<PAGE>
Dreyfus
Municipal Bond
Fund, Inc.
Semi-Annual
Report
February 28, 1999
<PAGE>
Year 2000 Issues (Unaudited)
The fund could be adversely affected if the computer systems used by The
Dreyfus Corporation and the fund's other service providers do not properly
process and calculate date-related information from and after January 1, 2000.
The Dreyfus Corporation is working to avoid Year 2000-related problems in its
systems and to obtain assurances from other service providers that they are
taking similar steps. 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.
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------
Letter to Shareholders
Dear Shareholder:
We are pleased to provide you with this report on the Dreyfus Municipal Bond
Fund, Inc. for the six-month period ended February 28, 1999. Your fund produced
a total return, including share price changes and dividend income generated, of
1.56%,* and an annualized tax-free distribution rate per share of 4.89%.**
The Economy
The economy in the period ended February 28, 1999 had several persistent
themes. These included weakness in the world economy, strength in the U.S.
economy, pervasive disinflation and action by central banks to lower interest
rates in many parts of the world.
Weakness in the world economy started in Asia with economic and financial
stresses throughout most of that continent. While China was able to generate
economic expansion by government spending, economic declines occurred in most of
the rest of Asia. The most severe phase occurred when Asian currencies dropped
and short-term interest rates rose. Tentative signs of a bottoming of the crises
in Asia had emerged by the end of your fund's fiscal year. However, Latin
America had begun to weaken in the aftermath of Brazilian economic weakness.
Europe was full of optimism about the benefits of currency unification into
the Euro as of year-end 1998. The reality was that economic growth in Europe
began 1998 at a modest pace and showed signs of stagnation by year-end. Even so,
the new European central bank postponed any reduction in interest rates in early
1999, probably because of a desire to build anti- inflationary credibility.
The U.S. economy over the last year grew at an impressively high rate despite
the economic weakness overseas. A major reason for this was that the negative
effects of foreign economic weakness on the traditional industrial sector were
offset by positive effects elsewhere in the economy. Low inflation and low
interest rates stimulated the housing and consumer sectors, while the technology
sector continued to expand.
The Federal Reserve Board eased monetary policy three times beginning on
September 30, 1998, lowering the Federal Funds rate from 5.50% to 4.75%. This
was not because of any shortfall in U.S. economic growth. Rather, it was a
response to the financial stresses that started with the Russian default in the
summer of 1998 and culminated in the liquidity crisis of an overleveraged hedge
fund in the September/October period. Despite widespread fears, the U.S. economy
never did slow. Long-term interest rates declined into early October, when fears
of financial crisis, deflation and possible economic recession were at their
greatest. However, long-term rates then drifted higher as the financial stresses
eased and the feared economic slowdown did not materialize.
Market Environment
So far in 1999, the environment for municipal securities has been favorable.
Investors continue to display a desire to add to their holdings of tax-exempt
bonds, while the available supply of new issues to date has slowed considerably
from last year's near record of $284 billion. In the current environment, it is
unlikely that this year's calendar will surpass last year's issuance. The
market's most recent adjustment to higher yields does not seem to have deterred
investor buying. This support for tax-exempt securities is best illustrated by
the relative performance of municipals to Treasuries. For much of 1998, the U.S.
Treasury market was well supported in the wake of global turmoil. Treasury
prices were bid sharply higher in the flight to safety, while municipal yields
became increasingly attractive. Historically, long-term high-grade municipals
have yielded 80% to 85% of the yields available on comparable Treasuries. During
the height of last year's turmoil, the ratio rose to 100%. In recent weeks this
ratio has fallen below 90%, as the rise in Treasury yields has outpaced that of
municipals. Much of the municipal market's support is directly attributable to
crossover buyers who "cross over" from
<PAGE>
purchasing taxable bonds to the cheaper municipals in order to capitalize at a
later date when the yield ratios normalize. Such a reversal could potentially
provide a large source of municipal supply for the market. This potential,
coupled with uncertainty regarding what the Federal Reserve Board's leaning is
on the economy's strength and interest rates, will keep the municipal market on
alert.
Portfolio Focus
Throughout the past six-month period, management of the fund continued to
emphasize securities transactions that it believed would enhance the portfolio's
principal value. While the market was not especially volatile during the period,
we exercised many opportunities to fine-tune the fund's holdings for the purpose
of improving total return potential. Often, the securities' sales we executed
resulted in realized capital gains. Nonetheless, because our outlook for the
municipal market continued to be positive throughout the period, our efforts in
managing the fund were designed to maximize the fund's total return performance.
In fact, to attain that objective, it was as important to focus on the structure
of the individual bonds held in the portfolio as on the sectors in which the
bond might be sited. For example, as the market's expectation of inflation's
rate of increase changed from time to time, the bond coupons preferred by the
marketplace also changed, and we bought and sold securities to adapt the
portfolio to the market's changing moods. Similarly, we adjusted portfolio
holdings so that the call features on the bonds held were, in our judgment, the
most advantageous in view of our market outlook. Our efforts are continually
directed toward attaining the income objectives of the fund's shareholders, via
the ownership of securities that will be sought by other buyers of municipal
securities.
Included in this report are detailed statements showing the fund's portfolio
holdings and financial condition: we hope that you find them informative. Please
know that we greatly appreciate your continued investment in the fund, as well
as your confidence in The Dreyfus Corporation.
Very truly yours,
/s/ Richard J. Moynihan
Director, Municipal Portfolio Management
The Dreyfus Corporation
March 18, 1999
New York, N.Y.
* Total return includes reinvestment of dividends and any capital gains
paid.
** Distribution rate per share is based upon dividends per share paid from net
investment income during the period (annualized), divided by the net asset
value per share at the end of the period, adjusted for any capital gain
distributions. Some income may be subject to the Federal Alternative Minimum
Tax (AMT) for certain shareholders.
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
Statement of Investments February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments--99.1% Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Alabama--2.5%
Alabama Housing Finance Authority, SFMR:
6.45%, 10/1/2025............................................................ $ 7,070,000 $ 7,541,710
6.10%, 10/1/2027............................................................ 9,915,000 10,504,645
Alabama Industrial Development Authority, SWDR (Pine City Fiber Co.)
6.45%, 12/1/2023............................................................ 23,000,000 24,275,580
Alabama Public School and College Authority,
Capital Improvement 4.25%, 11/1/2018 (Insured; FSA)......................... 20,000,000 18,145,600
Industrial Development Board of the Town of Courtland, SWDR
(Champion International Corp. Project)
7%, 11/1/2022............................................................... 8,100,000 8,758,530
The Industrial Development Board of the Town of McIntosh,
Environmental Facilities Refunding Revenue (Ciba Specialty Chemicals
Corp. Project)
5.375%, 6/1/2028............................................................ 8,855,000 8,996,414
Alaska--.5%
Alaska Housing Finance Corp.
