Dreyfus California
Tax Exempt Money Market Fund
SEMIANNUAL REPORT September 30, 2000
(reg.tm)
The views expressed herein are current to the date of this report. These views
and the composition of the fund's portfolio are subject to change at any time
based on market and other conditions.
* Not FDIC-Insured * Not Bank-Guaranteed * May Lose Value
Contents
THE FUND
--------------------------------------------------
2 Letter from the President
3 Discussion of Fund Performance
6 Statement of Investments
11 Statement of Assets and Liabilities
12 Statement of Operations
13 Statement of Changes in Net Assets
14 Financial Highlights
15 Notes to Financial Statements
FOR MORE INFORMATION
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Back Cover
The Fund
Dreyfus California
Tax Exempt Money Market Fund
LETTER FROM THE PRESIDENT
Dear Shareholder:
We are pleased to present this semiannual report for Dreyfus California
Tax-Exempt Money Market Fund, covering the six-month period from April 1, 2000
through September 30, 2000. Inside, you'll find valuable information about how
the fund was managed during the reporting period, including a discussion with
the fund's portfolio manager, Scott Sprauer.
Yields on tax-exempt money market instruments rose in general over the past six
months. However, because of supply-and-demand influences that are unique to the
tax-exempt markets, yields of tax-exempt money market instruments did not rise
as much as their taxable counterparts. Amid signs that its previous rate hikes
had begun to slow the economy, the Federal Reserve Board refrained from raising
rates further at its meetings in June and August. Other factors such as higher
energy prices and a weak euro also served to slow economic growth.
In general, the overall investment environment that prevailed in the second half
of the 1990s had provided returns well above long-term averages, establishing
unrealistic expectations for some investors. In our opinion, as the risks of the
stock market have become more apparent due to recent volatility, the safety and
tax-free income potential of tax-exempt money market funds can make them an
attractive investment as part of a well-balanced portfolio.
For more information about the economy and financial markets, we encourage you
to visit the Market Commentary section of our website at www.dreyfus.com. Or, to
speak with a Dreyfus customer service representative, call us at 1-800-782-6620
Thank you for investing in Dreyfus California Tax-Exempt Money Market Fund.
Sincerely,
Stephen E. Canter
President and Chief Investment Officer
The Dreyfus Corporation
October 16, 2000
DISCUSSION OF FUND PERFORMANCE
Scott Sprauer, Portfolio Manager
How did Dreyfus California Tax-Exempt Money Market Fund perform during the
period?
For the six-month period ended September 30, 2000, the fund produced an
annualized tax-exempt yield of 3.09% . Taking into account the effects of
compounding, the fund provided an annualized effective yield of 3.13%.(1) A
continuing decline in the volume of new short-term securities from California
issuers constrained the rise of tax-exempt money market yields relative to their
taxable counterparts during the reporting period.
What is the fund's investment approach?
The fund seeks high current federal and California state tax-exempt income while
looking to maintain a stable $1.00 share price. We are vigilant in our efforts
to preserve capital.
In pursuing the fund's investment approach, we employ two primary strategies.
First, we attempt to add value by constructing a diverse portfolio of high
quality, tax-exempt money market instruments from California issuers. Second, we
actively manage the fund's average maturity in anticipation of what we believe
to be supply-and-demand changes in California' s short-term municipal
marketplace.
For example, if we expect an increase in short-term supply, we may decrease the
average maturity of the fund, which would enable us to purchase new securities
with then current higher yields. Yields tend to rise when there is an increase
in new-issue supply competing for investor interest. New securities are
generally issued with maturities in the one-year range, which will lengthen the
fund' s average maturity. If we anticipate limited new-issue supply, we may
extend the fund' s average maturity to maintain current yields for as long as
practical. At other times, we try to maintain an average maturity that reflects
our view of short-term interest-rate trends and future supply-and-demand
considerations.
The Fund
DISCUSSION OF FUND PERFORMANCE (CONTINUED)
What other factors influenced the fund's performance?
The fund was positively influenced over the past year by rising interest rates.
When the reporting period began on April 1, 2000, the U.S. economy continued to
grow strongly, raising concerns that long-dormant inflationary pressures might
reemerge. In response, the Federal Reserve Board (the "Fed") raised short-term
interest rates by 0.50 percentage points at its May meeting. However, tax-exempt
yields later declined modestly when the Fed did not change interest rates at
subsequent meetings. The Fed held monetary policy steady because of signs that
its previous rate hikes were having the desired effect of slowing the economy.
