April 23, 1997
DREYFUS GNMA FUND, INC.
SUPPLEMENT TO PROSPECTUS
DATED SEPTEMBER 2, 1996
THE FOLLOWING INFORMATION SUPERSEDES THE INFORMATION CONTAINED IN THE
SECTION OF THE FUND'S PROSPECTUS ENTITLED "APPENDIX -- INVESTMENT
TECHNIQUES."
FORWARD COMMITMENTS -- The Fund may purchase or sell Ginnie Maes on a
forward commitment, when-issued or delayed delivery basis, which means that
delivery and payment take place a number of days after the date of the
commitment to purchase or sell the securities at a predetermined price and/or
yield. Typically, no interest accrues to the purchaser until the security is
delivered. When purchasing a security on a forward commitment basis, the Fund
assumes the rights and risks of ownership of the security, including the risk
of price and yield fluctuations, and takes such fluctuations into account when
determining its net asset value. Because the Fund is not required to pay for
these securities until the delivery date, these risks are in addition to the
risks associated with the Fund's other investments. If the Fund is fully or
almost fully invested when forward commitment purchases are outstanding, such
purchases may result in a form of leverage. The Fund intends to engage in
forward commit ments to increase its portfolio's financial exposure to the
types of securities in which it invests. Leveraging the portfolio in this
manner will increase the Fund's exposure to changes in interest rates and will
increase the volatility of its returns. A segregated account of the Fund
consisting of permissible liquid assets at least equal at all times to the
amount of the Fund's purchase commitments will be established and maintained
at the Fund's custodian bank. At no time will the Fund have more than 33 1\3%
of its assets committed to purchase securities on a forward commitment basis.
265s042297