(Collateralized Veterans Mortgage Program)
6.375%, 12/1/2027........................................................... 6,875,000 7,344,769
Anchorage, Electric Utility Revenue, Refunding
6.50%, 12/1/2015 (Insured; MBIA)............................................ 6,135,000 7,361,816
Arizona--1.1%
The Industrial Development Authority of the County of Apache, PCR, Refunding
(Tucson Electric Power Co. Project) 5.875%, 3/1/2033........................ 17,550,000 17,521,569
Pima County Industrial Development Authority, Industrial Revenue
(Tucson Electric Power Co. Project) 6%, 9/1/2029............................ 15,500,000 15,550,220
Arkansas--.7%
Little River County, Revenue, Refunding (Georgia-Pacific Corp. Project)
5.60%, 10/1/2026............................................................ 22,600,000 22,488,582
California--6.6%
Airport Commission City and County of San Francisco
(San Francisco International Airport):
6.50%, 5/1/2015 (Insured; FGIC)........................................... 10,100,000 11,346,138
4.50%, 5/1/2023 (Insured; MBIA)........................................... 25,000,000 23,305,500
4.50%, 5/1/2028 (Insured; MBIA)........................................... 16,000,000 14,789,120
Anaheim Public Financing Authority, LR (Public Improvement Project)
Zero Coupon, 9/1/2036 (Insured; FSA)........................................ 33,150,000 4,701,333
California 4.50%, 12/1/2021 (Insured; FGIC).................................... 20,000,000 18,661,400
California Higher Education Loan Authority, Inc.,
Student Loan Revenue, Refunding 6.50%, 6/1/2005............................. 19,250,000 20,983,270
California Statewide Communities Development Authority:
LR 8%, 10/1/2033 (a)........................................................ 20,750,000 21,877,555
Special Facilities Revenue 8.643%, 10/1/2034 (a)............................ 24,500,000 25,656,400
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
California (continued)
Department of Water and Power of The City of Los Angeles,
Water Works Revenue, Refunding 4.50%, 10/15/2024........................... $ 15,000,000 $ 13,850,850
Los Angeles, Wastewater System Revenue, Refunding
4%, 6/1/2014 (Insured; MBIA)............................................... 7,465,000 6,911,396
San Diego County, COP, Refunding (Interim Justice Facilities Project)
6.50%, 8/1/2007............................................................ 9,805,000 10,583,223
San Joaquin Hills Transportation Corridor Agency,
Toll Road Revenue, Refunding:
Zero Coupon, 1/15/2034 (Insured; MBIA)................................... 120,000,000 19,780,800
Zero Coupon, 1/15/2035 (Insured; MBIA)................................... 100,000,000 15,654,000
Colorado--1.9%
City of Colorado Springs, Utilities System Subordinate Lien Improvement
Revenue
4.75%, 11/15/2026.......................................................... 7,000,000 6,662,950
City and County of Denver:
Airport Revenue:
7.25%, 11/15/2023 (Prerefunded 11/15/2002) (b)........................... 6,390,000 7,286,134
7.25%, 11/15/2023........................................................ 19,375,000 21,384,575
Special Facilities Airport Revenue (United Airlines Project)
6.875%, 10/1/2032........................................................ 11,250,000 12,039,637
E-470 Public Highway Authority, Senior Revenue, Refunding
4.75%, 9/1/2023 (Insured; MBIA)............................................ 11,590,000 11,096,266
Connecticut--1.9%
Connecticut Development Authority, PCR, Refunding
(The Connecticut Light and Power Co. Project) 5.85%, 9/1/2028.............. 15,000,000 15,054,900
Connecticut Housing Finance Authority (Housing Mortgage Finance Program):
6.70%, 11/15/2012.......................................................... 3,295,000 3,577,349
6.30%, 5/15/2024........................................................... 7,240,000 7,659,775
6.50%, 5/15/2027........................................................... 3,845,000 4,111,843
Connecticut Resource Recovery Authority
(American Fuel Co. Project) 6.45%, 11/15/2022.............................. 7,325,000 7,792,335
Mashantucket Western Pequot Tribe, Special Revenue:
6.40%, 9/1/2011 (Prerefunded 9/1/2007) (b,c)............................... 9,170,000 10,770,257
6.40%, 9/1/2011 (c)........................................................ 9,330,000 10,330,549
Delaware--.5%
Delaware Economic Development Authority, Water Development Revenue
(Wilmington Suburban Water Corp. Project) 6.80%, 12/1/2023................. 8,000,000 8,559,040
Delaware Housing Authority, Senior SFMR
6.45%, 1/1/2026............................................................ 8,010,000 8,535,216
District of Columbia--3.2%
Metropolitan Washington Airports Authority, Airport System Revenue:
6.625%, 10/1/2012 (Insured; MBIA).......................................... 40,400,000 44,511,508
6.625%, 10/1/2019 (Insured; MBIA).......................................... 23,600,000 26,001,772
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
District of Columbia (continued)
Washington Convention Center Authority, Senior Lien Dedicated Tax Revenue
4.75%, 10/1/2028 (Insured; AMBAC)........................................... $ 32,000,000 $ 29,949,760
Florida--6.1%
Brevard County Housing Finance Authority, SFMR 6.80%, 3/1/2028................. 5,845,000 6,307,690
Florida Community Services Corp. Walton County, Water and Sewer Revenue
(South Walton County Regional Utility) 7%, 3/1/2018......................... 3,500,000 3,880,555
Florida State Board of Education, Public Education Capital Outlay
Refunding 4.50%, 6/1/2021................................................... 13,065,000 12,217,735
Florida State Department Juvenile Justice Lease Certificate
(185 Bed Juvenile Residential) 5.20%, 6/15/2019 (Insured; MBIA)............. 14,000,000 14,344,400
Florida, Department of Management Services, Florida Facilites Pool Revenue
4.50%, 9/1/2028 (Insured; FSA).............................................. 12,620,000 11,642,581
Florida Turnpike Authority, Turnpike Revenue
4.50%, 7/1/2028 (Insured; FSA) (d).......................................... 22,000,000 20,267,500
Gulf Breeze, Revenue (Capital Funding)
4.50%, 10/1/2027 (Insured; MBIA)............................................ 47,080,000 43,483,088
Orlando Utilities Commission, Water and Electric Revenue, Refunding
6.75%, 10/1/2017............................................................ 15,875,000 19,336,861
Palm Beach County, Solid Waste IDR:
(Okeelanta Power Limited Partnership Project) 6.70%, 2/15/2015 (e).......... 23,400,000 18,486,000
(Osceola Power Limited Partnership) 6.95%, 1/1/2022 (e)..................... 33,800,000 26,364,000
Polk County Industrial Development Authority, IDR