Fewer housing starts, moderating growth and little change in the core inflation
rate may suggest that the Fed's rate hikes could be at or near an end.
Despite slower growth, the continuing strength of the U.S. economy helped keep
tax-exempt money market yields relatively low compared to taxable money market
instruments. California enjoyed higher tax revenues, curtailing the state's need
to borrow and resulting in a reduced supply of securities compared to the same
period one year earlier. In fact, California did not issue any revenue
anticipation notes in 2000, which marks the first time in 20 years that the
state has not issued these securities. At the same time, demand for tax-exempt
money market instruments has been strong from California residents seeking to
protect their wealth from stock market volatility. When demand rises and supply
falls, prices of existing fixed-income securities tend to move higher.
In this environment, we generally maintained a longer average maturity than our
peer group. When it appeared likely in the summer that yields might fall, we
increased our holdings of fixed-rate commercial paper and reduced our holdings
of variable rate demand notes (VRDNs), which feature floating rates that are
reset daily or weekly. This change was designed to lock in prevailing yields for
as long as practical.
What is the fund's current strategy?
In our view, yields may decline further if the current economic slowdown
continues. Accordingly, we have maintained the fund's average maturity at a
point that is longer than the average for our peer group. However, we currently
believe it is likely that we may allow the fund's average maturity to decline
naturally as holdings mature over the next several months. In our opinion, this
strategy can allow us to make more funds available for new investments in the
fourth quarter of 2000, when we expect yields to rise temporarily in response to
year-end pressures. If yields should rise, we would then consider re-extending
the fund' s average maturity in order to lock in higher rates. Of course,
markets, strategy and portfolio composition can change at any time.
October 16, 2000
(1) ANNUALIZED EFFECTIVE YIELD IS BASED UPON DIVIDENDS DECLARED DAILY AND
REINVESTED MONTHLY. PAST PERFORMANCE IS NO GUARANTEE OF FUTURE RESULTS. YIELDS
FLUCTUATE. INCOME MAY BE SUBJECT TO STATE AND LOCAL TAXES FOR NON-CALIFORNIA
RESIDENTS, AND SOME INCOME MAY BE SUBJECT TO THE FEDERAL ALTERNATIVE MINIMUM TAX
(AMT) FOR CERTAIN INVESTORS. AN INVESTMENT IN THE FUND IS NOT INSURED OR
GUARANTEED BY THE FDIC OR THE U.S. GOVERNMENT. ALTHOUGH THE FUND SEEKS TO
PRESERVE THE VALUE OF YOUR INVESTMENT AT $1.00 PER SHARE, IT IS POSSIBLE TO LOSE
MONEY BY INVESTING IN THE FUND.
The Fund
STATEMENT OF INVESTMENTS
September 30, 2000 (Unaudited)
STATEMENT OF INVESTMENTS
<TABLE>
<CAPTION>
Principal
TAX EXEMPT INVESTMENTS--100.8% Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CALIFORNIA--87.2%
Anaheim Housing Authority, MFHR, Refunding
VRDN (Sage Park Project)
4.45%, Series A (LOC; FNMA) 2,000,000 (a) 2,000,000
State of California:
3.60%, Series BJ, 6/1/2001 5,000,000 4,978,629
CP 3.95%, 10/19/2000 (Liquidity
Facility: Bayerische Landesbank, Commerzbank,
Credit Agricole-Indosuez, Credit Locale de
France, Landesbank Hessen, Morgan Guaranty
Trust Co., State Street Bank and Trust, Toronto
Dominion Bank and Westdeutsche Landesbank) 5,000,000 5,000,000
GO Notes 7%, 3/1/2001 1,500,000 1,517,633
California Community College Finance Authority
TRAN 5%, Series B, 8/3/2001 3,500,000 3,522,306
