February 25, 1997
DREYFUS 100% U.S. TREASURY FUNDS
DREYFUS 100% U.S. TREASURY INTERMEDIATE TERM FUND
DREYFUS 100% U.S. TREASURY LONG TERM FUND
SUPPLEMENT TO THE PROSPECTUS
DATED MAY 1, 1996
THE FOLLOWING INFORMATION SUPPLEMENTS THE INFORMATION IN THE FUND'S
PROSPECTUS UNDER THE CAPTION "MANAGEMENT POLICIES."
U.S Treasury securities include Treasury Inflation-Protection
Securities ("TIPS"), which are newly created securities issued by the U.S.
Treasury designed to protect investors against inflation. The interest rate
paid by TIPS is fixed, while the principal value rises or falls semi-annually
based on changes in a published Consumer Price Index. Thus, if inflation goes
up, the principal and interest payments on the TIPS also increase, protecting
investors from inflationary loss. During a deflationary period, the principal
and interest payments decrease, although the TIPS' principal will not drop
below its face amount at maturity.
In exchange for the inflation protection, TIPS generally pay lower
interest rates than typical Treasury securities. Only if inflation rises will
TIPS offer a higher real yield than a conventional Treasury bond of the same
maturity. In addition, it is not possible to predict with assurance how the
market for TIPS will develop; initially, the secondary market for these
securities may not be as active or liquid as the secondary market for
conventional Treasury securities. Principal appreciation and interest
payments on TIPS will be taxed annually as ordinary interest income for
federal income tax calculations. As a result, any appreciation in principal
must be counted as interest income in the year the increase occurs, even
though the investor will not receive such amounts until the TIPS are sold or
mature. Principal appreciation and interest payments will be exempt from
state and local income taxes.
USTF/s022597