(IMC Fertilizer) 7.525%, 1/1/2015........................................... 15,200,000 16,474,976
Georgia--.3%
Georgia Housing and Finance Authority, Single Family Mortgage
6.55%, 12/1/2027............................................................ 9,440,000 10,055,866
Hawaii--.3%
Honolulu City and County Wastewater System Revenue
4.50%, 7/1/2028 (Insured; FGIC)............................................. 9,000,000 8,239,680
Idaho--.3%
Idaho Housing Agency, Multi-Family Housing Refunding
6.70%, 7/1/2024............................................................. 10,050,000 10,682,647
Illinois--4.9%
Chicago Board of Education:
(Chicago School Reform) Zero Coupon, 12/1/2028 (Insured; FGIC).............. 13,000,000 2,685,800
Refunding:
Zero Coupon, 12/1/2017 (Insured; FGIC).................................... 10,000,000 3,795,600
Zero Coupon, 12/1/2018 (Insured; FGIC).................................... 25,000,000 8,977,000
Chicago, Midway Airport Revenue
5%, 1/1/2031 (Insured; MBIA)................................................ 17,450,000 16,895,264
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Illinois (continued)
Chicago O'Hare International Airport, Revenue
Special Facilities (United Airlines Inc. Project):
5.35%, 9/1/2016........................................................... $ 10,850,000 $ 10,837,631
8.50%, 5/1/2018........................................................... 6,500,000 6,936,280
8.85%, 5/1/2018........................................................... 14,495,000 15,989,290
Illinois Development Finance Authority, Revenue
Pollution Control, Refunding (Central Illinois Public Service Co.)
6.375%, 1/1/2028............................................................ 14,000,000 14,930,160
Illinois Educational Facilities Authority, Revenue
(Illinois Institute of Technology)
Refunding 6.875%, 12/1/2015................................................. 7,250,000 8,237,160
Illinois Health Facilities Authority, Revenue, Refunding:
(Evangelical Hospitals) 6.50%, 4/15/2009 (Insured; FSA)..................... 5,000,000 5,893,500
(Mercy Hospital and Medical Center) 7%, 1/1/2015............................ 7,500,000 7,982,925
Illinois Housing Development Authority:
Homeowner Mortgage Revenue:
6.70%, 8/1/2025........................................................... 3,150,000 3,361,428
..6.625%, 8/1/2026.......................................................... 14,485,000 15,476,643
Multi-Family Housing (Lawndale Redevelopment Project) 6.90%, 12/1/2026...... 8,750,000 9,596,125
Multi-Family Program 6.75%, 9/1/2021........................................ 8,750,000 9,260,300
Section 8 Elderly Housing Revenue (Morningside North Development)
6.85%, 1/1/2021 (Prerefunded 1/1/2003) (b)................................ 11,220,000 12,578,069
Indiana--1.7%
Brownsburg School Building Corp., First Mortgage
6.10%, 2/1/2013 (Insured; FSA) (Prerefunded 2/1/2005) (b)................... 7,500,000 8,474,475
Indiana Health Facility Financing Authority, HR
(Clarian Health Partners, Inc.) 6%, 2/15/2021............................... 18,000,000 19,506,780
Indiana Transportation Finance Authority, Airport Facility LR
6.50%, 11/1/2007............................................................ 5,635,000 6,189,315
IPS School Building Corp., First Mortgage
6.10%, 1/15/2020 (Prerefunded 7/15/2004) (b)................................ 11,000,000 12,386,550
Logansport Multi-Purpose School Building Corp., First Mortgage Refunding
6%, 1/1/2009................................................................ 7,645,000 8,228,008
Iowa--.4%
Iowa Finance Authority, SFMR (Mortgage Backed Securities Program)
6.65%, 7/1/2028............................................................. 10,800,000 11,536,560
Kansas--1.1%
Wichita, HR 6.464%, 10/1/2022 (Insured; MBIA).................................. 31,300,000 34,334,222
Kentucky--2.4%
City of Ashland, Sewage and Solid Waste Revenue
(Ashland Inc. Project) 7.125%, 2/1/2022..................................... 13,170,000 14,862,345
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Kentucky (continued)
Carrollton and Henderson Public Energy Authority,
Gas Revenue (Kentucky Trust) 5%, 1/1/2009 (Insured; FSA).................... $ 13,000,000 $ 13,622,440
Kenton County Airport Board, Airport Revenue,
Special Facilities (Delta Airlines Project):
7.125%, 2/1/2021.......................................................... 8,455,000 9,095,889
6.125%, 2/1/2022.......................................................... 10,000,000 10,215,300
Mount Sterling, LR (Kentucky League Cities Funding)
6.10%, 3/1/2018............................................................. 7,955,000 9,015,401
Pendleton County, Multi-County LR
(Kentucky Associates Counties Leasing Trust Program) 6.50%, 3/1/2019........ 18,500,000 19,714,155
Louisiana--.9%
Parish of West Feliciana, PCR:
(Gulf States Utilities Co. Project) 9%, 5/1/2015............................ 13,500,000 14,519,790
(Gulf States Utilities-I) 7.70%, 12/1/2014.................................. 14,000,000 15,383,060
Maine--.7%
Maine Financial Authority, Solid Waste Revenue
Recycling Facilities (Great Northern Paper, Inc. Project-Bowater Inc. Obligor)
7.75%, 10/1/2022............................................................ 8,165,000 9,024,366
Maine Housing Authority, Mortgage Purchase
6.875%, 11/15/2023.......................................................... 12,320,000 13,376,933
Maryland--2.5%
Community Development Administration,
Department of Housing and Community Development State of Maryland:
6%, 7/1/2039.............................................................. 10,000,000 10,559,400
(Single Family Program):
6.80%, 4/1/2024......................................................... 33,400,000 35,301,128
6.55%, 4/1/2026......................................................... 9,190,000 9,879,985
6.75%, 4/1/2026......................................................... 19,990,000 21,463,463
Massachusetts--3.4%
Massachusetts Bay Transportation Authority, General Transportation System,
Refunding:
4.75%, 3/1/2021 (Insured; MBIA)............................................. 14,145,000 13,467,596
4.50%, 3/1/2026 (Insured; MBIA)............................................. 29,250,000 26,952,997
Massachusetts Health and Educational Facilities Authority, Revenue
(Brandeis University) 4.75%, 10/1/2028 (Insured; MBIA)...................... 14,050,000 13,271,630
Massachusetts Housing Finance Agency, Revenue:
Housing:
6.50%, 7/1/2025 (Insured; AMBAC).......................................... 4,140,000 4,466,191
6.60%, 1/1/2037 (Insured; AMBAC).......................................... 7,100,000 7,673,254
Single Family Housing:
7.125%, 6/1/2025.......................................................... 12,975,000 13,841,081
