, the Fund has changed its fiscal year
end from September 30 to April 30.
Premier Mutual Fund Services, Inc. (the "Distributor") acts as the
distributor of the Fund's shares. The Fund offers Class A, Class B, Class C
and Class R shares. Class A shares are subject to a sales charge imposed at
the time of purchase, Class B shares are subject to a contingent deferred
sales charge imposed at the time of redemption on redemptions made within six
years of purchase, Class C shares are subject to a contingent deferred sales
charge imposed at the time of redemption on redemptions made within one year
of purchase and Class R shares are sold at net asset value per share only to
institutional investors. Other differences between the four Classes include
the services offered to and the expenses borne by each Class and certain
voting rights.
(A) PORTFOLIO VALUATION: Investments in securities (including
options and financial futures) 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. Securities 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, except for open short positions, where the asked price is used
for valuation purposes. Bid price is used when no asked price is available.
Securities for which there are no such valuations are valued at fair value as
determined in good faith under the direction of the Board of Directors.
Investments denominated in foreign currencies are translated to U.S. dollars
at the prevailing rates of exchange. Forward currency exchange contracts are
valued at the forward rate.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(B) FOREIGN CURRENCY TRANSACTIONS: The Fund does not isolate that
portion of the results of operations resulting from changes in foreign
exchange rates on investments from the fluctuations arising from changes in
market prices of securities held. Such fluctuations are included with the net
realized and unrealized gain or loss from investments.
Net realized foreign exchange gains or losses arise from sales and
maturities of short-term securities, sales of foreign currencies, currency
gains or losses realized on securities transactions, the difference between
the amounts of dividends, interest, and foreign withholding taxes recorded on
the Fund's books, and the U.S. dollar equivalent of the amounts actually
received or paid. Net unrealized foreign exchange gains and losses arise from
changes in the value of assets and liabilities other than investments in
securities, resulting from changes in exchange rates. Such gains and losses
are included with net realized and unrealized gain or loss on investments.
(C) 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. Dividend
income is recognized on the ex-dividend date and interest income, including,
where applicable, amortization of discount on investments, is recognized on
the accrual basis.
(D) DIVIDENDS TO SHAREHOLDERS: Dividends are recorded on the
ex-dividend date. Dividends from investment income-net and dividends from net
realized capital gain are normally declared and paid annually, but the Fund
may make distributions on a more frequent basis to comply with the distribution
requirements of the Internal Revenue Code. To the extent that net realized
capital gain can be offset by capital loss carryovers, it is the policy of the
Fund not to distribute such gain.
(E) FEDERAL INCOME TAXES: It is the policy of the Fund to continue
to qualify as a regulated investment company, if such qualification is in the
best interests of its shareholders, by complying with the applicable
provisions of the Internal Revenue Code, and to make distributions of taxable
income sufficient to relieve it from substantially all Federal income and
excise taxes.
The Fund has an unused capital loss carryover of approximately
$138,700,000 available for Federal income tax purposes to be applied against
future net securities profits, if any, realized subsequent to April 30,
1996. If not applied, $9,100,000 of the carryover expires in fiscal 1999,
$29,800,000 expires in fiscal 2000, $17,800,000 expires in fiscal 2001,
$56,700,000 expires in fiscal 2002, $9,200,000 expires in fiscal 2003, and
$16,100,000 expires in fiscal 2004.
NOTE 2-BANK LINE OF CREDIT:
In accordance with an agreement with a bank, the Fund may borrow up
to $10 million under a short-term unsecured line of credit. Interest on
borrowings is charged at rates which are related to Federal Funds rates in
effect from time to time. At April 30, 1996, there were no outstanding
borrowings under the line of credit.
The average daily amount of short-term debt outstanding during the
period ended April 30, 1996 and September 30, 1995, was approximately
$1,126,761 and $859,000, respectively, with a related weighted average
annualized interest rate of 6.87% and 6.89%, respectively. The maximum amount
borrowed at any time during the period ended April 30, 1996 and September 30,
1995 was $10 million.