California Educational Facility Authority, Revenues
VRDN (San Francisco Conservatory)
4.50% (Corp. Guaranty; California State Teachers
Retirement System) 3,000,000 (a) 3,000,000
California Health Facilities Finance Authority, HR
VRDN (Adventist)
4.75%, Series B (Insured; MBIA and Liquidity
Facility; California State Teachers Retirement System) 2,000,000 (a) 2,000,000
California Housing Finance Agency
Home Mortgage Revenue:
3.90%, Series W, 10/1/2001 2,900,000 2,900,000
VRDN 2.60%, Series C (Corp. Guaranty;
California State Teachers Retirement System
and LOC; Commerzbank) 4,000,000 (a) 4,000,000
California Pollution Control Finance Authority, PCR
CP (Southern California Edison)
3.50%, Series C, 10/12/2000
(Corp. Guaranty; Southern California Edison) 5,400,000 5,400,000
California Public Capital Improvements Financing
Authority, Revenue (Pooled Project)
3.95%, Series C, 12/15/2000 (LOC; National
Westminster Bank) 9,000,000 9,000,000
California School Cash Reserve Program Authority
Revenue 5.25%, Series A, 7/3/2001
(Insured; AMBAC) 2,000,000 2,014,149
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
-----------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
City of Daly Housing Development Financing Agency
Multi-Family Revenue, Refunding, VRDN
(Serramonte Del Ray)
4.30%, Series A (LOC; FNMA) 10,000,000 (a) 10,000,000
Garden Grove Housing Authority
Multi-Family Revenue
VRDN (Valley View-Senior Villas Project)
5%, Series A (LOC; Wells Fargo Bank) 3,200,000 (a) 3,200,000
Kings County Housing Authority, MFHR, Refunding
VRDN (Edgewater Isle Apartments)
4.35%, Series A (LOC; Wells Fargo Bank) 6,155,000 (a) 6,155,000
City of Los Angeles, Multi-Family Revenue, VRDN
(Moutainback Apartments)
4.35%, Series B (LOC; Banco Santander) 1,840,000 (a) 1,840,000
Los Angeles County Metropolitan Transportation
Authority, CP, Sales Tax Revenue
4%, 10/13/2000 (Insured: Bank of America, Bayerische
Landesbank, Credit Agricole-Indosuez, Helaba Bank
and Morgan Guaranty Trust Co.) 2,000,000 2,000,000
Los Angeles County Public Works Financing Authority
LR, Refunding (Master Refunding Project)
5%, Series A, 3/1/2001 (Insured; FSA) 3,000,000 3,014,832
Los Angeles Department of Water and Power
Electric Plant Revenue, VRDN (Second Issue)
4.45%, Series D (Liquidity Facility; Toronto-Dominion
Bank) 8,000,000 (a) 8,000,000
Los Angeles Industrial Development Authority
Empowerment Zone Facilities Revenue
VRDN (AAA Packing and Shipping Project)
4.40% (Corp. Guaranty; California State Teachers
Retirement System) 3,000,000 (a) 3,000,000
Metropolitan Water District of Southern California
VRDN 3.65%, Series B 2,200,000 (a) 2,200,000
Waterworks Revenue:
CP 4%, Series A, 12/14/2000 (LOC; Westdeutsche
Landesbank) 7,100,000 7,100,000
Newport Beach, Revenues, VRDN
(Hoag Memorial Presbyterian Hospital) 5.40% 5,000,000 (a) 5,000,000
The Fund
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Orange County:
Apartment Development Revenue, VRDN
(Laguna Summit Apartments)
4.65%, Series X (Insured; FGIC) 8,500,000 (a) 8,500,000
Public Finance Authority, Waste Management
System Revenue, Refunding
5%, 12/1/2000 (Insured; Ambac) 1,360,000 1,361,254
Port Oakland, Revenue, VRDN
Merlots
5.75%, Series JJ (Insured; FGIC and
Liquidity Facility; First Union National Bank) 4,680,000 (a) 4,680,000
Sacramento Redevelopment Agency
Tax Allocation Revenue, Refunding
(Merged Downtown Redevelopment Project)
4%, 11/1/2000 (Insured; FSA) 1,000,000 1,000,019
San Bernardino County, LR, Prerefunded
(Capital Facilities Project)
7%, Series B, 8/1/2001 (Escrowed in; U.S.