6.65%, 12/1/2027.......................................................... 7,200,000 7,759,368
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Massachusetts (continued)
Massachusetts Industrial Finance Agency, Revenue
Museum (Norman Rockwell Stockbridge) 8.125%, 7/1/2011....................... $ 2,825,000 $ 2,981,420
Massachusetts Turnpike Authority, Metropolitan Highway System Revenue
5.25%, 1/1/2029 (Insured; MBIA)............................................. 15,000,000 15,235,350
Michigan--2.7%
Charter County of Wayne, Special Airport Facilities Revenue, Refunding
(Northwest Airlines, Inc., Facilities) 6.75%, 12/1/2015..................... 8,775,000 9,557,642
Clarkston Community Schools 5.25%, 5/1/2023 (Insured; MBIA).................... 8,295,000 8,401,674
The Economic Development Corp. of the County of Gratiot,
Limited Obligation EDR
(Danly Die Set Project) 7.625%, 4/1/2007.................................... 3,200,000 3,446,944
Michigan Hospital Finance Authority, Revenue
Hospital, Refunding (Genesys Health System Obligated Group):
8.125%, 10/1/2021 (Prerefunded 10/1/2005) (b)............................. 15,000,000 18,810,900
7.50%, 10/1/2027 (Prerefunded 10/1/2005) (b).............................. 15,300,000 18,401,922
Michigan Housing Development Authority, SFMR
6.20%, 12/1/2027............................................................ 23,845,000 25,476,952
Minnesota--1.8%
Minnesota Housing Finance Agency, Single Family Mortgage:
6.90%, 7/1/2022............................................................. 6,410,000 6,848,508
6.50%, 7/1/2024............................................................. 15,755,000 16,777,657
6.45%, 7/1/2025............................................................. 30,210,000 32,095,406
Missouri--.4%
Missouri Higher Education Loan Authority, Student Loan Revenue
6.75%, 2/15/2009............................................................ 11,500,000 12,285,220
Nebraska--1.5%
Omaha Public Power District, Electric Revenue 5.50%, 2/1/2014.................. 44,800,000 48,738,816
Nevada--1.4%
Clark County, Industrial Development Revenue, Refunding
(Nevada Power Co. Project) 5.90%, 10/1/2030................................. 15,500,000 15,516,430
Nevada Housing Division (Single Family Program)
6.80%, 4/1/2027............................................................. 9,960,000 10,610,388
Washoe County:
Gas Facilities Revenue (Sierra Pacific Power Co. Project)
6.70%, 11/1/2032 (Insured; MBIA).......................................... 10,000,000 10,984,600
Gas and Water Facilities Revenue, Refunding (Sierra Pacific)
6.30%, 12/1/2014 (Insured; AMBAC)......................................... 5,375,000 5,845,420
New Hampshire--4.1%
Business Finance Authority of the State of New Hampshire:
PCR, Refunding (Public Service Co. of New Hampshire Project)
6%, 5/1/2021.............................................................. 15,500,000 15,575,640
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
New Hampshire (continued)
Business Finance Authority of the State of New Hampshire (continued):
State Guaranteed Airport Revenue (Manchester Airport Project):
6.50%, 1/1/2019........................................................... $ 12,600,000 $ 13,541,976
6.375%, 1/1/2022.......................................................... 8,650,000 9,243,909
New Hampshire Housing Finance Authority:
Multi-Family Housing:
7.55%, 7/1/2013........................................................... 4,205,000 4,814,977
(Mariners Village Project)
6.60%, 1/1/2038 (Insured; FHA).......................................... 7,365,000 7,879,666
Single Family Mortgage:
7.25%, 1/1/2016........................................................... 2,720,000 2,954,709
6.55%, 7/1/2026........................................................... 20,230,000 21,562,348
Single Family Residential Mortgage:
7.10%, 1/1/2023........................................................... 19,560,000 20,534,284
7.75%, 7/1/2023........................................................... 13,185,000 13,967,793
6.85%, 1/1/2025........................................................... 8,860,000 9,406,928
6.95%, 1/1/2026........................................................... 8,775,000 9,373,981
New Jersey--2.0%
New Jersey Economic Development Authority, PCR
(Public Service Electric and Gas Co. Project)
6.40%, 5/1/2032 (Insured; MBIA)............................................. 32,040,000 35,591,314
New Jersey Housing and Mortgage Finance Agency, Revenue:
6%, 11/1/2002............................................................... 5,000,000 5,198,100
6.45%, 11/1/2007............................................................ 15,260,000 16,333,846
Pollution Control Financing Authority of Salem County, PCR, Refunding
(Public Service Electric and Gas Co. Project)
6.25%, 6/1/2031 (Insured; MBIA)............................................. 6,500,000 7,235,540
New Mexico--.6%
Albuquerque, HR, Refunding (Presbyterian Health Care Services)
6.375%, 8/1/2007 (Insured; MBIA) ........................................... 4,500,000 4,940,685
New Mexico Educational Assistance Foundation, Student Loan Revenue
7.45%, 3/1/2010............................................................. 8,130,000 8,868,285
New Mexico Mortgage Financing Authority
6.80%, 1/1/2026............................................................. 5,500,000 6,288,700
New York--15.9%
Long Island Power Authority Electric System General Revenue:
5.50%, 12/1/2012 (Insured; FSA)............................................. 10,750,000 11,814,250
5.50%, 12/1/2029............................................................ 21,465,000 22,140,504
Metropolitan Transportation Authority (Dedicated Tax Fund)
4.50%, 4/1/2018 (Insured; FGIC)............................................. 8,800,000 8,288,104
New York City:
7.50%, 2/1/2003............................................................. 9,000,000 9,999,180
7.25%, 8/15/2007............................................................ 13,790,000 16,673,765
6.375%, 8/15/2011 (Prerefunded 8/15/2005) (b)............................... 6,565,000 7,518,960
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
New York (continued)
New York City (continued):
6.375%, 8/15/2011........................................................... $ 24,720,000 $ 27,777,370
5.75%, 2/1/2014............................................................. 25,055,000 26,844,178
5.75%, 2/1/2015............................................................. 18,145,000 19,351,824
5.75%, 2/1/2017............................................................. 22,500,000 23,914,350
5.875%, 3/15/2018........................................................... 23,000,000 24,717,870
