August 4, 1994
DREYFUS CALIFORNIA TAX EXEMPT MONEY MARKET FUND
Supplement to Prospectus dated July 15, 1994
I. PROPOSED MERGER OF THE DREYFUS CORPORATION
The Fund's adviser, The Dreyfus Corporation ("Dreyfus"), has entered
into an Agreement and Plan of Merger providing for the merger (the
"Merger") of Dreyfus with a subsidiary of Mellon Bank, N.A. ("Mellon").
Following the Merger, it is planned that Dreyfus will be a direct
subsidiary of Mellon. Closing of the Merger is subject to a number of
contingencies, including approvals of the stockholders of Dreyfus and of
Mellon. The Merger is expected to occur in late August 1994, but could
occur significantly later.
The Merger will result in the automatic termination of the Fund's
current investment advisory agreement with Dreyfus, as required by the
Investment Company Act of 1940, as amended.
II. RESULTS OF FUND SHAREHOLDER VOTE
The following information supplements and supersedes any contrary
information contained in the Fund's Prospectus.
On August 4, 1994, the Fund's shareholders voted to (a) approve a new
investment advisory agreement with Dreyfus to become effective upon
consummation of the Merger and (b) change certain of the Fund's
fundamental policies and investment restrictions to permit the Fund to (i)
borrow money from banks for temporary or emergency (not leveraging)
purposes in an amount up to 15% of the value of the Fund's total assets,
(ii) pledge its assets to the extent necessary to secure permitted
borrowings and make such policy non-fundamental, and (iii) invest up to
10% of the value of its net assets in illiquid securities and make such
policy non-fundamental.
III. REVISED MANAGEMENT POLICIES
The following information supplements and should be read in
conjunction with the section in the Fund's Prospectus entitled
"Description of the Fund--Management Policies."
Borrowing Money--As a fundamental policy, the Fund is permitted to
borrow money only from banks for temporary or emergency (not leveraging)
purposes, in an amount up to 15% of the value of the Fund's total assets
(including the amount borrowed) valued at the lesser of cost or market,
less liabilities (not including the amount borrowed) at the time the
borrowing is made. While borrowings exceed 5% of the Fund's total assets,
the Fund will not make any additional investments.
Illiquid Securities--The Fund may invest up to 10% of the value of
its net assets in securities as to which a liquid trading market does not
exist, provided such investments are consistent with the Fund's investment
objective. Such securities may include securities that are not readily
marketable, such as certain securities that are subject to legal or
contractual restrictions on resale and repurchase agreements providing for
settlement in more than seven days after notice. As to these securities,
the Fund is subject to a risk that should the Fund desire to sell them
when a ready buyer is not available at a price the Fund deems
representative of their value, the value of the Fund's net assets could be
adversely affected.
August 4, 1994
DREYFUS CALIFORNIA TAX EXEMPT MONEY MARKET FUND
Supplement to the Statement of Additional Information
Dated July 15, 1994
At a meeting of Fund shareholders held on August 4, 1994,
shareholders approved new Investment Restrictions numbered 2, 3 and 6
below which supersede and replace the Fund's current Investment
Restrictions numbered 2, 3 and 6 in the section in the Fund's Statement of
Additional Information entitled "Investment Objective and Management
Policies--Investment Restrictions." Investment Restriction number 2 below
is a fundamental policy. This restriction cannot be changed without
approval by the holders of a majority (as defined in the Investment
Company Act of 1940, as amended (the "Act")) of the Fund's outstanding
voting shares. Investment Restrictions numbered 3 and 6 below are not
fundamental policies and may be changed by vote of a majority of the
Fund's Board members at any time. The Fund may not:
2. Borrow money, except from banks for temporary or emergency (not
leveraging) purposes in an amount up to 15% of the value of the Fund's
total assets (including the amount borrowed) based on the lesser of cost
or market, less liabilities (not including the amount borrowed) at the
time the borrowing is made. While borrowings exceed 5% of the value of
the Fund's total assets, the Fund will not make any additional
investments.]
3. Pledge, mortgage, hypothecate or otherwise encumber its assets,
except to the extent necessary to secure permitted borrowings.
* * *
6. Enter into repurchase agreements providing for settlement in more
than seven days after notice or purchase securities which are
illiquid if, in the aggregate, more than 10% of the value of the
Fund's net assets would be so invested.
The following information supplements and should be read in
conjunction with the section in the Fund's Statement of Additional
Information entitled "Investment Objective and Management Policies."
Illiquid Securities. When purchasing securities that have not been
registered under the Securities Act of 1933, as amended, and are not
readily marketable, the Fund will endeavor to obtain the right to
registration at the expense of the issuer. Generally, there will be a
lapse of time between the Fund's decision to sell any such security and
the registration of the security permitting sale. During any such period,
the price of the securities will be subject to market fluctuations.
However, if a substantial market of qualified institutional buyers
develops pursuant to Rule 144A under the Securities Act of 1933, as
amended, for certain unregistered securities held by the Fund, the Fund
intends to treat such securities as liquid securities in accordance with
procedures approved by the Fund's Board. Because it is not possible to
predict with assurance how the market for restricted securities pursuant
to Rule 144A will develop, the Fund's Board has directed the Manager to
monitor carefully the Fund's investments in such securities with
particular regard to trading activity, availability of reliable price
information and other relevant information. To the extent that, for a
period of time, qualified institutional buyers cease purchasing restricted
securities pursuant to Rule 144A, the Fund's investing in such securities
may have the effect of increasing the level of illiquidity in the Fund's
portfolio during such period.