Government Securities) 1,000,000 1,045,321
San Francisco Bay Area, Rapid Transit Distribution
Revenue:
3.65%, Series C, 11/14/2000 (LOC; Morgan
Guaranty Trust Company Co.) 1,000,000 1,000,000
3.70%, Series C, 11/14/2000 (LOC; Morgan
Guaranty Trust Company Co.) 1,000,000 1,000,000
3.75%, Series C, 11/14/2000 (LOC; Morgan
Guaranty Trust Company Co.) 1,000,000 1,000,000
City of San Jose, MFHR, Refunding, VRDN
(Kimberly Woods Apartments)
4.30%, Series A (LOC; Federal Home Loan Banks) 6,000,000 (a) 6,000,000
Santa Ana Community Redevelopment Agency
Tax Allocation Revenue, Prerefunded
(Santa Ana Redevelopment Project Area)
6.50%, Series B, 12/15/2000 (Escrowed in; U.S.
Government Securities) 2,000,000 2,050,862
Stanislaus County, Office of Education
TRAN 5%, 8/10/2001 3,000,000 3,026,074
Principal
TAX EXEMPT INVESTMENTS (CONTINUED) Amount ($) Value ($)
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
Tustin Improvement Bond Act 1915
Reassessment District Number 95-2-A
Special Assessment Revenue, VRDN
4.75% (LOC; Kredietbank) 2,500,000 (a) 2,500,000
University, Revenues, Refunding
(Multiple Purpose Project)
6.20%, 9/1/2001 (Insured; MBIA) 6,675,000 6,805,304
Victory Valley, Union High School District
TRAN 5%, 7/12/2001 2,000,000 2,011,937
U.S. RELATED--13.6%
Commonwealth of Puerto Rico Government
Development Bank, CP:
3.55%, 10/26/2000 2,920,000 2,920,000
4.50%, 10/27/2000 4,000,000 4,000,000
4%, 12/18/2000 2,000,000 2,000,000
Commonwealth of Puerto Rico Highway and
Transportation Authority, Transportation
Revenue, VRDN
4.50%, Series A (Insured; AMBAC and Liquidity
Facility; Bank of Nova Scotia) 10,300,000 (a) 10,300,000
Commonwealth of Puerto Rico, Public Improvement
GO Notes
5.50%, Series B, 7/1/2001 (Insured; AMBAC) 400,000 404,778
Virgin Islands Public Finance Authority
Revenue, Prerefunded
7.30%, Series A, 10/1/2000 (Escrowed in; U.S.
Government Securities) 2,110,000 2,131,100
-----------------------------------------------------------------------------------------------------------------------------------
TOTAL INVESTMENTS (cost $160,578,319) 100.8% 160,579,198
LIABILITIES, LESS CASH AND RECEIVABLES (.8%) (1,320,715)
NET ASSETS 100.8% 159,258,483
The Fund
</TABLE>
STATEMENT OF INVESTMENTS (Unaudited) (CONTINUED)
Summary of Abbreviations
AMBAC American Municipal Bond Assurance
Corporation
CP Commercial Paper
FGIC Financial Guaranty Insurance
Company
FNMA Federal National Mortgage
Association
FSA Financal Security Assurance
GO General Obligation
HR Hospital Revenue
LOC Letter of Credit
LR Lease Revenue
MBIA Municipal Bond Investors Assurance
Insurance Corporation
MFHR Multi-Family Housing Revenue
PCR Pollution Control Revenue
TRAN Tax and Revenue Anticipation Notes
VRDN Variable Rate Demand Notes
Summary of Combined Ratings (Unaudited)
<TABLE>
<CAPTION>
Fitch or Moody's or Standard & Poor's Value (%)
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
F1+/F1 VMIG1/MIG1, P1 SP1+/SP1, A1+/A1, A2 88.0
AAA/AA( b) Aaa/Aa( b) AAA/AA( b) 12.0
100.0
(A) SECURITIES PAYABLE ON DEMAND. VARIABLE INTEREST RATE-SUBJECT TO PERIODIC
CHANGE.
(B) NOTES WHICH ARE NOT F, MIG AND SP RATED ARE REPRESENTED BY BOND RATINGS OF
THE ISSUERS.