5.875%, 2/15/2019........................................................... 23,715,000 25,472,519
6%, 2/1/2022................................................................ 12,750,000 13,876,590
5.875%, 8/1/2024............................................................ 23,510,000 25,343,780
6.125%, 8/1/2025............................................................ 22,625,000 24,925,284
New York State Dormitory Authority:
LR (Municipal Health Facilities Improvement Program)
4.75%, 1/15/2029 (Insured; FSA)........................................... 9,000,000 8,538,840
Revenue:
(City University) 7.50%, 7/1/2010......................................... 10,000,000 12,150,900
(New York and Presbyterian Hospital) Refunding
4.75%, 8/1/2027 (Insured; AMBAC)........................................ 38,750,000 36,696,637
(State University Educational Facilities)
4.75%, 5/15/2028........................................................ 45,075,000 42,265,926
New York State Energy, Research and Development Authority,
Electric Facilities Revenue (Con Edison Co. Project)
7.50%, 1/1/2026............................................................. 15,000,000 15,623,850
New York State Housing Finance Agency, Revenue, Refunding (Housing Project
Mortgage)
6.125%, 11/1/2020 (Insured; FSA)............................................ 11,960,000 12,930,195
New York State Local Government Assistance Corp., Refunding:
5.25%, 4/1/2016 (Insured; AMBAC)............................................ 10,000,000 10,526,300
4.375%, 4/1/2018 (Insured; FGIC)............................................ 11,175,000 10,347,603
New York State Mortgage Agency, Revenue (Homeowner Mortgage)
6.65%, 10/1/2025............................................................ 21,610,000 23,459,600
Port Authority of New York and New Jersey, Refunding:
4.25%, 10/1/2026 (Insured; FGIC)............................................ 32,850,000 29,114,955
4.375%, 10/1/2033 (Insured; FGIC)........................................... 7,995,000 7,134,258
North Carolina--1.2%
City of Charlotte, Charlotte/Douglas International Airport,
Special Facility Refunding Revenue (US Airways, Inc. Project)
5.60%, 7/1/2027............................................................. 12,280,000 12,090,397
North Carolina Housing Finance Agency, Single Family Revenue
6.50%, 9/1/2026............................................................. 5,980,000 6,394,354
Pitt County, Revenue (Pitt County Memorial Hospital)
6.90%, 12/1/2021 (Prerefunded 12/1/2001) (b)................................ 12,000,000 13,311,840
Winston Salem, COP 6.90%, 6/1/2011 (Prerefunded 6/1/2001) (b................... 5,245,000 5,736,771
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
North Dakota--.2%
North Dakota Housing Finance Agency
(Housing Mortgage Finance Program) 6.75%, 7/1/2025.......................... $ 5,845,000 $ 6,269,230
Ohio--1.6%
Cleveland, Airport Revenue Special (Continental Airlines Inc. Project)
5.375%, 9/15/2027........................................................... 27,600,000 26,834,100
Cuyahoga County, HR (Meridia Health System)
7%, 8/15/2023 (Prerefunded 8/15/2001) (b)................................... 7,000,000 7,721,630
Ohio Turnpike Commission, Turnpike Revenue 4.50%, 2/15/2024 (Insured; FGIC).... 17,580,000 16,298,594
Oklahoma--1.0%
Claremore Industrial and Redevelopment Authority, EDR
(Yuba Project) 8.375%, 7/1/2011............................................. 7,500,000 8,034,600
Southern Oklahoma Memorial Hospital Authority, HR
6.60%, 12/1/2012 (Prerefunded 12/1/2002) (b)................................ 5,725,000 6,392,993
Tulsa Municipal Airport Trust, Revenue
(AMR Corp.) 7.60%, 12/1/2030................................................ 14,390,000 15,624,806
Pennsylvania--1.0%
Delaware County Industrial Development Authority, Water Facilities Revenue
(Philadelphia Suburban Water) 6.35%, 8/15/2025 (Insured; FGIC).............. 10,000,000 11,121,500
Geisinger Authority, Health System Revenue
(Penn State Geisinger Health System) 5%, 8/15/2028.......................... 6,890,000 6,608,130
Quakertown General Authority, Revenue (Community Mental Health/Retardation)
8.875%, 11/1/2010........................................................... 3,615,000 3,870,797
Saint Mary Hospital Authority (Bucks County) Revenue
(Catholic Health Initiatives) 5%, 12/1/2028................................. 10,125,000 9,723,037
Rhode Island--1.2%
Rhode Island Housing and Mortgage Finance Corp.
(Homeownership Opportunity):
6.95%, 4/1/2022........................................................... 9,215,000 9,899,214
6.60%, 10/1/2025.......................................................... 10,210,000 10,907,751
6.50%, 4/1/2027........................................................... 11,835,000 12,485,925
6.85%, 4/1/2027........................................................... 3,525,000 3,677,139
South Carolina--3.1%
Piedmont Municipal Power Agency, Electric Revenue, Refunding:
5.25%, 1/1/2021............................................................. 10,000,000 9,579,500
6.60%, 1/1/2021............................................................. 24,650,000 24,710,392
4.75%, 1/1/2025 (Insured; MBIA)............................................. 31,550,000 29,993,638
Richland County, Solid Waste Disposal Facilities Revenue
(Union Camp Corp. Project) 7.125%, 9/1/2021................................. 6,250,000 6,791,563
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
South Carolina (continued)
South Carolina Housing Finance and Development Authority,
Mortgage Revenue:
6.55%, 7/1/2015........................................................... $ 3,950,000 $ 4,240,167
6.75%, 7/1/2026........................................................... 6,270,000 6,716,048
6.70%, 7/1/2027........................................................... 6,770,000 7,275,516
South Carolina Transporation Infrastructure Bank Revenue
4.50%, 10/1/2016 (Insured; MBIA)............................................ 7,000,000 6,668,060
Tennessee--.8%
Montgomery County Health, Educational and Housing Facility Board,
HR, Refunding and Improvement (Clarksville Regional Health System)
5.375%, 1/1/2018............................................................ 3,250,000 3,194,588
Tennessee Housing Development Agency, Mortgage Finance
6.55%, 7/1/2026............................................................. 19,740,000 21,159,898
Texas--8.3%
Alliance Airport Authority Inc., Special Facilities Revenue:
9.50%, 4/1/2021 (a)......................................................... 28,035,000 32,644,515
(American Airlines Inc. Project) 7%, 12/1/2011.............................. 12,330,000 14,557,908
Angelina and Neches River Authority, SWDR (Champion International Corp.