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 3-INVESTMENT ADVISORY FEE, SUB-INVESTMENT ADVISORY FEE AND OTHER
TRANSACTIONS WITH AFFILIATES:
(A) Fees payable by the Fund pursuant to the provisions of an
Investment Advisory Agreement with Dreyfus and a Sub-Investment Advisory
Agreement with Comstock Partners (together "Agreements") are payable monthly,
computed on the average daily value of the Fund's net assets at the following
annual rates:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS DREYFUS COMSTOCK PARTNERS
__________________ ___________ __________________
<S> <C> <C>
0 up to $25 million.................. .60 of 1% .15 of 1%
$25 up to $75 million................ .50 of 1% .25 of 1%
$75 up to $200 million............... .45 of 1% .30 of 1%
$200 up to $300 million.............. .40 of 1% .35 of 1%
In excess of $300 million............ .375 of 1% .375 of 1%
</TABLE>
The Agreements further provide that the Fund may deduct from the
fees to be paid to Dreyfus and Comstock Partners, or Dreyfus and Comstock
Partners will bear such excess expense, to the extent required by state law,
should the Fund's aggregate expenses, exclusive of taxes, brokerage, interest
on borrowings (which, in the view of Stroock & Stroock & Lavan, counsel to
the Fund, also contemplates dividends and interest accrued on securities sold
short), and extraordinary expenses, exceed the expense limitation of any
state having jurisdiction over the Fund. The most stringent state expense
limitation applicable to the Fund presently requires reimbursement in any
full fiscal year that such expenses (exclusive of distribution expenses and
certain expenses as described above) exceed 2 1/2% of the first $30 million,
2% of the next $70 million and 1 1/2% of the excess over $100 million of the
average value of the Fund's net assets in accordance with California "blue
sky" regulations. No expense reimbursement was required for the period ended
April 30, 1996 and the year ended September 30, 1995.
Dreyfus Service Corporation, a wholly-owned subsidiary of Dreyfus,
retained $24,723 and $13,897 during the period ended April 30, 1996 and
September 30, 1995, respectively from commissions earned on sales of Fund
shares.
(B) Under the Distribution Plan adopted pursuant to Rule 12b-1
under the Act, the Fund pays the Distributor for distributing the Fund's
Class B and Class C shares at an annual rate of .75 of 1% of the value of the
average daily net assets of Class B and Class C. During the period ended
April 30, 1996 and September 30, 1995, respectively, $361,278 and $738,584
was charged to the Fund for the Class B shares and $5,810 and $1 was charged
to the Fund for the Class C shares.
(C) Under the Shareholder Services Plan, the Fund pays the
Distributor, at an annual rate of .25 of 1% of the value of the average daily
net assets of Class A, Class B and Class C shares for the provision of
certain services. The services provided may include personal services
relating to shareholder accounts, such as answering shareholder inquiries
regarding the Fund and providing reports and other information, and services
related to the maintenance of shareholder accounts. The Distributor may make
payments to Service Agents in respect of these services. The Distributor
determines the amount to be paid to Service Agents. For the period ended
April 30, 1996, $371,510, $120,426 and $1,937 were charged to Class A, Class
B and Class C shares, respectively, by the Distributor pursuant to the
Shareholder Services
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Plan. For the year ended September 30, 1995, $822,664 and $246,195
were charged to Class A & B shares, respectively, and no amounts were charged
to the Class C shares, by the Distributor pursuant to the Shareholder Service
Plan.
Effective December 1, 1995, the Fund compensates Dreyfus Transfer,
Inc., a wholly-owned subsidiary of the Manager, under a transfer agency
agreement for providing personnel and facilities to perform transfer agency
services for the Fund. Such compensation amounted to $94,974 for the period
from December 1, 1995 through April 30, 1996.