(C) AT SEPTEMBER 30, 2000, THE FUND HAD $44,595,000 (28.0% OF NET ASSETS)
INVESTED IN SECURITIES WHOSE PAYMENT OF PRINCIPAL AND OF INTEREST IS
DEPENDENT UPON REVENUES GENERATED FROM HOUSING PROJECTS.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 2000 (Unaudited)
Cost Value
--------------------------------------------------------------------------------
ASSETS ($):
Investments in securities--See Statement of
Investments 160,578,319 160,579,198
Cash 608,527
Interest receivable 1,066,742
Prepaid expenses and other assets 39,308
162,293,775
--------------------------------------------------------------------------------
LIABILITIES ($):
Due to The Dreyfus Corporation and affiliates 92,836
Payable for investment securities purchased 2,900,000
Accrued expenses and other liabilities 42,456
3,035,292
--------------------------------------------------------------------------------
NET ASSETS ($) 159,258,483
--------------------------------------------------------------------------------
COMPOSITION OF NET ASSETS ($):
Paid-in capital 159,317,902
Accumulated net realized gain (loss) on investments (60,298)
Accumulated gross unrealized appreciation of investments 879
--------------------------------------------------------------------------------
NET ASSETS ($) 159,258,483
--------------------------------------------------------------------------------
SHARES OUTSTANDING
(unlimited number of $.01 par value shares of Beneficial Interest authorized)
159,379,646
NET ASSET VALUE, offering and redemption price per share ($) 1.00
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
STATEMENT OF OPERATIONS
Six Months Ended September 30, 2000 (Unaudited)
--------------------------------------------------------------------------------
INVESTMENT INCOME ($):
INTEREST INCOME 3,104,648
EXPENSES:
Management fee--Note 2(a) 412,185
Shareholder servicing costs--Note 2(b) 83,001
Professional fees 19,526
Trustees' fees and expenses--Note 2(c) 14,753
Custodian fees 8,583
Registration fees 6,490
Prospectus and shareholders' reports 2,395
Miscellaneous 6,253
TOTAL EXPENSES 553,186
INVESTMENT INCOME--NET 2,551,462
-------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS--NOTE 1(B) ($):
Net realized gain (loss) on investments 2,907
Net unrealized appreciation (depreciation) on investments 879
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS 3,786
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS 2,555,248
SEE NOTES TO FINANCIAL STATEMENTS.
STATEMENT OF CHANGES IN NET ASSETS
Six Months Ended
September 30, 2000 Year Ended
(Unaudited) March 31, 2000
-------------------------------------------------------------------------------
OPERATIONS ($):
Investment income--net 2,551,462 4,260,364
Net realized gain (loss) from investments 2,907 8,135
Net unrealized appreciation (depreciation)
of investments 879 --
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS 2,555,248 4,268,499
-------------------------------------------------------------------------------
DIVIDENDS TO SHAREHOLDERS FROM ($):
INVESTMENT INCOME--NET (2,551,462) (4,260,364)
-------------------------------------------------------------------------------
BENEFICIAL INTEREST TRANSACTIONS ($1.00 per share):
Net proceeds from shares sold 141,908,630 361,109,472
Dividends reinvested 1,800,890 2,767,290
Cost of shares redeemed (147,764,327) (394,794,925)
INCREASE (DECREASE) IN NET ASSETS
FROM BENEFICIAL INTEREST TRANSACTIONS (4,054,807) (30,918,163)
TOTAL INCREASE (DECREASE) IN NET ASSETS (4,051,021) (30,910,028)
-------------------------------------------------------------------------------
NET ASSETS ($):
Beginning of Period 163,309,504 194,219,532
END OF PERIOD 159,258,483 163,309,504
SEE NOTES TO FINANCIAL STATEMENTS.
The Fund
FINANCIAL HIGHLIGHTS
The following table describes the performance for the fiscal periods indicated.
Total return shows how much your investment in the fund would have increased (or
decreased) during each period, assuming you had reinvested all dividends and
distributions. These figures have been derived from the fund's financial
statements.
<TABLE>
<CAPTION>
Six Months Ended
September 30, 2000 Year Ended March 31,
-----------------------------------------------------------------
(Unaudited) 2000 1999 1998 1997 1996
------------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA ($):
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period 1.00 1.00 1.00 1.00 1.00 1.00
Investment Operations:
Investment income--net .016 .024 .026 .029 .028 .030
Distributions:
Dividends from investment
income--net (.016) (.024) (.026) (.029) (.028) (.030)
Net asset value, end of period 1.00 1.00 1.00 1.00 1.00 1.00
------------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN (%) 3.11(a) 2.43 2.59 2.91 2.80 3.07
------------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA (%):
Ratio of expenses to
average net assets .67(a) .68 .66 .69 .66 .64
Ratio of net investment income
to average net assets 3.08(a) 2.40 2.56 2.88 2.77 3.03
------------------------------------------------------------------------------------------------------------------------------------
Net Assets, end of period
($ x 1,000) 159,258 163,310 194,220 194,213 226,548 252,985
(A) ANNUALIZED.