Project)
7.375%, 5/1/2015............................................................ 5,570,000 6,035,485
Austin Independent School District (Permanent School Fund Guaranteed)
4.50%, 8/1/2018............................................................. 14,200,000 13,331,812
Bell County Health Facilities Development Corp., Retirement Facility Revenue
(Buckner Retirement Services, Inc. Obligated Group Project)
5.25%, 11/15/2028........................................................... 25,000,000 24,141,250
Gulf Coast Waste Disposal Authority, Revenue:
(Champion International Corp.) 7.375%, 10/1/2025............................ 12,000,000 13,075,920
Solid Waste Disposal (Occidental Petroleum Corp. Project) 7%, 11/1/2020..... 7,725,000 8,361,154
Harris County Hospital District, Mortgage Revenue, Refunding
7.40%, 2/15/2010 (Insured; AMBAC)........................................... 8,355,000 10,107,043
Houston Hotel Occupancy Tax, Revenue 7%, 7/1/2009 (Insured; FGIC)
(Prerefunded 7/1/2001) (b).................................................. 12,225,000 13,207,646
Houston Independent School District (Permanent School Fund Guaranteed)
Refunding 4.75%, 2/15/2026.................................................. 25,000,000 23,672,500
Houston, Water and Sewer System Revenue, Refunding (Junior Lein)
Zero Coupon, 12/1/2026 (Insured; FSA)....................................... 100,520,000 23,825,250
Lower Colorado River Authority, Revenue (Junior Lein - Seventh Supply)
4.75%, 1/1/2028 (Insured; FSA).............................................. 14,000,000 13,252,960
Rio Grande Valley Health Facilities Development Corp., HR, Refunding
(Valley Baptist Medical Center Project) 6.40%, 8/1/2016 .................... 11,200,000 12,258,288
Tarrant County Health Facilities Development Corp., Health System Revenue,
Refunding (Texas Health Resources System) 5.75%, 2/15/2014 (Insured; MBIA).. 9,470,000 10,449,387
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Texas (continued)
Texas, GO (Veterans Housing Assistance Fund):
7%, 12/1/2025............................................................... $ 9,295,000 $ 10,057,841
Refunding 6.45%, 12/1/2020.................................................. 15,210,000 16,345,122
Texas Public Property Finance Corp., Revenue
(Mental Health and Retardation Project)
8.75%, 11/1/2010............................................................ 4,745,000 4,979,688
Texas Turnpike Authority, Dallas North Thruway Revenue
(President George Bush Turnpike) 5.25%, 1/1/2023 (Insured; FGIC)............ 8,725,000 8,844,533
Utah--1.9%
Carbon County, SWDR, Refunding (Sunnyside Cogeneration) 9.25%, 7/1/2018 (e).... 20,000,000 12,004,000
Intermountain Power Agency, Power Supply Revenue, Refunding
6.15%, 7/1/2014 (Insured; MBIA)............................................. 15,000,000 16,844,550
Tooele County, Hazardous Waste Treatment Revenue
(Union Pacific Project) 5.70%, 11/1/2026.................................... 13,500,000 13,387,275
Utah Housing Finance Agency, Single Family Mortgage:
6.55%, 1/1/2022............................................................. 3,535,000 3,773,259
6.40%, 1/1/2027............................................................. 5,765,000 6,140,820
6.65%, 7/1/2027............................................................. 6,595,000 7,078,545
7%, 7/1/2027................................................................ 1,940,000 2,084,297
Vermont--.4%
Vermont Housing Finance Agency, Single Family Housing 6.875%, 5/1/2025......... 10,500,000 11,154,360
Virginia--1.4%
Giles County Industrial Development Authority,
Solid Waste Disposal Facility Revenue (Hoechst Celanese Corp. Project)
6.625%, 12/1/2022........................................................... 8,715,000 9,326,880
Virginia Housing Development Authority, Commonwealth Mortgage:
6.70%, 1/1/2022............................................................. 6,950,000 7,393,202
6.40%, 7/1/2022 (Insured; MBIA)............................................. 24,000,000 25,847,280
Washington--.8%
Central Puget Sound Regional Transit Authority, Sales Tax Motor Vehicle
Excise Tax Revenue 4.75%, 2/1/2028 (Insured; FGIC).......................... 16,500,000 15,524,025
Public Utility District No. 1 of Chelan County,
Chelan Hydro Consolidated System Revenue 6.55%, 7/1/2023.................... 10,000,000 10,898,500
West Virgina--.3%
Braxton County, Solid Waste Disposal Revenue (Weyerhaeuser Co. Project)
6.50%, 4/1/2025............................................................. 8,000,000 8,722,000
Wisconsin--.3%
Madison, IDR (Madison Gas and Electric Co. Project)
6.75%, 4/1/2027............................................................. 10,000,000 10,809,900
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Investments (continued) February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Principal
Long-Term Municipal Investments (continued) Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Wyoming--1.1%
Sweetwater County:
PCR, Refunding (Idaho Power Co. Project) 6.05%, 7/15/2026................... $ 17,000,000 $ 18,093,780
SWDR (FMC Corp. Project) 6.90%, 9/1/2024.................................... 16,225,000 17,768,809
U.S. Related--.2%
Commonwealth of Puerto Rico, Public Improvement
5.25%, 7/1/2016............................................................. 5,500,000 5,772,250
---------------
TOTAL LONG-TERM MUNICIPAL INVESTMENTS
(cost $2,971,033,631)....................................................... $3,109,132,456
===============
</TABLE>
<TABLE>
<CAPTION>
Principal
Short-Term Municipal Investments--.2% Amount Value
- ------------------------------------------------------------------------------- -------------- -------------
<S> <C> <C>
Michigan--.0%
Midland County Economic Development Corp., Economic Development Ltd.