(D) Each director who is not an "affiliated person" as defined in
the Act receives from the Fund an annual fee of $4,500 and an attendance fee
of $500 per meeting. The Chairman of the Board receives an additional 25% of
such compensation and each director emeritus receives 50% of such
compensation.
NOTE 4-SECURITIES TRANSACTIONS:
(A) The aggregate amount of purchases and sales of investment
securities and securities sold short, excluding short-term securities,
financial futures, options transactions, and forward currency exchange
contracts during the period ended April 30, 1996 is summarized as follows:
<TABLE>
<CAPTION>
PURCHASES SALES
_______________ _______________
<S> <C> <C>
Long transactions.................... $ 64,643,105 $206,235,571
Short sale transactions.............. 51,796,802 58,427,934
_____________ _____________
TOTAL $116,439,907 $264,663,505
============= =============
</TABLE>
The Fund is engaged in short-selling which obligates the Fund to
replace the security borrowed by purchasing the security at current market
value. The Fund would incur a loss if the price of the security increases
between the date of the short sale and the date on which the Fund replaces
the borrowed security. The Fund would realize a gain if the price of the
security declines between those dates. Until the Fund replaces the borrowed
security, the Fund will maintain daily, a segregated account with a broker
and/or custodian, of cash and/or U.S. Government securities sufficient to
cover its short position. Securities sold short at April 30, 1996 and their
related market values and proceeds are set forth in the Statement of
Securities Sold Short.
The following summarizes open forward currency contracts at April
30, 1996:
<TABLE>
<CAPTION>
FOREIGN
CURRENCY U.S. DOLLAR UNREALIZED
FORWARD CURRENCY SALE CONTRACTS AMOUNT PROCEEDS VALUE APPRECIATION
________________________________ ____________ _________ ___________ _____________
<S> <C> <C> <C> <C>
German Deutschemarks,
expiring 7/17/96............ 30,575,000 $20,341,024 $20,047,866 $293,158
=========
</TABLE>
The Fund enters into forward currency exchange contracts in order
to hedge its exposure to changes in foreign currency exchange rates on its
foreign portfolio holdings. When executing forward currency exchange
contracts, the Fund is obligated to buy or sell a foreign currency at a
specified rate on a certain date in the future. With respect to sales of
forward currency exchange contracts, the Fund would incur a loss if the value
of the contract increases between the date the forward contract is opened and
the date the forward contract is closed. The Fund realizes a gain if the
value of the contract decreases between
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
those dates. With respect to purchases of forward currency exchange
contracts, the Fund would incur a loss if the value of the contract decreases
between the date the forward contract is opened and the date the forward
contract is closed. The Fund realizes a gain if the value of the contract
increases between those dates. The Fund is also exposed to credit risk
associated with counter party nonperformance on these forward currency
exchange contracts which is typically limited to the unrealized gains on such
contracts that are recognized in the Statement of Assets and Liabilities.
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 (see the Statement of Financial Futures). 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 contracts at the close
of each day's trading. Typically, variation margin payments are made or
received to reflect daily realized gains or losses. When the contracts are
closed, the Fund recognizes a realized gain or loss. These investments
require initial margin deposits with a custodian, which consist of cash or
cash equivalents, up to approximately 10% of the contract amount. The amount
of these deposits is determined by the exchange or Board of Trade on which
the contract is traded and is subject to change. Contracts open at April 30,
1996 and their related unrealized market appreciation are set forth in the
Statement of Financial Futures.
The Fund may purchase put and call options, including restricted
options, which are not exchange traded, in order to gain exposure to or
protect against changes in the market. The Fund's exposure to credit risk
associated with counter party nonperformance on these investments is
typically limited to the market value of such investments that are disclosed
in the Statement of Investments.