SEE NOTES TO FINANCIAL STATEMENTS.
</TABLE>
NOTES TO FINANCIAL STATEMENTS (Unaudited)
NOTE 1--Significant Accounting Policies:
Dreyfus California Tax Exempt Money Market Fund (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 and
State of California income taxes as is consistent with the preservation of
capital and the maintenance of liquidity. The Dreyfus Corporation (the
" Manager" ) serves as the fund's investment adviser. The Manager is a direct
subsidiary of Mellon Bank, N.A., which is a wholly-owned subsidiary of Mellon
Financial Corporation. Dreyfus Service Corporation (the "Distributor" ), a
wholly-owned subsidiary of the Manager, is the distributor of the fund's shares
which are sold to the public without a sales charge.
It is the fund's policy to maintain a continuous net asset value per share of
$1.00; the fund has adopted certain investment, portfolio valuation and dividend
and distribution policies to enable it to do so. There is no assurance, however,
that the fund will be able to maintain a stable net asset value per share of
$1.00.
The fund' s financial statements are prepared in accordance with generally
accepted accounting principles, which require the use of management estimates
and assumptions. Actual results could differ from those estimates.
(a) Portfolio valuation: Investments in securities are valued at amortized cost,
which has been determined by the fund's Board of Trustees to represent the fair
value of the fund's investments.
(b) Securities transactions and investment income: Securities transactions are
recorded on a trade date 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. Realized gain and loss from securities
transactions are recorded on the identified cost basis. Cost of investments
represents amortized cost. Under the terms of the custody agreement, the fund
receives net earnings credits based on available cash balances left on deposit.
The Fund
NOTES TO FINANCIAL STATEMENTS (Unaudited) (CONTINUED)
The fund follows an investment policy of investing primarily in municipal
obligations of one state. Economic changes affecting the state and certain of
its public bodies and municipalities may affect the ability of issuers within
the state to pay interest on, or repay principal of, municipal obligations held
by the fund.
(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, it is the policy of the fund not to distribute such gain.
(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.
The fund has an unused capital loss carryover of approximately $63,000 available
for Federal income tax purposes to be applied against future net securities
profits, if any, realized subsequent to March 31, 2000. If not applied, $21,000
of the carryover expires in fiscal 2002, $27,000 expires in fiscal 2003, $10,000
expires in fiscal 2004 and $5,000 expires in fiscal 2005.
During the period ended September 30, 2000, the fund reclassified $30,474
between accumulated net realized gain (loss) on investments and paid-in capital
due to the expiration of capital loss carryovers. The results of operations and
net assets were not affected by the reclassification.
At September 30, 2000, 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).
NOTE 2--Management Fee and Other Transactions With Affiliates:
(a) Pursuant to a management agreement with the Manager, the management fee is
computed at the annual rate of .50 of 1% of the value of the fund's average
daily net assets and is payable monthly.
(b) Under the Shareholder Services Plan, the fund reimburses the Distributor 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 September 30, 2000, the fund was charged $54,267
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 September 30, 2000, the fund was charged $21,106 pursuant to the transfer
agency agreement.
(c) Each trustee who is not an "affiliated person" as defined in the Act
receives from the fund an annual fee of $2,500 and an attendance fee of $250 per
meeting. The Chairman of the Board receives an additional 25% of such
compensation.
The Fund
For More Information
Dreyfus California Tax Exempt
Money Market Fund
200 Park Avenue
New York, NY 10166
Manager
The Dreyfus Corporation
200 Park Avenue
New York, NY 10166
Custodian
The Bank of New York
100 Church Street
New York, NY 10286
Transfer Agent &
Dividend Disbursing Agent
Dreyfus Transfer, Inc.
P.O. Box 9671
Providence, RI 02940
Distributor
Dreyfus Service Corporation
200 Park Avenue
New York, NY 10166
To obtain information:
BY TELEPHONE Call 1-800-645-6561
BY MAIL Write to: The Dreyfus Family of Funds 144 Glenn Curtiss Boulevard
Uniondale, NY 11556-0144
BY E-MAIL Send your request to [email protected]
ON THE INTERNET Information can be viewed online or downloaded from:
http://www.dreyfus.com
(c) 2000 Dreyfus Service Corporation 357SA009