Obligation Revenue, VRDN (Dow Chemical Co. Project) 3.25% (f)............... $ 1,500,000 $ 1,500,000
Minnesota--.1%
City of Wadena, IDR, VRDN (Homecrest Industries Inc. Project)
3.10% (LOC; U.S. Bank National Association) (f)............................. 3,100,000 3,100,000
Pennsylvania--.1%
Schuylkill County Industrial Development Authority, RRR, Refunding
VRDN (Northeastern Power Co.) 3.20% (LOC; Credit Local De France) (f)....... 3,400,000 3,400,000
---------------
TOTAL SHORT-TERM MUNICIPAL INVESTMENTS
(cost $8,000,000)........................................................... $ 8,000,000
===============
TOTAL INVESTMENTS
(cost $2,979,033,631)....................................................... 99.3% $ 3,117,132,456
------ ---------------
---------------
CASH AND RECEIVABLES (NET)..................................................... .7% $ 21,201,870
------ ---------------
------ ---------------
NET ASSETS..................................................................... 100.0% $ 3,138,334,326
====== ===============
</TABLE>
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Summary of Abbreviations
<TABLE>
<S> <C> <C> <C>
AMBAC American Municipal Bond Assurance Corporation IDR Industrial Development Revenue
COP Certificate of Participation LOC Letter of Credit
EDR Economic Development Revenue LR Lease Revenue
FGIC Financial Guaranty Insurance Company MBIA Municipal Bond Investors Assurance
FHA Federal Housing Administration Insurance Corporation
FSA Financial Security Assurance PCR Pollution Control Revenue
GO General Obligation RRR Resources Recovery Revenue
HR Hospital Revenue SFMR Single Family Mortgage Revenue
SWDR Solid Waste Disposal Revenue
VRDN Variable Rate Demand Notes
</TABLE>
Summary of Combined Ratings (Unaudited)
- ------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Fitch or Moody's or Standard & Poor's Percentage of Value
- ---- -------- ------------------ --------------------
AAA Aaa AAA 38.0%
AA Aa AA 21.5
A A A 19.5
BBB Baa BBB 12.6
BB Ba BB 2.3
B B B 1.1
F1 MIG1/P1 SP1/A1 .2
Not Rated (g) Not Rated (g) Not Rated (g) 4.8
-------
100.0%
=======
Notes to Statement of Investments:
- ------------------------------------------------------------------------------
<FN>
(a) Inverse floater security-the interest rate is subject to change
periodically.
(b) 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.
(c) Security exempt from registration under Rule 144A of the Securities Act of
1933. These securities may be resold in transactions exempt from
registration, normally to qualified institutional buyers. At February 28,
1999, these securities amounted to $21,100,806 or .7% of net assets.
(d) Purchased on a delayed delivery basis.
(e) Non-income producing security; interest payment in default.
(f) Securities payable on demand. Variable interest rate-subject to periodic
change.
(g) Securities which, while not rated by Fitch, Moody's and Standard & Poor's
have been determined by the Manager to be of comparable quality to those
rated securities in which the Fund may invest.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Assets and Liabilities February 28, 1999 (Unaudited)
<TABLE>
<CAPTION>
Cost Value
--------------- ---------------
<S> <C> <C> <C>
ASSETS: Investments in securities--See Statement of Investments........ $2,979,033,631 $3,117,132,456
Cash........................................................... 5,388,618
Interest receivable............................................ 43,725,668
Receivable for investment securities sold...................... 14,113,315
Receivable for shares of Common Stock subscribed............... 210
Prepaid expenses............................................... 195,541
----------------
3,180,555,808
----------------
LIABILITIES: Due to The Dreyfus Corporation and affiliates.................. 1,264,703
Payable for investment securities purchased.................... 39,346,312
Payable for shares of Common Stock redeemed.................... 631,311
Accrued expenses............................................... 979,156
----------------
42,221,482
----------------
NET ASSETS...................................................................... $3,138,334,326
================
REPRESENTED BY: Paid-in capital................................................ $2,984,107,793
Accumulated undistributed investment income--net 849,823
Accumulated net realized gain (loss) on investments 15,277,885
Accumulated net unrealized appreciation (depreciation)
on investments--Note 4....................................... 138,098,825
----------------
NET ASSETS...................................................................... $3,138,334,326
================
SHARES OUTSTANDING
(600 million shares of $.01 par value Common Stock authorized).................. 250,510,940
NET ASSET VALUE, offering and redemption price per share--Note 3(d)............. $12.53
======
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Operations Six Months Ended February 28, 1999 (Unaudited)
<TABLE>
INVESTMENT INCOME
<S> <C> <C> <C>
INCOME Interest Income. ..................................... $ 90,669,264
EXPENSES: Management fee--Note 3(a)............................... $ 9,660,535
Shareholder servicing costs--Note 3(b).................. 1,833,786
Custodian fees......................................... 77,129
Registration fees...................................... 46,954
Directors' fees and expenses--Note 3(c)................. 36,509
Prospectus and shareholders' reports................... 35,274
Professional fees...................................... 24,591
Loan commitment fees--Note 2............................ 7,443
Miscellaneous.......................................... 34,093
--------------
Total Expenses.................................... 11,756,314
Less--reduction in management fee due to
undertaking--Note 3(a)................................ (27,601)
--------------
Net Expenses........................................... 11,728,713
--------------
INVESTMENT INCOME--NET.......................................................... 78,940,551
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--Note 4:
Net realized gain (loss) on investments................ $ 29,848,255
Net unrealized appreciation (depreciation)
on investments....................................... (56,002,071)
---------------
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS......................... (26,153,816)
--------------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS........................... $ 52,786,735
==============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
Statement of Changes in Net Assets
<TABLE>
<CAPTION>
Six Months Ended
February 28, 1999 Year Ended
(Unaudited) August 31, 1998
----------------- ----------------
<S> <C> <C>
OPERATIONS:
Investment income--net..................................................... $ 78,940,551 $ 169,772,612
Net realized gain (loss) on investments.................................... 29,848,255 49,477,334
Net unrealized appreciation (depreciation) on investments.................. (56,002,071) 53,807,416
--------------- ---------------
Net Increase (Decrease) in Net Assets Resulting from Operations...... 52,786,735 273,057,362
--------------- ---------------
DIVIDENDS TO SHAREHOLDERS FROM:
Investment income--net..................................................... (78,090,728) (170,739,421)
Net realized gain on investments........................................... (57,678,882) (18,847,051)
--------------- ---------------
Total Dividends..................................................... (135,769,610) (189,586,472)
--------------- ---------------
CAPITAL STOCK TRANSACTIONS:
Net proceeds from shares sold.............................................. 464,815,258 1,928,492,791
Dividends reinvested....................................................... 89,968,311 118,802,455