The Fund may invest in fixed and floating rate loans arranged
through private negotiations between an issuer of Sovereign Debt Obligations
and one or more financial institutions. The Fund's investments in loans are
expected in most instances to be in the form of participations in loans and
assignments of all or a portion of loans from third parties. As a result, the
Fund may be subject to credit risk from the issuer of Sovereign Debt
Obligations and the third party. In addition, such loans may be less liquid
and may be subject to greater price volatility.
(B) At April 30, 1996, accumulated net unrealized appreciation on
investments was $186,283, consisting of $18,850,120 gross unrealized
appreciation and $18,663,837 gross unrealized depreciation.
At April 30, 1996, 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).
DREYFUS CAPITAL VALUE FUND (A Premier Fund)
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
SHAREHOLDERS AND BOARD OF DIRECTORS
DREYFUS CAPITAL VALUE FUND (A PREMIER FUND)
We have audited the accompanying statement of assets and
liabilities of Dreyfus Capital Value Fund (A Premier Fund), including the
statements of investments, financial futures and securities sold short, as of
April 30, 1996, and the related statements of operations for the seven months
ended April 30, 1996 and for the year ended September 30, 1995, the
statements of changes in net assets for the seven months ended April 30, 1996
and for each of the two years in the period ended September 30, 1995, and
financial highlights for each of the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
and financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of
securities owned as of April 30, 1996 by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights
referred to above present fairly, in all material respects, the financial
position of Dreyfus Capital Value Fund (A Premier Fund) at April 30, 1996,
the results of its operations for the seven months ended April 30, 1996 and
for the year ended September 30, 1995, the changes in its net assets for the
seven months ended April 30, 1996 and for each of the two years in the period
ended September 30, 1995, and the financial highlights for each of the
indicated periods, in conformity with generally accepted accounting
principles.
[Ernst and Young LLP signature logo]
New York, New York
June 7, 1996
[Dreyfus lion "d" logo]
DREYFUS
CAPITAL VALUE FUND
(A Premier Fund)
200 Park Avenue
New York, NY 10166
INVESTMENT ADVISER
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
SUB-INVESTMENT ADVISER
Comstock Partners
10 Exchange Place, Suite 2010
Jersey City, NJ 07302
CUSTODIAN
Bank of New York
90 Washington Street
New York, NY 10286
TRANSFER AGENT &
DIVIDEND DISBURSING AGENT
Dreyfus Transfer, Inc.
One American Express Plaza
Providence, RI 02903
Further information is contained
in the Prospectus, which must
precede or accompany this report.
Printed in U.S.A. CAPAR496
[Dreyfus logo]
Capital Value Fund
(A Premier Fund)
Annual Report
April 30, 1996
COMPARISON OF CHANGE IN VALUE OF $10,000 INVESTMENT
IN DREYFUS CAPITAL VALUE FUND ( A PREMIER FUND)
CLASS A SHARES AND THE STANDARD & POOR'S 500 COMPOSITE
STOCK PRICE INDEX
EXHIBIT A:
____________________________________________________
| | STANDARD | DREYFUS |
| | & POOR'S 500 | CAPITAL |
| PERIOD | COMPOSITE STOCK | VALUE FUND |
| | PRICE INDEX * | (CLASS A SHARES) |
|-----------|--------------------| -----------------|
| 10/10/85 | 10,000 | 9,552 |
| 4/30/86 | 13,223 | 13,366 |
| 4/30/87 | 16,728 | 15,148 |
| 4/30/88 | 15,641 | 17,453 |
| 4/30/89 | 19,221 | 19,476 |
| 4/30/90 | 21,243 | 22,353 |
| 4/30/91 | 24,978 | 22,984 |
| 4/30/92 | 28,475 | 23,822 |
| 4/30/93 | 31,100 | 24,328 |
| 4/30/94 | 32,752 | 24,299 |
| 4/30/95 | 38,464 | 23,929 |
| 4/30/96 | 50,068 | 23,596 |
---------------------------------------------------
*Source: Lipper Analytical Services, Inc.