Cost of shares redeemed.................................................... (668,449,739) (2,250,558,450)
--------------- ---------------
Increase (Decrease) in Net Assets from Capital Stock Transactions... (113,666,170) (203,263,204)
--------------- ---------------
Total Increase (Decrease) in Net Assets......................... (196,649,045) (119,792,314)
NET ASSETS:
Beginning of Period........................................................ 3,334,983,371 3,454,775,685
--------------- ---------------
End of Period.............................................................. $ 3,138,334,326 $ 3,334,983,371
=============== ===============
Undistributed investment income--net.......................................... $ 849,823 --
--------------- ---------------
Shares Shares
--------------- ---------------
CAPITAL SHARE TRANSACTIONS:
Shares sold ............................................................... 36,526,849 152,496,991
Shares issued for dividends reinvested..................................... 7,096,451 9,353,598
Shares redeemed............................................................ (52,559,700) (177,759,994)
--------------- ---------------
Net Increase (Decrease) in Shares Outstanding......................... (8,936,400) (15,909,405)
=============== ===============
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
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>
Six Months Ended
February 28, 1999 Year Ended August 31,
-------------------------------------------------------
PER SHARE DATA: (Unaudited) 1998 1997 1996 1995 1994
---------- ------- ------- ------- ------- -------
<S> <C> <C> <C> C> <C> <C>
Net asset value, beginning of period...... $12.85 $12.55 $12.23 $12.41 $12.39 $13.68
------ ------ ------ ------ ------ ------
Investment Operations:
Investment income--net.................... .31 .64 .67 .69 .72 .75
Net realized and unrealized gain (loss)
on investments.......................... (.10) .37 .33 (.18) .09 (.96)
------ ------ ------ ------ ------ ------
Total from Investment Operations.......... .21 1.01 1.00 .51 .81 (.21)
------ ------ ------ ------ ------ ------
Distributions:
Dividends from investment income--net..... (.31) (.64) (.67) (.69) (.72) (.75)
Dividends from net realized
gain on investments..................... (.22) (.07) (.01) -- (.07) (.33)
------ ------ ------ ------ ------ ------
Total Distributions....................... (.53) (.71) (.68) (.69) (.79) (1.08)
------ ------ ------ ------ ------ ------
Net asset value, end of period............ $12.53 $12.85 $12.55 $12.23 $12.41 $12.39
====== ====== ====== ====== ====== ======
TOTAL INVESTMENT RETURN...................... 3.15%(1) 8.36% 8.24% 4.16% 6.93% (1.63%)
RATIOS/SUPPLEMENTAL DATA:
Ratio of expenses to average net assets... .73%(1) .73% .71% .71% .70% .68%
Ratio of net investment income to average
net assets.............................. 4.90%(1) 5.04% 5.39% 5.57% 5.94% 5.80%
Decrease reflected in above expense ratios
due to undertakings by the Manager...... .00%(1,2) .01% -- -- -- --
Portfolio Turnover Rate................... 31.74%(3) 63.07% 66.89% 64.48% 51.55% 36.25%
Net Assets, end of period (000's Omitted) $3,138,334 $3,334,983 $3,454,776 $3,572,286 $3,936,734 $4,008,477
- -------------------
<FN>
(1) Annualized.
(2) Amount represents less than .01%.
(3) Not annualized.
</FN>
</TABLE>
See notes to financial statements.
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus Municipal Bond Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended (the "Act"), as a diversified
open-end management investment company. The Fund's investment objective is to
provide investors with as high a level of current income exempt from Federal
income tax as is consistent with the preservation of capital. The Dreyfus
Corporation (the "Manager") serves as the Fund's investment adviser. The Manager
is a direct subsidiary of Mellon Bank, N.A. Premier Mutual Fund Services, Inc.
is the distributor of the Fund's shares, which are sold to the public without a
sales charge.
The Fund's financial statements are prepared in accordance with generally
accepted accounting principles which may require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities (excluding 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
Directors. 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. 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. Under the terms of the custody
agreement, the Fund receives net earnings credits based on available cash
balances left on deposit.
(c) Dividends 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.
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(d) 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--Bank Line of Credit:
The Fund participates with other Dreyfus-managed funds in a $600 million
redemption credit facility ("Facility") to be utilized for temporary or
emergency purposes, including the financing of redemptions. In connection
therewith, the Fund has agreed to pay commitment fees on its pro rata portion of
the Facility. Interest is charged to the Fund at rates based on prevailing
market rates in effect at the time of borrowings. During the period ended
February 28, 1999, the Fund did not borrow under the Facility.
NOTE 3--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement ("Agreement") with the Manager, the
management fee is computed at the annual rate of .60 of 1% of the value of the
Fund's average daily net assets and is payable monthly. The Manager had
undertaken from September 1, 1998 through February 28, 1999 to reduce the
management fees paid by, or reimburse such excess expenses of the Fund, to the
extent that the Fund's aggregate annual expenses (excluding taxes, brokerage,
interest on borrowings, commitment fees and extraordinary expenses) exceeded an
annual rate of .74 of 1% of the value of the Fund's average daily net assets.
The reduction in management fee, pursuant to the undertaking, amounted to
$27,601 during the period ended February 28, 1999.
(b) Under the Shareholder Services Plan, the Fund reimburses Dreyfus Service
Corporation, a wholly-owned subsidiary of the Manager, an amount not to exceed
an annual rate of .25 of 1% of the value of the Fund's average daily net assets
for certain allocated expenses of providing personal services and/or maintaining
shareholder accounts. 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. During the period ended
February 28, 1999, the Fund was charged $1,103,974 pursuant to the Shareholder
Services Plan.
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. During the period
ended February 28, 1999, the Fund was charged $479,180 pursuant to the transfer
agency agreement.
(c) 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 the Director Emeritus receives 50% of such compensation.
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
- ------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
(d) A .10% redemption fee is charged and retained by the Fund on shares
redeemed within fifteen days of their issuance, including on redemptions made
through the use of the Fund Exchanges privilege. During the period ended
February 28, 1999, redemption fees retained by the Fund amounted to $63,012.
NOTE 4--Securities Transactions:
The aggregate amount of purchases and sales of investment securities,
excluding short-term securities, during the period ended February 28, 1999
amounted to $1,020,742,380 and $1,155,651,029, respectively.
At February 28, 1999, accumulated net unrealized appreciation on investments
was $138,098,825, consisting of $167,864,905 gross unrealized appreciation and
$29,766,080 gross unrealized depreciation.
At February 28, 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).
<PAGE>
Dreyfus Municipal Bond Fund, Inc.
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
90 Washington Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Printed in U.S.A. 054SA992
